Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 10, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-13445 | |
Entity Registrant Name | Sonida Senior Living, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-2678809 | |
Entity Address, Address Line One | 14755 Preston Road | |
Entity Address, Address Line Two | Suite 810 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75254 | |
City Area Code | 972 | |
Local Phone Number | 770-5600 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | SNDA | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 8,177,846 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001043000 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 3,562 | $ 16,913 |
Restricted cash | 17,590 | 13,829 |
Accounts receivable, net | 8,124 | 6,114 |
Prepaid expenses and other assets | 3,540 | 4,099 |
Derivative assets | 745 | 2,611 |
Total current assets | 33,561 | 43,566 |
Property and equipment, net | 594,116 | 615,754 |
Other assets, net | 1,412 | 1,948 |
Total assets | 629,089 | 661,268 |
Current liabilities: | ||
Accounts payable | 10,067 | 7,272 |
Accrued expenses | 41,532 | 36,944 |
Current portion of notes payable, net of deferred loan costs | 64,309 | 46,029 |
Deferred income | 3,790 | 3,419 |
Federal and state income taxes payable | 158 | 0 |
Other current liabilities | 548 | 653 |
Total current liabilities | 120,404 | 94,317 |
Notes payable, net of deferred loan costs and current portion | 565,149 | 625,002 |
Other liabilities | 61 | 113 |
Total liabilities | 685,614 | 719,432 |
Commitments and contingencies | ||
Redeemable preferred stock: | ||
Series A convertible preferred stock, $0.01 par value; 41 shares authorized, 41 shares issued and outstanding as of September 30, 2023 and December 31, 2022 | 47,243 | 43,550 |
Shareholders’ deficit: | ||
Preferred stock, $0.01 par value: Authorized shares - 15,000 as of September 30, 2023 and December 31, 2022; none issued or outstanding, except Series A convertible preferred stock as noted above | 0 | 0 |
Common stock, $0.01 par value: Authorized shares - 15,000 as of September 30, 2023 and December 31, 2022; 7,178 and 6,670 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 78 | 67 |
Additional paid-in capital | 299,690 | 295,277 |
Retained deficit | (403,536) | (397,058) |
Total shareholders’ deficit | (103,768) | (101,714) |
Total liabilities, redeemable preferred stock and shareholders’ deficit | $ 629,089 | $ 661,268 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Series A convertible preferred stock , par value (in USD per share) | $ 0.01 | $ 0.01 |
Temporary equity, shares authorized (in shares) | 41,000 | 41,000 |
Temporary equity, shares issued (in shares) | 41,000 | 41,000 |
Temporary equity, shares outstanding (in shares) | 41,000 | 41,000 |
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock, shares issued (in shares) | 7,778,000 | 6,670,000 |
Common stock, shares outstanding (in shares) | 7,778,000 | 6,670,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||||
Total revenues | $ 64,675 | $ 60,787 | $ 189,602 | $ 178,908 |
Expenses: | ||||
Operating expense | 44,486 | 43,123 | 132,956 | 126,562 |
General and administrative expense | 8,615 | 5,851 | 22,252 | 23,563 |
Depreciation and amortization expense | 9,943 | 9,691 | 29,751 | 28,940 |
Long-lived asset impairment | 5,965 | 0 | 5,965 | 0 |
Managed community reimbursement expense | 4,989 | 7,694 | 15,314 | 21,757 |
Total expenses | 73,998 | 66,359 | 206,238 | 200,822 |
Other income (expense): | ||||
Interest income | 139 | 44 | 521 | 47 |
Interest expense | (9,020) | (8,205) | (26,445) | (23,728) |
Gain (loss) on extinguishment of debt, net | 0 | 0 | 36,339 | (641) |
Gain (loss) on sale of assets, net | (34) | 0 | 217 | 0 |
Other income (expense), net | (90) | (6) | (269) | 8,663 |
Loss before provision for income taxes | (18,328) | (13,739) | (6,273) | (37,573) |
Provision for income taxes | (83) | 0 | (205) | (254) |
Net loss | (18,411) | (13,739) | (6,478) | (37,827) |
Dividends on Series A convertible preferred stock | 0 | 0 | 0 | (2,267) |
Undeclared dividends on Series A convertible preferred stock | (1,265) | (1,134) | (3,693) | (1,134) |
Net loss attributable to common stockholders | $ (19,676) | $ (14,873) | $ (10,171) | $ (41,228) |
Weighted average shares outstanding — basic (in shares) | 7,050 | 6,364 | 6,602 | 6,357 |
Weighted average shares outstanding — diluted (in shares) | 7,050 | 6,364 | 6,602 | 6,357 |
Basic net loss per common share (in USD per share) | $ (2.79) | $ (2.34) | $ (1.54) | $ (6.49) |
Diluted net loss per common share (in USD per share) | $ (2.79) | $ (2.34) | $ (1.54) | $ (6.49) |
Resident revenue | ||||
Revenue from Contract with Customer [Abstract] | ||||
Total revenues | $ 59,117 | $ 52,485 | $ 172,683 | $ 155,315 |
Management fees | ||||
Revenue from Contract with Customer [Abstract] | ||||
Total revenues | 569 | 608 | 1,605 | 1,836 |
Managed community reimbursement revenue | ||||
Revenue from Contract with Customer [Abstract] | ||||
Total revenues | $ 4,989 | $ 7,694 | $ 15,314 | $ 21,757 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Deficit) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 6,634 | |||
Beginning balance at Dec. 31, 2021 | $ (46,810) | $ 66 | $ 295,781 | $ (342,657) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Series A convertible preferred stock dividends | (1,133) | (1,133) | ||
Stock-based plan activity (in shares) | 31 | |||
Stock-based plan activity | 1 | $ 1 | ||
Non-cash stock-based compensation | 1,827 | 1,827 | ||
Net loss | (16,678) | (16,678) | ||
Ending balance (in shares) at Mar. 31, 2022 | 6,665 | |||
Ending balance at Mar. 31, 2022 | (62,793) | $ 67 | 296,475 | (359,335) |
Beginning balance (in shares) at Dec. 31, 2021 | 6,634 | |||
Beginning balance at Dec. 31, 2021 | (46,810) | $ 66 | 295,781 | (342,657) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Series A convertible preferred stock dividends | (2,267) | |||
Net loss | (37,827) | |||
Ending balance (in shares) at Sep. 30, 2022 | 6,670 | |||
Ending balance at Sep. 30, 2022 | (84,822) | $ 67 | 295,595 | (380,484) |
Beginning balance (in shares) at Mar. 31, 2022 | 6,665 | |||
Beginning balance at Mar. 31, 2022 | (62,793) | $ 67 | 296,475 | (359,335) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Series A convertible preferred stock dividends | (1,134) | (1,134) | ||
Stock-based plan activity (in shares) | 157 | |||
Stock-based plan activity | (219) | $ 1 | (220) | |
Non-cash stock-based compensation | 2,240 | 2,240 | ||
Net loss | (7,410) | (7,410) | ||
Ending balance (in shares) at Jun. 30, 2022 | 6,822 | |||
Ending balance at Jun. 30, 2022 | (69,316) | $ 68 | 297,361 | (366,745) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Series A convertible preferred stock dividends | 0 | |||
Undeclared dividends on Series A convertible preferred stock | (1,134) | (1,134) | ||
Stock-based plan activity (in shares) | (152) | |||
Stock-based plan activity | (45) | $ (1) | (44) | |
Non-cash stock-based compensation | (588) | (588) | ||
Net loss | (13,739) | (13,739) | ||
Ending balance (in shares) at Sep. 30, 2022 | 6,670 | |||
Ending balance at Sep. 30, 2022 | (84,822) | $ 67 | 295,595 | (380,484) |
Beginning balance (in shares) at Dec. 31, 2022 | 6,670 | |||
Beginning balance at Dec. 31, 2022 | (101,714) | $ 67 | 295,277 | (397,058) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Undeclared dividends on Series A convertible preferred stock | (1,198) | (1,198) | ||
Stock-based plan activity (in shares) | 272 | |||
Stock-based plan activity | (15) | $ 2 | (17) | |
Non-cash stock-based compensation | 902 | 902 | ||
Net loss | 24,145 | 24,145 | ||
Ending balance (in shares) at Mar. 31, 2023 | 6,942 | |||
Ending balance at Mar. 31, 2023 | (77,880) | $ 69 | 294,964 | (372,913) |
Beginning balance (in shares) at Dec. 31, 2022 | 6,670 | |||
Beginning balance at Dec. 31, 2022 | (101,714) | $ 67 | 295,277 | (397,058) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Series A convertible preferred stock dividends | 0 | |||
Net loss | (6,478) | |||
Ending balance (in shares) at Sep. 30, 2023 | 7,778 | |||
Ending balance at Sep. 30, 2023 | (103,768) | $ 78 | 299,690 | (403,536) |
Beginning balance (in shares) at Mar. 31, 2023 | 6,942 | |||
Beginning balance at Mar. 31, 2023 | (77,880) | $ 69 | 294,964 | (372,913) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Undeclared dividends on Series A convertible preferred stock | (1,230) | (1,230) | ||
Issuance of common stock, net (in shares) | 68 | |||
Issuance of common stock, net | 0 | $ 1 | (1) | |
Stock-based plan activity (in shares) | 168 | |||
Stock-based plan activity | (12) | $ 2 | (14) | |
Non-cash stock-based compensation | 601 | 601 | ||
Net loss | (12,212) | (12,212) | ||
Ending balance (in shares) at Jun. 30, 2023 | 7,178 | |||
Ending balance at Jun. 30, 2023 | (90,733) | $ 72 | 294,320 | (385,125) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Series A convertible preferred stock dividends | 0 | |||
Undeclared dividends on Series A convertible preferred stock | (1,265) | (1,265) | ||
Issuance of common stock, net (in shares) | 600 | |||
Issuance of common stock, net | 6,000 | $ 6 | 5,994 | |
Non-cash stock-based compensation | 641 | 641 | ||
Net loss | (18,411) | (18,411) | ||
Ending balance (in shares) at Sep. 30, 2023 | 7,778 | |||
Ending balance at Sep. 30, 2023 | $ (103,768) | $ 78 | $ 299,690 | $ (403,536) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (6,478) | $ (37,827) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 29,751 | 28,940 |
Amortization of deferred loan costs | 1,130 | 946 |
Gain on sale of assets, net | (217) | 0 |
Long-lived asset impairment | 5,965 | 0 |
Write-off of other assets | 0 | 535 |
Unrealized (gain) loss on interest rate cap, net | 1,958 | (206) |
(Gain) loss on extinguishment of debt | (36,339) | 641 |
Provision for bad debt | 582 | 908 |
Non-cash stock-based compensation expense | 2,144 | 3,479 |
Other non-cash items | (7) | 7 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (2,592) | (1,760) |
Prepaid expenses and other assets | 2,997 | 6,755 |
Other assets, net | (45) | (115) |
Accounts payable and accrued expense | 11,276 | 566 |
Federal and state income taxes payable | 158 | (423) |
Deferred income | 371 | 414 |
Other current liabilities | (11) | 43 |
Net cash provided by operating activities | 10,643 | 2,903 |
Cash flows from investing activities: | ||
Acquisition of new communities | 0 | (12,342) |
Capital expenditures | (14,168) | (18,317) |
Proceeds from sale of assets | 1,376 | 0 |
Net cash used in investing activities | (12,792) | (30,659) |
Cash flows from financing activities: | ||
Proceeds from notes payable | 0 | 80,000 |
Repayments of notes payable | (12,508) | (98,535) |
Proceeds from issuance of common stock | 6,000 | (263) |
Dividends paid on Series A convertible preferred stock | 0 | (2,987) |
Purchase of interest rate cap | 0 | (258) |
Deferred loan costs paid | (825) | (2,180) |
Other financing costs | (108) | (81) |
Net cash used in financing activities | (7,441) | (24,304) |
Decrease in cash and cash equivalents and restricted cash | (9,590) | (52,060) |
Cash, cash equivalents, and restricted cash at beginning of period | 30,742 | 92,876 |
Cash, cash equivalents, and restricted cash at end of period | 21,152 | 40,816 |
Cash paid during the period for: | ||
Interest | 21,216 | 21,536 |
Income taxes paid, net | 77 | 672 |
Non-cash investing and financing activities: | ||
Undeclared dividends on Series A convertible preferred stock | 3,693 | 1,134 |
Non-cash additions of property and equipment | $ 1,919 | $ 1,197 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Organization and Business Sonida Senior Living, Inc. (formerly known as Capital Senior Living Corporation), a Delaware corporation (together with its subsidiaries, the “Company,” “our,” “us,” or “Sonida”), is one of the leading owner-operators of senior housing communities in the United States in terms of resident capacity. The Company owns, operates, and manages senior housing communities throughout the United States. As of September 30, 2023, the Company operated 71 senior housing communities in 18 states with an aggregate capacity of approximately 8,000 residents, including 61 communities which the Company owned and 10 communities that the Company managed on behalf of third parties. As of December 31, 2022, the Company had two properties that were no longer operated and were in the process of transitioning the legal ownership back to the Federal National Mortgage Association (“Fannie Mae”). The transfer of ownership was completed during January 2023. In August 2023, the Company sold one community located in Shaker Heights, Ohio. The accompanying condensed consolidated financial statements include the financial statements of Sonida Senior Living, Inc. and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. Interim Unaudited Financial Information The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and should be read in conjunction with the condensed consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted from this Quarterly Report on Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The results for the interim periods shown in this report are not necessarily indicative of future financial results. The accompanying condensed consolidated financial statements have not been audited by our independent registered public accounting firm. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, including normal recurring items, necessary to present fairly our condensed consolidated financial position as of September 30, 2023 and December 31, 2022, and our condensed consolidated results of operations and cash flows for the periods ended September 30, 2023 and 2022. Reclassifications Certain amounts previously reflected in the prior year condensed consolidated financial statements have been reclassified to conform to our September 30, 2023 presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. These estimates include such items related to the accounting for: income taxes, including assessments of probabilities of realization of income tax benefits; impairment of long-lived assets, including applicable cash flow projections, holding periods and fair value evaluations; self-insurance liabilities and expense; stock-based compensation; and depreciation and amortization including determination of estimated useful lives. Actual results could differ from those estimates. |
Going Concern Uncertainty and R
Going Concern Uncertainty and Related Strategic Cash Preservation Initiatives | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern Uncertainty and Related Strategic Cash Preservation Initiatives | Going Concern Uncertainty and Related Strategic Cash Preservation InitiativesAccounting Standards Codification (“ASC”) 205-40, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” requires an evaluation of whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within 12 months after the date the financial statements are issued. Initially, this evaluation does not consider the potential mitigating effect of management’s plans that have not been fully implemented. When substantial doubt exists, management evaluates the mitigating effect of its plans to determine if it is probable that (1) the plans will be effectively implemented within one year after the date the financial statements are issued, and (2) when implemented, the plans will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In complying with the requirements under ASC 205-40 to complete an evaluation without considering mitigating factors, the Company considered several conditions or events including: (1) the current inflationary environment and financial results; (2) recurring and non-recurring scheduled principal and interest payments due in the next 12 months; (3) recurring operating losses; (4) the Company’s working capital deficit; and (5) events of non-compliance with certain of our mortgage agreements, as noted in “ Note 6–Notes Payable .” The above conditions raise substantial doubt about the Company’s ability to continue as a going concern for the 12-month period following the date the September 30, 2023 f inancial statements are issued. As discussed below, the Company has implemented plans that encompass short-term cash preservation initiatives to provide the Company with adequate liquidity to meet its obligations for at least the 12-month period following the date its September 30, 2023 financial statements are issued, in addition to creating sustained cash flow generation thereafter. The Company’s primary sources of near- and medium-term liquidity are expected to be (1) net cash generated from operations; (2) debt modifications, refinancings and extensions to the extent available on acceptable terms; and (3) equity issuances pursuant but not limited to the equity commitment agreement defined and described below. Strategic and Cash Preservation Initiatives The Company has taken the following actions, among others, to improve its liquidity position and to address uncertainty about its ability to continue as a going concern: • Upon its management team transition in September 2022, the Company promptly implemented new strategic and operational plans to accelerate margin recovery, including the following: ◦ Design and execution of a comprehensive resident rate review program to align revenues with the significant increase in the operating cost environment. ◦ Implementation of a global purchasing organization function to leverage scaled purchasing to lower unit operating costs. ◦ Use of several internally developed and external programs to provide alternative mitigants to a challenging labor environment. • We have adopted a comprehensive cash optimization strategy aimed at improving working capital management. • I n June 2023, the Company entered into a forbearance agreement with Fannie Mae (“Fannie Forbearance” and “Fannie Forbearance Agreement”), pursuant to which, among other things, the Company and Fannie Mae structured a loan modification agreement with terms identical to those contained within the Fannie Forbearance that significantly reduces debt service payments, improves working capital, and extends loan maturities. The Company entered into Loan Modification Agreements with Fannie Mae on October 2, 2023. Concurrent with the Fannie Mae Forbearance Agreement, the Company executed a second amendment to its Refinance Facility and Second Amended and Restated Limited Payment Guaranty with Ally Bank, which, among other things, temporarily reduced the minimum liquidity covenant under such Refinance Facility for a period of 18 months, subject to certain conditions set forth therein. See “ Note 6 – Notes Payable ” for more information about these agreements and transactions. • In June 2023, the Company entered into a $13.5 million equity commitment agreement with the Conversant Investors, at the Company’s right, but not the obligation. See “ Note 7–Securities Financing ” and “ Note 15 –Subsequent Events .” • Through recently integrated systems and revised process workflows, the Company has implemented additional proactive spending reductions, including reduced discretionary spending and more stringent, return-based capital spending. • The Company received approximately $0.5 million in various state grants during the quarter ended September 30, 2023 and approximately $2.9 million for the nine months ended September 30, 2023. • Under the terms of the Amended and Restated Investment Agreement, dated October 1, 2021 (the “A&R Investment Agreement”) entered into with Conversant Dallas Parkway (A) LP and Conversant Dallas Parkway (B) LP, (together “Conversant” or the “Conversant Investors”), the Company may request additional investments from the Conversant Investors in shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”) (up to an aggregate amount equal to $25.0 million) that can be used for future investment in accretive capital expenditures and acquisitions, subject to certain conditions. • The Compan y filed for an employee retention credit (“ERC”) with the Internal Revenue Service after September 30, 2023. The ERC is a tax credit for businesses that had employees that were affected during the COVID-19 pandemic. While the Company’s plans are designed to provide it with adequate liquidity to meet its obligations for at least the 12-month period following the date its financial statements are issued, the remediation plan is dependent on conditions and matters that may be outside of the Company’s control, and no assurances can be given that certain options will be available on terms acceptable to the Company, or at all. Accordingly, management could not conclude that it was probable that the plans will mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern . The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities in the normal course of business for the 12-month period following the date the financial statements are issued. As such, the accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents. The Company has deposits in banks that exceed Federal Deposit Insurance Corporation insurance limits. Management believes that credit risk related to these deposits is minimal. Restricted cash consists of reserve accounts for property insurance, real estate taxes, capital expenditures, derivatives, and debt service required by certain loan agreements. In addition, restricted cash includes deposits required by certain counterparties as collateral pursuant to letters of credit which must remain so long as the letters of credit are outstanding, which are subject to renewal annually. The following table sets forth our cash, cash equivalents, and restricted cash (in thousands): September 30, December 31, Cash and cash equivalents $ 3,562 $ 16,913 Restricted cash: Property tax and insurance reserves 7,495 6,184 Lender reserves 4,237 1,500 Capital expenditures reserves 1,834 2,034 Deposits pursuant to outstanding letters of credit 4,024 4,111 Total restricted cash 17,590 13,829 Total cash, cash equivalents, and restricted cash $ 21,152 $ 30,742 Long-Lived Assets Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets. At each balance sheet date, the Company reviews the carrying value of its property and equipment to determine if facts and circumstances suggest that they may be impaired or that the depreciation period may need to be changed. The Company considers internal factors such as net operating losses along with external factors relating to each asset, including contract changes, local market developments, and other publicly available information to determine whether impairment indicators exist. If an indicator of impairment is identified, recoverability of an asset group is assessed by comparing its carrying amount to the estimated future undiscounted net cash flows expected to be generated by the asset group through operation or disposition, calculated utilizing the lowest level of identifiable cash flows. If this comparison indicates that the carrying amount of an asset group is not recoverable, we estimate fair value of the asset group and record an impairment loss when the carrying amount exceeds fair value. The Company recognized a non-cash impairment charge of $6.0 million to its “Property and equipment, net” during the three and nine months ended September 30, 2023, which related to one owned community. There were no impairments on long-lived assets during the nine months ended September 30, 2022. In evaluating our long-lived assets for impairment, we undergo continuous evaluations of property level performance and real estate trends, and management makes several estimates and assumptions, including, but not limited to, the projected date of disposition, estimated sales price, and future cash flows of each property during our estimated holding period. If our analysis or assumptions regarding the projected cash flows expected to result from the use and eventual disposition of our properties change, we incur additional costs and expenses during the holding period, or our expected hold periods change, we may incur future impairment losses. Upon the acquisition of new communities accounted for as an acquisition of assets, we recognize the assets acquired and the liabilities assumed as of the acquisition date, measured at their relative fair values once we have determined the fair value of each of these assets and liabilities. The acquisition date is the date on which we obtain control of the real estate property. The assets acquired and liabilities assumed consist of land, inclusive of associated rights, buildings, assumed debt, and identified intangible assets and liabilities. See “ Note 4–Property and Equipment, net .” Revenue Recognition Resident revenue consists of fees for basic housing and certain support services and fees associated with additional housing and expanded support requirements such as assisted living care, memory care, and ancillary services. Basic housing and certain support services revenue is recorded when services are rendered, and amounts billed are due from residents in the period in which the rental and other services are provided. Residency agreements are generally short term in nature with durations of one year or less and are typically terminable by either party, under certain circumstances, upon providing 30 days’ notice, unless state law provides otherwise, with resident fees billed monthly in advance. Revenue for certain ancillary services is recognized as services are provided, and includes fees for services such as medication management, daily living activities, beautician/barber, laundry, television, guest meals, pets, and parking, which are generally billed monthly in arrears. Other operating revenue consists of state relief funds received from various states due to the financial distress impacts of COVID-19 (“State Relief Funds”). The Company’s senior housing communities have residency agreements that generally require the resident to pay a community fee and other amounts prior to moving into the community, which are initially recorded by the Company as deferred revenue. The Company had contract liabilities for deferred fees paid by our residents prior to the month housing and support services were to be provided totaling approximately $3.8 million and $3.4 million, respectively, which is reported as deferred income within current liabilities of the Company’s condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022. Revenues from the Medicaid program accounted for approximately 11.4% and 10.1% of the Company’s revenue in the three months ended September 30, 2023 and 2022, respectively. Revenues from the Medicaid program accounted for approximately 10.0% and 9.9% of the Company’s revenue in the nine months ended September 30, 2023 and 2022, respectively. During the three months ended September 30, 2023 and 2022, 23 and 24, respectively, of the Company’s communities were providers of services under the Medicaid program, and during the nine months ended September 30, 2023 and 2022, 24 and 28, respectively, of the Company’s communities were providers of services under the Medicaid program. Accordingly, these communities were entitled to reimbursement under the Medicaid program at established rates that were lower than private pay rates. Resident revenues for Medicaid residents were recorded at the reimbursement rates as the rates were set prospectively by the applicable state upon the filing of an annual cost report. None of the Company’s communities were providers of services under the Medicare program during the three and nine months ended September 30, 2023 and 2022. Laws and regulations governing the Medicaid program are complex and subject to interpretation. The Company believes that it is in compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing that would have a material effect on its Condensed Consolidated Financial Statements. While no such regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation as well as significant regulatory action including fines, penalties, and exclusion from the Medicaid program. The Company has management agreements whereby it manages certain communities on behalf of third-party owners under contracts that provide for periodic management fee payments to the Company. The Company has determined that all community management activities are a single performance obligation, which is satisfied over time as the services are rendered. The Company’s estimate of the transaction price for management services also includes the amount of reimbursement due from the owners of the communities for services provided and related costs incurred. Such revenue is included in “managed community reimbursement revenue” on the Company’s condensed consolidated statements of operations. The related costs are included in “managed community reimbursement expense” on the Company’s condensed consolidated statements of operations. See “ Note 8–Revenue .” The Company received approximately $9.1 million in the nine months ended September 30, 2022 through grants from the Public Health and Social Services Emergency Fund’s (the “Provider Relief Fund”) Phase 4 General Distribution, which was expanded by the CARES Act to provide grants or other funding mechanisms to eligible healthcare providers for healthcare-related or lost revenues attributable to COVID-19. For the three and nine months ended September 30, 2023, the Company received approximately $0.5 million and $2.9 million, respectively, in various State Relief Funds received from state departments due to financial distress impacts of COVID-19. For the nine months ended September 30, 2022, the Company received approximately $1.2 million in various State Relief Funds from state departments due to financial distress impacts of COVID-19. For the three months ended September 30, 2022, no grants were received from the state departments. The Company recognizes income for government grants on a systematic and rational basis over the periods in which the Company recognizes the related expenses or loss of revenue for which the grants are intended to compensate when there is reasonable assurance that the Company will comply with the applicable terms and conditions of the grant and there is reasonable assurance that the grant will be received. The Phase 4 Provider Relief Funds received from the Federal Government were recorded in “other income (expense), net” and the State Relief Funds were recorded as “resident revenue – other operating revenue” in the Company’s condensed consolidated financial statements and notes thereto. Credit Risk and Allowance for Doubtful Accounts The Company’s resident accounts receivable are generally due within 30 days after the date billed. Accounts receivable are reported net of an allowance for doubtful account s of $5.1 million and $5.9 million as of September 30, 2023 and December 31, 2022, respectively, and represent the Company’s estimate of the amount that ultimately will be collected. The adequacy of the Company’s allowance for doubtful accounts is reviewed on an ongoing basis, using historical payment trends, write-off experience, analyses of receivable portfolios by payor source and aging of receivables, as well as a review of specific accounts, and adjustments are made to the allowance, as necessary. Credit losses on resident receivables have historically been within management’s estimates, and management believes that the allowance for doubtful accounts adequately provides for expected losses. Concentration of Credit Risk and Business Risk Substantially all of our revenues are derived from senior living communities we own and senior living communities that we manage. Senior living operations are particularly sensitive to adverse economic, social and competitive conditions and trends, including the effects of the COVID-19 pandemic, which has adversely affected, and may continue to adversely affect, our business, financial condition, and results of operations. We have a concentration of owned properties operating in Texas (16), Indiana (12), Ohio (10) and Wisconsin (8), which we estimate represented approximatel y 23%, 19%, 20% and 10%, resp ectively, of our resident revenues for the three months ended September 30, 2023 and approximatel y 24%, 18%, 19% and 10%, re spectively, of our resident revenues for the nine months ended September 30, 2023 . Self-Insurance Liability Accruals The Company offers full-time employees an option to participate in its health and dental plans. The Company is self-insured up to certain limits and is insured if claims in excess of these limits are incurred. The cost of employee health and dental benefits, net of employee contributions, is shared between the corporate office and the senior housing communities based on the respective number of plan participants. Funds collected are used to pay the actual program costs, including estimated annual claims, third-party administrative fees, network provider fees, communication costs, and other related administrative costs incurred by the plans. Claims are paid as they are submitted to the Company’s third-party administrator. The Company records a liability for outstanding claims and claims that have been incurred but not yet reported. This liability is based on the historical claim reporting lag and payment trends of health insurance claims. Management believes that the recorded liabilities and reserves established for outstanding losses and expenses are adequate to cover the ultimate cost of losses and expenses incurred as of September 30, 2023 . It is possible that actual claims and expenses may differ from established reserves. Any subsequent changes in estimates are recorded in the period in which they are determined. The Company uses a combination of insurance and self-insurance for workers’ compensation. Determining the reserve for workers’ compensation losses and costs that the Company has incurred as of the end of a reporting period involves significant judgments based on projected future events, including among other factors, potential settlements for pending claims, known incidents which may result in claims, estimates of incurred but not yet reported claims, changes in insurance premiums and estimated litigation costs. The Company regularly adjusts these estimates to reflect changes in the foregoing factors. However, since this reserve is based on estimates, it is possible the actual expenses incurred may differ from the amounts reserved. Any subsequent changes in estimates are recorded in the period in which they are determined. Income Taxes Income taxes are computed using the asset and liability method and current income taxes are recorded based on amounts refundable or payable in the current year. The effective tax rates for the three and nine months ended September 30, 2023 and 2022 differ from the statutory tax rates due to state income taxes, permanent tax differences, and changes in the deferred tax asset valuation allowance. Deferred income taxes are recorded based on the estimated future tax effects of loss carryforwards and temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which the Company expects those carryforwards and temporary differences to be recovered or settled. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. For the tax year ended December 31, 2022, the Company had a three-year cumulative net operating loss for its operations and is subject to annual operating loss utilization limits and accordingly, has provided a full valuation allowance on its federal and state net deferred tax assets as of December 31, 2022 and September 30, 2023. The valuation allowance reduces the Company’s net deferred tax assets to the amount that is “more likely than not” (i.e., a greater than 50% likelihood) to be realized. However, in the event that the Company were to ultimately determine that it would be more likely than not that the Company would realize the benefit of deferred tax assets in the future in excess of their net recorded amounts, adjustments to deferred tax assets would increase net income in the period such determination was made. The benefits of the net deferred tax assets might not be realized if actual results differ from expectations. The Company evaluates uncertain tax positions through consideration of accounting and reporting guidance on criteria, measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better financial statement comparability among different companies. The Company is required to recognize a tax benefit in its financial statements for an uncertain tax position only if management’s assessment is that its position is “more likely than not” (i.e., a greater than 50 percent likelihood) to be upheld on audit based only on the technical merits of the tax position. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as income tax expense. Redeemable Preferred Stock The Company's Series A Preferred Stock is convertible outside of our control and in accordance with ASC 480-10-S99-3A is classified as mezzanine equity. The Series A Preferred Stock was initially recorded at fair value upon issuance, net of issuance costs and discounts. The holders, or Conversant Dallas Parkway (A) LP and Conversant Dallas Parkway (B) LP (together, “Conversant” or the “Conversant Investors”), of Series A Preferred Stock are entitled to vote with the holders of common stock on all matters submitted to a vote of stockholders of the Company. As such, the Conversant Investors, in combination with their common stock ownership as of September 30, 2023 and December 31, 2022, have voting rights in excess of 50% of the Company’s total voting stock. It is deemed probable that the Series A Preferred Stock could be redeemed for cash by the Conversant Investors, and as such, the Series A Preferred Stock is required to be remeasured and adjusted to its maximum redemption value at the end of each reporting period. However, to the extent that the maximum redemption value of the Series A Preferred Stock does not exceed the fair value of the shares at the date of issuance, the shares are not adjusted below the fair value at the date of issuance. As of September 30, 2023 and December 31, 2022, the Series A Preferred Stock is carried at the maximum redemption value. The Series A Preferred Stock does not have a maturity date and therefore is considered perpetual. Dividends on redeemable Series A Preferred Stock are recorded to retained earnings or additional paid-in capital if retained earnings is an accumulated deficit. Dividends are cumulative, and any declaration of dividends is at the discretion of the Company’s Board of Directors (the “Board”). If the Board does not declare a dividend in respect of any dividend payment date, the amount of such accrued and unpaid dividend is added to the liquidation preference of the Series A Preferred Stock and compounds quarterly thereafter. During the nine months ended September 30, 2023, the Board did not declare any dividends with respect to the Series A Preferred Stock, and accordingly, an aggregate of $3.7 million was added to the liquidation preference of the Series A Preferred Stock during such period, effectively increasing the carrying value of the redeemable preferred stock. Derivative Instruments We use derivative instruments as part of our overall strategy to manage our exposure to market risks associated with the fluctuations in interest rates. We are also required to enter into interest rate derivative instruments in compliance with certain debt agreements. We regularly monitor the financial stability and credit standing of the counterparties to our derivative instruments. We do not enter into derivative financial instruments for trading or speculative purposes. We record all derivatives at fair value. As of September 30, 2023, our derivative instruments consisted of interest rate caps that were not designated as hedge instruments. Changes in fair value of undesignated hedge instruments are recorded in current period earnings as interest expense. See “ Note 14–Derivatives and Hedging .” Net Income (Loss) Per Common Share The Company uses the two-class method to compute net income (loss) per common share because the Company has issued securities (Series A Preferred Stock) that entitle the holder to participate in dividends and earnings of the Company. Under this method, net income is reduced by the amount of any dividends earned during the period. The remaining earnings (undistributed earnings) are allocated based on the weighted-average shares outstanding of common stock and Series A Preferred Stock (on an if-converted basis) to the extent that each preferred security may share in earnings as if all of the earnings for the period had been distributed. The total earnings allocated to common stock is then divided by the number of outstanding shares to which the earnings are allocated to determine the earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the Series A Preferred Stock have no obligation to fund losses. Diluted net income (loss) per common share is computed under the two-class method by using the weighted-average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options, stock-based compensation awards, and warrants. In addition, the Company analyzes the potential dilutive effect of the outstanding Series A Preferred Stock under the "if-converted" method when calculating diluted earnings per share, in which it is assumed that the outstanding Series A Preferred Stock converts into common stock at the beginning of the period or when issued, if later. The Company reports the more dilutive of the approaches (two class or "if-converted") as its diluted net income per share during the period. See “ Note 9 – Net Loss Per Share .” Segment Reporting The Company evaluates the performance and allocates resources of its senior living communities based on current operations and market assessments on a property-by-property basis. The Company does not have a concentration of operations geographically or by product or service as its management functions are integrated at the property level. The Company has determined that its operating units meet the criteria in ASC Topic 280, Segment Reporting , to be aggregated into one reporting segment. As such, the Company operates in one segment. Troubled Debt Restructurings The Company assesses all loan modifications with existing lenders to determine if it is a troubled debt restructuring. A loan that has been modified or renewed is considered to be a troubled debt restructuring when two conditions are met: (1) the borrower is experiencing financial difficulty and (2) concessions are made for the borrower’s benefit that would not otherwise be considered for a borrower or a transaction with similar credit risk characteristics. These concessions may include modifications of the terms of the debt such as deferral of payments, extension of maturity, reduction of principal balance, reduction of the stated interest rate other than normal market rate adjustments, or a combination of these concessions. The Company compares the total cash outflows of the restructured debt to the carrying amount of the debt prior to the restructure. If cash outflows of the restructured debt are less than the carrying amount, a gain is recognized and the carrying amount of the debt is adjusted. If cash outflows of the restructured debt are more than the carrying amount, no gain or loss is recognized and the carrying amount of the debt is not adjusted. The change in cash outflows resulting from the restructuring is accounted for on a prospective basis by calculating a new effective interest rate on the restructured debt and applying it to recognize lower interest expense over the remaining term. See “ Note 6–Notes Payable .” Recently Adopted Accounting Pronouncements Allowance for Doubtful Accounts In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. Current GAAP requires an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. ASU 2016-13 replaces the current incurred loss methodology for credit losses and removes the thresholds that companies apply to measure credit losses on financial statements measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. The determination of the allowance for credit losses under the new standard would typically be based on evaluation of a number of factors, including, but not limited to, general economic conditions, payment status, historical collection patterns and loss experience, financial strength of the borrower, and nature, extent and value of the underlying collateral. For smaller reporting companies, ASU 2016-13 is effective for fiscal years and for interim periods within those fiscal years beginning after December 15, 2022. It requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. The Company adopted ASU 2016-13 on January 1, 2023. The effect of the adoption had an immaterial impact on our condensed consolidated financial statements. Reference Rate Reform |
Property and Equipment, net
Property and Equipment, net | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net As of September 30, 2023 and December 31, 2022, property and equipment, net, which include assets under finance leases, consist of the following (in thousands): Asset Lives September 30, December 31, Land $ 47,322 $ 47,476 Land improvements 5 to 20 years 20,377 20,053 Buildings and building improvements 10 to 40 years 841,206 842,854 Furniture and equipment 5 to 10 years 57,031 53,236 Automobiles 5 to 7 years 2,686 2,704 Assets under financing leases and leasehold improvements (1) 4,279 1,899 Construction in progress 704 666 Total property and equipment 973,605 968,888 Less accumulated depreciation and amortization (379,489) (353,134) Total property and equipment, net $ 594,116 $ 615,754 __________ (1) Leasehold improvements are amortized over the shorter of the useful life of the asset or the remaining lease term. Assets under financing leases e $0.1 million and $0.2 million of financing lease right-of-use assets as of September 30, 2023 and December 31, 2022, respectively. The Company recognized a non-cash impairment charge of $6.0 million to its “Property and equipment, net” during the three and nine months ended September 30, 2023, which related to one owned community. Due to recurring net operating losses, the Company concluded the assets related to this community had indicators of impairment and the carrying value was not recoverable. The fair value of the property and equipment, net of this community was determined using an income approach considering stabilized facility operating income, a discount rate of 8.5% and market capitalization rate of 7.5%. This impairment charge is primarily due to recurring net operating losses and lower than expected operating performance at the community and reflects the amount by which the carrying amount of these assets exceeded fair value. There were no impairments of long-lived assets for the three and nine months ended September 30, 2022. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses The following is a summary of accrued expenses as of September 30, 2023 and December 31, 2022 (in thousands): September 30, December 31, Accrued payroll and employee benefits $ 16,186 $ 13,795 Accrued interest (1) 8,645 9,374 Accrued taxes 9,000 6,939 Accrued professional fees 4,638 3,179 Accrued other expenses 3,063 3,657 Total accrued expenses $ 41,532 $ 36,944 __________ (1) Includes $2.3 million of deferred interest as of September 30, 2023 in consideration of the Loan Modification. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable Notes payable consists of the following (in thousands): Weighted average Maturity Date September 30, December 31, Fixed rate mortgage notes payable 4.5% 2024 to 2045 $ 493,436 $ 503,312 Fannie Mae 18 mortgage notes payable (1) — 31,991 Variable rate mortgage notes payable (2) 5.9% 2026 to 2029 137,320 137,652 Notes payable - insurance 6.4% 2024 1,865 1,724 Notes payable - other 8.5% 2023 1,619 1,619 Notes payable (5) 634,240 676,298 Deferred loan costs, net 4,782 5,267 Total notes payable, net of deferred loan costs $ 629,458 $ 671,031 Current portion of notes payable (3) 64,309 46,029 Long-term notes payable, net $ 565,149 $ 625,002 The following schedule summarizes our notes payable as of September 30, 2023 (in thousands): Principal payments due in: 2023 (3) (4) $ 57,312 2024 9,179 2025 40,107 2026 319,901 2027 3,597 Thereafter 204,144 Total notes payable, excluding deferred loan costs (5) $ 634,240 __________ (1) See “2020 Foreclosure Proceedings on Fannie Mae Loans (18 properties)” disclosure below. (2) See Note 13 for interest rate cap agreements on variable rate mortgage notes payable. (3) September 30, 2023 includes $55.8 million aggregate outstanding principal due under the loans currently in default with Protective Life Insurance Company. (4) See “Protective Life Insurance Company Non-recourse Mortgages” disclosure below. (5) Maturities reflect the terms of the Loan Modification Agreements executed in October 2023. As of September 30, 2023, our fixed rate mortgage notes bear interest rates ranging from 3.6% to 6.3%. Our variable rate mortgage notes are based on either one-month LIBOR or the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin. As of September 30, 2023, one-month LIBOR and one-month SOFR were 5.4% and 5.3% , respectively, and the applicable margins were 2.14% and 3.50%, respectively. As of September 30, 2023, we had property and equipment with a net carrying value of $590.2 million that is secured by outstanding notes payable. Fannie Mae Loan Modification On June 29, 2023, the Company entered into the Fannie Forbearance with Fannie Mae for all 37 of its encumbered communities, effective as of June 1, 2023 (“Fannie Forbearance Effective Date”). Under the Fannie Forbearance, Fannie Mae agreed to forbear on its remedies otherwise available under the community mortgages and Master Credit Facility (“MCF”) in connection with reduced debt service payments made by the Company during the forbearance period. In connection with the Fannie Forbearance, the Company made a $5.0 million principal payment in July 2023. The Fannie Forbearance was the first of a two-step process to modify all existing mortgage agreements with Fannie Mae by October 1, 2023 under a proposed loan modification agreement, as defined in the Fannie Forbearance (“Loan Modification Agreement”). T erms outlined in an agreed upon term sheet accompanying the Fannie Forbearance were included in the Loan Modification Agreements as the final step to modify the various 37 Fannie Mae community mortgages and MCF prior to the expiration of the Fannie Forbearance, which was subsequently extended to October 6, 2023. The Company entered into Loan Modification Agreements with Fannie Mae on October 2, 2023. The material terms of the Loan Modification Agreements, are as follows: • Maturities on 18 community mortgages, ranging from July 2024 to December 2026, have been extended to December 2026. The remaining 19 communities under the MCF have existing maturities in December 2028. • The Company is not required to make scheduled principal payments due under the 18 community mortgages and 19 communities under the MCF through the revised maturity date of December 2026 or 36 months from the Fannie Forbearance Effective Date, respectively. • The monthly interest rate will be reduced by a 1.5% weighted average on all 37 communities for 12 months from the Fannie Forbearance Effective Date and deferred (the “Fannie Interest Abatement Period”). • The Company is required to make a second principal payment of $5.0 million with respect to the Fannie Mae debt which is due on June 1, 2024, the one-year anniversary of the Fannie Forbearance Effective Date. • The Company provided a full corporate guaranty in the amount of $5.0 million related to the second principal payment of $5.0 million (the “Second Payment Guaranty”). This guaranty will fully expire upon payment of the second $5.0 million principal payment. • In addition to the Second Payment Guaranty above, the Company also provided a $10.0 million guaranty (the “Supplemental Fannie Guaranty”). After the expiration of 24 months from the Fannie Forbearance Effective Date, Sonida may discharge the full amount of the Supplemental Fannie Guaranty by making a $5.0 million principal payment to Fannie Mae on its community mortgages and/or its MCF. • In the first twelve months following the effective date of the Loan Modification Agreements, the Company is required to escrow 50% of Net Cash Flow less Debt Service (as defined in the Fannie mortgages and MCF) on an aggregate basis over all 37 Fannie Mae communities. The excess cash flow will be deposited into a lender-controlled capital expenditure reserve on a monthly basis to support the re-investment into certain communities, as mutually determined by the Company and Fannie Mae. The Company will be able to draw down such amounts on qualifying projects as the capital expenditures are incurred. The Company has determined that the Fannie loan modification is a troubled debt restructuring where the total cash outflows exceed the current carrying value of the debt. The Company incurred restructuring costs of $0.5 million and $0.7 million in the three and nine months ended September 30, 2023, respectively. These costs are included in deferred loan costs as of September 30, 2023 and will be amortized over the new lives of the Fannie Mae loans. Ally Loan Amendment On June 29, 2023, and concurrent with the Fannie Forbearance, Sonida executed a second amendment (“Ally Amendment”) to its Refinance Facility (“Ally Term Loan” or “Ally Term Loan Agreement”) and an amended guaranty (“Second Amended and Restated Limited Payment Guaranty”) with Ally Bank with terms as follows: • With respect to the Second Amended and Restated Limited Payment Guaranty, Ally will grant Sonida, as Guarantor, a waiver (“Limited Payment Guaranty Waiver” or “Waiver”) of the Liquid Assets minimum requirement of $13.0 million for a 12-month period. On July 1, 2024, a new Liquid Assets Threshold of $7.0 million will be effective, with such threshold increasing $1.0 million per month through the earlier of the release of the Waiver period or December 31, 2024. • During the Waiver period, a new and temporary Liquid Assets minimum threshold (“Limited Payment Guaranty Waiver Minimum Threshold”) will be established. The Limited Payment Guaranty Waiver Minimum Threshold is $6.0 million and is measured weekly. If breached, the “Excess Cash Flow Sweep” is triggered and all excess cash from the communities collateralizing the Ally Term Loan will be swept into an “Equity Cure Fund”, as defined in the Ally Term Loan Agreement. As provided for in the Ally Amendment, the Excess Cash Flow Sweep, if triggered, will cease upon the achievement of meeting or exceeding the Limited Payment Guaranty Waiver Minimum Threshold for four consecutive weeks. Consistent with the Ally Term Loan, all amounts held in escrow (i.e., Debt Service Escrow and IRC Reserve) will be included and combined with the Company’s unrestricted cash for purposes of measurement against the Limited Payment Guaranty Waiver Minimum Threshold. • During the Waiver period, the Company cannot avail itself to (1) its two potential $5.0 million draw-downs, (2) the release of its Debt Service Escrow Account and Waiver Principal Reserve Account (defined below), or (3) its interest rate margin reduction, all otherwise provided for in the Ally Term Loan, subject to achievement of certain financial performance metrics as more fully described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. • During the Waiver period, Ally will collect the equivalent of the monthly Ally Term Loan principal payment (as provided for in the Ally Term Loan Agreement) of approximately $117,000 through an Ally controlled escrow (“Waiver Principal Reserve Account”). • Upon meeting the Ally Term Loan’s Liquid Assets Threshold of $13.0 million, the Company may elect to remove the Waiver, with initial terms in the Ally Term Loan applicable again, except as described further below. • In July 2023, Sonida was required to fund $2.3 million to an interest rate cap reserve (“IRC Reserve”) held by Ally, which represents the quoted cost of a one-year interest rate cap on the full $88.1 million notional value of the Ally Term Loan at a 2.25% SOFR strike rate. The valuation date used for pricing the interest rate cap is November 30, 2023, the date on which the current interest rate cap expires. At each month-end subsequent to the effective date of the Ally Amendment and through its next required annual interest rate cap purchase under the Ally Term Loan, Sonida is required to fund an additional IRC Reserve amount such that the then estimated interest rate cap cost is fully escrowed. An additional $0.1 million was funded to the IRC Reserve during the three months ended September 30, 2023. Until the terms of the Limited Payment Guaranty Waiver have expired or have been met and elected at the Company’s discretion, the IRC Reserve is required to be replenished to its replacement cost. • To the extent either the Second Payment Guaranty or Supplemental Fannie Guaranty have not been discharged, any uncured monetary event of default under the Fannie Forbearance will constitute a cross default under the Ally Amendment, resulting in the immediate trigger of a full excess cash flow sweep for the communities collateralizing the Ally Term Loan as well as additional performance and liquidity reporting requirements. • Subsequent to the Waiver period, all funds in the Waiver Principal Reserve Account as well as any funds swept into the Equity Cure Fund will be released to the Company. • In consideration for the terms contemplated in the Ally Amendment and upon execution of the same, Sonida paid Ally an Amendment Fee of $0.1 million, which is included in deferred loan costs as of September 30, 2023 and will be amortized over the life of the Ally Term Loan. The foregoing description of the Fannie Forbearance, the Ally Amendment, Second Amended and Restated Limited Payment Guaranty, and the Loan Modification Agreements and the transactions contemplated thereby do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Fannie Forbearance, the Ally Amendment and Second Amended and Restated Limited Payment Guaranty which are filed as Exhibits 10.1, 10.2 and 10.3, respectively, and the Loan Modification Agreements, which are filed as Exhibits 10.4 and 10.5 to this Quarterly Report on Form 10-Q. See “ Item 6. Exhibits .” 2022 Ally Loan Refinance In March 2022, the Company completed the refinancing of certain existing mortgage debt (“Refinance Facility”) for ten of its communities. The Refinance Facility includes an initial term loan of $80.0 million. In addition, $10.0 million is available as delayed loans that can be borrowed upon achieving and maintaining certain financial covenant requirements and up to an additional uncommitted $40.0 million may be available to fund future growth initiatives. In addition, the Company provided a limited payment guaranty. In conjunction with the Refinance Facility, the Company incurred costs of $2.2 million in March 2022. These costs, net of amortization of $0.7 million, are included in deferred loan costs as of September 30, 2023. On December 13, 2022, the Company amended the Refinance Facility with Ally Bank by adding two additional subsidiaries of the Company as borrowers and mortgaging their communities. The amendment increased the principal by $8.1 million to $88.1 million. In conjunction with the amendment, the Company incurred costs of approximately $0.2 million in December 2022 that are included in deferred loan costs as of September 30, 2023 and will be deferred and amortized over the remaining life of the term loan. The Refinance Facility requires the financial performance of the twelve communities to meet certain financial covenants, including a minimum debt service coverage ratio and a minimum debt yield (as defined in the Loan Agreement) with a first measurement date as of June 30, 2022 and quarterly measurement dates thereafter. As of September 30, 2023, we were in compliance with the financial covenants. The debt service coverage financial covenant was waived entirely for the June 30, 2023 measurement date. We can provide no assurance that any financial covenants will be met in the future. The Refinance Facility required the Company to purchase and maintain an interest rate cap facility during the term of the Refinance Facility. To comply with the lender’s requirement, the Company entered into an interest rate cap agreement for an aggregate notional amount of $88.1 million in November 2022. Notes Payable - Insurance In December 2022, the Company renewed certain insurance policies and entered into a finance agreement totaling approximately $1.1 million. In May 2023, the Company entered into a finance agreement totaling approximately $2.3 million with a fixed interest rate of 6.50%. As of September 30, 2023, the Company had finance agreements totaling $1.9 million, with fixed interest rates ranging from 4.75% to 6.50%, and weighted average rate of 6.43%, with principal amounts being fully repaid over a seven-month term. 2020 Foreclosure Proceedings on Fannie Mae Loans (18 properties) The CARES Act, among other things, permitted borrowers with mortgages from Government Sponsored Enterprises who experienced a financial hardship related to the COVID-19 pandemic t o obtain forbearance of their loans for up to 90 days . During 2020, the Company entered into several loan forbearance agreements with Fannie Mae. In July 2020, t he Company elected not to pay $3.8 million on the loans for 18 properties as of that date as it initiated a process intended to transfer the operations and ownership of such properties to Fannie Mae. Therefore, the Company was in default on such loans. As a result of the events of default and receivership order obtained by Fannie Mae, the Company discontinued recognizing revenues and expenses related to the 18 properties effective August 1, 2020, which was the date of default. In addition, the Company concluded that it was no longer entitled to receive any existing accounts receivable or revenue related to the properties, that all amounts held in escrow by Fannie Mae were forfeited, and that the Company no longer had control of the properties in accordance with GAAP. Accordingly, the Company derecognized the net carrying value of the properties and related assets from the financial statements and recorded a loss from the forbearance. The Company continued to recognize the related debt and liabilities until the debt was formally released. Once the debts were formally released, the net carrying value of the debts were derecognized and a gain on extinguishment of debt was recognized. As of December 31, 2022, Fannie Mae had completed the transition of legal ownership of 16 of the Company's properties. In January 2023, the Company received notice that the foreclosure sales conducted by Fannie Mae had successfully transitioned the remaining two properties to new owners. This event relieved the Company of the existing Fannie Mae debt relating to the two properties. Accordingly, the Company recognized a total of $36.3 million for the gain on debt extinguishments for the nine months ended September 30, 2023. With the transition of these two remaining properties, the 18 total Fannie Mae properties’ foreclosure was complete. Protective Life Insurance Company Non-recourse Mortgages During 2023, the Company elected to not make principal and interest payments due under certain non-recourse mortgage loan agreements with Protective Life Insurance Company (“Protective Life”). As of September 30, 2023 there were three communities with an aggregate outstanding principal amount as of $55.8 million that were in default. The Company has presented the total amount due on these three communities as current notes payable on the condensed consolidated balance sheets. |
Securities Financing
Securities Financing | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Securities Financing | Securities Financing Series A Preferred Stock In November 2021, the Company issued 41,250 shares of Series A Preferred Stock. The Series A Preferred Stock is convertible outside of the Company's control and, in accordance with GAAP, is classified as mezzanine equity, outside the stockholders’ equity (deficit) section, on our condensed consolidated balance sheets. The Series A Preferred Stock has an 11% annual dividend calculated on the original investment of approximately $41.3 million accrued quarterly in arrears and compounded. Dividends are cumulative, and any declaration of dividends is at the discretion of the Company’s Board of Directors. If the Board does not declare a dividend in respect of any dividend payment date, the amount of such accrued and unpaid dividend is added to the liquidation preference and compounds quarterly thereafter. On March 31, 2023, June 30, 2023, and September 30, 2023, the Board did not declare dividends with respect to the Series A Preferred Stock, and accordingly, $1.2 million, $1.2 million, and $1.3 million, respectively, were added to the liquidation preference of the Series A Preferred Stock, effectively increasing the carrying value of the Series A Preferred Stock . On March 31, 2022, the Company declared a $1.1 million cash dividend on the Series A Preferred Stock which was paid in April 2022. On June 8, 2022, the Company declared a $1.1 million cash dividend on the Series A Preferred Stock, which was paid in June 2022. On September 30, 2022, the Board did not declare dividends with respect to the Series A Preferred Stock, and accordingly, $1.1 million was added to the liquidation preference of the Series A Preferred Stock. Conversant Equity Commitment In connection with the Fannie Forbearance and Ally Amendment signed on June 29, 2023, the Company entered into a $13.5 million equity commitment agreement (“Equity Commitment”) with Conversant Investors for a term of 18 months. The Equity Commitment had a commitment fee of $675,000 payable through the issuance of 67,500 shares of common stock of the Company. The commitment fee shares were issued to Conversant on June 29, 2023. Sonida has the right, but not the obligation, to utilize Conversant’s equity commitment and may draw on the commitment in whole or in part. The Company made an equity draw in July 2023 of $6.0 million and issued 600,000 shares of common stock to Conversant. The Company used $5.0 million of the proceeds to make unscheduled principal payments on two of its Fannie Mae loan balances. On November 1, 2023, the Company made an equity draw of $4.0 million and issued 400,000 shares of common stock to the Conversant Investors. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue for the three and nine months ended September 30, 2023 and 2022 is comprised of the following components (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Housing and support services $ 57,887 $ 51,703 $ 167,527 $ 151,854 Community fees 428 481 1,354 1,410 Ancillary services 288 301 807 838 Other operating revenue (1) 514 — 2,995 1,213 Resident revenue 59,117 52,485 172,683 155,315 Management fees 569 608 1,605 1,836 Managed community reimbursement revenue 4,989 7,694 15,314 21,757 Total revenues $ 64,675 $ 60,787 $ 189,602 $ 178,908 __________ (1) Other operating revenue consists of funds received from state departments due to financial distress impacts of COVID-19. The Company intends to pursue additional funding that may become available in the future, but there is no guarantee of qualifying for, or receiving, any additional relief funds. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net income (loss) per share (“EPS”) is calculated by dividing net earnings by the weighted average number of common shares outstanding during the period. Potentially dilutive securities include warrants, Series A Preferred Stock, shares of restricted stock, restricted stock units, and former employee stock options. Diluted EPS reflects the assumed exercise or conversion of all dilutive securities. The Series A Preferred Stock is considered participating securities for the purposes of the Company's EPS calculation. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except for per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Basic net loss per common share calculation: Net loss $ (18,411) $ (13,739) $ (6,478) $ (37,827) Less: Dividends on Series A Preferred Stock — — — (2,267) Less: Undeclared dividends on Series A Preferred Stock (1,265) (1,134) (3,693) (1,134) Net loss attributable to common stockholders $ (19,676) $ (14,873) $ (10,171) $ (41,228) Weighted average shares outstanding — basic 7,050 6,364 6,602 6,357 Basic net loss per share $ (2.79) $ (2.34) $ (1.54) $ (6.49) Diluted net loss per common share calculation: Net loss attributable to common stockholders $ (19,676) $ (14,873) $ (10,171) $ (41,228) Weighted average shares outstanding — diluted 7,050 6,364 6,602 6,357 Diluted net loss per share $ (2.79) $ (2.34) $ (1.54) $ (6.49) The following weighted-average shares of securities were not included in the computation of diluted net loss per common share as their effect would have been antidilutive: Three Months Ended September 30, Nine Months Ended September 30, (shares in thousands) 2023 2022 2023 2022 Warrants 1,031 1,031 1,031 1,031 Series A Preferred Stock (if converted) 1,165 1,045 1,135 1,036 Restricted stock awards 725 392 641 380 Restricted stock units 3 9 1 4 Stock options 10 10 10 10 Total 2,934 2,487 2,818 2,461 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation At the Company's annual meeting on June 15, 2023, the Company's stockholders approved an amendment to the 2019 Omnibus Stock and Incentive Plan, as amended (the “2019 Plan”), to add an additional 500,000 shares of common stock that the Company may issue under the 2019 Plan and removed the limitation of the maximum number of shares of common stock with respect to which awards may be granted to any one participant during any calendar year. During the nine months ended September 30, 2023, the Company granted restricted stock awards under the 2019 Plan as follows: (in thousands, except weighted average amount) Restricted Stock Awards Weighted Average Grant Date Fair Value Per Share Total Grant Date Fair Value Nine months ended September 30, 2023 447 $ 7.80 3,486 During the nine months ended September 30, 2023, the Company granted 3,000 time-based restricted stock units under the Company’s 2019 Plan to a certain non-employee director at a grant date fair value of $8.80 per share that are scheduled to vest on the first anniversary of the grant date. The Company recognized $0.6 million and $2.1 million in stock-based compensation expense for the three and nine months ended September 30, 2023, respectively. The Company recognized $(0.6) million and $3.5 million in stock-based compensation expense for the three and nine months ended September 30, 2022, respectively. The negative expense for the three months ended September 30, 2022 is due to forfeiture credits as a result of executive personnel changes in September 2022. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies As of September 30, 2023, the Company had contractual commitments of $3.6 million related to future renovations and technology enhancements to our communities, which are expected to be substantially expended during 2023. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of September 30, 2023 , Conversant Investors and affiliates beneficially owned approximately 59% of our outstanding shares of common sto ck (inclusive of common stock issuable upon conversion of outstanding Series A Preferred Stock and outstanding warrants). O n June 29, 2023, the Company entered into a $13.5 million equity commitment agreement with Conversant. The Company made equity draws of $6.0 million in July 2023 and $4.0 million in November 2023 against the equity commitment. See “ Note 7–Securities Financing ” and “ Note 15–Subsequent Events |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company uses interest rate cap arrangements with financial institutions to manage exposure to interest rate changes for loans that utilize floating interest rates. As of September 30, 2023, we had interest rate cap agreements with an aggregate notional value of $138.4 million that were entered into during 2022. The fair value of these derivative assets as of September 30, 2023 was $1.0 million which was determined using significant observable inputs (Level 2), including quantitative models that utilize multiple market inputs to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions, and third-party pricing services. Financial Instruments Not Reported at Fair Value For those financial instruments not carried at fair value, the carrying amount and estimated fair values of our financial assets and liabilities were as follows as of September 30, 2023 and December 31, 2022 (in thousands): September 30, 2023 December 31, 2022 Carrying Fair Value Carrying Fair Value Cash and cash equivalents $ 3,562 $ 3,562 $ 16,913 $ 16,913 Restricted cash 17,590 $ 17,590 13,829 13,829 Notes payable, excluding deferred loan costs $ 634,240 $ 511,450 $ 676,298 $ 638,485 We believe the carrying amount of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable, and accrued expenses approximate fair value due to their short-term nature. The fair value of notes payable, excluding deferred loan costs, is estimated using discounted cash flow analysis, based on current incremental borrowing rates for similar types of borrowing arrangements, which represent Level 2 inputs as defined in ASC 820 , Fair Value Measurement. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis The Company adjusts the carrying amount of certain non-financial assets to fair value on a non-recurring basis when they are impaire d. There were no impairment losses for the nine months ended September 30, 2022. During the three and nine months ended September 30, 2023, the Company recorded non-cash impairment charges of $6.0 million to “Property and equipment, net.” The fair value of the impaired assets was $7.3 million as of September 30, 2023. The fair value of the property and equipment, net was primarily determined utilizing the income approach considering stabilized facility operating income, a discount rate of 8.5%, and market capitalization rates of 7.5%. |
Derivatives and Hedging
Derivatives and Hedging | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | Derivatives and Hedging The Company uses derivatives as part of its overall strategy to manage our exposure to market risks associated with the fluctuations in interest rates. We are also required to enter into interest rate derivative instruments in compliance with certain debt agreements. We do not enter into derivative financial instruments for trading or speculative purposes. On March 1, 2022, the Company entered into an interest rate cap transaction for an aggregate notional amount of $50.3 million to reduce exposure to interest rate fluctuations associated with certain of our variable mortgage notes payable. The interest rate cap agreement has a 24-month term and effectively caps LIBOR at 4.00% from March 1, 2022 through March 1, 2024 with respect to such floating rate indebtedness. In the event LIBOR is less than the capped rate, we will pay interest at the lower LIBOR rate plus the applicable margin. In the event LIBOR is higher than the capped rate, we will only pay interest at the capped rate of 4.00% plus the applicable margin. The interest rate cap is not designated as a cash flow hedge under ASC 815-20, Derivatives - Hedging, therefore, all changes in the fair value of the instrument are captured as a component of interest expense in our condensed consolidated statements of operations. On November 30, 2022, in order to comply with the lender’s requirements under the Ally Bank Refinance Facility, the Company entered into a SOFR-based interest rate cap transaction for an aggregate notional amount of $88.1 million at a cost of $2.4 million. The interest rate cap agreement expires on November 30, 2023 and effectively caps the interest rate of the SOFR portion of the Ally Bank debt at 2.25%. The interest rate cap is not designated as a hedge under ASC 815-20, “Derivatives - Hedging,” therefore, all changes in the fair value of the instrument are included as a component of interest expense in our condensed consolidated statements of operations. As of September 30, 2023, all of our variable-rate debt obligations were covered by interest rate cap transactions. The following table presents the fair values of derivative assets and liabilities in the condensed consolidated balance sheets (in thousands): September 30, 2023 Derivative Asset Derivative Liability Notional Amount Fair Value Notional Amount Fair Value Interest rate cap (LIBOR-based) $ 50,260 $ 342 $ — $ — Interest rate cap (SOFR-based) 88,125 684 — — Total derivatives, net $ 138,385 $ 1,026 $ — $ — December 31, 2022 Derivative Asset Derivative Liability Notional Amount Fair Value Notional Amount Fair Value Interest rate cap (LIBOR-based) $ 50,260 $ 542 $ — $ — Interest rate cap (SOFR-based) 88,125 2,180 — — Total derivatives, net $ 138,385 $ 2,722 $ — $ — The following table presents the effect of the derivative instruments on the condensed consolidated statements of operations (in thousands): Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Derivative not designated as hedge Interest rate cap (Gain) loss on derivatives not designated as hedges included in interest expense $ (855) $ 251 $ 1,978 $ 206 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Fannie Mae Loan Modification Agreement The Company entered into Loan Modification Agreements with Fannie Mae on October 2, 2023. See “ Note 6–Notes Payable .” Equity Commitment Draw and Principal Payments Subsequent to September 30, 2023, the Company elected to draw down an additional $4.0 million of the Equity Commitment in October, which was received on November 1, 2023. The Company issued 400,000 shares of common stock to Conversant on November 1, 2023. Employee Retention Credit The Company filed for an ERC with the Internal Revenue Service after September 30, 2023. The ERC is a tax credit for businesses that had employees and were affected during the COVID-19 pandemic. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Reclassifications | ReclassificationsCertain amounts previously reflected in the prior year condensed consolidated financial statements have been reclassified to conform to our September 30, 2023 presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. These estimates include such items related to the accounting for: income taxes, including assessments of probabilities of realization of income tax benefits; impairment of long-lived assets, including applicable cash flow projections, holding periods and fair value evaluations; self-insurance liabilities and expense; stock-based compensation; and depreciation and amortization including determination of estimated useful lives. Actual results could differ from those estimates. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted CashThe Company considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents. The Company has deposits in banks that exceed Federal Deposit Insurance Corporation insurance limits. Management believes that credit risk related to these deposits is minimal. Restricted cash consists of reserve accounts for property insurance, real estate taxes, capital expenditures, derivatives, and debt service required by certain loan agreements. In addition, restricted cash includes deposits required by certain counterparties as collateral pursuant to letters of credit which must remain so long as the letters of credit are outstanding, which are subject to renewal annually |
Long-Lived Assets | Long-Lived Assets Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets. At each balance sheet date, the Company reviews the carrying value of its property and equipment to determine if facts and circumstances suggest that they may be impaired or that the depreciation period may need to be changed. The Company considers internal factors such as net operating losses along with external factors relating to each asset, including contract changes, local market developments, and other publicly available information to determine whether impairment indicators exist. If an indicator of impairment is identified, recoverability of an asset group is assessed by comparing its carrying amount to the estimated future undiscounted net cash flows expected to be generated by the asset group through operation or disposition, calculated utilizing the lowest level of identifiable cash flows. If this comparison indicates that the carrying amount of an asset group is not recoverable, we estimate fair value of the asset group and record an impairment loss when the carrying amount exceeds fair value. The Company recognized a non-cash impairment charge of $6.0 million to its “Property and equipment, net” during the three and nine months ended September 30, 2023, which related to one owned community. There were no impairments on long-lived assets during the nine months ended September 30, 2022. In evaluating our long-lived assets for impairment, we undergo continuous evaluations of property level performance and real estate trends, and management makes several estimates and assumptions, including, but not limited to, the projected date of disposition, estimated sales price, and future cash flows of each property during our estimated holding period. If our analysis or assumptions regarding the projected cash flows expected to result from the use and eventual disposition of our properties change, we incur additional costs and expenses during the holding period, or our expected hold periods change, we may incur future impairment losses. |
Revenue Recognition | Revenue Recognition Resident revenue consists of fees for basic housing and certain support services and fees associated with additional housing and expanded support requirements such as assisted living care, memory care, and ancillary services. Basic housing and certain support services revenue is recorded when services are rendered, and amounts billed are due from residents in the period in which the rental and other services are provided. Residency agreements are generally short term in nature with durations of one year or less and are typically terminable by either party, under certain circumstances, upon providing 30 days’ notice, unless state law provides otherwise, with resident fees billed monthly in advance. Revenue for certain ancillary services is recognized as services are provided, and includes fees for services such as medication management, daily living activities, beautician/barber, laundry, television, guest meals, pets, and parking, which are generally billed monthly in arrears. Other operating revenue consists of state relief funds received from various states due to the financial distress impacts of COVID-19 (“State Relief Funds”). The Company’s senior housing communities have residency agreements that generally require the resident to pay a community fee and other amounts prior to moving into the community, which are initially recorded by the Company as deferred revenue. The Company had contract liabilities for deferred fees paid by our residents prior to the month housing and support services were to be provided totaling approximately $3.8 million and $3.4 million, respectively, which is reported as deferred income within current liabilities of the Company’s condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022. Revenues from the Medicaid program accounted for approximately 11.4% and 10.1% of the Company’s revenue in the three months ended September 30, 2023 and 2022, respectively. Revenues from the Medicaid program accounted for approximately 10.0% and 9.9% of the Company’s revenue in the nine months ended September 30, 2023 and 2022, respectively. During the three months ended September 30, 2023 and 2022, 23 and 24, respectively, of the Company’s communities were providers of services under the Medicaid program, and during the nine months ended September 30, 2023 and 2022, 24 and 28, respectively, of the Company’s communities were providers of services under the Medicaid program. Accordingly, these communities were entitled to reimbursement under the Medicaid program at established rates that were lower than private pay rates. Resident revenues for Medicaid residents were recorded at the reimbursement rates as the rates were set prospectively by the applicable state upon the filing of an annual cost report. None of the Company’s communities were providers of services under the Medicare program during the three and nine months ended September 30, 2023 and 2022. Laws and regulations governing the Medicaid program are complex and subject to interpretation. The Company believes that it is in compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing that would have a material effect on its Condensed Consolidated Financial Statements. While no such regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation as well as significant regulatory action including fines, penalties, and exclusion from the Medicaid program. The Company has management agreements whereby it manages certain communities on behalf of third-party owners under contracts that provide for periodic management fee payments to the Company. The Company has determined that all community management activities are a single performance obligation, which is satisfied over time as the services are rendered. The Company’s estimate of the transaction price for management services also includes the amount of reimbursement due from the owners of the communities for services provided and related costs incurred. Such revenue is included in “managed community reimbursement revenue” on the Company’s condensed consolidated statements of operations. The related costs are included in “managed community reimbursement expense” on the Company’s condensed consolidated statements of operations. See “ Note 8–Revenue .” The Company received approximately $9.1 million in the nine months ended September 30, 2022 through grants from the Public Health and Social Services Emergency Fund’s (the “Provider Relief Fund”) Phase 4 General Distribution, which was expanded by the CARES Act to provide grants or other funding mechanisms to eligible healthcare providers for healthcare-related or lost revenues attributable to COVID-19. For the three and nine months ended September 30, 2023, the Company received approximately $0.5 million and $2.9 million, respectively, in various State Relief Funds received from state departments due to financial distress impacts of COVID-19. For the nine months ended September 30, 2022, the Company received approximately $1.2 million in various State Relief Funds from state departments due to financial distress impacts of COVID-19. For the three months ended September 30, 2022, no grants were received from the state departments. The Company recognizes income for government grants on a systematic and rational basis over the periods in which the Company recognizes the related expenses or loss of revenue for which the grants are intended to compensate when there is reasonable assurance that the Company will comply with the applicable terms and conditions of the grant and there is reasonable assurance that the grant will be received. The Phase 4 Provider Relief Funds received from the Federal Government were recorded in “other income (expense), net” and the State Relief Funds were recorded as “resident revenue – other operating revenue” in the Company’s condensed consolidated financial statements and notes thereto. |
Credit Risk and Allowance for Doubtful Accounts | Credit Risk and Allowance for Doubtful Accounts The Company’s resident accounts receivable are generally due within 30 days after the date billed. Accounts receivable are reported net of an allowance for doubtful account s of $5.1 million and $5.9 million as of September 30, 2023 and December 31, 2022, respectively, and represent the Company’s estimate of the amount that ultimately will be collected. The adequacy of the Company’s allowance for doubtful accounts is reviewed on an ongoing basis, using historical payment trends, write-off experience, analyses of receivable portfolios by payor source and aging of receivables, as well as a review of specific accounts, and adjustments are made to the allowance, as necessary. Credit losses on resident receivables have historically been within management’s estimates, and management believes that the allowance for doubtful accounts adequately provides for expected losses. |
Concentration of Credit Risk and Business Risk | Concentration of Credit Risk and Business Risk Substantially all of our revenues are derived from senior living communities we own and senior living communities that we manage. Senior living operations are particularly sensitive to adverse economic, social and competitive conditions and trends, including the effects of the COVID-19 pandemic, which has adversely affected, and may continue to adversely affect, our business, financial condition, and results of operations. |
Self-Insurance Liability Accruals | Self-Insurance Liability Accruals The Company offers full-time employees an option to participate in its health and dental plans. The Company is self-insured up to certain limits and is insured if claims in excess of these limits are incurred. The cost of employee health and dental benefits, net of employee contributions, is shared between the corporate office and the senior housing communities based on the respective number of plan participants. Funds collected are used to pay the actual program costs, including estimated annual claims, third-party administrative fees, network provider fees, communication costs, and other related administrative costs incurred by the plans. Claims are paid as they are submitted to the Company’s third-party administrator. The Company records a liability for outstanding claims and claims that have been incurred but not yet reported. This liability is based on the historical claim reporting lag and payment trends of health insurance claims. Management believes that the recorded liabilities and reserves established for outstanding losses and expenses are adequate to cover the ultimate cost of losses and expenses incurred as of September 30, 2023 . It is possible that actual claims and expenses may differ from established reserves. Any subsequent changes in estimates are recorded in the period in which they are determined. The Company uses a combination of insurance and self-insurance for workers’ compensation. Determining the reserve for workers’ compensation losses and costs that the Company has incurred as of the end of a reporting period involves significant judgments based on projected future events, including among other factors, potential settlements for pending claims, known incidents which may result in claims, estimates of incurred but not yet reported claims, changes in insurance premiums and estimated litigation costs. The Company regularly adjusts these estimates to reflect changes in the foregoing factors. However, since this reserve is based on estimates, it is possible the actual expenses incurred may differ from the amounts reserved. Any subsequent changes in estimates are recorded in the period in which they are determined. |
Income Taxes | Income Taxes Income taxes are computed using the asset and liability method and current income taxes are recorded based on amounts refundable or payable in the current year. The effective tax rates for the three and nine months ended September 30, 2023 and 2022 differ from the statutory tax rates due to state income taxes, permanent tax differences, and changes in the deferred tax asset valuation allowance. Deferred income taxes are recorded based on the estimated future tax effects of loss carryforwards and temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which the Company expects those carryforwards and temporary differences to be recovered or settled. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. For the tax year ended December 31, 2022, the Company had a three-year cumulative net operating loss for its operations and is subject to annual operating loss utilization limits and accordingly, has provided a full valuation allowance on its federal and state net deferred tax assets as of December 31, 2022 and September 30, 2023. The valuation allowance reduces the Company’s net deferred tax assets to the amount that is “more likely than not” (i.e., a greater than 50% likelihood) to be realized. However, in the event that the Company were to ultimately determine that it would be more likely than not that the Company would realize the benefit of deferred tax assets in the future in excess of their net recorded amounts, adjustments to deferred tax assets would increase net income in the period such determination was made. The benefits of the net deferred tax assets might not be realized if actual results differ from expectations. The Company evaluates uncertain tax positions through consideration of accounting and reporting guidance on criteria, measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better financial statement comparability among different companies. The Company is required to recognize a tax benefit in its financial statements for an uncertain tax position only if management’s assessment is that its position is “more likely than not” (i.e., a greater than 50 percent likelihood) to be upheld on audit based only on the technical merits of the tax position. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as income tax expense. |
Redeemable Preferred Stock | Redeemable Preferred Stock The Company's Series A Preferred Stock is convertible outside of our control and in accordance with ASC 480-10-S99-3A is classified as mezzanine equity. The Series A Preferred Stock was initially recorded at fair value upon issuance, net of issuance costs and discounts. The holders, or Conversant Dallas Parkway (A) LP and Conversant Dallas Parkway (B) LP (together, “Conversant” or the “Conversant Investors”), of Series A Preferred Stock are entitled to vote with the holders of common stock on all matters submitted to a vote of stockholders of the Company. As such, the Conversant Investors, in combination with their common stock ownership as of September 30, 2023 and December 31, 2022, have voting rights in excess of 50% of the Company’s total voting stock. It is deemed probable that the Series A Preferred Stock could be redeemed for cash by the Conversant Investors, and as such, the Series A Preferred Stock is required to be remeasured and adjusted to its maximum redemption value at the end of each reporting period. However, to the extent that the maximum redemption value of the Series A Preferred Stock does not exceed the fair value of the shares at the date of issuance, the shares are not adjusted below the fair value at the date of issuance. As of September 30, 2023 and December 31, 2022, the Series A Preferred Stock is carried at the maximum redemption value. The Series A Preferred Stock does not have a maturity date and therefore is considered perpetual. Dividends on redeemable Series A Preferred Stock are recorded to retained earnings or additional paid-in capital if retained earnings is an accumulated deficit. Dividends are cumulative, and any declaration of dividends is at the discretion of the Company’s Board of Directors (the “Board”). If the Board does not declare a dividend in respect of any dividend payment date, the amount of such accrued and unpaid dividend is added to the liquidation preference of the Series A Preferred Stock and compounds quarterly thereafter. During the nine |
Derivative Instruments | Derivative Instruments We use derivative instruments as part of our overall strategy to manage our exposure to market risks associated with the fluctuations in interest rates. We are also required to enter into interest rate derivative instruments in compliance with certain debt agreements. We regularly monitor the financial stability and credit standing of the counterparties to our derivative instruments. We do not enter into derivative financial instruments for trading or speculative purposes. We record all derivatives at fair value. As of September 30, 2023, our derivative instruments consisted of interest rate caps that were not designated as hedge instruments. Changes in fair value of undesignated hedge instruments are recorded in current period earnings as interest expense. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share The Company uses the two-class method to compute net income (loss) per common share because the Company has issued securities (Series A Preferred Stock) that entitle the holder to participate in dividends and earnings of the Company. Under this method, net income is reduced by the amount of any dividends earned during the period. The remaining earnings (undistributed earnings) are allocated based on the weighted-average shares outstanding of common stock and Series A Preferred Stock (on an if-converted basis) to the extent that each preferred security may share in earnings as if all of the earnings for the period had been distributed. The total earnings allocated to common stock is then divided by the number of outstanding shares to which the earnings are allocated to determine the earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the Series A Preferred Stock have no obligation to fund losses. |
Segment Reporting | Segment Reporting The Company evaluates the performance and allocates resources of its senior living communities based on current operations and market assessments on a property-by-property basis. The Company does not have a concentration of operations geographically or by product or service as its management functions are integrated at the property level. The Company has determined that its operating units meet the criteria in ASC Topic 280, Segment Reporting , to be aggregated into one reporting segment. As such, the Company operates in one segment. |
Troubled Debt Restructurings | Troubled Debt RestructuringsThe Company assesses all loan modifications with existing lenders to determine if it is a troubled debt restructuring. A loan that has been modified or renewed is considered to be a troubled debt restructuring when two conditions are met: (1) the borrower is experiencing financial difficulty and (2) concessions are made for the borrower’s benefit that would not otherwise be considered for a borrower or a transaction with similar credit risk characteristics. These concessions may include modifications of the terms of the debt such as deferral of payments, extension of maturity, reduction of principal balance, reduction of the stated interest rate other than normal market rate adjustments, or a combination of these concessions. The Company compares the total cash outflows of the restructured debt to the carrying amount of the debt prior to the restructure. If cash outflows of the restructured debt are less than the carrying amount, a gain is recognized and the carrying amount of the debt is adjusted. If cash outflows of the restructured debt are more than the carrying amount, no gain or loss is recognized and the carrying amount of the debt is not adjusted. The change in cash outflows resulting from the restructuring is accounted for on a prospective basis by calculating a new effective interest rate on the restructured debt and applying it to recognize lower interest expense over the remaining term. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements Allowance for Doubtful Accounts In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. Current GAAP requires an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. ASU 2016-13 replaces the current incurred loss methodology for credit losses and removes the thresholds that companies apply to measure credit losses on financial statements measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. The determination of the allowance for credit losses under the new standard would typically be based on evaluation of a number of factors, including, but not limited to, general economic conditions, payment status, historical collection patterns and loss experience, financial strength of the borrower, and nature, extent and value of the underlying collateral. For smaller reporting companies, ASU 2016-13 is effective for fiscal years and for interim periods within those fiscal years beginning after December 15, 2022. It requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. The Company adopted ASU 2016-13 on January 1, 2023. The effect of the adoption had an immaterial impact on our condensed consolidated financial statements. Reference Rate Reform |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents and Restricted Cash | The following table sets forth our cash, cash equivalents, and restricted cash (in thousands): September 30, December 31, Cash and cash equivalents $ 3,562 $ 16,913 Restricted cash: Property tax and insurance reserves 7,495 6,184 Lender reserves 4,237 1,500 Capital expenditures reserves 1,834 2,034 Deposits pursuant to outstanding letters of credit 4,024 4,111 Total restricted cash 17,590 13,829 Total cash, cash equivalents, and restricted cash $ 21,152 $ 30,742 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Net Property and Equipment and Leasehold Improvements | As of September 30, 2023 and December 31, 2022, property and equipment, net, which include assets under finance leases, consist of the following (in thousands): Asset Lives September 30, December 31, Land $ 47,322 $ 47,476 Land improvements 5 to 20 years 20,377 20,053 Buildings and building improvements 10 to 40 years 841,206 842,854 Furniture and equipment 5 to 10 years 57,031 53,236 Automobiles 5 to 7 years 2,686 2,704 Assets under financing leases and leasehold improvements (1) 4,279 1,899 Construction in progress 704 666 Total property and equipment 973,605 968,888 Less accumulated depreciation and amortization (379,489) (353,134) Total property and equipment, net $ 594,116 $ 615,754 __________ (1) Leasehold improvements are amortized over the shorter of the useful life of the asset or the remaining lease term. Assets under financing leases e $0.1 million and $0.2 million of financing lease right-of-use assets as of September 30, 2023 and December 31, 2022, respectively. |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | The following is a summary of accrued expenses as of September 30, 2023 and December 31, 2022 (in thousands): September 30, December 31, Accrued payroll and employee benefits $ 16,186 $ 13,795 Accrued interest (1) 8,645 9,374 Accrued taxes 9,000 6,939 Accrued professional fees 4,638 3,179 Accrued other expenses 3,063 3,657 Total accrued expenses $ 41,532 $ 36,944 __________ (1) Includes $2.3 million of deferred interest as of September 30, 2023 in consideration of the Loan Modification. |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consists of the following (in thousands): Weighted average Maturity Date September 30, December 31, Fixed rate mortgage notes payable 4.5% 2024 to 2045 $ 493,436 $ 503,312 Fannie Mae 18 mortgage notes payable (1) — 31,991 Variable rate mortgage notes payable (2) 5.9% 2026 to 2029 137,320 137,652 Notes payable - insurance 6.4% 2024 1,865 1,724 Notes payable - other 8.5% 2023 1,619 1,619 Notes payable (5) 634,240 676,298 Deferred loan costs, net 4,782 5,267 Total notes payable, net of deferred loan costs $ 629,458 $ 671,031 Current portion of notes payable (3) 64,309 46,029 Long-term notes payable, net $ 565,149 $ 625,002 |
Summary of Aggregate Scheduled Maturities of Notes Payable | The following schedule summarizes our notes payable as of September 30, 2023 (in thousands): Principal payments due in: 2023 (3) (4) $ 57,312 2024 9,179 2025 40,107 2026 319,901 2027 3,597 Thereafter 204,144 Total notes payable, excluding deferred loan costs (5) $ 634,240 __________ (1) See “2020 Foreclosure Proceedings on Fannie Mae Loans (18 properties)” disclosure below. (2) See Note 13 for interest rate cap agreements on variable rate mortgage notes payable. (3) September 30, 2023 includes $55.8 million aggregate outstanding principal due under the loans currently in default with Protective Life Insurance Company. (4) See “Protective Life Insurance Company Non-recourse Mortgages” disclosure below. (5) Maturities reflect the terms of the Loan Modification Agreements executed in October 2023. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenue for the three and nine months ended September 30, 2023 and 2022 is comprised of the following components (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Housing and support services $ 57,887 $ 51,703 $ 167,527 $ 151,854 Community fees 428 481 1,354 1,410 Ancillary services 288 301 807 838 Other operating revenue (1) 514 — 2,995 1,213 Resident revenue 59,117 52,485 172,683 155,315 Management fees 569 608 1,605 1,836 Managed community reimbursement revenue 4,989 7,694 15,314 21,757 Total revenues $ 64,675 $ 60,787 $ 189,602 $ 178,908 __________ |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except for per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Basic net loss per common share calculation: Net loss $ (18,411) $ (13,739) $ (6,478) $ (37,827) Less: Dividends on Series A Preferred Stock — — — (2,267) Less: Undeclared dividends on Series A Preferred Stock (1,265) (1,134) (3,693) (1,134) Net loss attributable to common stockholders $ (19,676) $ (14,873) $ (10,171) $ (41,228) Weighted average shares outstanding — basic 7,050 6,364 6,602 6,357 Basic net loss per share $ (2.79) $ (2.34) $ (1.54) $ (6.49) Diluted net loss per common share calculation: Net loss attributable to common stockholders $ (19,676) $ (14,873) $ (10,171) $ (41,228) Weighted average shares outstanding — diluted 7,050 6,364 6,602 6,357 Diluted net loss per share $ (2.79) $ (2.34) $ (1.54) $ (6.49) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following weighted-average shares of securities were not included in the computation of diluted net loss per common share as their effect would have been antidilutive: Three Months Ended September 30, Nine Months Ended September 30, (shares in thousands) 2023 2022 2023 2022 Warrants 1,031 1,031 1,031 1,031 Series A Preferred Stock (if converted) 1,165 1,045 1,135 1,036 Restricted stock awards 725 392 641 380 Restricted stock units 3 9 1 4 Stock options 10 10 10 10 Total 2,934 2,487 2,818 2,461 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Grants of Market-Based Restricted Stock Awards | During the nine months ended September 30, 2023, the Company granted restricted stock awards under the 2019 Plan as follows: (in thousands, except weighted average amount) Restricted Stock Awards Weighted Average Grant Date Fair Value Per Share Total Grant Date Fair Value Nine months ended September 30, 2023 447 $ 7.80 3,486 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Carrying Amounts and Fair Values of Financial Instruments | For those financial instruments not carried at fair value, the carrying amount and estimated fair values of our financial assets and liabilities were as follows as of September 30, 2023 and December 31, 2022 (in thousands): September 30, 2023 December 31, 2022 Carrying Fair Value Carrying Fair Value Cash and cash equivalents $ 3,562 $ 3,562 $ 16,913 $ 16,913 Restricted cash 17,590 $ 17,590 13,829 13,829 Notes payable, excluding deferred loan costs $ 634,240 $ 511,450 $ 676,298 $ 638,485 |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in the Balance Sheets | The following table presents the fair values of derivative assets and liabilities in the condensed consolidated balance sheets (in thousands): September 30, 2023 Derivative Asset Derivative Liability Notional Amount Fair Value Notional Amount Fair Value Interest rate cap (LIBOR-based) $ 50,260 $ 342 $ — $ — Interest rate cap (SOFR-based) 88,125 684 — — Total derivatives, net $ 138,385 $ 1,026 $ — $ — December 31, 2022 Derivative Asset Derivative Liability Notional Amount Fair Value Notional Amount Fair Value Interest rate cap (LIBOR-based) $ 50,260 $ 542 $ — $ — Interest rate cap (SOFR-based) 88,125 2,180 — — Total derivatives, net $ 138,385 $ 2,722 $ — $ — |
Schedule of Derivative Instruments in the Statement of Operations | The following table presents the effect of the derivative instruments on the condensed consolidated statements of operations (in thousands): Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Derivative not designated as hedge Interest rate cap (Gain) loss on derivatives not designated as hedges included in interest expense $ (855) $ 251 $ 1,978 $ 206 |
Basis of Presentation (Details)
Basis of Presentation (Details) resident in Thousands | 1 Months Ended | ||
Aug. 31, 2023 property | Sep. 30, 2023 seniorHousingCommunity state resident | Dec. 31, 2022 property | |
Real Estate Properties [Line Items] | |||
Number of senior housing communities | 71 | ||
Number of states with senior housing communities | state | 18 | ||
Aggregate capacity of residents in senior housing communities | resident | 8 | ||
Number of properties no longer operated | property | 2 | ||
Number of properties sold | property | 1 | ||
Managed On Behalf Of Third Parties | |||
Real Estate Properties [Line Items] | |||
Number of senior housing communities | 10 | ||
Wholly Owned Properties | |||
Real Estate Properties [Line Items] | |||
Number of senior housing communities | 61 |
Going Concern Uncertainty and_2
Going Concern Uncertainty and Related Strategic Cash Preservation Initiatives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Jun. 29, 2023 | |
Debt Instrument [Line Items] | ||||
Proceeds of state grants | $ 0.5 | $ 2.9 | ||
Mortgage Debt | ||||
Debt Instrument [Line Items] | ||||
Purchase commitment value | $ 13.5 | |||
Refinance Facility | Mortgage Debt | Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Commitment period | 18 months | |||
A&R Investment Agreement | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 25 | $ 25 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Cash and Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Cash and cash equivalents | $ 3,562 | $ 16,913 | ||
Restricted cash | 17,590 | 13,829 | ||
Total cash, cash equivalents, and restricted cash | 21,152 | 30,742 | $ 40,816 | $ 92,876 |
Property tax and insurance reserves | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | 7,495 | 6,184 | ||
Lender reserves | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | 4,237 | 1,500 | ||
Capital expenditures reserves | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | 1,834 | 2,034 | ||
Deposits pursuant to outstanding letters of credit | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Restricted cash | $ 4,024 | $ 4,111 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Narrative (Detail) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) seniorHousingCommunity property | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) seniorHousingCommunity | Sep. 30, 2023 USD ($) seniorHousingCommunity property segment | Sep. 30, 2022 USD ($) seniorHousingCommunity | Dec. 31, 2022 USD ($) | |
Accounting Policies [Line Items] | ||||||||
Non-cash impairment charge on property and equipment | $ 6,000,000 | $ 6,000,000 | $ 0 | |||||
Number of communities | seniorHousingCommunity | 23 | 24 | 24 | 28 | ||||
Grants receivable | $ 9,100,000 | $ 9,100,000 | $ 9,100,000 | |||||
Grants receivables | $ 500,000 | $ 0 | $ 2,900,000 | $ 1,200,000 | ||||
Resident receivables due period | 30 days | |||||||
Allowance for doubtful accounts | $ 5,100,000 | $ 5,100,000 | $ 5,900,000 | |||||
Number of senior housing communities | seniorHousingCommunity | 71 | 71 | ||||||
Percentage of voting rights | 0.50 | 0.50 | 0.50 | |||||
Number of reportable segments | segment | 1 | |||||||
Number of operating segments | segment | 1 | |||||||
Properties | Geographic Concentration Risk | Texas | ||||||||
Accounting Policies [Line Items] | ||||||||
Concentration risk percentage | 23% | 24% | ||||||
Number of senior housing communities | property | 16 | 16 | ||||||
Properties | Geographic Concentration Risk | Indiana | ||||||||
Accounting Policies [Line Items] | ||||||||
Concentration risk percentage | 19% | 18% | ||||||
Number of senior housing communities | property | 12 | 12 | ||||||
Properties | Geographic Concentration Risk | Ohio | ||||||||
Accounting Policies [Line Items] | ||||||||
Concentration risk percentage | 20% | 19% | ||||||
Number of senior housing communities | property | 10 | 10 | ||||||
Properties | Geographic Concentration Risk | Wisconsin | ||||||||
Accounting Policies [Line Items] | ||||||||
Concentration risk percentage | 10% | 10% | ||||||
Number of senior housing communities | property | 8 | 8 | ||||||
Convertible Preferred Stock | ||||||||
Accounting Policies [Line Items] | ||||||||
Increase in carrying amount of redeemable preferred stock | $ 1,100,000 | $ 1,300,000 | $ 1,200,000 | $ 1,200,000 | $ 3,700,000 | |||
Housing and support services | ||||||||
Accounting Policies [Line Items] | ||||||||
Contract liabilities for deferred fees paid | $ 3,800,000 | $ 3,800,000 | $ 3,400,000 | |||||
Medicaid Program Revenue | Revenue Benchmark | Customer Concentration Risk | ||||||||
Accounting Policies [Line Items] | ||||||||
Concentration risk percentage | 11.40% | 10.10% | 10% | 9.90% |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Net Property and Equipment and Leasehold Improvements (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 973,605 | $ 968,888 |
Less accumulated depreciation and amortization | (379,489) | (353,134) |
Total property and equipment, net | $ 594,116 | $ 615,754 |
Finance lease, right-of-use asset, statement of financial position | Total property and equipment, net | Total property and equipment, net |
Finance lease, right-of-use asset, after accumulated amortization | $ 100 | $ 200 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 47,322 | 47,476 |
Land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 20,377 | 20,053 |
Land improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 5 years | |
Land improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 20 years | |
Buildings and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 841,206 | 842,854 |
Buildings and building improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 10 years | |
Buildings and building improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 40 years | |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 57,031 | 53,236 |
Furniture and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 5 years | |
Furniture and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 10 years | |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 2,686 | 2,704 |
Automobiles | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 5 years | |
Automobiles | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 7 years | |
Assets under financing leases and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 4,279 | 1,899 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 704 | $ 666 |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Property, Plant and Equipment [Line Items] | |||||
Non-cash impairment charge on property and equipment | $ 6,000,000 | $ 6,000,000 | $ 0 | ||
Proceeds from sale of property, plant, and equipment | $ 1,000,000 | ||||
Loss on sale of assets | $ 55,000 | 34,000 | $ 0 | (217,000) | 0 |
Recurring | |||||
Property, Plant and Equipment [Line Items] | |||||
Non-cash impairment charge on property and equipment | $ 6,000,000 | $ 6,000,000 | $ 0 | ||
Recurring | Discount Rate | |||||
Property, Plant and Equipment [Line Items] | |||||
Rates utilized | 0.085 | 0.085 | |||
Recurring | Capitalization Rate | |||||
Property, Plant and Equipment [Line Items] | |||||
Rates utilized | 0.075 | 0.075 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of accounts payable and accrued liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Modified [Line Items] | ||
Accrued payroll and employee benefits | $ 16,186 | $ 13,795 |
Accrued interest | 8,645 | 9,374 |
Accrued taxes | 9,000 | 6,939 |
Accrued professional fees | 4,638 | 3,179 |
Accrued other expenses | 3,063 | 3,657 |
Total accrued expenses | 41,532 | $ 36,944 |
Entity Loan Modification Program | ||
Financing Receivable, Modified [Line Items] | ||
Accrued interest | $ 2,300 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Detail) $ in Thousands | Sep. 30, 2023 USD ($) seniorHousingCommunity | Dec. 31, 2022 USD ($) seniorHousingCommunity |
Debt Instrument [Line Items] | ||
Number of senior housing communities | seniorHousingCommunity | 71 | |
Notes payable | $ 634,240 | $ 676,298 |
Deferred loan costs, net | 4,782 | 5,267 |
Total notes payable, net of deferred loan costs | 629,458 | 671,031 |
Less current portion | 64,309 | 46,029 |
Long-term notes payable, net | $ 565,149 | 625,002 |
Fixed rate mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 4.50% | |
Notes payable | $ 493,436 | $ 503,312 |
Fannie Mae Loan | ||
Debt Instrument [Line Items] | ||
Number of senior housing communities | seniorHousingCommunity | 18 | |
Notes payable | $ 0 | $ 31,991 |
Variable rate mortgages note payable | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 5.90% | |
Notes payable | $ 137,320 | 137,652 |
Notes payable - insurance | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 6.40% | |
Notes payable | $ 1,865 | 1,724 |
Notes payable - other | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 8.50% | |
Notes payable | $ 1,619 | $ 1,619 |
Notes Payable - Schedule of Agg
Notes Payable - Schedule of Aggregate Scheduled Maturities of Notes Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
2023 | $ 57,312 | |
2024 | 9,179 | |
2025 | 40,107 | |
2026 | 319,901 | |
2027 | 3,597 | |
Thereafter | 204,144 | |
Total notes payable, excluding deferred loan costs | 634,240 | $ 676,298 |
Aggregate outstanding principal due | 64,309 | $ 46,029 |
Protective Life Insurance Company | ||
Debt Instrument [Line Items] | ||
Aggregate outstanding principal due | $ 55,800 |
Notes Payable - Narrative (Deta
Notes Payable - Narrative (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||
Jun. 01, 2024 USD ($) | Jun. 29, 2023 USD ($) property | May 11, 2023 USD ($) | Dec. 13, 2022 USD ($) subsidiary | Nov. 30, 2022 USD ($) | Jul. 31, 2020 USD ($) property | Aug. 31, 2023 loan | Jul. 31, 2023 USD ($) seniorHousingCommunity | Mar. 31, 2022 USD ($) seniorHousingCommunity | Sep. 30, 2023 USD ($) seniorHousingCommunity property | Sep. 30, 2022 seniorHousingCommunity | Sep. 30, 2023 USD ($) seniorHousingCommunity property | Sep. 30, 2022 USD ($) seniorHousingCommunity | Dec. 31, 2022 USD ($) seniorHousingCommunity | May 31, 2023 USD ($) | Jan. 31, 2023 property | Mar. 01, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||||||||||||
Property and equipment, net | $ 590,200 | $ 590,200 | |||||||||||||||
Number of properties | seniorHousingCommunity | 71 | 71 | |||||||||||||||
Debt instrument, weighted average rate | 0.015 | ||||||||||||||||
Purchase of interest rate cap | $ 0 | $ 258 | |||||||||||||||
Amortization of deferred loan costs | $ 1,130 | $ 946 | |||||||||||||||
Number of subsidiaries | subsidiary | 2 | ||||||||||||||||
Number of communities | seniorHousingCommunity | 23 | 24 | 24 | 28 | |||||||||||||
Gain (loss) on debt | $ 36,339 | $ (641) | |||||||||||||||
Aggregate outstanding principal due | $ 64,309 | $ 64,309 | $ 46,029 | ||||||||||||||
Protective Life Insurance Company | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Number of communities | seniorHousingCommunity | 3 | ||||||||||||||||
Aggregate outstanding principal due | 55,800 | $ 55,800 | |||||||||||||||
Number of loans sold | loan | 3 | ||||||||||||||||
Outstanding balance sold | 43,200 | 43,200 | |||||||||||||||
Interest rate cap (LIBOR-based) | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Purchase of interest rate cap | $ 2,300 | ||||||||||||||||
Derivative term | 1 year | ||||||||||||||||
Derivative, notional amount | $ 88,100 | $ 88,100 | 138,385 | 138,385 | 138,385 | $ 50,300 | |||||||||||
Additional funding | 100 | ||||||||||||||||
SOFR | Interest rate cap (LIBOR-based) | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, variable rate at period end | 2.25% | 2.25% | |||||||||||||||
Purchase of interest rate cap | $ 2,400 | ||||||||||||||||
Derivative, notional amount | $ 88,100 | $ 88,125 | $ 88,125 | 88,125 | |||||||||||||
Fixed rate mortgage notes payable | Minimum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt effective interest rate | 3.60% | 3.60% | |||||||||||||||
Fixed rate mortgage notes payable | Maximum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt effective interest rate | 6.30% | 6.30% | |||||||||||||||
Variable rate mortgages note payable | One Month LIBOR | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, variable rate at period end | 5.40% | 5.40% | |||||||||||||||
Debt instrument, basis spread on variable rate | 2.14% | ||||||||||||||||
Variable rate mortgages note payable | SOFR | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, variable rate at period end | 5.30% | 5.30% | |||||||||||||||
Debt instrument, basis spread on variable rate | 3.50% | ||||||||||||||||
Refinance Facility | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt issuance costs, net | $ 2,200 | ||||||||||||||||
Amortization of deferred loan costs | $ 700 | ||||||||||||||||
Refinance Facility | Mortgage Debt | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Increase in principal | $ 8,100 | ||||||||||||||||
Number of communities refinanced | seniorHousingCommunity | 10 | ||||||||||||||||
Finance agreement amount | $ 88,100 | $ 80,000 | |||||||||||||||
Amount available as delayed loans | 10,000 | ||||||||||||||||
Additional uncommitted amount | $ 40,000 | ||||||||||||||||
Debt issuance costs, net | 200 | ||||||||||||||||
Number of communities | seniorHousingCommunity | 12 | ||||||||||||||||
4.60% 10-Month Term Financing Agreement | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Finance agreement amount | $ 1,100 | ||||||||||||||||
6.50% Financing Agreement | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Finance agreement amount | $ 2,300 | ||||||||||||||||
Note interest rate | 6.50% | ||||||||||||||||
4.45% 10-Month Term Financing Agreement, One | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Finance agreement amount | $ 1,900 | $ 1,900 | |||||||||||||||
4.45% 10-Month Term Financing Agreement, Two | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Finance agreement term | 7 months | ||||||||||||||||
Note interest rate | 6.43% | 6.43% | |||||||||||||||
4.45% 10-Month Term Financing Agreement, Two | Minimum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Note interest rate | 4.75% | 4.75% | |||||||||||||||
4.45% 10-Month Term Financing Agreement, Two | Maximum | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Note interest rate | 6.50% | 6.50% | |||||||||||||||
Forbearance Agreements | Forecast | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt periodic principal payments | $ 5,000 | ||||||||||||||||
Fannie Mae Loan | Fannie Mae | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Number of properties | property | 2,000 | ||||||||||||||||
Fannie Mae Loan | Forbearance Agreements | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Number of properties | property | 37 | 18 | 37 | 37 | |||||||||||||
Debt periodic principal payments | $ 5,000 | ||||||||||||||||
Finance agreement term | 12 months | ||||||||||||||||
Effective date | 1 year | ||||||||||||||||
Debt restructuring costs | $ 500 | $ 700 | |||||||||||||||
Unpaid loans | $ 3,800 | ||||||||||||||||
Transition of ownership, number of real estate properties | seniorHousingCommunity | 16 | ||||||||||||||||
Fannie Mae Loan | Forbearance Agreements | Master Credit Facility | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Number of properties | property | 19 | 19 | |||||||||||||||
Debt instrument, effective date | 36 months | 36 months | |||||||||||||||
Finance agreement term | 12 months | ||||||||||||||||
Escrow percentage | 0.50 | ||||||||||||||||
Fannie Mae Loan | Forbearance Agreements | Forecast | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt periodic principal payments | $ 5,000 | ||||||||||||||||
Finance agreement term | 24 months | ||||||||||||||||
Guaranty amount | $ 10,000 | ||||||||||||||||
Fannie Mae Loan | Forbearance Agreements | Fixed rate mortgage notes payable | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Number of properties | property | 18 | 18 | 18 | ||||||||||||||
Fannie Mae Loan | Forbearance Agreements | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt periodic principal payments | $ 5,000 | ||||||||||||||||
Number of payments | seniorHousingCommunity | 2 | ||||||||||||||||
Ally Loan, Amendment | Refinance Facility | Mortgage Debt | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt instrument, covenant, liquidity, amount, minimum | $ 7,000 | ||||||||||||||||
Increase in principal | $ 1,000 | ||||||||||||||||
Debt issuance costs | $ 100 | $ 100 | |||||||||||||||
Ally Loan, Amendment | Forbearance Agreements | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Debt periodic principal payments | $ 5,000 | ||||||||||||||||
Number of payments | seniorHousingCommunity | 2 | ||||||||||||||||
Debt instrument, covenant, liquidity, amount, minimum | $ 13,000 | ||||||||||||||||
Debt instrument covenant term | 12 months | ||||||||||||||||
Limited payment guaranty waiver threshold | $ 6,000 | ||||||||||||||||
Waiver principal reserve | $ 117 |
Securities Financing (Detail)
Securities Financing (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Nov. 01, 2023 USD ($) shares | Jun. 29, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Jul. 31, 2023 USD ($) seniorHousingCommunity shares | Sep. 30, 2023 USD ($) shares | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) shares | Dec. 31, 2022 shares | Jun. 08, 2022 USD ($) | Mar. 31, 2022 USD ($) | Nov. 30, 2021 shares | |
Class of Stock [Line Items] | ||||||||||||
Temporary equity, shares issued (in shares) | shares | 41,000 | 41,000 | 41,000 | |||||||||
Preferred stock, dividend rate, percentage | 11% | |||||||||||
Undeclared dividends on Series A convertible preferred stock | $ 1,134 | $ 3,693 | $ 3,693 | |||||||||
Fannie Mae Loan | Forbearance Agreements | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Debt periodic principal payments | $ 5,000 | |||||||||||
Number of payments | seniorHousingCommunity | 2 | |||||||||||
Mortgage Debt | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Purchase commitment value | $ 13,500 | |||||||||||
Commitment period | 18 months | |||||||||||
Refinance Facility | Mortgage Debt | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Commitment fee payable | $ 675 | |||||||||||
Convertible Preferred Stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Temporary equity, shares issued (in shares) | shares | 41,250 | |||||||||||
Increase in carrying amount of redeemable preferred stock | $ 1,100 | $ 1,300 | $ 1,200 | $ 1,200 | 3,700 | |||||||
Undeclared dividends on Series A convertible preferred stock | $ 1,100 | $ 1,100 | ||||||||||
Convertible Preferred Stock | Private Placement | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Proceeds from sale of stock under agreement | $ 41,300 | |||||||||||
Common Stock | Refinance Facility | Mortgage Debt | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Shares issued under agreement (in shares) | shares | 67,500 | |||||||||||
Common Stock | Private Placement | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Shares issued under agreement (in shares) | shares | 600,000 | |||||||||||
Stock issued during period | $ 6,000 | |||||||||||
Common Stock | Private Placement | Subsequent Event | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Shares issued under agreement (in shares) | shares | 400,000 | |||||||||||
Stock issued during period | $ 4,000 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 64,675 | $ 60,787 | $ 189,602 | $ 178,908 |
Resident revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 59,117 | 52,485 | 172,683 | 155,315 |
Housing and support services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 57,887 | 51,703 | 167,527 | 151,854 |
Community fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 428 | 481 | 1,354 | 1,410 |
Ancillary services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 288 | 301 | 807 | 838 |
Other operating revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 514 | 0 | 2,995 | 1,213 |
Management fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 569 | 608 | 1,605 | 1,836 |
Managed community reimbursement revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 4,989 | $ 7,694 | $ 15,314 | $ 21,757 |
Net Loss Per Share - Net Loss P
Net Loss Per Share - Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Basic net loss per common share calculation: | ||||||||
Net loss | $ (18,411) | $ (12,212) | $ 24,145 | $ (13,739) | $ (7,410) | $ (16,678) | $ (6,478) | $ (37,827) |
Less: Dividends on Series A Preferred Stock | 0 | 0 | $ (1,134) | $ (1,133) | 0 | (2,267) | ||
Less: Undeclared dividends on Series A Preferred Stock | (1,265) | (1,134) | (3,693) | (1,134) | ||||
Net loss attributable to common stockholders | $ (19,676) | $ (14,873) | $ (10,171) | $ (41,228) | ||||
Weighted average shares outstanding — basic (in shares) | 7,050 | 6,364 | 6,602 | 6,357 | ||||
Basic net loss per share (in USD per share) | $ (2.79) | $ (2.34) | $ (1.54) | $ (6.49) | ||||
Diluted net loss per common share calculation: | ||||||||
Net loss attributable to common stockholders | $ (19,676) | $ (14,873) | $ (10,171) | $ (41,228) | ||||
Weighted average shares outstanding — diluted (in shares) | 7,050 | 6,364 | 6,602 | 6,357 | ||||
Diluted net loss per share (in USD per share) | $ (2.79) | $ (2.34) | $ (1.54) | $ (6.49) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from earnings per share (in shares) | 2,934 | 2,487 | 2,818 | 2,461 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from earnings per share (in shares) | 1,031 | 1,031 | 1,031 | 1,031 |
Series A Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from earnings per share (in shares) | 1,165 | 1,045 | 1,135 | 1,036 |
Restricted stock awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from earnings per share (in shares) | 725 | 392 | 641 | 380 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from earnings per share (in shares) | 10 | 10 | 10 | 10 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from earnings per share (in shares) | 3 | 9 | 1 | 4 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 15, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of additional shares granted under the plan (in shares) | 500,000 | ||||
Stock-based compensation expense | $ 0.6 | $ (0.6) | $ 2.1 | $ 3.5 | |
Time-Based RSAs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares (in shares) | 3,000 | 3,000 | |||
Average market value of common stock on date of grant (in USD per share) | $ 8.80 | $ 8.80 | |||
Vesting period | 1 year |
Stock-Based Compensation - Crat
Stock-Based Compensation - Crats of Market-Based Restricted Stock Awards (Detail) - Restricted stock awards $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted Stock Awards (in shares) | shares | 447 |
Weighted Average Grant Date Fair Value Per Share (in USD per share) | $ / shares | $ 7.80 |
Total Grant Date Fair Value | $ | $ 3,486 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual obligation | $ 3.6 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 1 Months Ended | |||
Nov. 01, 2023 USD ($) | Jul. 31, 2023 USD ($) | Sep. 30, 2023 | Jun. 29, 2023 USD ($) | |
Common Stock | Private Placement | ||||
Related Party Transaction [Line Items] | ||||
Stock issued during period | $ 6 | |||
Common Stock | Subsequent Event | Private Placement | ||||
Related Party Transaction [Line Items] | ||||
Stock issued during period | $ 4 | |||
Mortgage Debt | ||||
Related Party Transaction [Line Items] | ||||
Purchase commitment value | $ 13.5 | |||
Related Party | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage, controlling owners | 0.59 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Detail) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Jul. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Nov. 30, 2022 USD ($) | Mar. 01, 2022 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Non-cash impairment charge on property and equipment | $ 6,000,000 | $ 6,000,000 | $ 0 | ||||
Recurring | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Non-cash impairment charge on property and equipment | 6,000,000 | 6,000,000 | $ 0 | ||||
Fair value of impaired property and equipment | $ 7,300,000 | $ 7,300,000 | |||||
Recurring | Discount Rate | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Rates utilized | 0.085 | 0.085 | |||||
Recurring | Capitalization Rate | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Rates utilized | 0.075 | 0.075 | |||||
Interest rate cap (LIBOR-based) | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Derivative, notional amount | $ 138,385,000 | $ 138,385,000 | $ 88,100,000 | $ 138,385,000 | $ 88,100,000 | $ 50,300,000 | |
Derivative assets, fair value | $ 1,026,000 | $ 1,026,000 | $ 2,722,000 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amounts and Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 3,562 | $ 16,913 |
Restricted cash | 17,590 | 13,829 |
Notes payable, excluding deferred loan costs | 629,458 | 671,031 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 3,562 | 16,913 |
Restricted cash | 17,590 | 13,829 |
Notes payable, excluding deferred loan costs | 634,240 | 676,298 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 3,562 | 16,913 |
Restricted cash | 17,590 | 13,829 |
Notes payable, excluding deferred loan costs | $ 511,450 | $ 638,485 |
Derivatives and Hedging - Narra
Derivatives and Hedging - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||||
Nov. 30, 2022 | Mar. 01, 2022 | Jul. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Purchase of interest rate cap | $ 0 | $ 258 | ||||
Interest rate cap (LIBOR-based) | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Derivative, notional amount | $ 88,100 | $ 50,300 | $ 88,100 | 138,385 | $ 138,385 | |
Interest rate cap agreement term | 24 months | |||||
Purchase of interest rate cap | $ 2,300 | |||||
(LIBOR) London Interbank Offered Rate | Interest rate cap (LIBOR-based) | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Derivative, notional amount | 50,260 | 50,260 | ||||
Debt instrument, variable rate at period end | 4% | |||||
SOFR | Interest rate cap (LIBOR-based) | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Derivative, notional amount | $ 88,100 | $ 88,125 | $ 88,125 | |||
Debt instrument, variable rate at period end | 2.25% | 2.25% | ||||
Purchase of interest rate cap | $ 2,400 |
Derivatives and Hedging - Sched
Derivatives and Hedging - Schedule of Derivative Instruments in Balance Sheet (Details) - Interest rate cap (LIBOR-based) - USD ($) $ in Thousands | Sep. 30, 2023 | Jul. 31, 2023 | Dec. 31, 2022 | Nov. 30, 2022 | Mar. 01, 2022 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | $ 138,385 | $ 88,100 | $ 138,385 | $ 88,100 | $ 50,300 |
Derivative assets, fair value | 1,026 | 2,722 | |||
(LIBOR) London Interbank Offered Rate | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | 50,260 | 50,260 | |||
Derivative assets, fair value | 342 | 542 | |||
SOFR | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | 88,125 | 88,125 | $ 88,100 | ||
Derivative assets, fair value | $ 684 | $ 2,180 |
Derivatives and Hedging - Sch_2
Derivatives and Hedging - Schedule of Derivative Instruments in Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Interest rate cap (LIBOR-based) | Interest Expense | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
(Gain) loss on derivatives not designated as hedges included in interest expense | $ (855) | $ 251 | $ 1,978 | $ 206 |
Subsequent Events (Details)
Subsequent Events (Details) - Common Stock - Private Placement - USD ($) $ in Millions | 1 Months Ended | |
Nov. 01, 2023 | Jul. 31, 2023 | |
Subsequent Event [Line Items] | ||
Stock issued during period | $ 6 | |
Shares issued under agreement (in shares) | 600,000 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Stock issued during period | $ 4 | |
Shares issued under agreement (in shares) | 400,000 |