Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 06, 2021 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-52566 | |
Entity Registrant Name | SUMMIT HEALTHCARE REIT, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 73-1721791 | |
Entity Address, Address Line One | 2 SOUTH POINTE DRIVE, SUITE 100, | |
Entity Address, City or Town | LAKE FOREST | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92630 | |
City Area Code | 800 | |
Local Phone Number | 978-8136 | |
Title of 12(b) Security | N/A | |
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 | 23,027,978 | |
Entity Central Index Key | 0001310383 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
No Trading Symbol Flag | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 17,000,000 | $ 14,658,000 |
Restricted cash | 2,999,000 | 2,933,000 |
Real estate properties, net | 62,835,000 | 44,921,000 |
Notes receivable | 65,000 | 262,000 |
Tenant and other receivables, net | 3,622,000 | 4,677,000 |
Deferred leasing commissions, net | 484,000 | 536,000 |
Other assets, net | 1,512,000 | 1,203,000 |
Equity-method investments | 7,597,000 | 11,375,000 |
Total assets | 96,114,000 | 80,565,000 |
LIABILITIES AND EQUITY | ||
Accounts payable and accrued liabilities | 2,898,000 | 2,530,000 |
Security deposits | 1,182,000 | 664,000 |
Loans payable, net of debt issuance costs | 59,329,000 | 45,274,000 |
Total liabilities | 63,409,000 | 48,468,000 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding at September 30, 2021 and December 31, 2020 | 0 | 0 |
Common stock, $0.001 par value; 290,000,000 shares authorized; 23,027,978 shares issued and outstanding at September 30, 2021 and December 31, 2020 | 23,000 | 23,000 |
Additional paid-in capital | 116,391,000 | 116,335,000 |
Accumulated deficit | (83,910,000) | (84,456,000) |
Total stockholders' equity | 32,504,000 | 31,902,000 |
Noncontrolling interests | 201,000 | 195,000 |
Total equity | 32,705,000 | 32,097,000 |
Total liabilities and equity | $ 96,114,000 | $ 80,565,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 290,000,000 | 290,000,000 |
Common stock, shares issued | 23,027,978 | 23,027,978 |
Common stock, shares outstanding | 23,027,978 | 23,027,978 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Total rental revenues | $ 1,853,000 | $ 1,624,000 | $ 4,061,000 | $ 4,828,000 |
Acquisition and asset management fees | 165,000 | 292,000 | 789,000 | 910,000 |
Interest income from notes receivable | 7,000 | 7,000 | 20,000 | 21,000 |
Total operating revenue | 2,025,000 | 1,923,000 | 4,870,000 | 5,759,000 |
Expenses: | ||||
Property operating costs | 264,000 | 252,000 | 694,000 | 722,000 |
General and administrative | 933,000 | 779,000 | 3,426,000 | 2,566,000 |
Depreciation and amortization | 524,000 | 417,000 | 1,316,000 | 1,252,000 |
Total operating expenses | 1,721,000 | 1,448,000 | 5,436,000 | 4,540,000 |
Operating income (loss) | 304,000 | 475,000 | (566,000) | 1,219,000 |
Income (loss) from equity-method investees | 191,000 | 179,000 | (595,000) | 346,000 |
Gain on sale of equity-method investment | 0 | 0 | 3,515,000 | 0 |
Other income | 5,000 | 5,000 | 17,000 | 53,000 |
Interest expense | (729,000) | (531,000) | (1,767,000) | (1,754,000) |
Net (loss) income | (229,000) | 128,000 | 604,000 | (136,000) |
Noncontrolling interests' share in net (income) loss | (18,000) | (16,000) | (58,000) | (39,000) |
Net (loss) income applicable to common stockholders | $ (247,000) | $ 112,000 | $ 546,000 | $ (175,000) |
Basic: | ||||
Net income (loss) applicable to common stockholders | $ (0.01) | $ 0 | $ 0.02 | $ (0.01) |
Diluted: | ||||
Net income ( loss) applicable to common stockholders | $ (0.01) | $ 0 | $ 0.02 | $ (0.01) |
Weighted average shares used to calculate earnings per common share | ||||
Basic | 23,027,978 | 23,027,978 | 23,027,978 | 23,027,978 |
Diluted | 23,027,978 | 23,515,414 | 23,553,606 | 23,027,978 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity | Noncontrolling Interests | Total |
Balance at Dec. 31, 2019 | $ 23,000 | $ 116,184,000 | $ (83,843,000) | $ 32,364,000 | $ 200,000 | $ 32,564,000 |
Balance (in shares) at Dec. 31, 2019 | 23,027,978 | |||||
Stock-based compensation | $ 0 | 42,000 | 0 | 42,000 | 0 | 42,000 |
Distributions paid to noncontrolling interests | 0 | 0 | 0 | 0 | (12,000) | (12,000) |
Net income (loss) | 0 | 0 | (213,000) | (213,000) | 12,000 | (201,000) |
Balance at Mar. 31, 2020 | $ 23,000 | 116,226,000 | (84,056,000) | 32,193,000 | 200,000 | 32,393,000 |
Balance (in shares) at Mar. 31, 2020 | 23,027,978 | |||||
Balance at Dec. 31, 2019 | $ 23,000 | 116,184,000 | (83,843,000) | 32,364,000 | 200,000 | 32,564,000 |
Balance (in shares) at Dec. 31, 2019 | 23,027,978 | |||||
Net income (loss) | (136,000) | |||||
Balance at Sep. 30, 2020 | $ 23,000 | 116,299,000 | (84,018,000) | 32,304,000 | 195,000 | 32,499,000 |
Balance (in shares) at Sep. 30, 2020 | 23,027,978 | |||||
Balance at Mar. 31, 2020 | $ 23,000 | 116,226,000 | (84,056,000) | 32,193,000 | 200,000 | 32,393,000 |
Balance (in shares) at Mar. 31, 2020 | 23,027,978 | |||||
Stock-based compensation | $ 0 | 38,000 | 0 | 38,000 | 0 | 38,000 |
Distributions paid to noncontrolling interests | 0 | 0 | 0 | 0 | (15,000) | (15,000) |
Net income (loss) | 0 | 0 | (74,000) | (74,000) | 11,000 | (63,000) |
Balance at Jun. 30, 2020 | $ 23,000 | 116,264,000 | (84,130,000) | 32,157,000 | 196,000 | 32,353,000 |
Balance (in shares) at Jun. 30, 2020 | 23,027,978 | |||||
Stock-based compensation | $ 0 | 35,000 | 0 | 35,000 | 0 | 35,000 |
Distributions paid to noncontrolling interests | 0 | 0 | 0 | 0 | (17,000) | (17,000) |
Net income (loss) | 0 | 0 | 112,000 | 112,000 | 16,000 | 128,000 |
Balance at Sep. 30, 2020 | $ 23,000 | 116,299,000 | (84,018,000) | 32,304,000 | 195,000 | 32,499,000 |
Balance (in shares) at Sep. 30, 2020 | 23,027,978 | |||||
Balance at Dec. 31, 2020 | $ 23,000 | 116,335,000 | (84,456,000) | 31,902,000 | 195,000 | 32,097,000 |
Balance (in shares) at Dec. 31, 2020 | 23,027,978 | |||||
Stock-based compensation | $ 0 | 36,000 | 0 | 36,000 | 0 | 36,000 |
Distributions paid to noncontrolling interests | 0 | 0 | 0 | 0 | (16,000) | (16,000) |
Net income (loss) | 0 | 0 | (1,758,000) | (1,758,000) | 18,000 | (1,740,000) |
Balance at Mar. 31, 2021 | $ 23,000 | 116,371,000 | (86,214,000) | 30,180,000 | 197,000 | 30,377,000 |
Balance (in shares) at Mar. 31, 2021 | 23,027,978 | |||||
Balance at Dec. 31, 2020 | $ 23,000 | 116,335,000 | (84,456,000) | 31,902,000 | 195,000 | 32,097,000 |
Balance (in shares) at Dec. 31, 2020 | 23,027,978 | |||||
Net income (loss) | 604,000 | |||||
Balance at Sep. 30, 2021 | $ 23,000 | 116,391,000 | (83,910,000) | 32,504,000 | 201,000 | 32,705,000 |
Balance (in shares) at Sep. 30, 2021 | 23,027,978 | |||||
Balance at Mar. 31, 2021 | $ 23,000 | 116,371,000 | (86,214,000) | 30,180,000 | 197,000 | 30,377,000 |
Balance (in shares) at Mar. 31, 2021 | 23,027,978 | |||||
Stock-based compensation | $ 0 | 11,000 | 0 | 11,000 | 0 | 11,000 |
Distributions paid to noncontrolling interests | 0 | 0 | 0 | 0 | (19,000) | (19,000) |
Net income (loss) | 0 | 0 | 2,551,000 | 2,551,000 | 22,000 | 2,573,000 |
Balance at Jun. 30, 2021 | $ 23,000 | 116,382,000 | (83,663,000) | 32,742,000 | 200,000 | 32,942,000 |
Balance (in shares) at Jun. 30, 2021 | 23,027,978 | |||||
Stock-based compensation | $ 0 | 9,000 | 0 | 9,000 | 0 | 9,000 |
Distributions paid to noncontrolling interests | 0 | 0 | 0 | 0 | (17,000) | (17,000) |
Net income (loss) | 0 | 0 | (247,000) | (247,000) | 18,000 | (229,000) |
Balance at Sep. 30, 2021 | $ 23,000 | $ 116,391,000 | $ (83,910,000) | $ 32,504,000 | $ 201,000 | $ 32,705,000 |
Balance (in shares) at Sep. 30, 2021 | 23,027,978 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 604,000 | $ (136,000) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Amortization of debt issuance costs | 72,000 | 72,000 |
Depreciation and amortization expense | 1,316,000 | 1,252,000 |
Amortization of above/below market lease intangible | 16,000 | 0 |
Straight-line rents | 435,000 | (178,000) |
Write-off of debt issuance costs | 0 | 77,000 |
Stock-based compensation expense | 56,000 | 115,000 |
Gain on sale of equity-method investment | (3,515,000) | 0 |
Loss (income) from equity-method investees | 595,000 | (346,000) |
Change in operating assets and liabilities: | ||
Tenant and other receivables, net | 634,000 | 591,000 |
Other assets | 561,000 | 102,000 |
Accounts payable and accrued liabilities | 436,000 | 162,000 |
Security deposits | 594,000 | 0 |
Net cash provided by operating activities | 1,804,000 | 1,711,000 |
Cash flows from investing activities: | ||
Real estate acquisitions | (20,133,000) | 0 |
Investment in equity-method investees | (140,000) | 0 |
Proceeds from sale of equity-method investment | 5,411,000 | 0 |
Distributions received from equity-method investees | 1,339,000 | 866,000 |
Payments from notes receivable | 196,000 | 250,000 |
Net cash (used in) provided by investing activities | (13,327,000) | 1,116,000 |
Cash flows from financing activities: | ||
Proceeds from issuance of loans payable | 15,000,000 | 11,863,000 |
Payments of loans payable | (789,000) | (11,415,000) |
Distributions paid to noncontrolling interests | (52,000) | (44,000) |
Deferred financing costs | (228,000) | (656,000) |
Net cash provided by (used in) financing activities | 13,931,000 | (252,000) |
Net increase in cash, cash equivalents and restricted cash | 2,408,000 | 2,575,000 |
Cash, cash equivalents and restricted cash - beginning of period | 17,591,000 | 16,077,000 |
Cash, cash equivalents and restricted cash - end of period | 19,999,000 | 18,652,000 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | $ 1,382,000 | $ 1,391,000 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2021 | |
Organization | |
Organization | 1. Organization Summit Healthcare REIT, Inc. (“Summit”) is a real estate investment trust that owns 100% of six properties, 95.3% of four properties, a 10% equity interest in an unconsolidated equity-method investment that holds 17 properties, a 35% equity interest in an unconsolidated equity-method investment that holds two properties, a 20% equity interest in an unconsolidated equity-method investment that holds two properties, a 10% equity interest in an unconsolidated equity-method investment that holds nine properties, and a 10% equity interest in an unconsolidated equity-method investment that holds six properties. In June 2021, we sold our 15% equity interest in an unconsolidated equity-method investment that held 14 properties. Summit is a Maryland corporation, formed in 2004 under the General Corporation Law of Maryland for the purpose of investing in and owning real estate. As used in these notes, the “Company”, “we”, “us” and “our” refer to Summit and its consolidated subsidiaries, including but not limited to Summit Healthcare Operating Partnership, L.P. (the “Operating Partnership”), except where the context otherwise requires. We conduct substantially all of our operations through the Operating Partnership, which is a Delaware limited partnership. We own a 99.88% general partner interest in the Operating Partnership, and Cornerstone Realty Advisors, LLC (“CRA”), a former affiliate, owns a 0.12% limited partnership interest. Summit and the Operating Partnership are managed and operated as one entity, and Summit has no significant assets other than its investment in the Operating Partnership. Summit, as the general partner of the Operating Partnership, controls the Operating Partnership and consolidates the assets, liabilities, and results of operations of the Operating Partnership. Therefore, the assets and liabilities of Summit and the Operating Partnership are the same. Cornerstone Healthcare Partners LLC – Consolidated Joint Venture We own 95% of Cornerstone Healthcare Partners LLC (“CHP LLC”), which was formed in 2012, and the remaining 5% noncontrolling interest is owned by Cornerstone Healthcare Real Estate Fund, Inc. (“CHREF”), an affiliate of CRA. CHP LLC is consolidated within our condensed consolidated financial statements and owns four properties (the “JV Properties”) with another partially owned subsidiary. As of September 30, 2021 and December 31, 2020, we own a 95.3%interest in the four JV Properties, and CHREF owns a 4.7% interest. Summit Union Life Holdings, LLC – Equity-Method Investment In April 2015, through our Operating Partnership, we entered into a limited liability company agreement with Best Years, LLC (“Best Years”), an unrelated entity and a U.S.-based affiliate of Union Life Insurance Co, Ltd. (a Chinese corporation), and formed Summit Union Life Holdings, LLC (the “SUL JV”). The SUL JV is not consolidated in our condensed consolidated financial statements and is accounted for under the equity-method. As of September 30, 2021 and December 31, 2020, we have a 10%interest in the SUL JV which owns 17 properties. Summit Fantasia Holdings, LLC – Equity-Method Investment In September 2016, through our Operating Partnership, we entered into a limited liability company agreement with Fantasia Investment III LLC (“Fantasia”), an unrelated entity and a U.S.-based affiliate of Fantasia Holdings Group Co., Limited (a Chinese corporation listed on the Stock Exchange of Hong Kong (HKEX)), and formed Summit Fantasia Holdings, LLC (the “Fantasia JV”). The Fantasia JV is not consolidated in our condensed consolidated financial statements and is accounted for under the equity-method. As of September 30, 2021 and December 31, 2020, we have a 35%interest in the Fantasia JV which owns two properties. Summit Fantasia Holdings II, LLC – Equity-Method Investment In December 2016, through our Operating Partnership, we entered into a limited liability company agreement with Fantasia, and formed Summit Fantasia Holdings II, LLC (the “Fantasia II JV”). The Fantasia II JV is not consolidated in our condensed consolidated financial statements and is accounted for under the equity-method. As of September 30, 2021 and December 31, 2020, we have a 20%interest in the Fantasia II JV which owns two properties. Summit Fantasia Holdings III, LLC– Equity-Method Investment In July 2017, through our Operating Partnership, we entered into a limited liability company agreement with Fantasia and formed Summit Fantasia Holdings III, LLC (the “Fantasia III JV”). The Fantasia III JV is not consolidated in our condensed consolidated financial statements and is accounted for under the equity-method. As of September 30, 2021 and December 31, 2020, we have a 10%interest in the Fantasia III JV which owns nine properties. Summit Fantasy Pearl Holdings, LLC– Equity-Method Investment In October 2017, through our Operating Partnership, we entered into a limited liability company agreement with Fantasia, Atlantis Senior Living 9, LLC, a Delaware limited liability company (“Atlantis”), and Fantasy Pearl LLC, a Delaware limited liability company (“Fantasy”), and formed Summit Fantasy Pearl Holdings, LLC (the “FPH JV”). The FPH JV is not consolidated in our condensed consolidated financial statements and is accounted for under the equity-method. As of September 30, 2021 and December 31, 2020, we have a 10%interest in the FPH JV which owns six properties. Indiana JV– Equity-Method Investment In June 2021, we sold our 15% interest in the Indiana JV for approximately $5.4 million. See Note 5 for further information. The Indiana JV was not consolidated in our condensed consolidated financial statements and was accounted for under the equity-method. As of September 30, 2021 and December 31, 2020, we had a 0% and 15% interest in the Indiana JV, respectively, which owned 14 properties. Summit Healthcare Asset Management, LLC (TRS) Summit Healthcare Asset Management, LLC (“SAM TRS”) is our wholly-owned taxable REIT subsidiary (“TRS”). We serve as the manager of the SUL JV, Fantasia JV, Fantasia II JV, Fantasia III JV, and FPH JV, and as the former operating member of the Indiana JV through June 11, 2021 (collectively, our “Equity-Method Investments”), and provide management services in exchange for fees and reimbursements. All acquisition fees and asset management fees earned by us are paid to SAM TRS and expenses incurred by us, as the manager, are reimbursed from SAM TRS. See Notes 5 and 7 for further information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies For more information regarding our significant accounting policies and estimates, please refer to “Summary of Significant Accounting Policies” contained in the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (“SEC”) on March 29, 2021. There have been no material changes to our policies since that filing except as noted under Recently Adopted Accounting Pronouncements. The accompanying condensed consolidated balance sheet at December 31, 2020 has been derived from the audited consolidated financial statements at that date. We assume that users of these condensed consolidated financial statements have read or have access to the audited December 31, 2020 consolidated financial statements and contained in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 29, 2021 and that the adequacy of additional disclosure needed for a fair presentation, except in regard to material contingencies, may be determined in that context. Accordingly, footnotes and other disclosures which would substantially duplicate those contained in our most recent Annual Report on Form 10-K for the year ended December 31, 2020 have been omitted in this report. Principles of Consolidation and Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, the Operating Partnership and its consolidated companies and are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. The accompanying financial information reflects all adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods. Interim results of operations are not necessarily indicative of the results to be expected for the full year. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statements of cash flows. September 30, December 31, 2021 2020 Cash and cash equivalents $ 17,000,000 $ 14,658,000 Restricted cash 2,999,000 2,933,000 Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows $ 19,999,000 $ 17,591,000 Recently Adopted Accounting Pronouncements In January 2020, the Financial Accounting Standards Board issued Accounting Standard Update (“ASU”) 2020-01 to clarify the interaction among the accounting standards for equity securities, equity method investments and certain derivatives. The new ASU clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The adoption of the new standard on January 1, 2021 did not have a material effect on the Company’s financial position, results of operations, or cash flows. Coronavirus (COVID-19) Since it was first reported in December 2019, COVID-19 has spread globally. The outbreak has led governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to control its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders. The COVID-19 pandemic and measures to prevent its spread negatively impacted senior housing and skilled nursing facilities in a number of ways, including but not limited to: ● Decreased occupancy and increased operating costs for the Company’s tenants and borrowers, which may adversely impact their ability to make full and timely rental and debt payments to the Company. The Company may have to restructure tenants’ long-term rent obligations in the future and may not be able to do so on terms that are as favorable to the Company as those currently in place. Reduced or modified rental and debt amounts could result in the determination that the full amounts of the Company’s real estate properties and notes receivable are not recoverable, which could result in an impairment charge. ● Decreased occupancy and increased operating costs for the Company’s Equity-Method Investments that own senior housing and skilled nursing facilities, which may negatively impact the operating results of these investments. The Equity-Method Investments may have to restructure tenants’ long-term rent obligations and may not be able to do so on terms that are as favorable to the Equity-Method Investments as those currently in place. Prolonged deterioration in the operating results for these investments could result in the determination that the full amounts of the Company’s investments are not recoverable, which could result in an impairment charge . For the period ended September 30, 2021, two of our tenants experienced a material adverse effect on their operations related to COVID-19, and that has affected their ability to make their rent payments in 2021. For one of the tenants, in October 2020, under a court order, a receiver assumed the responsibilities of operating and managing the Pennington Gardens facility in Chandler, Arizona. In October 2021, we reached an agreement with the tenant to terminate the lease, and we are currently negotiating with the U.S. Department of Housing and Urban Development (“HUD”) to approve the termination of the lease and approve the current receiver as the new operator/manager. Once approved by HUD, the lease will be terminated and the operations of Pennington Gardens will be consolidated in our financial statements. Beginning in March 2021, we recorded rent payments on a cash basis and wrote off the remaining straight-line rent receivable of $0.4 million. For the other tenant that is managing the Sundial Assisted Living facility, in October 2021, we reached an agreement with the tenant to terminate the lease, and we are currently negotiating with HUD to approve the termination of the lease and install a new operator/manager. Once approved by HUD, the lease will be terminated and the operations of Sundial Assisted Living will be consolidated in our financial statements. Beginning in June 2021, we recorded rent payments on a cash basis and in May 2021, wrote off the remaining straight-line rent receivable of $0.1 million. Additionally, some of our Equity-Method Investment tenants have experienced decreased occupancy and increased operating costs related to COVID-19, however; there have been no rent concessions for such tenants during 2021. It is impossible to predict the continuing effect and ultimate impact of the COVID-19 pandemic on our operations and results as the situation is continuing to evolve. Many of our consolidated and Equity Method Investments facilities have administered the vaccine to residents and employees. It is too early to assess the total effect of the vaccinations on the industry, but it is believed they will help save the lives of those who are most at risk, as well as lessen the operational and financial burden on our facilities and their employees. The rapid development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact on the demand for senior housing and skilled nursing and presents material uncertainty and risk with respect to our business, operations, financial condition and liquidity, including recording impairments, lease modifications and credit losses associated with notes receivable in future periods. CARES Act During 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted to provide economic stimulus and assistance to business owners to help maintain on-going operations in the form of grants, forgivable loans and other relief. We did not obtain a paycheck protection program loan. We have evaluated the CARES Act and determined that there was no impact on the Company for the nine-month period ended September 30, 2021 or the year ended December 31, 2020. We will continue to evaluate and monitor the CARES Act, and any new COVID-19-related legislation to determine the ultimate impact and benefits, if any, to the Company. |
Investments in Real Estate Prop
Investments in Real Estate Properties | 9 Months Ended |
Sep. 30, 2021 | |
Investments in Real Estate Properties | |
Investments in Real Estate Properties | 3. Investments in Real Estate Properties As of September 30, 2021 and December 31, 2020, our investments in real estate properties including those held by our consolidated subsidiaries (excluding the 36 and 50 properties, respectively, owned by our unconsolidated Equity-Method Investments) are set forth below: September 30, December 31, 2021 2020 Land $ 8,530,000 $ 6,237,000 Buildings and improvements 64,203,000 48,295,000 Less: accumulated depreciation (10,959,000) (9,853,000) Buildings and improvements, net 53,244,000 38,442,000 Furniture and fixtures 4,678,000 4,230,000 Less: accumulated depreciation (4,134,000) (3,988,000) Furniture and fixtures, net 544,000 242,000 Intangible lease assets 526,000 — Less: accumulated amortization (9,000) — Intangible lease assets, net 517,000 — Real estate properties, net $ 62,835,000 $ 44,921,000 For the three months ended September 30, 2021 and 2020, depreciation and amortization expense (excluding leasing commission amortization) was approximately $0.5 million and $0.4 million, respectively. For the nine months ended September 30, 2021 and 2020, depreciation and amortization expense (excluding leasing commission amortization) was approximately $1.3 million and $1.2 million, respectively. As of September 30, 2021, our portfolio consisted of 10 real estate properties which were 100% leased to the tenants of the related facilities. The following table provides summary information regarding our portfolio (excluding the 36 properties owned by our unconsolidated Equity-Method Investments) as of September 30, 2021: Loans Payable, Excluding Debt Purchase Issuance Property Location Date Purchased Type (1) Price Costs Sheridan Care Center Sheridan, OR August 3, 2012 SNF $ 4,100,000 $ 4,210,000 Fernhill Care Center Portland, OR August 3, 2012 SNF 4,500,000 3,693,000 Friendship Haven Healthcare and Rehabilitation Center Galveston County, TX September 14, 2012 SNF 15,000,000 11,592,000 Pacific Health and Rehabilitation Center Tigard, OR December 24, 2012 SNF 8,140,000 6,157,000 Brookstone of Aledo Aledo, IL July 2, 2013 AL 8,625,000 6,764,000 Sundial Assisted Living Redding, CA December 18, 2013 AL 3,500,000 3,752,000 Pennington Gardens Chandler, AZ July 17, 2017 AL/MC 13,400,000 10,232,000 Yucaipa Hill Post Acute Yucaipa, CA July 2, 2021 SNF 10,715,000 8,014,000 Creekside Post Acute Yucaipa, CA July 2, 2021 SNF 4,780,000 3,575,000 University Post Acute Mentone, CA July 2, 2021 SNF 4,560,000 3,411,000 Total: $ 77,320,000 $ 61,400,000 (1) SNF is an abbreviation for skilled nursing facility. AL is an abbreviation for assisted living facility. MC is an abbreviation for memory care facility. Future Minimum Lease Payments The future minimum lease payments to be received under our existing tenant operating leases (excluding the 36 properties owned by our unconsolidated Equity-Method Investments) as of September 30, 2021, for the period from October 1, 2021 to December 31, 2021 and for each of the four following years and thereafter ending December 31 are as follows: Years ending October 1, 2021 to December 31, 2021 $ 1,481,000 2022 5,998,000 2023 6,107,000 2024 6,218,000 2025 6,332,000 Thereafter 37,010,000 $ 63,146,000 2021 Acquisitions On July 2, 2021, through our wholly-owned subsidiary, we acquired three skilled nursing facilities, two located in Yucaipa, California and one located in Mentone, California (collectively, the “CA3 Properties”), for the purchase price of $20,055,000, which was funded through cash on hand plus the proceeds from the loan described in Note 4. We incurred approximately $80,000 in acquisition costs in connection with these acquisitions. The CA3 Properties are leased to three unrelated parties under three separate 15-year triple net leases, each of which has The following table represents the allocation of the relative fair value of the real estate acquired for the CA3 Properties acquisition: Land $ 2,293,000 Building and improvements 15,908,000 Furniture and fixtures 448,000 Intangible lease assets and above/below market leases (1) 1,486,000 Total purchase price plus acquisition costs $ 20,135,000 (1) Above/below market leases intangible asset is included in other assets, net on the condensed consolidated balance sheets. Leasing Commissions As a self-managed REIT, we no longer pay leasing commissions. Leasing commissions which were capitalized prior to April 2014 at cost and are amortized on a straight-line basis over the related lease term. As of September 30, 2021 and December 31, 2020, total costs incurred were $1.1 million, and the unamortized balance of capitalized leasing commissions was approximately $0.5 million. Amortization expense for each of the three months ended September 30, 2021 and 2020 was approximately $18,000. Amortization expense for each of the nine months ended September 30, 2021 and 2020 was approximately $53,000. |
Loans Payable
Loans Payable | 9 Months Ended |
Sep. 30, 2021 | |
Loans Payable | |
Loans Payable | 4. Loans Payable As of September 30, 2021 and December 31, 2020, our loans payable consisted of the following: September 30, 2021 December 31, 2020 Loan payable to Capital One Multifamily Finance, LLC (insured by HUD) in monthly installments of approximately $49,000, including interest at a fixed rate of 4.23%, due in September 2053, and collateralized by Pennington Gardens. $ 10,232,000 $ 10,330,000 Loans payable to Lument Capital (formerly ORIX Real Estate Capital, LLC) (insured by HUD) in monthly installments of approximately $183,000, including interest, ranging from a fixed rate of 2.79% to 4.2%, due in September 2039 through April 2055, and as of September 30, 2021 and December 31, 2020, collateralized by Sheridan, Fernhill, Pacific Health, Friendship Haven, Aledo and Sundial Assisted Living. $ 36,168,000 $ 36,857,000 Loans payable to CIBC Bank, USA in monthly installments of approximately $65,000, interest only through July 2022 at LIBOR (with a floor of 1%) plus 4% (5% at September 30, 2021), due in July 2024, and collateralized by Yucaipa Post Acute, Creekside Post Acute and University Post Acute) 15,000,000 — 61,400,000 47,187,000 Less debt issuance costs (2,071,000) (1,913,000) Total loans payable $ 59,329,000 $ 45,274,000 As of September 30, 2021, we have total debt obligations of approximately $61.4 million that will mature between 2024 and 2055. See table above listing loans payable for further information. See Note 3 for loans payable balance for each property. Seven of our properties are financed with HUD-insured loans by various lenders as noted above. All of our HUD-insured loans are subject to customary representations, warranties and ongoing covenants and agreements with respect to the operation of the facilities, including the provision for certain maintenance and other reserve accounts for property tax, insurance, and capital expenditures, as described in the HUD agreements. These reserves are included in restricted cash in our condensed consolidated balance sheets. Additionally, all of our HUD-insured loans have certain financial and non-financial covenants, including ratios and financial statement considerations. On July 2, 2021, in conjunction with the acquisition of the CA3 Properties (see Note 3), we entered into a first priority $15.0 million mortgage loan collateralized by the CA3 Properties with CIBC Bank, USA (“CIBC”). The loan bears interest at the One Month London Interbank Offer Rate (LIBOR) (with a floor of 1%) plus 4.00%, and matures on July 2, 2024. In the absence of LIBOR, the interest rate on this loan will be based on the banks base or prime rate plus 2.0%. The loan is interest only for the first year and thereafter requires additional monthly installments of principal that are held by the lender in a cash loan guarantee fund until maturity. The loan may be prepaid at any time with no penalty if the CA3 Properties are refinanced through HUD, otherwise we would be required to pay an exit fee as defined in the agreement. Additionally, the CIBC loan has certain financial and non-financial covenants. As of September 30, 2021, we were in compliance with all of our debt covenants. In connection with our loans payable, we incurred debt issuance costs. As of September 30, 2021 and December 31, 2020, the unamortized balance of the debt issuance costs was approximately $2.1 million and $1.9 million, respectively. These debt issuance costs are being amortized over the life of their respective financing agreements using the straight-line basis which approximates the effective interest rate method. For the three months ended September 30, 2021 and 2020, $37,000 and $18,000, respectively, of debt issuance costs were amortized and included in interest expense in our condensed consolidated statements of operations. For each of the nine months ended September 30, 2021 and 2020, $0.1 million of debt issuance costs were amortized and included in interest expense in our condensed consolidated statements of operations. Included in the amortization of debt issuance costs for the nine months ended September 30, 2020 is $77,000 related to the write off of debt issuance costs for CHP Friendswood SNF, LLC’s prior loan. During the three months ended September 30, 2021 and 2020, we incurred approximately $0.7 million and $0.5 million of interest expense (excluding debt issuance costs amortization), respectively, related to our loans payable. During the nine months ended September 30, 2021 and 2020, we incurred approximately $1.7 million and $1.6 million, respectively, of interest expense (excluding debt issuance costs amortization) related to our loans payable. The principal payments due on the loans payable (excluding debt issuance costs) for the period from October 1, 2021 to December 31, 2021 and for each of the four following years and thereafter ending December 31 are as follows: Principal Years Ending Amount October 1, 2021 to December 31, 2021 $ 273,000 2022 1,269,000 2023 1,475,000 2024 15,730,000 2025 1,246,000 Thereafter 41,407,000 $ 61,400,000 |
Equity-Method Investments
Equity-Method Investments | 9 Months Ended |
Sep. 30, 2021 | |
Equity-Method Investments | |
Equity-Method Investments | 5. Equity-Method Investments As of September 30, 2021 and December 31, 2020, the aggregate balances of our Equity-Method Investments were approximately $7.6 million and $11.4 million, respectively, and are as follows: Summit Union Life Holdings, LLC The SUL JV will exist until an event of dissolution occurs, as defined in the limited liability company agreement of the SUL JV (the “SUL LLC Agreement”). Under the SUL LLC Agreement, net operating cash flow of the SUL JV is distributed monthly, first to the Operating Partnership and Best Years pari passu pari passu As of September 30, 2021 and December 31, 2020, the balance of our equity-method investment related to the SUL JV was approximately $2.4 million and $2.7 million, respectively. Summit Fantasia Holdings, LLC The Fantasia JV will exist until an event of dissolution occurs, as defined in the limited liability company agreement of the Fantasia JV (the “Fantasia LLC Agreement”). Under the Fantasia LLC Agreement, net operating cash flow of the Fantasia JV is distributed quarterly, first to the Operating Partnership and Fantasia pari passu pari passu As of September 30, 2021 and December 31, 2020, the balance of our equity-method investment related to the Fantasia JV was approximately $2.1 million and $2.0 million, respectively. Summit Fantasia Holdings II, LLC The Fantasia II JV will exist until an event of dissolution occurs, as defined in the limited liability company agreement of the Fantasia II JV (the “Fantasia II LLC Agreement”). Under the Fantasia II LLC Agreement, net operating cash flow of the Fantasia JV is distributed quarterly, first to the Operating Partnership and Fantasia pari passu pari passu As of September 30, 2021 and December 31, 2020, the balance of our equity-method investment related to the Fantasia II JV was approximately $1.3 million and $1.4 million, respectively. Summit Fantasia Holdings III, LLC The Fantasia III JV will continue until an event of dissolution occurs, as defined in the limited liability company agreement of the Fantasia III JV (the “Fantasia III LLC Agreement”). Under the Fantasia III LLC Agreement, net operating cash flow of the Fantasia III JV is distributed quarterly, first to the Operating Partnership and Fantasia pari passu pari passu As of September 30, 2021 and December 31, 2020, the balance of our equity-method investment related to the Fantasia III JV was approximately $1.5 million and $1.6 million, respectively. Summit Fantasy Pearl Holdings, LLC The FPH JV will continue until an event of dissolution occurs, as defined in the limited liability company agreement of the FPH JV (the “FPH LLC Agreement”). Under the FPH LLC Agreement, net operating cash flow of the FPH JV is distributed quarterly, first to the members pari passu pari passu unpaid 9% return plus its total capital contribution, and thereafter 65.25% to Fantasy, 7.5% to Atlantis, 7.25% to Fantasia, and 20% to the Operating Partnership. As of September 30, 2021 and December 31, 2020, the balance of our equity-method investment related to the FPH JV was approximately $0.3 million and $0.2 million, respectively. Indiana JV In June 2021, we sold our 15% interest in the Indiana JV for approximately $5.4 million in cash. For the nine months ended September 30, 2021, we recorded approximately $3.5 million in gain on the sale from this equity-method investment which is included in our condensed consolidated statements of operations under gain on sale of equity-method investment. As of September 30, 2021 and December 31, 2020, the balance of our equity-method investment related to the Indiana JV was approximately $0 and $3.5 million, respectively. Summarized Financial Data for Equity-Method Investments Our Equity-Method Investments are significant equity-method investments in the aggregate. The information for the Indiana JV is through the date of the sale of our interest, June 11, 2021. The results of operations of our Equity-Method Investments for the nine months ended September 30, 2021 are summarized below: Fantasia Fantasia Fantasia FPH Indiana Combined SUL JV JV II JV III JV JV JV Total Revenue $ 15,339,000 $ 2,860,000 $ 2,759,000 $ 6,156,000 $ 2,731,000 $ (1,695,000) $ 28,150,000 Income (loss) from operations $ 5,072,000 $ 282,000 $ 1,448,000 $ 3,094,000 $ 1,255,000 $ (5,093,000) $ 6,058,000 Net income (loss) $ 1,421,000 $ 369,000 $ 738,000 $ 1,510,000 $ 1,205,000 $ (8,567,000) $ (3,324,000) Summit interest in Equity-Method Investments net income (loss) $ 142,000 $ 129,000 $ 148,000 $ 151,000 $ 121,000 $ (1,286,000) $ (595,000) The results of operations of our Equity-Method Investments for the nine months ended September 30, 2020 are summarized below: Fantasia Fantasia Fantasia FPH Combined SUL JV JV II JV III JV JV Indiana JV Total Revenue $ 13,703,000 $ 3,106,000 $ 2,668,000 $ 5,986,000 $ 2,650,000 $ 8,839,000 $ 36,952,000 Income from operations $ 5,851,000 $ 460,000 $ 1,474,000 $ 3,240,000 $ 1,256,000 $ 5,579,000 $ 17,860,000 Net income (loss) $ 2,467,000 $ (72,000) $ 748,000 $ 1,437,000 $ (1,175,000) $ (356,000) $ 3,049,000 Summit interest in Equity-Method Investments net income (loss) $ 247,000 $ (25,000) $ 150,000 $ 144,000 $ (117,000) $ (53,000) $ 346,000 Distributions from Equity-Method Investments As of September 30, 2021 and December 31, 2020, we have distributions receivable, which are included in tenant and other receivables in our condensed consolidated balance sheets, as follows: September 30, December 31, 2021 2020 SUL JV $ 324,000 $ 466,000 Fantasia JV 162,000 36,000 Fantasia II JV 53,000 51,000 Fantasia III JV 331,000 257,000 FPH JV 26,000 26,000 Indiana JV — 498,000 Total $ 896,000 $ 1,334,000 For the nine months ended September 30, 2021 and 2020, we have received cash distributions, which are included in our cash flows from operating activities in tenant and other receivables, and cash flows from investing activities, as follows: Nine months ended September 30, 2021 Nine months ended September 30, 2020 Cash Flow Cash Flow Cash Flow Cash Flow Total Cash from from Total Cash from from Distributions Operating Investing Distributions Operating Investing Received Activities Activities Received Activities Activities SUL JV $ 631,000 $ 142,000 $ 489,000 $ 352,000 $ 246,000 $ 106,000 Fantasia JV — — — 144,000 — 144,000 Fantasia II JV 225,000 148,000 77,000 219,000 150,000 69,000 Fantasia III JV 123,000 123,000 — 104,000 104,000 — FPH JV 114,000 114,000 — 118,000 — 118,000 Indiana JV 773,000 — 773,000 429,000 — 429,000 Total $ 1,866,000 $ 527,000 $ 1,339,000 $ 1,366,000 $ 500,000 $ 866,000 Acquisition and Asset Management Fees We serve as the manager of our Equity-Method Investments and provide management services in exchange for fees and reimbursements. As the manager, we are paid an acquisition fee, as defined in the applicable joint venture agreements. Additionally, we are paid an annual asset management fee for managing the properties held by our Equity-Method Investments, as defined in those agreements. For the three months ended September 30, 2021 and 2020, we recorded approximately $0.2 million and $0.3 million,respectively, in acquisition and asset management fees from our Equity-Method Investments. For the nine months ended September 30, 2021 and 2020, we recorded $0.8 million and $0.9 million, respectively,in acquisition and asset management fees from our Equity-Method Investments (see Note 7). |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2021 | |
Receivables | |
Receivables | 6. Receivables Tenant and Other Receivables, Net Tenant and other receivables, net consists of: September 30, December 31, 2021 2020 Straight-line rent receivables $ 2,337,000 $ 2,772,000 Distribution receivables from Equity-Method Investments 896,000 1,334,000 Asset management fees 348,000 432,000 Other receivables 41,000 139,000 Total $ 3,622,000 $ 4,677,000 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions | |
Related Party Transactions | 7. Related Party Transactions CRA Prior to the termination of our advisory agreement on April 1, 2014 with CRA (our former advisor, a related party), we incurred costs related to fees paid and costs reimbursed for services rendered to us by CRA through September 30, 2014. Some of the fees we had paid to CRA were considered to be in excess of allowed amounts and, therefore, CRA was required to reimburse us for the amount of the excess costs we paid to them. As of September 30, 2021 and December 31, 2020, the receivables from CRA are fully reserved due to the uncertainty of collectability and are included in tenant and other receivables in our condensed consolidated balance sheets (see Note 10). As of September 30, 2021 and December 31, 2020, we had the following receivables and reserves related to CRA: Receivables Reserves Balance Organizational and offering costs $ 738,000 $ (738,000) $ — Asset management fees and expenses 32,000 (32,000) — Operating expenses (direct and indirect) 189,000 (189,000) — Operating expenses (2%/25% Test) 1,717,000 (1,717,000) — Total $ 2,676,000 $ (2,676,000) $ — Equity-Method Investments See Notes 5 and 6 for further discussion of distributions and acquisition and asset management fees related to our Equity-Method Investments. |
Concentration of Risk
Concentration of Risk | 9 Months Ended |
Sep. 30, 2021 | |
Concentration of Risk | |
Concentration of Risk | 8. Concentration of Risk Our cash is generally invested in short-term money market instruments. As of September 30, 2021, we had cash and cash equivalent accounts in excess of FDIC-insured limits. However, we do not believe the risk associated with this excess is significant. As of September 30, 2021, we owned four properties in California, three properties in Oregon, one property in Texas, one property in Illinois, and one property in Arizona (excluding the 36 properties held by our Equity-Method Investments). Accordingly, there is a geographic concentration of risk subject to economic conditions in certain states. Additionally, for the three months ended September 30, 2021, we leased our 10 real estate properties to eight different tenants under long-term triple net leases, and four of the eight tenants each represented more than 10% of our rental revenue. For the three months ended September 30, 2020, we leased our seven real estate properties to five different tenants under long-term triple net leases, and four of the five tenants each represented more than 10% of our rental revenue. For the nine months ended September 30, 2021, we leased our 10 real estate properties to eight different tenants under long-term triple net leases, and three of the eight tenants each represented more than 10% of our rental revenue. For the nine months ended September 30, 2020, we leased our seven real estate properties to five different tenants under long-term triple net leases, and four of the five tenants each represented more than 10% of our rental revenue . As of September 30, 2021, no tenants constituted a significant asset concentration as the net assets leased to the tenants were not greater than 20% of our total assets. |
Fair Value Measurements of Fina
Fair Value Measurements of Financial Instruments | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Measurements of Financial Instruments | |
Fair Value Measurements of Financial Instruments | 9. Fair Value Measurements of Financial Instruments Our condensed consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, notes receivable, tenant and other receivables, certain other assets, accounts payable and accrued liabilities, security deposits and loans payable. With the exception of the loans payable discussed below, we consider the carrying values to approximate fair value for such financial instruments because of the short period of time between origination of the instruments and their expected payment. As of September 30, 2021 and December 31, 2020, the fair value of loans payable was $55.6 million and $52.6 million, compared to the principal balance (excluding debt discount) of $61.4 million and $47.2 million, respectively. The fair value of loans payable was estimated using lending rates available to us for financial instruments with similar terms and maturities. To estimate fair value as of September 30, 2021, we utilized discount rates ranging from 2.8% to 5.0% and a weighted average discount rate of 5.0%. As the inputs to our valuation estimate are neither observable in nor supported by market activity, our loans payable are classified as Level 3 liability within the fair value hierarchy. As a result of our ongoing analysis for potential impairment of our investments in real estate, we may be required to adjust the carrying value of certain assets to their estimated fair values, or estimated fair value less selling costs, under certain circumstances. No impairments were recorded during the three and nine months ended September 30, 2021 and 2020. At September 30, 2021 and December 31, 2020, we do not have any financial assets or financial liabilities that are measured at fair value on a recurring basis in our condensed consolidated financial statements. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10. Commitments and Contingencies We inspect our properties under a Phase I assessment for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist, we are not currently aware of any environmental liability with respect to the properties that would have a material effect on our consolidated financial condition, results of operations and cash flows. Further, we are not aware of any environmental liability or any unasserted claim or assessment with respect to an environmental liability that we believe would require additional disclosure or the recording of a loss contingency. Our commitments and contingencies include the usual obligations of real estate owners and licensed operators in the normal course of business. In the opinion of management, these matters are not expected to have a material impact on our consolidated financial condition, results of operations and cash flows. We are also subject to contingent losses resulting from litigation against the Company. Legal Proceedings On April 1, 2014, CRA and Cornerstone Ventures, Inc. filed a complaint in the Superior Court of California for the County of Orange-Central Justice Center, Case No. 30-2014-00714004-CU-BT-CJC, naming the Company, its former directors, one of its officers and one of its former officers as defendants, seeking declaratory and injunctive relief and compensatory and punitive damages. On September 17, 2014, we filed a First Amended Cross-Complaint seeking compensatory damages and an accounting pursuant to Sections 10(c)(i) and 17(c)(ii) of the Advisory Agreement and including any monies Plaintiffs and Terry Roussel directly or indirectly received from or paid to the Company. On February 22, 2018, the action was assigned to a different trial judge. On May 29, 2018, the Company filed a motion for terminating and monetary sanctions against CRA, Cornerstone Ventures, Inc. and their counsel, Winget Spadafora & Schwartzberg. On November 30, 2018, the new trial judge vacated the trial date, pending resolution of the Company’s motion for terminating and monetary sanctions against CRA and Cornerstone Ventures, Inc. and denied the Company’s motion for sanctions against Winget Spadafora & Schwartzberg. On February 13, 2019, the trial judge held another hearing on the Company’s motion for terminating and monetary sanctions and indicated that it intended to grant the Company’s motion for terminating sanctions and award the Company monetary sanctions. On March 14, 2019, the Court entered an Order and Judgment granting the Company’s motion for terminating sanctions, awarding the Company monetary sanctions in the amount of $588,672, and dismissing CRA and Cornerstone Ventures Inc.’s Complaint with prejudice. On May 21, 2019, CRA and Cornerstone Ventures, Inc. filed a notice of appeal from the Judgment and, on June 3, 2019, the Company filed a notice of cross-appeal from the Judgment. On July 9, 2019, the California Court of Appeal, Fourth District dismissed CRA and Cornerstone Ventures, Inc.’s appeal with prejudice. The briefing to the Court of Appeal, Fourth District on the Company’s appeals against CRA, Cornerstone Ventures, Inc and Winget Spadafora & Schwartzberg was completed on April 27, 2020. On October 28, 2020, the Court of Appeal issued an opinion affirming in part, and reversing, in part, the trial court’s opinion and remanded the action back to the trial court. On February 11, 2021, the trial court issued an order awarding an additional $189,645 in monetary sanctions for the period prior to July 12, 2016 in favor of the Company and against CRA and CVI. In September 2015, a bankruptcy petition was filed against Healthcare Real Estate Partners, LLC (“HCRE”) by the investors in Healthcare Real Estate Fund, LLC and Healthcare Real Estate Qualified Purchasers Fund, LLC (collectively, the “Funds”). HCRE did not timely respond to the involuntary petition and the Bankruptcy Court entered an Order of Relief making HCRE a debtor in bankruptcy. As a result, HCRE was removed as manager under the Funds’ operating agreement. Thereafter the Company became the manager of the Funds and purchased the investors’ interests in the Funds for approximately $0.9 million. Following the subsequent dismissal of the involuntary bankruptcy petition filed against it, HCRE filed a motion for attorneys’ fees and damages and a separate complaint for violation of the automatic stay against the petitioning creditors and the Company in the United States Bankruptcy Court of the District of Delaware. The Bankruptcy Court granted a motion to dismiss the complaint for violation of the automatic stay filed jointly by the petitioning creditors and us, and dismissed the complaint with prejudice. HCRE appealed the Bankruptcy Court’s decision to the United States District Court for the District of Delaware which affirmed the Bankruptcy Court’s dismissal of the complaint in a decision dated September 9, 2018. On October 11, 2018, HCRE appealed the District Court’s decision affirming the Bankruptcy Court’s dismissal of the complaint to the United States Court of Appeals for the Third Circuit. On October 22, 2019, the Third Circuit granted HCRE’s appeal, reversing the District Court and holding that HCRE could assert the adversary complaint seeking damages for violation of the automatic stay. The Company filed a Petition for Rehearing on November 5, 2019 asserting that HCRE is not entitled to assert a claim for damages for violation of the automatic stay. This Petition was denied and the mandate was issued sending the matter back to the Bankruptcy Court. The Bankruptcy Court held a status conference on February 4, 2021, and subsequently entered scheduling orders to govern discovery and pretrial matters, and discovery is ongoing. The parties have filed dispositive motions, including a motion filed by the Company and the petitioning creditors for judgment on the pleadings. Following a further status conference on October 14, 2021, the parties agreed to postpone remaining discovery until after the Court rules on the pending motions.Based on the assessment by management of the numerous legal arguments that can be raised on this claim, the Company believes that a loss is currently not probable or estimable under ASC 450, “Contingencies”, and as of September 30, 2021 no accrual has been made with regard to the claim. We believe that all of HCRE’s remaining alleged claims are without merit and will vigorously defend ourselves. Indemnification and Employment Agreements We have entered into indemnification agreements with certain of our executive officers and directors which indemnify them against all judgments, penalties, fines and amounts paid in settlement and all expenses actually and reasonably incurred by him or her in connection with any proceeding. Additionally, effective October 19, 2021, we amended our employment agreements with our executive officers to extend the term of each agreement for an additional three years. These employment agreements include customary terms relating to salary, bonus, position, duties and benefits (including eligibility for equity compensation), as well as a cash payment following a change in control of the Company, as defined in such agreements. Management of our Equity-Method Investments As the manager of our Equity-Method Investments, we are responsible for the day-to-day management. Additionally, we could be subject to a capital call from our Equity-Method Investments. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2021 | |
Equity | |
Equity | 11. Equity Share-Based Compensation Plans Upon the grant of stock options, we determine the exercise price by using our estimated per-share value, which is calculated by aggregating the estimated fair value of our investments in real estate and the estimated fair value of our other assets, subtracting the book value of our liabilities, utilizing a discount for the fact that the shares are not currently traded on a national securities exchange and a lack of a control premium, and divided by the total by the number of our common shares outstanding at the time the options were granted. The fair value of each grant is estimated on the date of grant using the Black-Scholes option-pricing model. Assumptions required by the model include the risk-free interest rate, the expected life of the options, the expected stock price volatility over the expected life of the options, and the expected distribution yield. Compensation expense for employee stock options is recognized ratably over the vesting term. The expected life of the options was based on the simplified method as we do not have sufficient historical exercise data. The risk-free interest rate was based on the U.S. Treasury yield curve at the date of grant with maturity dates approximating the expected term of the options at the date of grant. Volatility was based on historical volatility of the stock prices for a sample of publicly traded companies with risk profiles similar to ours. The valuation model applied in this calculation utilizes highly subjective assumptions that could potentially change over time, including the expected stock price volatility and the expected life of an option. The following table summarizes our stock options as of September 30, 2021: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term Value Options outstanding at January 1, 2021 1,871,908 $ 2.09 Granted — Exercised — Cancelled/forfeited (1,333) 2.26 Options outstanding at September 30, 2021 1,870,575 $ 2.09 6.06 $ 1,524,000 Options exercisable at September 30, 2021 1,828,685 $ 2.08 6.06 $ 1,497,000 For our outstanding non-vested options as of September 30, 2021, the weighted average grant date fair value per share was $0.59. As of September 30, 2021, we have unrecognized stock-based compensation expense related to unvested stock options which is expected to be recognized as follows: Years Ending December 31, October 1, 2021 to December 31, 2021 $ 10,000 2022 14,000 2023 1,000 $ 25,000 The stock-based compensation expense reported for the three months ended September 30, 2021 and 2020 was approximately $9,000 and $35,000, respectively, and is included in general and administrative expense in the condensed consolidated statements of operations. The stock-based compensation expense reported for the nine months ended September 30, 2021 and 2020 was approximately $56,000 and $115,000, respectively, and is included in general and administrative expense in the condensed consolidated statements of operations. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share | |
Earnings Per Share | 12. Earnings Per Share The following table presents the calculation of basic and diluted earnings per share (“EPS”) for the Company’s common stock for the three and nine months ended September 30, 2021 and 2020, and reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS: Three Months Ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Numerator: (Loss) income $ (229,000) $ 128,000 $ 604,000 $ (136,000) (Income) loss attributable to noncontrolling interest (18,000) (16,000) (58,000) (39,000) Net (loss) income applicable to common stockholders $ (247,000) $ 112,000 $ 546,000 $ (175,000) Denominator: Basic: Denominator for basic EPS - weighted average shares 23,027,978 23,027,978 23,027,978 23,027,978 Effect of dilutive shares: Stock options — 487,436 525,628 — Denominator for diluted EPS – adjusted weighted average shares 23,027,978 23,515,414 23,553,606 23,027,978 Basic EPS $ (0.01) $ 0.00 $ 0.02 $ (0.01) Diluted EPS $ (0.01) $ 0.00 $ 0.02 $ (0.01) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, the Operating Partnership and its consolidated companies and are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. The accompanying financial information reflects all adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods. Interim results of operations are not necessarily indicative of the results to be expected for the full year. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. |
Restricted Cash | Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statements of cash flows. September 30, December 31, 2021 2020 Cash and cash equivalents $ 17,000,000 $ 14,658,000 Restricted cash 2,999,000 2,933,000 Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows $ 19,999,000 $ 17,591,000 |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In January 2020, the Financial Accounting Standards Board issued Accounting Standard Update (“ASU”) 2020-01 to clarify the interaction among the accounting standards for equity securities, equity method investments and certain derivatives. The new ASU clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The adoption of the new standard on January 1, 2021 did not have a material effect on the Company’s financial position, results of operations, or cash flows. |
Coronavirus (COVID-19) | Coronavirus (COVID-19) Since it was first reported in December 2019, COVID-19 has spread globally. The outbreak has led governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to control its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders. The COVID-19 pandemic and measures to prevent its spread negatively impacted senior housing and skilled nursing facilities in a number of ways, including but not limited to: ● Decreased occupancy and increased operating costs for the Company’s tenants and borrowers, which may adversely impact their ability to make full and timely rental and debt payments to the Company. The Company may have to restructure tenants’ long-term rent obligations in the future and may not be able to do so on terms that are as favorable to the Company as those currently in place. Reduced or modified rental and debt amounts could result in the determination that the full amounts of the Company’s real estate properties and notes receivable are not recoverable, which could result in an impairment charge. ● Decreased occupancy and increased operating costs for the Company’s Equity-Method Investments that own senior housing and skilled nursing facilities, which may negatively impact the operating results of these investments. The Equity-Method Investments may have to restructure tenants’ long-term rent obligations and may not be able to do so on terms that are as favorable to the Equity-Method Investments as those currently in place. Prolonged deterioration in the operating results for these investments could result in the determination that the full amounts of the Company’s investments are not recoverable, which could result in an impairment charge . For the period ended September 30, 2021, two of our tenants experienced a material adverse effect on their operations related to COVID-19, and that has affected their ability to make their rent payments in 2021. For one of the tenants, in October 2020, under a court order, a receiver assumed the responsibilities of operating and managing the Pennington Gardens facility in Chandler, Arizona. In October 2021, we reached an agreement with the tenant to terminate the lease, and we are currently negotiating with the U.S. Department of Housing and Urban Development (“HUD”) to approve the termination of the lease and approve the current receiver as the new operator/manager. Once approved by HUD, the lease will be terminated and the operations of Pennington Gardens will be consolidated in our financial statements. Beginning in March 2021, we recorded rent payments on a cash basis and wrote off the remaining straight-line rent receivable of $0.4 million. For the other tenant that is managing the Sundial Assisted Living facility, in October 2021, we reached an agreement with the tenant to terminate the lease, and we are currently negotiating with HUD to approve the termination of the lease and install a new operator/manager. Once approved by HUD, the lease will be terminated and the operations of Sundial Assisted Living will be consolidated in our financial statements. Beginning in June 2021, we recorded rent payments on a cash basis and in May 2021, wrote off the remaining straight-line rent receivable of $0.1 million. Additionally, some of our Equity-Method Investment tenants have experienced decreased occupancy and increased operating costs related to COVID-19, however; there have been no rent concessions for such tenants during 2021. It is impossible to predict the continuing effect and ultimate impact of the COVID-19 pandemic on our operations and results as the situation is continuing to evolve. Many of our consolidated and Equity Method Investments facilities have administered the vaccine to residents and employees. It is too early to assess the total effect of the vaccinations on the industry, but it is believed they will help save the lives of those who are most at risk, as well as lessen the operational and financial burden on our facilities and their employees. The rapid development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact on the demand for senior housing and skilled nursing and presents material uncertainty and risk with respect to our business, operations, financial condition and liquidity, including recording impairments, lease modifications and credit losses associated with notes receivable in future periods. |
CARES Act | CARES Act During 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted to provide economic stimulus and assistance to business owners to help maintain on-going operations in the form of grants, forgivable loans and other relief. We did not obtain a paycheck protection program loan. We have evaluated the CARES Act and determined that there was no impact on the Company for the nine-month period ended September 30, 2021 or the year ended December 31, 2020. We will continue to evaluate and monitor the CARES Act, and any new COVID-19-related legislation to determine the ultimate impact and benefits, if any, to the Company. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Policies | |
Schedule of restrictions on cash and cash equivalents | September 30, December 31, 2021 2020 Cash and cash equivalents $ 17,000,000 $ 14,658,000 Restricted cash 2,999,000 2,933,000 Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows $ 19,999,000 $ 17,591,000 |
Investments in Real Estate Pr_2
Investments in Real Estate Properties (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments in Real Estate Properties | |
Schedule of business acquisitions, by acquisition | September 30, December 31, 2021 2020 Land $ 8,530,000 $ 6,237,000 Buildings and improvements 64,203,000 48,295,000 Less: accumulated depreciation (10,959,000) (9,853,000) Buildings and improvements, net 53,244,000 38,442,000 Furniture and fixtures 4,678,000 4,230,000 Less: accumulated depreciation (4,134,000) (3,988,000) Furniture and fixtures, net 544,000 242,000 Intangible lease assets 526,000 — Less: accumulated amortization (9,000) — Intangible lease assets, net 517,000 — Real estate properties, net $ 62,835,000 $ 44,921,000 |
Schedule of real estate properties | The following table provides summary information regarding our portfolio (excluding the 36 properties owned by our unconsolidated Equity-Method Investments) as of September 30, 2021: Loans Payable, Excluding Debt Purchase Issuance Property Location Date Purchased Type (1) Price Costs Sheridan Care Center Sheridan, OR August 3, 2012 SNF $ 4,100,000 $ 4,210,000 Fernhill Care Center Portland, OR August 3, 2012 SNF 4,500,000 3,693,000 Friendship Haven Healthcare and Rehabilitation Center Galveston County, TX September 14, 2012 SNF 15,000,000 11,592,000 Pacific Health and Rehabilitation Center Tigard, OR December 24, 2012 SNF 8,140,000 6,157,000 Brookstone of Aledo Aledo, IL July 2, 2013 AL 8,625,000 6,764,000 Sundial Assisted Living Redding, CA December 18, 2013 AL 3,500,000 3,752,000 Pennington Gardens Chandler, AZ July 17, 2017 AL/MC 13,400,000 10,232,000 Yucaipa Hill Post Acute Yucaipa, CA July 2, 2021 SNF 10,715,000 8,014,000 Creekside Post Acute Yucaipa, CA July 2, 2021 SNF 4,780,000 3,575,000 University Post Acute Mentone, CA July 2, 2021 SNF 4,560,000 3,411,000 Total: $ 77,320,000 $ 61,400,000 (1) SNF is an abbreviation for skilled nursing facility. AL is an abbreviation for assisted living facility. MC is an abbreviation for memory care facility. |
Schedule of future minimum rental payments to be received | Years ending October 1, 2021 to December 31, 2021 $ 1,481,000 2022 5,998,000 2023 6,107,000 2024 6,218,000 2025 6,332,000 Thereafter 37,010,000 $ 63,146,000 |
Schedule of the allocation of the relative fair value of the real estate | The following table represents the allocation of the relative fair value of the real estate acquired for the CA3 Properties acquisition: Land $ 2,293,000 Building and improvements 15,908,000 Furniture and fixtures 448,000 Intangible lease assets and above/below market leases (1) 1,486,000 Total purchase price plus acquisition costs $ 20,135,000 (1) Above/below market leases intangible asset is included in other assets, net on the condensed consolidated balance sheets. |
Loans Payable (Tables)
Loans Payable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Loans Payable | |
Schedule of debt | September 30, 2021 December 31, 2020 Loan payable to Capital One Multifamily Finance, LLC (insured by HUD) in monthly installments of approximately $49,000, including interest at a fixed rate of 4.23%, due in September 2053, and collateralized by Pennington Gardens. $ 10,232,000 $ 10,330,000 Loans payable to Lument Capital (formerly ORIX Real Estate Capital, LLC) (insured by HUD) in monthly installments of approximately $183,000, including interest, ranging from a fixed rate of 2.79% to 4.2%, due in September 2039 through April 2055, and as of September 30, 2021 and December 31, 2020, collateralized by Sheridan, Fernhill, Pacific Health, Friendship Haven, Aledo and Sundial Assisted Living. $ 36,168,000 $ 36,857,000 Loans payable to CIBC Bank, USA in monthly installments of approximately $65,000, interest only through July 2022 at LIBOR (with a floor of 1%) plus 4% (5% at September 30, 2021), due in July 2024, and collateralized by Yucaipa Post Acute, Creekside Post Acute and University Post Acute) 15,000,000 — 61,400,000 47,187,000 Less debt issuance costs (2,071,000) (1,913,000) Total loans payable $ 59,329,000 $ 45,274,000 |
Schedule of maturities of long-term debt | The principal payments due on the loans payable (excluding debt issuance costs) for the period from October 1, 2021 to December 31, 2021 and for each of the four following years and thereafter ending December 31 are as follows: Principal Years Ending Amount October 1, 2021 to December 31, 2021 $ 273,000 2022 1,269,000 2023 1,475,000 2024 15,730,000 2025 1,246,000 Thereafter 41,407,000 $ 61,400,000 |
Equity-Method Investments (Tabl
Equity-Method Investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity-Method Investments | |
Schedule of results of operations | The results of operations of our Equity-Method Investments for the nine months ended September 30, 2021 are summarized below: Fantasia Fantasia Fantasia FPH Indiana Combined SUL JV JV II JV III JV JV JV Total Revenue $ 15,339,000 $ 2,860,000 $ 2,759,000 $ 6,156,000 $ 2,731,000 $ (1,695,000) $ 28,150,000 Income (loss) from operations $ 5,072,000 $ 282,000 $ 1,448,000 $ 3,094,000 $ 1,255,000 $ (5,093,000) $ 6,058,000 Net income (loss) $ 1,421,000 $ 369,000 $ 738,000 $ 1,510,000 $ 1,205,000 $ (8,567,000) $ (3,324,000) Summit interest in Equity-Method Investments net income (loss) $ 142,000 $ 129,000 $ 148,000 $ 151,000 $ 121,000 $ (1,286,000) $ (595,000) The results of operations of our Equity-Method Investments for the nine months ended September 30, 2020 are summarized below: Fantasia Fantasia Fantasia FPH Combined SUL JV JV II JV III JV JV Indiana JV Total Revenue $ 13,703,000 $ 3,106,000 $ 2,668,000 $ 5,986,000 $ 2,650,000 $ 8,839,000 $ 36,952,000 Income from operations $ 5,851,000 $ 460,000 $ 1,474,000 $ 3,240,000 $ 1,256,000 $ 5,579,000 $ 17,860,000 Net income (loss) $ 2,467,000 $ (72,000) $ 748,000 $ 1,437,000 $ (1,175,000) $ (356,000) $ 3,049,000 Summit interest in Equity-Method Investments net income (loss) $ 247,000 $ (25,000) $ 150,000 $ 144,000 $ (117,000) $ (53,000) $ 346,000 |
Schedule of distributions receivable | September 30, December 31, 2021 2020 SUL JV $ 324,000 $ 466,000 Fantasia JV 162,000 36,000 Fantasia II JV 53,000 51,000 Fantasia III JV 331,000 257,000 FPH JV 26,000 26,000 Indiana JV — 498,000 Total $ 896,000 $ 1,334,000 |
Schedule of cash distributions | Nine months ended September 30, 2021 Nine months ended September 30, 2020 Cash Flow Cash Flow Cash Flow Cash Flow Total Cash from from Total Cash from from Distributions Operating Investing Distributions Operating Investing Received Activities Activities Received Activities Activities SUL JV $ 631,000 $ 142,000 $ 489,000 $ 352,000 $ 246,000 $ 106,000 Fantasia JV — — — 144,000 — 144,000 Fantasia II JV 225,000 148,000 77,000 219,000 150,000 69,000 Fantasia III JV 123,000 123,000 — 104,000 104,000 — FPH JV 114,000 114,000 — 118,000 — 118,000 Indiana JV 773,000 — 773,000 429,000 — 429,000 Total $ 1,866,000 $ 527,000 $ 1,339,000 $ 1,366,000 $ 500,000 $ 866,000 |
Receivables (Tables)
Receivables (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Receivables | |
Schedule of tenant and other receivables | September 30, December 31, 2021 2020 Straight-line rent receivables $ 2,337,000 $ 2,772,000 Distribution receivables from Equity-Method Investments 896,000 1,334,000 Asset management fees 348,000 432,000 Other receivables 41,000 139,000 Total $ 3,622,000 $ 4,677,000 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions | |
Schedule of receivables and reserves related to CRA | As of September 30, 2021 and December 31, 2020, we had the following receivables and reserves related to CRA: Receivables Reserves Balance Organizational and offering costs $ 738,000 $ (738,000) $ — Asset management fees and expenses 32,000 (32,000) — Operating expenses (direct and indirect) 189,000 (189,000) — Operating expenses (2%/25% Test) 1,717,000 (1,717,000) — Total $ 2,676,000 $ (2,676,000) $ — |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity | |
Schedule of stock options | The following table summarizes our stock options as of September 30, 2021: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term Value Options outstanding at January 1, 2021 1,871,908 $ 2.09 Granted — Exercised — Cancelled/forfeited (1,333) 2.26 Options outstanding at September 30, 2021 1,870,575 $ 2.09 6.06 $ 1,524,000 Options exercisable at September 30, 2021 1,828,685 $ 2.08 6.06 $ 1,497,000 |
Schedule of unrecognized stock-based compensation expense | Years Ending December 31, October 1, 2021 to December 31, 2021 $ 10,000 2022 14,000 2023 1,000 $ 25,000 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share | |
Schedule of basic and diluted earning per share and reconciliation weighted average common stock outstanding | Three Months Ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Numerator: (Loss) income $ (229,000) $ 128,000 $ 604,000 $ (136,000) (Income) loss attributable to noncontrolling interest (18,000) (16,000) (58,000) (39,000) Net (loss) income applicable to common stockholders $ (247,000) $ 112,000 $ 546,000 $ (175,000) Denominator: Basic: Denominator for basic EPS - weighted average shares 23,027,978 23,027,978 23,027,978 23,027,978 Effect of dilutive shares: Stock options — 487,436 525,628 — Denominator for diluted EPS – adjusted weighted average shares 23,027,978 23,515,414 23,553,606 23,027,978 Basic EPS $ (0.01) $ 0.00 $ 0.02 $ (0.01) Diluted EPS $ (0.01) $ 0.00 $ 0.02 $ (0.01) |
Organization (Details)
Organization (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2021USD ($)property | Sep. 30, 2021USD ($)property | Dec. 31, 2020USD ($)property | |
Organization [Line Items] | |||
Equity method investment ownership percentage | 10.00% | ||
Equity-method investments | $ | $ 7,597,000 | $ 11,375,000 | |
Number of owned properties | 17 | ||
Summit Healthcare Operating Partnership [Member] | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 99.88% | ||
Summit Healthcare Operating Partnership [Member] | Cornerstone Realty Advisors, LLC [Member] | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest by Affiliates | 0.12% | ||
Cornerstone Healthcare Partners [Member] | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 95.00% | ||
Cornerstone Healthcare Real Estate Fund [Member] | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest by Affiliates | 5.00% | ||
JV Properties [Member] | |||
Organization [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 4.70% | ||
Summit Union Life Holding [Member] | |||
Organization [Line Items] | |||
Real Estate Investment Trust Own Percentage | 10.00% | ||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest by Affiliates | 10.00% | 10.00% | |
Number of owned properties | 17 | 17 | |
Four Jv Properties [Member] | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 95.30% | ||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest by Affiliates | 95.30% | 95.30% | |
Summit Fantasia Holdings III, LLC | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest by Affiliates | 10.00% | 10.00% | |
Number of owned properties | 9 | 9 | |
Summit Fantasy Pearl Holdings, LLC [Member] | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 10.00% | 10.00% | |
Number of owned properties | 6 | 6 | |
Fantasia II JV | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest by Affiliates | 20.00% | ||
Equity method investment ownership percentage | 20.00% | 20.00% | |
Number of owned properties | 2 | 2 | |
Fantasia JV | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 35.00% | ||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest by Affiliates | 35.00% | 35.00% | |
Number of owned properties | 2 | 2 | |
Summit Health Care Three Properties [Member] | |||
Organization [Line Items] | |||
Equity method investment ownership percentage | 100.00% | ||
Indiana JV | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 15.00% | 15.00% | |
Equity method investment ownership percentage | 0.00% | 15.00% | |
Equity-method investments | $ | $ 5,400,000 | ||
Number of owned properties | 14 | 14 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash and cash equivalents | $ 17,000,000 | $ 14,658,000 | ||
Restricted cash | 2,999,000 | 2,933,000 | ||
Total cash, cash equivalents, and restricted cash shown on the consolidated statements of cash flows | 19,999,000 | $ 18,652,000 | $ 17,591,000 | $ 16,077,000 |
Straight-line rents | (435,000) | $ 178,000 | ||
Pennington Gardens | ||||
Straight-line rents | 400,000 | |||
Sundial Assisted Living | ||||
Straight-line rents | $ 100,000 |
Investments in Real Estate Pr_3
Investments in Real Estate Properties - Investments in real estate properties (Details) - USD ($) | Jul. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Real Estate Properties [Line Items] | |||
Real estate properties, net | $ 62,835,000 | $ 44,921,000 | |
CA3 Properties | |||
Real Estate Properties [Line Items] | |||
Total purchase price plus acquisition costs | $ 20,055,000 | 20,135,000 | |
Land | |||
Real Estate Properties [Line Items] | |||
Real estate properties, net | 8,530,000 | 6,237,000 | |
Land | CA3 Properties | |||
Real Estate Properties [Line Items] | |||
Total purchase price plus acquisition costs | 2,293,000 | ||
Buildings and improvements | |||
Real Estate Properties [Line Items] | |||
Investments in real estate | 64,203,000 | 48,295,000 | |
Less: accumulated depreciation | (10,959,000) | (9,853,000) | |
Real estate properties, net | 53,244,000 | 38,442,000 | |
Buildings and improvements | CA3 Properties | |||
Real Estate Properties [Line Items] | |||
Total purchase price plus acquisition costs | 15,908,000 | ||
Furniture and fixtures | |||
Real Estate Properties [Line Items] | |||
Investments in real estate | 4,678,000 | 4,230,000 | |
Less: accumulated depreciation | (4,134,000) | (3,988,000) | |
Real estate properties, net | 544,000 | $ 242,000 | |
Furniture and fixtures | CA3 Properties | |||
Real Estate Properties [Line Items] | |||
Total purchase price plus acquisition costs | 448,000 | ||
Intangible lease assets | |||
Real Estate Properties [Line Items] | |||
Investments in real estate | 526,000 | ||
Less: accumulated depreciation | (9,000) | ||
Real estate properties, net | 517,000 | ||
Intangible lease assets | CA3 Properties | |||
Real Estate Properties [Line Items] | |||
Total purchase price plus acquisition costs | $ 1,486,000 |
Investments in Real Estate Pr_4
Investments in Real Estate Properties - Summary information regarding portfolio (Details) | Sep. 30, 2021USD ($) |
Real Estate Properties [Line Items] | |
Purchase Price | $ 77,320,000 |
Loans Payable, Excluding Debt Issuance Costs | 61,400,000 |
Sheridan Care Center | |
Real Estate Properties [Line Items] | |
Purchase Price | 4,100,000 |
Loans Payable, Excluding Debt Issuance Costs | 4,210,000 |
Fernhill Care Center | |
Real Estate Properties [Line Items] | |
Purchase Price | 4,500,000 |
Loans Payable, Excluding Debt Issuance Costs | 3,693,000 |
Friendship Haven Healthcare and Rehabilitation Center | |
Real Estate Properties [Line Items] | |
Purchase Price | 15,000,000 |
Loans Payable, Excluding Debt Issuance Costs | 11,592,000 |
Pacific Health and Rehabilitation Center | |
Real Estate Properties [Line Items] | |
Purchase Price | 8,140,000 |
Loans Payable, Excluding Debt Issuance Costs | 6,157,000 |
Brookstone of Aledo | |
Real Estate Properties [Line Items] | |
Purchase Price | 8,625,000 |
Loans Payable, Excluding Debt Issuance Costs | 6,764,000 |
Sundial Assisted Living | |
Real Estate Properties [Line Items] | |
Purchase Price | 3,500,000 |
Loans Payable, Excluding Debt Issuance Costs | 3,752,000 |
Yucaipa Hill Post Acute | |
Real Estate Properties [Line Items] | |
Purchase Price | 10,715,000 |
Loans Payable, Excluding Debt Issuance Costs | 8,014,000 |
Creekside Post Acute | |
Real Estate Properties [Line Items] | |
Purchase Price | 4,780,000 |
Loans Payable, Excluding Debt Issuance Costs | 3,575,000 |
University Post Acute | |
Real Estate Properties [Line Items] | |
Purchase Price | 4,560,000 |
Loans Payable, Excluding Debt Issuance Costs | 3,411,000 |
Pennington Gardens | |
Real Estate Properties [Line Items] | |
Purchase Price | 13,400,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 10,232,000 |
Investments in Real Estate Pr_5
Investments in Real Estate Properties - Future Minimum Lease Payments (Details) | Sep. 30, 2021USD ($) |
Investments in Real Estate Properties | |
October 1, 2021 to December 31, 2021 | $ 1,481,000 |
2022 | 5,998,000 |
2023 | 6,107,000 |
2024 | 6,218,000 |
2025 | 6,332,000 |
Thereafter | 37,010,000 |
Operating Leases, Future Minimum Payments Receivable | $ 63,146,000 |
Investments in Real Estate Pr_6
Investments in Real Estate Properties - Additional information (Details) | Jul. 02, 2021USD ($)facilityitem | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($)property | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($)property | Dec. 31, 2020USD ($) | Sep. 30, 2021 | Sep. 30, 2021property |
Real Estate Properties [Line Items] | ||||||||
Number of leased real estate properties | 7 | 7 | 10 | 10 | ||||
Depreciation | $ 500,000 | $ 400,000 | $ 1,300,000 | $ 1,200,000 | ||||
Percentage of Real Estate Properties | 100.00% | |||||||
Deferred Costs | 1,100,000 | $ 1,100,000 | $ 1,100,000 | |||||
Unamortized balance of capitalized leasing commissions | 500,000 | $ 500,000 | ||||||
Amortization of Deferred Leasing Commissions | $ 18,000 | $ 18,000 | 53,000 | $ 53,000 | ||||
CA3 Properties | ||||||||
Real Estate Properties [Line Items] | ||||||||
Business Combination, Acquisition Related Costs | $ 80,000 | |||||||
Number of skilled nursing facilities acquired | facility | 3 | |||||||
Purchase price amount | $ 20,055,000 | $ 20,135,000 | ||||||
Number of unrelated parties for lease under acquisition | item | 3 | |||||||
Lease term under three separate triple net leases | 15 years | |||||||
CA3 Properties | 1st Renewal Options | ||||||||
Real Estate Properties [Line Items] | ||||||||
Lease renewal options | 5 years | |||||||
CA3 Properties | 2nd Renewal Options | ||||||||
Real Estate Properties [Line Items] | ||||||||
Lease renewal options | 5 years | |||||||
CA3 Properties | Yucaipa, California | ||||||||
Real Estate Properties [Line Items] | ||||||||
Number of skilled nursing facilities acquired | facility | 2 | |||||||
CA3 Properties | Mentone, California | ||||||||
Real Estate Properties [Line Items] | ||||||||
Number of skilled nursing facilities acquired | facility | 1 |
Loans Payable - Debt (Details)
Loans Payable - Debt (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 61,400,000 | $ 47,187,000 |
Less debt issuance costs | (2,071,000) | (1,913,000) |
Total loans payable | 59,329,000 | 45,274,000 |
CIBC Bank | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 15,000,000 | |
Capital One Multifamily Finance LLC [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 10,232,000 | 10,330,000 |
Lument Capital (formerly ORIX Real Estate Capital, LLC) [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 36,168,000 | $ 36,857,000 |
Loans Payable (Details) (Parent
Loans Payable (Details) (Parenthetical) - USD ($) | Jul. 02, 2020 | Sep. 30, 2021 | Jul. 02, 2021 |
CA3 Properties | CIBC Bank | |||
Principal amount of loan | $ 65,000 | $ 15,000,000 | |
LIBOR floor (as a percentage) | 4.00% | 4.00% | |
Interest on loan with LIBOR | 1.00% | 1.00% | |
Capital One Multifamily Finance LLC [Member] | |||
Debt Instrument, Periodic Payment | $ 49,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | ||
Lument Capital (formerly ORIX Real Estate Capital, LLC) [Member] | |||
Debt Instrument, Periodic Payment | $ 183,000 | ||
Lument Capital (formerly ORIX Real Estate Capital, LLC) [Member] | Minimum [Member] | |||
Debt Instrument, Interest Rate, Stated Percentage | 2.79% | ||
Lument Capital (formerly ORIX Real Estate Capital, LLC) [Member] | Maximum [Member] | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.20% |
Loans Payable - Maturities of l
Loans Payable - Maturities of long term debt (Details) | Sep. 30, 2021USD ($) |
Loans Payable | |
October 1, 2021 to December 31, 2021 | $ 273,000 |
2022 | 1,269,000 |
2023 | 1,475,000 |
2024 | 15,730,000 |
2025 | 1,246,000 |
Thereafter | 41,407,000 |
Total | $ 61,400,000 |
Loans Payable - Additional info
Loans Payable - Additional information (Details) - USD ($) | Jul. 02, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||||||
Long-term Debt, Gross | $ 61,400,000 | $ 61,400,000 | $ 47,187,000 | |||
Debt Instrument, Unamortized Discount | 2,071,000 | 2,071,000 | 1,913,000 | |||
Amortization of Debt Discount (Premium) | 37,000 | $ 18,000 | 100,000 | $ 100,000 | ||
Write-off of debt issuance costs | 0 | 77,000 | ||||
Interest Expense, Debt | 700,000 | $ 500,000 | 1,700,000 | $ 1,600,000 | ||
Debt Instrument, Unamortized Discount | 2,071,000 | 2,071,000 | 1,913,000 | |||
Prime Rate | ||||||
Debt Instrument [Line Items] | ||||||
Interest on loan with LIBOR | 2.00% | |||||
CIBC Bank | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt, Gross | 15,000,000 | 15,000,000 | ||||
Lument Capital (formerly ORIX Real Estate Capital, LLC) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Periodic Payment | 183,000 | |||||
Long-term Debt, Gross | $ 36,168,000 | $ 36,168,000 | $ 36,857,000 |
Equity-Method Investments - Res
Equity-Method Investments - Results of Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of Equity Method Investments [Line Items] | ||||
Revenue | $ 2,025,000 | $ 1,923,000 | $ 4,870,000 | $ 5,759,000 |
Income (Loss) from Operations | 6,058,000 | 17,860,000 | ||
Net Income (Loss) | (247,000) | 112,000 | 546,000 | (175,000) |
Summit interest in Equity-Method Investments net income (loss) | $ 191,000 | $ 179,000 | (595,000) | 346,000 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue | 28,150,000 | 36,952,000 | ||
Net Income (Loss) | (3,324,000) | 3,049,000 | ||
SUL JV | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Income (Loss) from Operations | 5,072,000 | 5,851,000 | ||
Summit interest in Equity-Method Investments net income (loss) | 142,000 | 247,000 | ||
SUL JV | Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue | 15,339,000 | 13,703,000 | ||
Net Income (Loss) | 1,421,000 | 2,467,000 | ||
Fantasia JV | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Income (Loss) from Operations | 282,000 | 460,000 | ||
Summit interest in Equity-Method Investments net income (loss) | 129,000 | (25,000) | ||
Fantasia JV | Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue | 2,860,000 | 3,106,000 | ||
Net Income (Loss) | 369,000 | (72,000) | ||
Fantasia II JV | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Income (Loss) from Operations | 1,448,000 | 1,474,000 | ||
Summit interest in Equity-Method Investments net income (loss) | 148,000 | 150,000 | ||
Fantasia II JV | Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue | 2,759,000 | 2,668,000 | ||
Net Income (Loss) | 738,000 | 748,000 | ||
Summit Fantasia Holdings III, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Income (Loss) from Operations | 3,094,000 | 3,240,000 | ||
Summit interest in Equity-Method Investments net income (loss) | 151,000 | 144,000 | ||
Summit Fantasia Holdings III, LLC | Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue | 6,156,000 | 5,986,000 | ||
Net Income (Loss) | 1,510,000 | 1,437,000 | ||
FPH JV | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Income (Loss) from Operations | 1,255,000 | 1,256,000 | ||
Summit interest in Equity-Method Investments net income (loss) | 121,000 | (117,000) | ||
FPH JV | Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue | 2,731,000 | 2,650,000 | ||
Net Income (Loss) | 1,205,000 | (1,175,000) | ||
Indiana JV | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Income (Loss) from Operations | (5,093,000) | 5,579,000 | ||
Summit interest in Equity-Method Investments net income (loss) | (1,286,000) | (53,000) | ||
Indiana JV | Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenue | (1,695,000) | 8,839,000 | ||
Net Income (Loss) | $ (8,567,000) | $ (356,000) |
Equity-Method Investments - Dis
Equity-Method Investments - Distributions receivable (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Dividends Receivable | $ 896,000 | $ 1,334,000 |
SUL JV | ||
Dividends Receivable | 324,000 | 466,000 |
Fantasia JV | ||
Dividends Receivable | 162,000 | 36,000 |
Fantasia II JV | ||
Dividends Receivable | 53,000 | 51,000 |
Summit Fantasia Holdings III, LLC | ||
Dividends Receivable | 331,000 | 257,000 |
FPH JV | ||
Dividends Receivable | $ 26,000 | 26,000 |
Indiana JV | ||
Dividends Receivable | $ 498,000 |
Equity-Method Investments - Cas
Equity-Method Investments - Cash Distributions (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Total Cash Distributions Received | $ 1,866,000 | $ 1,366,000 |
Cash Flow from Operating Activities | 527,000 | 500,000 |
Cash Flow from Investing Activities | 1,339,000 | 866,000 |
SUL JV | ||
Total Cash Distributions Received | 631,000 | 352,000 |
Cash Flow from Operating Activities | 142,000 | 246,000 |
Cash Flow from Investing Activities | 489,000 | 106,000 |
Fantasia JV | ||
Total Cash Distributions Received | 0 | 144,000 |
Cash Flow from Operating Activities | 0 | 0 |
Cash Flow from Investing Activities | 0 | 144,000 |
Fantasia II JV | ||
Total Cash Distributions Received | 225,000 | 219,000 |
Cash Flow from Operating Activities | 148,000 | 150,000 |
Cash Flow from Investing Activities | 77,000 | 69,000 |
Summit Fantasia Holdings III, LLC | ||
Total Cash Distributions Received | 123,000 | 104,000 |
Cash Flow from Operating Activities | 123,000 | 104,000 |
Cash Flow from Investing Activities | 0 | |
FPH JV | ||
Total Cash Distributions Received | 114,000 | 118,000 |
Cash Flow from Operating Activities | 114,000 | 0 |
Cash Flow from Investing Activities | 0 | 118,000 |
Indiana JV | ||
Total Cash Distributions Received | 773,000 | 429,000 |
Cash Flow from Operating Activities | 0 | 0 |
Cash Flow from Investing Activities | $ 773,000 | $ 429,000 |
Equity-Method Investments - Add
Equity-Method Investments - Additional information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Equity method investment ownership percentage | 10.00% | 10.00% | ||||
Equity Method Investments | $ 7,597,000 | $ 7,597,000 | $ 11,375,000 | |||
Dividends Receivable | 896,000 | 896,000 | 1,334,000 | |||
Proceeds from Dividends Received | 527,000 | $ 500,000 | ||||
Gain on Sale of Equity Investments | 3,500,000 | |||||
Revenue from Contract with Customer, Including Assessed Tax | 165,000 | $ 292,000 | 789,000 | 910,000 | ||
Summit Fantasia ll Holdings LLC [Member] | ||||||
Revenue from Contract with Customer, Including Assessed Tax | 200,000 | $ 300,000 | 800,000 | $ 900,000 | ||
Indiana JV | ||||||
Equity Method Investment, Amount Sold | 5,400,000 | |||||
Equity Method Investments | $ 0 | $ 0 | $ 3,500,000 | |||
Indiana JV | ||||||
Equity method investment ownership percentage | 0.00% | 0.00% | 15.00% | |||
Equity Method Investments | $ 5,400,000 | |||||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 15.00% | 15.00% | ||||
Summit Union Life Holdings, LLC [Member] | ||||||
Minimum percentage of interest in annual return | 9.00% | |||||
Percentage of interest in annual return | 10.00% | |||||
Equity Method Investments | $ 2,400,000 | $ 2,400,000 | $ 2,700,000 | |||
Summit Union Life Holdings, LLC [Member] | Best Years Llc [Member] | ||||||
Net Operating Cash Flows, Percentage of Interest | 75.00% | |||||
Capital Proceeds, Percentage of Interest | 75.00% | |||||
Summit Union Life Holdings, LLC [Member] | Operating Partnership [Member] | ||||||
Net Operating Cash Flows, Percentage of Interest | 25.00% | |||||
Capital Proceeds, Percentage of Interest | 25.00% | |||||
Summit Fantasia Holdings Llc [Member] | ||||||
Percentage of interest in annual return | 8.00% | |||||
Equity Method Investments | 2,100,000 | $ 2,100,000 | 2,000,000 | |||
Summit Fantasia Holdings Llc [Member] | Fantasia Investment III LLC [Member] | ||||||
Net Operating Cash Flows, Percentage of Interest | 50.00% | |||||
Capital Proceeds, Percentage of Interest | 50.00% | |||||
Summit Fantasia Holdings Llc [Member] | Operating Partnership [Member] | ||||||
Net Operating Cash Flows, Percentage of Interest | 50.00% | |||||
Capital Proceeds, Percentage of Interest | 50.00% | |||||
Summit Fantasia ll Holdings LLC [Member] | ||||||
Percentage of interest in annual return | 8.00% | |||||
Equity Method Investments | 1,300,000 | $ 1,300,000 | 1,400,000 | |||
Summit Fantasia ll Holdings LLC [Member] | Fantasia Investment III LLC [Member] | ||||||
Net Operating Cash Flows, Percentage of Interest | 70.00% | |||||
Capital Proceeds, Percentage of Interest | 70.00% | |||||
Summit Fantasia ll Holdings LLC [Member] | Operating Partnership [Member] | ||||||
Net Operating Cash Flows, Percentage of Interest | 30.00% | |||||
Capital Proceeds, Percentage of Interest | 30.00% | |||||
Summit Fantasia Holdings III, LLC [Member] | ||||||
Percentage of interest in annual return | 9.00% | |||||
Equity Method Investments | 1,500,000 | $ 1,500,000 | 1,600,000 | |||
Summit Fantasia Holdings III, LLC [Member] | Fantasia Investment III LLC [Member] | ||||||
Net Operating Cash Flows, Percentage of Interest | 75.00% | |||||
Capital Proceeds, Percentage of Interest | 75.00% | |||||
Summit Fantasia Holdings III, LLC [Member] | Operating Partnership [Member] | ||||||
Net Operating Cash Flows, Percentage of Interest | 25.00% | |||||
Capital Proceeds, Percentage of Interest | 25.00% | |||||
Summit Fantasy Pearl Holdings, LLC [Member] | ||||||
Percentage of interest in annual return | 9.00% | |||||
Equity Method Investments | $ 300,000 | $ 300,000 | $ 200,000 | |||
Summit Fantasy Pearl Holdings, LLC [Member] | Fantasia Investment III LLC [Member] | ||||||
Net Operating Cash Flows, Percentage of Interest | 7.25% | |||||
Capital Proceeds, Percentage of Interest | 7.25% | |||||
Summit Fantasy Pearl Holdings, LLC [Member] | Summit Fantasy Pearl Holdings, LLC- Equity-Method Investment | ||||||
Net Operating Cash Flows, Percentage of Interest | 65.25% | |||||
Capital Proceeds, Percentage of Interest | 65.25% | |||||
Summit Fantasy Pearl Holdings, LLC [Member] | Atlantis [Member] | ||||||
Net Operating Cash Flows, Percentage of Interest | 7.50% | |||||
Capital Proceeds, Percentage of Interest | 7.50% | |||||
Summit Fantasy Pearl Holdings, LLC [Member] | Operating Partnership [Member] | ||||||
Net Operating Cash Flows, Percentage of Interest | 20.00% | |||||
Capital Proceeds, Percentage of Interest | 20.00% |
Receivables (Details)
Receivables (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Receivables | ||
Straight-line rent receivables | $ 2,337,000 | $ 2,772,000 |
Distribution receivable from Equity-Method Investments | 896,000 | 1,334,000 |
Asset management fees | 348,000 | 432,000 |
Other receivables | 41,000 | 139,000 |
Total | $ 3,622,000 | $ 4,677,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - Cornerstone Realty Advisors, LLC [Member] - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Receivables | $ 2,676,000 | $ 2,676,000 |
Reserves | (2,676,000) | (2,676,000) |
Organizational and offering costs [Member] | ||
Receivables | 738,000 | 738,000 |
Reserves | (738,000) | (738,000) |
Asset management fees and expenses [Member] | ||
Receivables | 32,000 | 32,000 |
Reserves | (32,000) | (32,000) |
Operating expenses (direct and indirect) [Member] | ||
Receivables | 189,000 | 189,000 |
Reserves | (189,000) | (189,000) |
Operating expenses (2%/25% Test) [Member] | ||
Receivables | 1,717,000 | 1,717,000 |
Reserves | $ (1,717,000) | $ (1,717,000) |
Concentration of Risk (Details)
Concentration of Risk (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021tenantproperty | Sep. 30, 2020tenantproperty | Sep. 30, 2021propertytenant | Sep. 30, 2020tenantproperty | Sep. 30, 2021 | |
Concentration Risk [Line Items] | |||||
Number of owned properties | 17 | 17 | |||
Number of owned properties held by Equity Method Investment | 36 | 36 | |||
Number of leased real estate properties | 10 | 7 | 10 | 7 | 10 |
Number of tenants under long-term triple net leases | tenant | 8 | 5 | 8 | 5 | |
Number of tenants represents more than 10% of our rental revenue | tenant | 4 | 4 | 3 | 4 | |
Customer Concentration Risk [Member] | Tenant [Member] | Assets, Total [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration Risk, Percentage | 20.00% | ||||
California | |||||
Concentration Risk [Line Items] | |||||
Number of owned properties | 4 | 4 | |||
Oregon | |||||
Concentration Risk [Line Items] | |||||
Number of owned properties | 3 | 3 | |||
Texas | |||||
Concentration Risk [Line Items] | |||||
Number of owned properties | 1 | 1 | |||
Illinois | |||||
Concentration Risk [Line Items] | |||||
Number of owned properties | 1 | 1 | |||
Arizona | |||||
Concentration Risk [Line Items] | |||||
Number of owned properties | 1 | 1 |
Fair Value Measurements of Fi_2
Fair Value Measurements of Financial Instruments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair value of loans payable | $ 55,600,000 | $ 55,600,000 | $ 52,600,000 | ||
Long-term Debt, Gross | 61,400,000 | 61,400,000 | $ 47,187,000 | ||
Asset impairment charges | $ 0 | $ 0 | $ 0 | $ 0 | |
Minimum [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair values utilized discount rates | 2.80% | 2.80% | |||
Maximum [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair values utilized discount rates | 5.00% | 5.00% | |||
Weighted Average [Member] | |||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||
Fair values utilized discount rates | 5.00% | 5.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Feb. 11, 2021 | Mar. 14, 2019 | Sep. 30, 2021 |
Commitments and Contingencies | |||
Amount of monetary sanctions | $ 588,672 | ||
Amount of additional monetary sanction | $ 189,645 | ||
Purchased the investors' interests | $ 900,000 |
Equity - Stock options (Details
Equity - Stock options (Details) | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Equity | |
Options outstanding, Beginning Balance | 1,871,908 |
Granted | 0 |
Exercised | 0 |
Cancelled/forfeited | (1,333) |
Options outstanding, Ending Balance | 1,870,575 |
Options exercisable, Ending Balance | 1,828,685 |
Weighted Average Exercise Price, Outstanding at Beginning Balance | $ / shares | $ 2.09 |
Weighted Average Exercise Price, Cancelled/forfeited | $ / shares | 2.26 |
Weighted Average Exercise Price, Outstanding at Ending Balance | $ / shares | 2.09 |
Weighted Average Exercise Price, Exercisable at Ending Balance | $ / shares | $ 2.08 |
Options outstanding, Weighted Average Remaining Contractual Term | 6 years 21 days |
Options exercisable, Weighted Average Remaining Contractual Term | 6 years 21 days |
Options outstanding, Aggregate Intrinsic Value | $ | $ 1,524,000 |
Options exercisable, Aggregate Intrinsic Value | $ | $ 1,497,000 |
Equity - Unrecognized stock-bas
Equity - Unrecognized stock-based compensation expense (Details) | Sep. 30, 2021USD ($) |
Schedule of Equity Method Investments [Line Items] | |
Unrecognized stock-based compensation expense related to unvested stock options, net of forfeitures | $ 25,000 |
October 1, 2021 to December 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | |
Unrecognized stock-based compensation expense related to unvested stock options, net of forfeitures | 10,000 |
2022 | |
Schedule of Equity Method Investments [Line Items] | |
Unrecognized stock-based compensation expense related to unvested stock options, net of forfeitures | 14,000 |
2023 | |
Schedule of Equity Method Investments [Line Items] | |
Unrecognized stock-based compensation expense related to unvested stock options, net of forfeitures | $ 1,000 |
Equity - Additional information
Equity - Additional information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of Equity [Line Items] | ||||
Weighted average grant date fair value (per share) | $ 0.59 | $ 0.59 | ||
General and Administrative Expense [Member] | ||||
Schedule of Equity [Line Items] | ||||
Stock-based compensation expense | $ 9,000 | $ 35,000 | $ 56,000 | $ 115,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||
Income (loss) | $ (229,000) | $ 128,000 | $ 604,000 | $ (136,000) |
(Income) loss attributable to noncontrolling interest | (18,000) | (16,000) | (58,000) | (39,000) |
Net (loss) income applicable to common stockholders | $ (247,000) | $ 112,000 | $ 546,000 | $ (175,000) |
Basic: | ||||
Denominator for basic EPS - weighted average shares | 23,027,978 | 23,027,978 | 23,027,978 | 23,027,978 |
Effect of dilutive shares: | ||||
Stock options | 487,436 | 525,628 | ||
Denominator for diluted EPS - adjusted weighted average shares | 23,027,978 | 23,515,414 | 23,553,606 | 23,027,978 |
Basic EPS | $ (0.01) | $ 0 | $ 0.02 | $ (0.01) |
Diluted EPS | $ (0.01) | $ 0 | $ 0.02 | $ (0.01) |