Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 08, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 000-54685 | |
Entity Registrant Name | CNL Healthcare Properties, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 27-2876363 | |
Entity Address, Address Line One | CNL Center at City Commons | |
Entity Address, Address Line Two | 450 South Orange Avenue | |
Entity Address, City or Town | Orlando | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 32801 | |
City Area Code | 407 | |
Local Phone Number | 650-1000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 175,274,045 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001496454 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
ASSETS | ||
Real estate investment properties, net (including one VIE $29,847 and $30,041, respectively) | $ 1,269,283 | $ 1,279,137 |
Cash (including one VIE $545 and $1,345, respectively) | 42,364 | 54,097 |
Restricted cash (including one VIE $0 and $8, respectively) | 3,342 | 1,791 |
Other assets (including one VIE $2 and $17, respectively) | 19,341 | 19,127 |
Deferred rent, lease incentives and intangibles, net | 11,070 | 11,386 |
Total assets | 1,345,400 | 1,365,538 |
Liabilities: | ||
Mortgages and other notes payable, net (including one VIE $20,490 and $20,622, respectively) | 36,376 | 36,569 |
Credit facilities, net | 532,477 | 541,840 |
Accounts payable and accrued liabilities (including one VIE $556 and $1,411, respectively) | 28,407 | 31,322 |
Total liabilities | 607,342 | 621,498 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share, 200,000 shares authorized; none issued or outstanding | 0 | 0 |
Excess shares, $0.01 par value per share, 300,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value per share, 1,120,000 shares authorized, 187,958 shares issued and 175,274 shares outstanding | 1,739 | 1,739 |
Capital in excess of par value | 1,516,806 | 1,516,806 |
Accumulated income | 69,675 | 74,710 |
Accumulated distributions | (851,573) | (847,120) |
Accumulated other comprehensive income (loss) | 919 | (2,572) |
Total stockholders' equity | 737,566 | 743,563 |
Noncontrolling interest | 492 | 477 |
Total equity | 738,058 | 744,040 |
Total liabilities and equity | 1,345,400 | 1,365,538 |
Nonrelated Party | ||
Liabilities: | ||
Other liabilities/Due to related parties | 8,669 | 10,475 |
Related Party | ||
Liabilities: | ||
Other liabilities/Due to related parties | $ 1,413 | $ 1,292 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Real estate investment properties, net | $ 1,269,283 | $ 1,279,137 |
Cash | 42,364 | 54,097 |
Restricted cash | 3,342 | 1,791 |
Other assets | 19,341 | 19,127 |
Mortgages and other notes payable, net | 36,376 | 36,569 |
Accounts payable and accrued liabilities | $ 28,407 | $ 31,322 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Excess shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Excess shares, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Excess shares, shares issued (in shares) | 0 | 0 |
Excess shares, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,120,000,000 | 1,120,000,000 |
Common stock, shares issued (in shares) | 187,958,000 | 187,958,000 |
Common stock, shares outstanding (in shares) | 175,274,000 | 175,274,000 |
Variable Interest Entity, Primary Beneficiary | ||
Real estate investment properties, net | $ 29,847 | $ 30,041 |
Cash | 545 | 1,345 |
Restricted cash | 0 | 8 |
Other assets | 2 | 17 |
Mortgages and other notes payable, net | 20,490 | 20,622 |
Accounts payable and accrued liabilities | 556 | 1,411 |
Other liabilities | $ 200 | $ 216 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues: | ||
Rental income and related revenues | $ 6,800 | $ 6,714 |
Resident fees and services | 82,281 | 76,945 |
Total revenues | 89,081 | 83,659 |
Operating expenses: | ||
Property operating expenses | 60,632 | 57,867 |
General and administrative expenses | 2,216 | 2,244 |
Depreciation and amortization | 12,525 | 13,410 |
Total operating expenses | 82,750 | 80,813 |
Operating income | 6,331 | 2,846 |
Other income (expense): | ||
Interest and other income | 359 | 1,066 |
Interest expense and loan cost amortization | (11,595) | (9,654) |
Total other expense | (11,236) | (8,588) |
Loss before income taxes | (4,905) | (5,742) |
Income tax expense | (115) | (111) |
Net loss | (5,020) | (5,853) |
Less: Amounts attributable to noncontrolling interests | 15 | (2) |
Net loss attributable to common stockholders | $ (5,035) | $ (5,851) |
Net loss per share of common stock, basic (in dollars per share) | $ (0.03) | $ (0.03) |
Net loss per share of common stock, diluted (in dollars per share) | $ (0.03) | $ (0.03) |
Weighted average number of shares of common stock outstanding, basic (in shares) | 173,942 | 173,960 |
Weighted average number of shares of common stock outstanding, diluted (in shares) | 173,942 | 173,960 |
Asset management fees | ||
Operating expenses: | ||
Asset management fees/Property management fees | $ 3,337 | $ 3,476 |
Property management fees | ||
Operating expenses: | ||
Asset management fees/Property management fees | $ 4,040 | $ 3,816 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (5,020) | $ (5,853) |
Other comprehensive income (loss): | ||
Unrealized gain (loss) on derivative financial instruments, net | 3,491 | (328) |
Total other comprehensive income (loss) | 3,491 | (328) |
Comprehensive loss | (1,529) | (6,181) |
Less: Comprehensive income (loss) attributable to noncontrolling interest | 15 | (2) |
Comprehensive loss attributable to common stockholders | $ (1,544) | $ (6,179) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | Total | Total Stockholders' Equity | Common Stock | Capital in Excess of Par Value | Accumulated Income | Accumulated Distributions | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interest |
Beginning balance (in shares) at Dec. 31, 2022 | 173,960 | |||||||
Beginning balance at Dec. 31, 2022 | $ 790,294 | $ 789,751 | $ 1,740 | $ 1,516,926 | $ 100,408 | $ (829,307) | $ (16) | $ 543 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net (loss) income | (5,853) | (5,851) | (5,851) | (2) | ||||
Other comprehensive income (loss) | (328) | (328) | (328) | |||||
Distributions to noncontrolling interests | (41) | (41) | ||||||
Cash distributions declared | (4,453) | (4,453) | (4,453) | |||||
Ending balance (in shares) at Mar. 31, 2023 | 173,960 | |||||||
Ending balance at Mar. 31, 2023 | $ 779,619 | 779,119 | $ 1,740 | 1,516,926 | 94,557 | (833,760) | (344) | 500 |
Beginning balance (in shares) at Dec. 31, 2023 | 175,274 | 173,942 | ||||||
Beginning balance at Dec. 31, 2023 | $ 744,040 | 743,563 | $ 1,739 | 1,516,806 | 74,710 | (847,120) | (2,572) | 477 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net (loss) income | (5,020) | (5,035) | (5,035) | 15 | ||||
Other comprehensive income (loss) | 3,491 | 3,491 | 3,491 | |||||
Cash distributions declared | $ (4,453) | (4,453) | (4,453) | |||||
Ending balance (in shares) at Mar. 31, 2024 | 175,274 | 173,942 | ||||||
Ending balance at Mar. 31, 2024 | $ 738,058 | $ 737,566 | $ 1,739 | $ 1,516,806 | $ 69,675 | $ (851,573) | $ 919 | $ 492 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash distributions declared (in dollars per share) | $ 0.0256 | $ 0.0256 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating activities: | ||
Net cash flows provided by operating activities | $ 7,148 | $ 5,328 |
Investing activities: | ||
Capital expenditures | (2,652) | (2,028) |
Proceeds from maturity of short-term securities | 0 | 2,500 |
Net cash (used in) provided by investing activities | (2,652) | 472 |
Financing activities: | ||
Distributions to stockholders | (4,453) | (4,453) |
Repayments on credit facilities | (10,000) | 0 |
Purchase of interest rate cap | 0 | (3,128) |
Principal payments on mortgages and other notes payable | (218) | (24,552) |
Distributions to noncontrolling interests | 0 | (41) |
Other financing activities | (7) | (22) |
Net cash flows used in financing activities | (14,678) | (32,196) |
Net decrease in cash and restricted cash | (10,182) | (26,396) |
Cash and restricted cash at beginning of period | 55,888 | 73,574 |
Cash and restricted cash at end of period | $ 45,706 | $ 47,178 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization CNL Healthcare Properties, Inc. (the “Company”) is a Maryland corporation that elected to be taxed as a real estate investment trust (“REIT”) for United States (“U.S.”) federal income tax purposes. The Company has been and intends to continue to be organized and operate in a manner that allows it to remain qualified as a REIT for U.S. federal income tax purposes. The Company conducts substantially all of its operations either directly or indirectly through: (1) an operating partnership, CHP Partners, LP (“Operating Partnership”), in which the Company is the sole limited partner and its wholly-owned subsidiary, CHP GP, LLC, is the sole general partner; (2) a wholly-owned taxable REIT subsidiary (“TRS”), CHP TRS Holding, Inc.; (3) property owner and lender subsidiaries, which are single purpose entities; and (4) investments in joint ventures. The Company is externally managed and advised by CNL Healthcare Corp. (“Advisor”), which is an affiliate of CNL Financial Group, LLC (“Sponsor”). The Sponsor is an affiliate of CNL Financial Group, Inc. (“CNL”). The Advisor is responsible for managing the Company’s day-to-day operations, serving as a consultant in connection with policy decisions to be made by the board of directors, and for identifying, recommending and executing on possible strategic alternatives and dispositions on the Company’s behalf pursuant to an advisory agreement among the Company, the Operating Partnership and the Advisor (as amended, the “Advisory Agreement”). Substantially all of the Company’s operating, administrative and certain property management services are provided by affiliates of the Advisor. In addition, certain property management services are provided by third-party property managers. In 2017, the Company began evaluating possible strategic alternatives to provide liquidity to the Company’s stockholders. As part of executing under possible strategic alternatives, the Company’s board of directors committed to a plan to sell 70 properties, consisting of medical office buildings, post-acute care facilities, acute care hospitals and several skilled nursing facilities across the U.S. The Company completed the sale of the last of the 70 properties in 2022. As of March 31, 2024, the Company’s seniors housing portfolio was geographically diversified with properties in 26 states and consisted of interests in 70 properties, including 69 seniors housing communities and one vacant land parcel. The Company has primarily leased its seniors housing properties to wholly-owned TRS entities and engaged independent third-party managers under management agreements to operate the properties under the RIDEA structures; however, the Company has also leased some of its properties to third-party tenants under triple-net or similar lease structures, where the tenant bears all or substantially all of the costs (including cost increases, for real estate taxes, utilities, insurance and ordinary repairs). In addition, most of the Company’s investments have been wholly owned, although, it has, to a lesser extent, invested through partnerships with other entities where it was believed to be appropriate and beneficial. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Consolidation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the U.S. (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are necessary for the fair statement of the Company’s results for the interim period presented. Operating results for the three months ended March 31, 2024 may not be indicative of the results that may be expected for the year ending December 31, 2024. Amounts as of December 31, 2023 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The accompanying unaudited condensed consolidated financial statements include the Company’s accounts, the accounts of wholly owned subsidiaries or subsidiaries for which the Company has a controlling interest, the account s of one v ariable interest entity (“VIE”) in which the Company is the primary beneficiary, and the accounts of other subsidiaries over which the Company has a controlling financial interest. All material intercompany accounts and transactions have been eliminated in consolidation. 2. Summary of Significant Accounting Policies (continued) Grant Income — In response to the coronavirus pandemic, the federal government and some states provided funds to providers of seniors housing communities under the CARES Act. These funds were deemed federal/state governmental grants and provided that the recipients attested to and complied with certain terms and conditions. Grant income is recognized upon receipt of the funds and when all the conditions of the grant have been met. During the three months ended March 31, 2023, the Company recorded approximately $0.6 million as other income in the accompanying condensed consolidated statements of operations as all conditions of the grant had been met. The Company did not receive or recognize provider relief funds under the CARES Act during the three months ended March 31, 2024. Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements, the reported amounts of revenues and expenses during the reporting periods and the disclosure of contingent liabilities. For example, significant assumptions are made in the analysis of real estate impairments (when such impairments exist), the valuation of contingent assets and liabilities, and the valuation of restricted common stock (“Restricted Stock”) shares issued to the Advisor through March 2017 pursuant to the Advisor expense support agreement (the “Expense Support Agreement”). Accordingly, actual results could differ from those estimates. Variable Interest Entities — As of March 31, 2024 and December 31, 2023, the Company had net assets in one subsidiary classified as a VIE. This s ubsidiary is a joint venture in which the Company’s equity interest consists of non-substantive protective voting rights. As of March 31, 2024, the Company determined it is the primary beneficiary and held a controlling financial interest in the subsidiary due to its power to direct the activities that most significantly impact the economic performance of this entity, as well as its obligation to absorb the losses and its right to receive benefits from this entity that could potentially be significant to this entity. As such, the transactions and accounts of this VIE are included in the accompanying condensed consolidated financial statements. The Company’s maximum exposure to loss as a result of its involvement with this VIE is limited to its net investment in this entity which totaled approximately $8.7 million as of March 31, 2024. The Company’s exposure is limited because of the non-recourse nature of the borrowings of this VIE. Recent Accounting Pronouncements — In November 2023, the FASB issued ASU 2023-07, “Segment Reporting—Improvements to Reportable Segment Disclosures (Topic 280)”, which requires incremental disclosures related to a public entity’s reportable segments. This ASU is effective for annual periods periods beginning after December 15, 2024, and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact adopting ASU 2023-07 will have on the Company's consolidated financial statements and disclosures. In December 2023, the FASB issued ASU No. 2023-09, “Improvements to Income Tax Disclosures (Topic 740),” which requires entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes as well as additional information about reconciling items if certain quantitative thresholds are met. This ASU will require all entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. All entities are required to apply the guidance prospectively, with the option to apply it retrospectively. The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company has determined it will adopt this ASU on January 1, 2025, the adoption of which is not expected to have a material impact on the Company’s consolidated results of operations or cash flows. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The following table presents disaggregated revenue related to the Company’s resident fees and services during the three months ended March 31, 2024 and 2023: Three Months Ended March 31, Number of Units Revenues (in millions) Percentage of Revenues Resident fees and services: 2024 2023 2024 2023 2024 2023 Independent living 2,222 2,222 $ 21.3 $ 19.6 25.9 % 25.5 % Assisted living 3,039 3,039 40.8 38.4 49.6 49.9 Memory care 932 932 16.1 15.2 19.6 19.8 Other revenues — — 4.1 3.7 4.9 4.8 6,193 6,193 $ 82.3 $ 76.9 100.0 % 100.0 % |
Real Estate Assets, net
Real Estate Assets, net | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate [Abstract] | |
Real Estate Assets, net | Real Estate Assets, net The gross carrying amount and accumulated depreciation of the Company’s real estate assets as of March 31, 2024 and December 31, 2023 are as follows (in thousands): March 31, December 31, Land and land improvements $ 137,612 $ 137,393 Building and building improvements 1,504,381 1,502,579 Furniture, fixtures and equipment 113,667 113,034 Less: accumulated depreciation (486,377) (473,869) Real estate investment properties, net $ 1,269,283 $ 1,279,137 |
Indebtedness
Indebtedness | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness During the three months ended March 31, 2024, the Company paid approximately $0.2 million in scheduled principal payments on its mortgages and other notes payable. In March 2024, the Company used cash on hand to pay down approximately $10.0 million of amounts outstanding under the Company’s revolving credit facility (the “2023 Revolving Credit Facility”). The following is a schedule of future principal payments for the Company’s total indebtedness for the remainder of 2024, each of the next four years and thereafter, in the aggregate, as of March 31, 2024 (in thousands): 2024 $ 20,750 2025 308 2026 553,542 2027 — 2028 — Thereafter — $ 574,600 The following table provides the details of the fair market value and carrying value of the Company’s indebtedness as of March 31, 2024 and December 31, 2023 (in millions): March 31, 2024 December 31, 2023 Fair Value Carrying Value Fair Value Carrying Value Mortgages and other notes payable, net $ 36.6 $ 36.4 $ 36.8 $ 36.6 Credit facilities, net (1) $ 538.0 $ 532.5 $ 548.0 $ 541.8 ______________________________ FOOTNOTE: (1) The carrying value of credit facilities, net includes unamortized debt issuance costs of approximately $5.5 million and $6.2 million as of March 31, 2024 and December 31, 2023, respectively. These fair market values are based on current rates and spreads the Company would expect to obtain for similar borrowings. Since this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair values related to the Company’s mortgage notes payable and credit facilities is categorized as Level 3 on the three-level valuation hierarchy. Generally, the loan agreements for the Company’s mortgage loans contain customary financial covenants and ratios; including (but not limited to) the following: debt service coverage ratio, minimum occupancy levels, limitations on incurrence of additional indebtedness, etc. The loan agreements also contain customary events of default and remedies for the lenders. As of March 31, 2024, the Company was in compliance with all financial covenants related to its mortgage loans. 5. Indebtedness (continued) |
Related Party Arrangements
Related Party Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Arrangements | Related Party Arrangements The Company paid approximately $0.03 million during each of the three months ended March 31, 2024 and 2023, of cash distributions on Restricted Stock. These amounts have been recognized as compensation expense and included in general and administrative expenses in the accompanying condensed consolidated statements of operations. The termination of the Expense Support Agreement in June 2023 does not impact the previously issued Restricted Stock. The expenses and fees incurred by and reimbursable to the Company’s related parties for the three months ended March 31, 2024 and 2023, and related amounts unpaid as of March 31, 2024 and December 31, 2023 are as follows (in thousands): Three Months Ended March 31, Unpaid amounts as of (1) 2024 2023 March 31, 2024 December 31, 2023 Reimbursable expenses: Operating expenses (2) $ 785 $ 722 $ 301 $ 180 785 722 301 180 Asset management fees 3,337 3,476 1,112 1,112 $ 4,122 $ 4,198 $ 1,413 $ 1,292 ______________________________ FOOTNOTES: (1) Amounts are recorded as due to related parties in the accompanying condensed consolidated balance sheets. (2) |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The following summarizes the terms of the Company's interest rate caps and swaps and the corresponding asset (liability) as of March 31, 2024 and December 31, 2023 (in thousands): Notional Amount (1) Strike Credit Spread (2) Trade Forward Maturity Fair Value Asset (Liability) as of March 31, 2024 December 31, 2023 Caps $ 8,000 3.50 % 2.60 % 6/29/2023 7/3/2023 1/1/2024 $ — $ — $ 8,000 3.50 % 2.60 % 12/20/2023 1/2/2024 7/1/2024 $ 36 $ 63 Swaps $ 267,000 4.40 % 2.35 % 12/7/2023 12/1/2023 12/1/2025 $ 832 $ (1,678) $ 80,000 4.54 % 2.35 % 12/8/2023 12/1/2023 12/1/2025 $ 70 $ (706) $ 20,000 4.54 % 2.35 % 12/8/2023 12/1/2023 12/1/2025 $ 17 $ (177) ______________ FOOTNOTES: (1) Amounts related to the interest rate caps and swaps held by the Company are recorded at fair value and included in other assets or other liabilities in the accompanying condensed consolidated balance sheets. (2) The all-in rates are equal to the sum of the Strike and Credit Spread. Although the Company has determined that the majority of the inputs used to value its derivative financial instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative financial positions and has determined that such impact is not significant to the overall valuation of its derivative financial instruments. As a result, the Company determined that its derivative financial instruments valuation in its entirety is classified in Level 2 of the fair value hierarchy. Determining fair value requires management to make certain estimates and judgments. Changes in assumptions could have a positive or negative impact on the estimated fair values of such instruments which could, in turn, impact the Company’s results of operations. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, the Company may be a party to legal proceedings in the ordinary course of, or incidental to the normal course of, its business, including proceedings to enforce its contractual or statutory rights. While the Company cannot predict the outcome of these legal proceedings with certainty, based upon currently available information, the Company does not believe the final outcome of any pending or threatened legal proceeding will have a material adverse effect on its results of operations or financial condition. The Company’s Advisor has approximately 1.3 million contingently issuable Restricted Stock shares that were issued pursuant to the Expense Support Agreement. The Restricted Stock shares were treated as unissued for financial reporting purposes because the vesting criteria had not been met as of March 31, 2024. Refer to Note 6. “Related Party Arrangements” |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the U.S. (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are necessary for the fair statement of the Company’s results for the interim period presented. Operating results for the three months ended March 31, 2024 may not be indicative of the results that may be expected for the year ending December 31, 2024. Amounts as of December 31, 2023 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The accompanying unaudited condensed consolidated financial statements include the Company’s accounts, the accounts of wholly owned subsidiaries or subsidiaries for which the Company has a controlling interest, the account s of one v |
Consolidation | All material intercompany accounts and transactions have been eliminated in consolidation. |
Grant Income | Grant Income — |
Use of Estimates | Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements, the reported amounts of revenues and expenses during the reporting periods and the disclosure of contingent liabilities. For example, significant assumptions are made in the analysis of real estate impairments (when such impairments exist), the valuation of contingent assets and liabilities, and the valuation of restricted common stock (“Restricted Stock”) shares issued to the Advisor through March 2017 pursuant to the Advisor expense support agreement (the “Expense Support Agreement”). Accordingly, actual results could differ from those estimates. |
Variable Interest Entities | Variable Interest Entities — As of March 31, 2024 and December 31, 2023, the Company had net assets in one subsidiary classified as a VIE. This s |
Recent Accounting Pronouncements | Recent Accounting Pronouncements — In November 2023, the FASB issued ASU 2023-07, “Segment Reporting—Improvements to Reportable Segment Disclosures (Topic 280)”, which requires incremental disclosures related to a public entity’s reportable segments. This ASU is effective for annual periods periods beginning after December 15, 2024, and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact adopting ASU 2023-07 will have on the Company's consolidated financial statements and disclosures. In December 2023, the FASB issued ASU No. 2023-09, “Improvements to Income Tax Disclosures (Topic 740),” which requires entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes as well as additional information about reconciling items if certain quantitative thresholds are met. This ASU will require all entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. All entities are required to apply the guidance prospectively, with the option to apply it retrospectively. The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company has determined it will adopt this ASU on January 1, 2025, the adoption of which is not expected to have a material impact on the Company’s consolidated results of operations or cash flows. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenue | The following table presents disaggregated revenue related to the Company’s resident fees and services during the three months ended March 31, 2024 and 2023: Three Months Ended March 31, Number of Units Revenues (in millions) Percentage of Revenues Resident fees and services: 2024 2023 2024 2023 2024 2023 Independent living 2,222 2,222 $ 21.3 $ 19.6 25.9 % 25.5 % Assisted living 3,039 3,039 40.8 38.4 49.6 49.9 Memory care 932 932 16.1 15.2 19.6 19.8 Other revenues — — 4.1 3.7 4.9 4.8 6,193 6,193 $ 82.3 $ 76.9 100.0 % 100.0 % |
Real Estate Assets, net (Tables
Real Estate Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Real Estate [Abstract] | |
Summary of Gross Carrying Amount and Accumulated Depreciation of Real Estate Assets | The gross carrying amount and accumulated depreciation of the Company’s real estate assets as of March 31, 2024 and December 31, 2023 are as follows (in thousands): March 31, December 31, Land and land improvements $ 137,612 $ 137,393 Building and building improvements 1,504,381 1,502,579 Furniture, fixtures and equipment 113,667 113,034 Less: accumulated depreciation (486,377) (473,869) Real estate investment properties, net $ 1,269,283 $ 1,279,137 |
Indebtedness (Tables)
Indebtedness (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Summary of Future Principal Payments | The following is a schedule of future principal payments for the Company’s total indebtedness for the remainder of 2024, each of the next four years and thereafter, in the aggregate, as of March 31, 2024 (in thousands): 2024 $ 20,750 2025 308 2026 553,542 2027 — 2028 — Thereafter — $ 574,600 |
Summary of Fair Market Value and Carrying Value of Indebtedness | The following table provides the details of the fair market value and carrying value of the Company’s indebtedness as of March 31, 2024 and December 31, 2023 (in millions): March 31, 2024 December 31, 2023 Fair Value Carrying Value Fair Value Carrying Value Mortgages and other notes payable, net $ 36.6 $ 36.4 $ 36.8 $ 36.6 Credit facilities, net (1) $ 538.0 $ 532.5 $ 548.0 $ 541.8 ______________________________ FOOTNOTE: (1) |
Related Party Arrangements (Tab
Related Party Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Summary of Fees, Reimbursable Expenses and Related Amounts Unpaid to Related Parties | The expenses and fees incurred by and reimbursable to the Company’s related parties for the three months ended March 31, 2024 and 2023, and related amounts unpaid as of March 31, 2024 and December 31, 2023 are as follows (in thousands): Three Months Ended March 31, Unpaid amounts as of (1) 2024 2023 March 31, 2024 December 31, 2023 Reimbursable expenses: Operating expenses (2) $ 785 $ 722 $ 301 $ 180 785 722 301 180 Asset management fees 3,337 3,476 1,112 1,112 $ 4,122 $ 4,198 $ 1,413 $ 1,292 ______________________________ FOOTNOTES: (1) Amounts are recorded as due to related parties in the accompanying condensed consolidated balance sheets. (2) |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Equity Method Investment's, Interest Rate Caps and Corresponding Asset (Liability) and Gross and Net Presentation of Amounts | The following summarizes the terms of the Company's interest rate caps and swaps and the corresponding asset (liability) as of March 31, 2024 and December 31, 2023 (in thousands): Notional Amount (1) Strike Credit Spread (2) Trade Forward Maturity Fair Value Asset (Liability) as of March 31, 2024 December 31, 2023 Caps $ 8,000 3.50 % 2.60 % 6/29/2023 7/3/2023 1/1/2024 $ — $ — $ 8,000 3.50 % 2.60 % 12/20/2023 1/2/2024 7/1/2024 $ 36 $ 63 Swaps $ 267,000 4.40 % 2.35 % 12/7/2023 12/1/2023 12/1/2025 $ 832 $ (1,678) $ 80,000 4.54 % 2.35 % 12/8/2023 12/1/2023 12/1/2025 $ 70 $ (706) $ 20,000 4.54 % 2.35 % 12/8/2023 12/1/2023 12/1/2025 $ 17 $ (177) ______________ FOOTNOTES: (1) Amounts related to the interest rate caps and swaps held by the Company are recorded at fair value and included in other assets or other liabilities in the accompanying condensed consolidated balance sheets. (2) The all-in rates are equal to the sum of the Strike and Credit Spread. |
Organization (Details)
Organization (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 State property agreement | Dec. 31, 2022 property | Dec. 31, 2017 property | |
MOB/Healthcare Portfolio | |||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Number of properties | 70 | ||
Number of properties sold | 70 | ||
Investment Portfolio | |||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Number of properties | 70 | ||
Number of states | State | 26 | ||
Number of seniors housing properties | 69 | ||
Investment Portfolio | Vacant Land Parcel | |||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Number of properties | agreement | 1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 USD ($) subsidiary | Mar. 31, 2023 USD ($) | Dec. 31, 2023 subsidiary | |
Summary Of Significant Accounting Policies [Line Items] | |||
Maximum exposure to loss VIEs limits | $ 8,700,000 | ||
VIEs | Joint Ventures Real Estate Under Development Entities | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of subsidiaries | subsidiary | 1 | 1 | |
Provider Relief Fund | COVID19 | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Grant income received | $ 0 | $ 600,000 |
Revenue (Details)
Revenue (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) Facility | Mar. 31, 2023 USD ($) Facility | |
Disaggregation Of Revenue [Line Items] | ||
Number of Units | Facility | 6,193 | 6,193 |
Revenues | $ | $ 82,281 | $ 76,945 |
Percentage of Revenues | 100% | 100% |
Independent living | ||
Disaggregation Of Revenue [Line Items] | ||
Number of Units | Facility | 2,222 | 2,222 |
Revenues | $ | $ 21,300 | $ 19,600 |
Percentage of Revenues | 25.90% | 25.50% |
Assisted living | ||
Disaggregation Of Revenue [Line Items] | ||
Number of Units | Facility | 3,039 | 3,039 |
Revenues | $ | $ 40,800 | $ 38,400 |
Percentage of Revenues | 49.60% | 49.90% |
Memory care | ||
Disaggregation Of Revenue [Line Items] | ||
Number of Units | Facility | 932 | 932 |
Revenues | $ | $ 16,100 | $ 15,200 |
Percentage of Revenues | 19.60% | 19.80% |
Other revenues | ||
Disaggregation Of Revenue [Line Items] | ||
Number of Units | Facility | 0 | 0 |
Revenues | $ | $ 4,100 | $ 3,700 |
Percentage of Revenues | 4.90% | 4.80% |
Real Estate Assets, Net - Summa
Real Estate Assets, Net - Summary of Gross Carrying Amount and Accumulated Depreciation of Real Estate Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Real Estate [Abstract] | ||
Land and land improvements | $ 137,612 | $ 137,393 |
Building and building improvements | 1,504,381 | 1,502,579 |
Furniture, fixtures and equipment | 113,667 | 113,034 |
Less: accumulated depreciation | (486,377) | (473,869) |
Real estate investment properties, net | $ 1,269,283 | $ 1,279,137 |
Real Estate Assets, Net - Narra
Real Estate Assets, Net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Real Estate [Abstract] | ||
Depreciation expense | $ 12.5 | $ 12.6 |
Indebtedness - Narrative (Detai
Indebtedness - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Line of Credit Facility [Line Items] | |||
Principal payments on mortgages and other notes payable | $ 218 | $ 24,552 | |
Repayments on credit facilities | $ 10,000 | $ 0 | |
Maximum allowable distributions as a percentage of adjusted FFO | 70% | ||
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Repayments on credit facilities | $ 10,000 | ||
Mortgages and other notes payable, net | |||
Line of Credit Facility [Line Items] | |||
Principal payments on mortgages and other notes payable | $ 200 |
Indebtedness - Summary of Futur
Indebtedness - Summary of Future Principal Payments (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 20,750 |
2025 | 308 |
2026 | 553,542 |
2027 | 0 |
2028 | 0 |
Thereafter | 0 |
Total | $ 574,600 |
Indebtedness - Summary of Fair
Indebtedness - Summary of Fair Market Value and Carrying Value of Indebtedness (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Carrying Value | $ 574,600 | |
Credit facilities, net | ||
Debt Instrument [Line Items] | ||
Fair Value | 538,000 | $ 548,000 |
Carrying Value | 532,500 | 541,800 |
Unamortized debt issuance costs | 5,500 | 6,200 |
Mortgages and other notes payable, net | ||
Debt Instrument [Line Items] | ||
Fair Value | 36,600 | 36,800 |
Carrying Value | $ 36,400 | $ 36,600 |
Related Party Arrangements - Na
Related Party Arrangements - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Related Party Transaction [Line Items] | ||
Cash distributions on restricted stock | $ 4,453 | $ 4,453 |
Restricted Stock | Related Party | ||
Related Party Transaction [Line Items] | ||
Cash distributions on restricted stock | $ 30 | $ 30 |
Related Party Arrangements - Su
Related Party Arrangements - Summary of Fees, Reimbursable Expenses and Related Amounts Unpaid to Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Line of Credit Facility [Line Items] | |||
Total reimbursable expenses, net | $ 4,122 | $ 4,198 | |
Asset management fees | |||
Line of Credit Facility [Line Items] | |||
Asset management fees | 3,337 | 3,476 | |
Related Party | |||
Line of Credit Facility [Line Items] | |||
Operating expenses | 785 | 722 | |
Total reimbursable expenses | 785 | 722 | |
Other liabilities/Due to related parties | 1,413 | $ 1,292 | |
Related Party | Reimbursable Operating Expenses | |||
Line of Credit Facility [Line Items] | |||
Other liabilities/Due to related parties | 301 | 180 | |
Related Party | Reimbursable Expenses | |||
Line of Credit Facility [Line Items] | |||
Other liabilities/Due to related parties | 301 | 180 | |
Related Party | Asset Management Fee | |||
Line of Credit Facility [Line Items] | |||
Other liabilities/Due to related parties | 1,112 | $ 1,112 | |
Related Party | Asset management fees | |||
Line of Credit Facility [Line Items] | |||
Asset management fees | $ 3,337 | $ 3,476 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Interest Rate Cap One | ||
Derivative [Line Items] | ||
Notional Amount | $ 8,000 | |
Strike | 3.50% | |
Credit Spread | 2.60% | |
Trade | Jun. 29, 2023 | |
Forward | Jul. 03, 2023 | |
Maturity Date | Jan. 01, 2024 | |
Fair value asset (liability) | $ 0 | $ 0 |
Interest Rate Cap Two | ||
Derivative [Line Items] | ||
Notional Amount | $ 8,000 | |
Strike | 3.50% | |
Credit Spread | 2.60% | |
Trade | Dec. 20, 2023 | |
Forward | Jan. 02, 2024 | |
Maturity Date | Jul. 01, 2024 | |
Fair value asset (liability) | $ 36 | 63 |
Interest Rate Swap One | ||
Derivative [Line Items] | ||
Notional Amount | $ 267,000 | |
Strike | 4.40% | |
Credit Spread | 2.35% | |
Trade | Dec. 07, 2023 | |
Forward | Dec. 01, 2023 | |
Maturity Date | Dec. 01, 2025 | |
Fair value asset (liability) | $ 832 | (1,678) |
Interest Rate Swap Two | ||
Derivative [Line Items] | ||
Notional Amount | $ 80,000 | |
Strike | 4.54% | |
Credit Spread | 2.35% | |
Trade | Dec. 08, 2023 | |
Forward | Dec. 01, 2023 | |
Maturity Date | Dec. 01, 2025 | |
Fair value asset (liability) | $ 70 | (706) |
Interest Rate Swap Three | ||
Derivative [Line Items] | ||
Notional Amount | $ 20,000 | |
Strike | 4.54% | |
Credit Spread | 2.35% | |
Trade | Dec. 08, 2023 | |
Forward | Dec. 01, 2023 | |
Maturity Date | Dec. 01, 2025 | |
Fair value asset (liability) | $ 17 | $ (177) |
Commitments and Contingencies (
Commitments and Contingencies (Details) shares in Millions | 3 Months Ended |
Mar. 31, 2024 shares | |
Advisor Expense Support Agreement | Restricted Stock | |
Commitments And Contingencies [Line Items] | |
Contingently issuable restricted stock shares | 1.3 |