Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 02, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-36181 | |
Entity Registrant Name | CareTrust REIT, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 46-3999490 | |
Entity Address, Address Line One | 905 Calle Amanecer | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | San Clemente | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92673 | |
City Area Code | 949 | |
Local Phone Number | 542-3130 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | CTRE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 99,476,284 | |
Entity Central Index Key | 0001590717 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets: | ||
Real estate investments, net | $ 1,528,234 | $ 1,421,410 |
Other real estate related investments, at fair value (including accrued interest of $1,136 as of June 30, 2023 and $1,320 as of December 31, 2022) | 166,822 | 156,368 |
Assets held for sale, net | 21,554 | 12,291 |
Cash and cash equivalents | 1,145 | 13,178 |
Accounts and other receivables | 387 | 416 |
Prepaid expenses and other assets, net | 14,029 | 11,690 |
Deferred financing costs, net | 4,781 | 5,428 |
Total assets | 1,736,952 | 1,620,781 |
Liabilities and Equity: | ||
Senior unsecured notes payable, net | 395,594 | 395,150 |
Senior unsecured term loan, net | 199,454 | 199,348 |
Unsecured revolving credit facility | 280,000 | 125,000 |
Accounts payable, accrued liabilities and deferred rent liabilities | 21,039 | 24,360 |
Dividends payable | 27,843 | 27,550 |
Total liabilities | 923,930 | 771,408 |
Commitments and contingencies (Note 11) | ||
Equity: | ||
Preferred stock, $0.01 par value; 100,000,000 shares authorized, no shares issued and outstanding as of June 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock, $0.01 par value; 500,000,000 shares authorized, 99,124,082 and 99,010,112 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 991 | 990 |
Additional paid-in capital | 1,245,717 | 1,245,337 |
Cumulative distributions in excess of earnings | (433,686) | (396,954) |
Total equity | 813,022 | 849,373 |
Total liabilities and equity | $ 1,736,952 | $ 1,620,781 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Other real estate related investments, accrued interest | $ 1,136 | $ 1,320 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 99,124,082 | 99,010,112 |
Common stock, outstanding (in shares) | 99,124,082 | 99,010,112 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Rental income | $ 47,745 | $ 46,806 | $ 93,908 | $ 92,813 |
Interest and other income | 3,808 | 747 | 8,251 | 1,216 |
Total revenues | 51,553 | 47,553 | 102,159 | 94,029 |
Expenses: | ||||
Depreciation and amortization | 12,716 | 12,559 | 24,954 | 26,134 |
Interest expense | 11,040 | 6,303 | 20,867 | 12,045 |
Property taxes | 1,390 | 1,254 | 2,270 | 2,674 |
Impairment of real estate investments | 21,392 | 1,701 | 23,278 | 61,384 |
Provision for loan losses, net | 0 | 0 | 0 | 3,844 |
Property operating expenses | 658 | 89 | 1,621 | 536 |
General and administrative | 4,718 | 4,978 | 9,779 | 10,193 |
Total expenses | 51,914 | 26,884 | 82,769 | 116,810 |
Other (loss) income: | ||||
Gain on sale of real estate, net | 2,028 | 0 | 1,958 | 186 |
Unrealized losses on other real estate related investments, net | (2,151) | 0 | (2,605) | 0 |
Total other (loss) income | (123) | 0 | (647) | 186 |
Net (loss) income | $ (484) | $ 20,669 | $ 18,743 | $ (22,595) |
(Loss) earnings per common share: | ||||
Basic (in usd per share) | $ (0.01) | $ 0.21 | $ 0.19 | $ (0.24) |
Diluted (in usd per share) | $ (0.01) | $ 0.21 | $ 0.19 | $ (0.24) |
Weighted-average number of common shares: | ||||
Basic (in shares) | 99,117 | 96,564 | 99,090 | 96,487 |
Diluted (in shares) | 99,117 | 96,598 | 99,194 | 96,487 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Cumulative Distributions in Excess of Earnings |
Beginning balance (in shares) at Dec. 31, 2021 | 96,296,673 | |||
Beginning balance at Dec. 31, 2021 | $ 915,757 | $ 963 | $ 1,196,839 | $ (282,045) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Vesting of restricted common stock, net of shares withheld for employee taxes (in shares) | 190,393 | |||
Vesting of restricted common stock, net of shares withheld for employee taxes | (2,772) | $ 2 | (2,774) | |
Amortization of stock-based compensation | 1,521 | 1,521 | ||
Common dividends | (26,659) | (26,659) | ||
Net income (loss) | (43,264) | (43,264) | ||
Ending balance (in shares) at Mar. 31, 2022 | 96,487,066 | |||
Ending balance at Mar. 31, 2022 | 844,583 | $ 965 | 1,195,586 | (351,968) |
Beginning balance (in shares) at Dec. 31, 2021 | 96,296,673 | |||
Beginning balance at Dec. 31, 2021 | 915,757 | $ 963 | 1,196,839 | (282,045) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (22,595) | |||
Ending balance (in shares) at Jun. 30, 2022 | 96,605,112 | |||
Ending balance at Jun. 30, 2022 | 838,268 | $ 966 | 1,195,282 | (357,980) |
Beginning balance (in shares) at Mar. 31, 2022 | 96,487,066 | |||
Beginning balance at Mar. 31, 2022 | 844,583 | $ 965 | 1,195,586 | (351,968) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Vesting of restricted common stock, net of shares withheld for employee taxes (in shares) | 118,046 | |||
Vesting of restricted common stock, net of shares withheld for employee taxes | (1,697) | $ 1 | (1,698) | |
Amortization of stock-based compensation | 1,394 | 1,394 | ||
Common dividends | (26,681) | (26,681) | ||
Net income (loss) | 20,669 | 20,669 | ||
Ending balance (in shares) at Jun. 30, 2022 | 96,605,112 | |||
Ending balance at Jun. 30, 2022 | $ 838,268 | $ 966 | 1,195,282 | (357,980) |
Beginning balance (in shares) at Dec. 31, 2022 | 99,010,112 | 99,010,112 | ||
Beginning balance at Dec. 31, 2022 | $ 849,373 | $ 990 | 1,245,337 | (396,954) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Vesting of restricted common stock, net of shares withheld for employee taxes (in shares) | 87,978 | |||
Vesting of restricted common stock, net of shares withheld for employee taxes | (1,479) | $ 1 | (1,480) | |
Amortization of stock-based compensation | 936 | 936 | ||
Common dividends | (27,738) | (27,738) | ||
Net income (loss) | 19,227 | 19,227 | ||
Ending balance (in shares) at Mar. 31, 2023 | 99,098,090 | |||
Ending balance at Mar. 31, 2023 | $ 840,319 | $ 991 | 1,244,793 | (405,465) |
Beginning balance (in shares) at Dec. 31, 2022 | 99,010,112 | 99,010,112 | ||
Beginning balance at Dec. 31, 2022 | $ 849,373 | $ 990 | 1,245,337 | (396,954) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | $ 18,743 | |||
Ending balance (in shares) at Jun. 30, 2023 | 99,124,082 | 99,124,082 | ||
Ending balance at Jun. 30, 2023 | $ 813,022 | $ 991 | 1,245,717 | (433,686) |
Beginning balance (in shares) at Mar. 31, 2023 | 99,098,090 | |||
Beginning balance at Mar. 31, 2023 | 840,319 | $ 991 | 1,244,793 | (405,465) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Vesting of restricted common stock (in shares) | 25,992 | |||
Amortization of stock-based compensation | 924 | 924 | ||
Common dividends | (27,737) | (27,737) | ||
Net income (loss) | $ (484) | (484) | ||
Ending balance (in shares) at Jun. 30, 2023 | 99,124,082 | 99,124,082 | ||
Ending balance at Jun. 30, 2023 | $ 813,022 | $ 991 | $ 1,245,717 | $ (433,686) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Common dividends (in usd per share) | $ 0.28 | $ 0.28 | $ 0.275 | $ 0.275 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 18,743 | $ (22,595) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization (including below-market ground leases) | 24,983 | 26,167 |
Amortization of deferred financing costs | 1,217 | 1,040 |
Unrealized losses on other real estate related investments, net | 2,605 | 0 |
Amortization of stock-based compensation | 1,860 | 2,915 |
Straight-line rental income | 14 | (11) |
Adjustment for collectibility of rental income | 0 | 977 |
Noncash interest income | 184 | (13) |
Gain on sale of real estate, net | (1,958) | (186) |
Impairment of real estate investments | 23,278 | 61,384 |
Provision for loan losses, net | 0 | 3,844 |
Change in operating assets and liabilities: | ||
Accounts and other receivables | 14 | 578 |
Prepaid expenses and other assets, net | (330) | (1,724) |
Accounts payable, accrued liabilities and deferred rent liabilities | (3,624) | (4,074) |
Net cash provided by operating activities | 66,986 | 68,302 |
Cash flows from investing activities: | ||
Acquisitions of real estate, net of deposits applied | (172,453) | (21,915) |
Purchases of equipment, furniture and fixtures and improvements to real estate | (6,380) | (3,628) |
Investment in real estate related investments and other loans receivable | (27,262) | (102,086) |
Principal payments received on real estate related investments and other loans receivable | 15,287 | 1,026 |
Escrow deposits for potential acquisitions of real estate | (300) | 0 |
Net proceeds from sales of real estate | 14,464 | 959 |
Net cash used in investing activities | (176,644) | (125,644) |
Cash flows from financing activities: | ||
Proceeds from (costs paid for) the issuance of common stock, net | (629) | 0 |
Borrowings under unsecured revolving credit facility | 155,000 | 125,000 |
Payments of deferred financing costs | (21) | 0 |
Net-settle adjustment on restricted stock | (1,479) | (4,469) |
Dividends paid on common stock | (55,246) | (52,817) |
Net cash provided by financing activities | 97,625 | 67,714 |
Net (decrease) increase in cash and cash equivalents | (12,033) | 10,372 |
Cash and cash equivalents as of the beginning of period | 13,178 | 19,895 |
Cash and cash equivalents as of the end of period | 1,145 | 30,267 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 21,000 | 10,987 |
Supplemental schedule of noncash investing and financing activities: | ||
Increase in dividends payable | 294 | 522 |
Right-of-use asset obtained in exchange for new operating lease obligation | 369 | 0 |
Transfer of pre-acquisition costs to acquired assets | 0 | 7 |
Sale of real estate settled with notes receivable | $ 2,000 | $ 0 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Description of Business— CareTrust REIT, Inc.’s (“CareTrust REIT” or the “Company”) primary business consists of acquiring, financing, developing and owning real property to be leased to third-party tenants in the healthcare sector. As of June 30, 2023, the Company owned and leased to independent ope rators , 224 skilled nursing facilities (“SNFs”), multi-service campuses, assisted living facilities (“ALFs”) and independent living facilities (“ILFs”) consisting of 23,694 operational beds and units located in 28 states with the highest concentration of properties by rental income located in California, Texas, Louisiana, Idaho and Arizona. As of June 30, 2023, the Company also had other real estate related investments consisting of five real estate secured loans receivable and one mezzanine loan receivable with a carrying value of $166.8 million. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation —The accompanying condensed consolidated financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the disclosures required by GAAP for a complete set of annual audited financial statements. The 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 fiscal year ended December 31, 2022. In the opinion of management, all adjustments which are of a normal and recurring nature and considered necessary for a fair presentation of the results of the interim periods presented have been included. The results of operations for the interim periods are not necessarily indicative of results for the full year. All intercompany transactions and account balances within the Company have been eliminated. |
REAL ESTATE INVESTMENTS, NET
REAL ESTATE INVESTMENTS, NET | 6 Months Ended |
Jun. 30, 2023 | |
Real Estate [Abstract] | |
REAL ESTATE INVESTMENTS, NET | REAL ESTATE INVESTMENTS, NET The following table summarizes the Company’s investment in owned properties held for use at June 30, 2023 and December 31, 2022 (dollars in thousands): June 30, 2023 December 31, 2022 Land $ 266,010 $ 238,738 Buildings and improvements 1,575,661 1,483,133 Integral equipment, furniture and fixtures 97,755 97,199 Identified intangible assets 2,832 2,832 Real estate investments 1,942,258 1,821,902 Accumulated depreciation and amortization (414,024) (400,492) Real estate investments, net $ 1,528,234 $ 1,421,410 As of June 30, 2023, 222 of the Company’s 224 facilities were leased to various operators under triple-net leases. All of these leases contain annual escalators based on the percentage change in the Consumer Price Index (“CPI”) (but not less than zero), some of which are subject to a cap, or fixed rent escalators. Two of the Company’s 224 facilities are non-operational and are leased under a short term lease with an expected remaining term of less than one year as of June 30, 2023. As of June 30, 2023, 15 facilities were held for sale. See Note 4, Impairment of Real Estate Investments, Assets Held for Sale, Net and Asset Sales, for additional information. As of June 30, 2023, the Company’s total future contractual minimum rental income for all of its tenants, excluding operating expense reimbursements and assets held for sale, was as follows (dollars in thousands): Year Amount 2023 (six months) $ 98,155 2024 197,155 2025 198,310 2026 198,853 2027 195,687 2028 193,433 Thereafter 941,966 Total $ 2,023,559 Tenant Purchase Options Certain of the Company’s operators hold purchase options allowing them to acquire properties they currently lease from the Company. A summary of these purchase options is presented below (dollars in thousands): Asset Type (1) Properties Lease Expiration Option Period Open Date (2) Option Type (3) Current Cash Rent (4) SNF 1 March 2029 4/1/2022 (5) A / B (7) 832 SNF / Campus 2 (8) October 2032 1/1/2024 (6) A 1,097 SNF 4 November 2034 12/1/2024 (5) A 3,891 (1) Excludes a purchase option on an 11 building SNF portfolio classified as held for sale as of June 30, 2023 and representing $5.1 million of current cash rent. Tenant is currently not eligible to elect the option. (2) The Company has not received notice of exercise for the option periods that are currently open. (3) Option type includes: A - Fixed base price. B - Fixed capitalization rate on lease revenue. (4) Based on annualized cash revenue for contracts in place as of June 30, 2023. (5) Option window is open until the expiration of the lease term. (6) Option window is open for six months from the option period open date. (7) Purchase option reflects two option types. (8) Includes one property classified as held for sale as of June 30, 2023. Rental Income The following table summarizes components of the Company’s rental income (dollars in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, Rental Income 2023 2022 2023 2022 Contractual rent due (1) $ 47,752 $ 46,801 $ 93,922 $ 93,779 Straight-line rent (7) 5 (14) 11 Adjustment for collectibility (2) — — — (977) Total $ 47,745 $ 46,806 $ 93,908 $ 92,813 (1) Includes initial cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. Tenant operating expense reimbursements for the three months ended June 30, 2023 and 2022 were $1.2 million and $0.7 million, respectively. Tenant operating expense reimbursements for the six months ended June 30, 2023 and 2022 were $1.9 million and $1.3 million, respectively. (2) During the six months ended June 30, 2022, and in accordance with Accounting Standards Codification 842, the Company evaluated the collectibility of lease payments through maturity and determined that it was not probable that the Company would collect substantially all of the contractual obligations from four existing and former operators. As such, the Company reversed $0.7 million of operating expense reimbursements, $0.2 million of contractual rent and $0.1 million of straight-line rent during the six months ended June 30, 2022. If lease payments are subsequently deemed probable of collection, the Company will reestablish the receivable which will result in an increase in rental income for such recoveries. Recent Real Estate Acquisitions The following table summarizes the Company’s acquisitions for the six months ended June 30, 2023 (dollars in thousands): Type of Property Purchase Price (1) Initial Annual Cash Rent (2) Number of Properties Number of Beds/Units (3) Skilled nursing $ 107,858 $ 9,085 7 871 Multi-service campuses 25,276 1,916 1 168 Assisted living 39,319 3,495 4 241 Total $ 172,453 $ 14,496 12 1,280 (1) Purchase price includes capitalized acquisition costs. (2) Initial annual cash rent represents initial cash rent for the first twelve months excluding the impact of rent abatement in the first one to three months, if applicable. (3) The number of beds/units includes operating beds at the acquisition date. Lease Amendments Amended Premier Lease . Effective January 1, 2023, the Company amended its master lease with affiliates of Premier Senior Living, LLC (“Premier”). In connection with the lease amendment, the Company reduced the annual cash rent by $1.7 million, to approximately $2.6 million. The Premier lease, as amended, had a remaining term at the date of amendment of approximately 8 years with two five-year renewal options and CPI-based rent escalators. Noble VA Lease Termination and New Pennant Lease. Effective March 16, 2023, two ALFs in Wisconsin were removed from a master lease with affiliates of Noble VA Holdings (“Noble VA”) and the Company terminated the applicable Noble VA master lease. Annual cash rent under the applicable Noble VA master lease prior to lease termination was approximately $2.3 million. In connection with the lease termination, the Company entered into a new lease with The Pennant Group, Inc. (“Pennant”) with respect to the two ALFs. The applicable Pennant lease had an initial term at the date of the lease of approximately 15 years with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the new lease was approximately $0.8 million and the master lease provides Pennant with three months deferred rent to be repaid before the expiration or termination of the lease. Amended Hillstone Lease. On March 24, 2023, the Company amended its master lease with affiliates of Hillstone Healthcare, Inc. (“Hillstone”). In connection with the lease amendment, the Company agreed to defer rent of approximately $0.7 million for 12 months from December 2022 through November 2023 to be repaid as a percentage of adjusted gross revenues of one underlying facility, as defined in the amended lease, beginning January 1, 2025, until deferred rent has been paid in full. The amended Hillstone lease had a remaining term at the date of amendment of approximately 7 years with two five-year renewal options and 2% fixed rent escalators. |
IMPAIRMENT OF REAL ESTATE INVES
IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE, NET AND ASSET SALES | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE, NET AND ASSET SALES | IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE, NET AND ASSET SALESDuring the three and six months ended June 30, 2023, the Company recognized an impairment charge on 12 and 15 facilities of $21.4 million and $23.3 million, respectively, which is reported in impairment of real estate investments in the condensed consolidated statements of operations. As of June 30, 2023, there were 15 facilities classified as held for sale, all of which have been marked down to fair value and considered Level 3 measurements within the fair value hierarchy. During the three and six months ended June 30, 2022, the Company recognized an impairment charge on one and 21 facilities of $1.7 million and $61.4 million, respectively. The fair value of the assets held for sale was based on estimated sales prices, which are considered to be Level 3 measurements within the fair value hierarchy. Estimated sales prices were determined using a market approach (comparable sales model), which relies on certain assumptions by management, including: (i) comparable market transactions, (ii) estimated prices per unit, and (iii) binding agreements for sales and non-binding offers to purchase from unrelated third-parties. There are inherent uncertainties in making these assumptions. For the Company’s impairment calculations, the Company’s fair value estimates primarily relied on a market approach and utilized prices per unit ranging from $18,000 to $35,000, with a weighted average price per unit of $21,000. Asset Sales and Held for Sale Reclassifications The following table summarizes the Company’s dispositions for the three and six months ended June 30, 2023 and 2022 (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Number of facilities 3 — 4 1 Net sales proceeds (1) $ 13,234 $ — $ 16,464 $ 959 Net carrying value 11,206 — 14,506 773 Net gain on sale $ 2,028 $ — $ 1,958 $ 186 (1) Net sales proceeds includes $2 million of seller financing in connection with the sale of one ALF in June 2023. The $2.0 million mortgage loan is included in other real estate related investments on the Company’s condensed consolidated balance sheets. The following table summarizes the Company’s assets held for sale activity for the periods presented (dollars in thousands): Net Carrying Value Number of Facilities December 31, 2022 $ 12,291 5 Additions to assets held for sale 47,047 14 Assets sold (14,506) (4) Impairment of real estate held for sale (23,278) — June 30, 2023 $ 21,554 15 |
OTHER REAL ESTATE RELATED AND O
OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS | 6 Months Ended |
Jun. 30, 2023 | |
Investments, All Other Investments [Abstract] | |
OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS | OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS As of June 30, 2023 and December 31, 2022, the Company’s other real estate related investments, at fair value, consisted of the following (dollar amounts in thousands): As of June 30, 2023 Investment Facility Count and Type Principal Balance as of June 30, 2023 Book Value as of June 30, 2023 Book Value as of December 31, 2022 Weighted Average Contractual Interest Rate Maturity Date Senior mortgage secured loan receivable 18 SNF/Campus $ 75,000 $ 71,488 $ 72,543 8.4 % (1) 6/30/2027 Mortgage secured loan receivable 5 SNF 22,250 21,208 21,345 10.6 % (2) 8/1/2025 Mortgage secured loan receivable 4 SNF 24,900 23,503 23,796 9.0 % (2) 9/8/2025 Mortgage secured loan receivable (3) 1 ALF 2,000 2,000 — 9.0 % 5/31/2024 Mortgage secured loan receivable (4) 2 SNF Campus / ILF 25,993 25,993 — 9.0 % 6/29/2033 Mezzanine loan receivable (5) 9 SNF — — 14,672 — — Mezzanine loan receivable 18 SNF/Campus 25,000 22,630 24,012 11.0 % 6/30/2032 $ 175,143 $ 166,822 $ 156,368 (1) Rate is net of subservicing fee. (2) Term secured overnight financing rate (“SOFR”) used as of June 30, 2023 was 5.11%. Rates are net of subservicing fees. (3) In June 2023, the Company closed on the sale of one ALF. In connection with the sale, the Company provided affiliates of the purchaser of the properties with a $2.0 million mortgage loan. The mortgage loan is secured by the ALF. The mortgage loan has a one-year extension option and may be prepaid in whole before the maturity date. (4) In June 2023, the Company extended a $26.0 million mortgage loan to a skilled nursing real estate owner. The mortgage loan is secured by one SNF campus and one ILF. The mortgage loan is set to mature on June 29, 2033 and may (subject to certain restrictions) be prepaid in whole before the maturity date for an exit fee ranging from 0% to 3% of the loan plus unpaid interest payments. (5) Mezzanine loan was prepaid during the six months ended June 30, 2023. The following table summarizes the Company’s other real estate related investments activity for the six months ended June 30, 2023 and 2022 (dollars in thousands): Six Months Ended June 30, 2023 2022 Origination of other real estate related investments $ 28,243 $ 100,000 Accrued interest, net (184) 13 Unrealized losses on other real estate related investments, net (2,605) — Repayments of other real estate related investments (15,000) — Net increase in other real estate related investments, at fair value $ 10,454 $ 100,013 As of June 30, 2023 and December 31, 2022, the Company’s other loans receivable, included in prepaid expenses and other assets, net on the Company’s condensed consolidated balance sheets, consisted of the following (dollars in thousands): As of June 30, 2023 Investment Principal Balance as of June 30, 2023 Book Value as of June 30, 2023 Book Value as of December 31, 2022 Weighted Average Contractual Interest Rate Maturity Date Other loans receivable $ 10,328 $ 10,333 $ 9,600 8.5 % 8/31/2023 - 9/30/2025 Expected credit loss — (2,094) (2,094) Total $ 10,328 $ 8,239 $ 7,506 The following table summarizes the Company’s other loans receivable activity for the six months ended June 30, 2023 and 2022 (dollars in thousands): Six Months Ended June 30, 2023 2022 Origination of loans receivable $ 1,019 $ 2,500 Principal payments (287) (276) Accrued interest, net 1 (2) Provision for loan losses, net — (4,594) Net increase (decrease) in other loans receivable $ 733 $ (2,372) Expected credit losses and recoveries are recorded in provision for loan losses, net in the condensed consolidated statements of operations. During the six months ended June 30, 2022, the Company recorded a $4.6 million expected credit loss related to two other loans receivable that have been placed on non-accrual status, including an unfunded loan commitment of $0.4 million, net of a loan loss recovery of $0.8 million related to a loan previously written-off. During the six months ended June 30, 2023 , the Company had no additional expected credit loss and did not consider any loan receivable investments to be impaired. The following table summarizes the interest and other income recognized from the Company’s loans receivable and other investments during the three and six months ended June 30, 2023 and 2022 (dollars in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, Investment 2023 2022 2023 2022 Mortgage secured loans receivable $ 2,762 $ 17 $ 5,466 $ 17 Mezzanine loans receivable 695 713 2,278 1,163 Other 351 17 507 36 Total $ 3,808 $ 747 $ 8,251 $ 1,216 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. GAAP guidance defines three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and, depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. The Company does not expect that changes in classifications between levels will be frequent. Items Measured at Fair Value on a Recurring Basis The following table presents information about the Company’s assets measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022, aggregated by the level in the fair value hierarchy within which those instruments fall (dollars in thousands): Level 1 Level 2 Level 3 Balance as of June 30, 2023 Assets: Mortgage secured loans receivable $ — $ — $ 144,192 $ 144,192 Mezzanine loans receivable — — 22,630 22,630 Total $ — $ — $ 166,822 $ 166,822 Level 1 Level 2 Level 3 Balance as of December 31, 2022 Assets: Mortgage secured loans receivable $ — $ — $ 117,684 $ 117,684 Mezzanine loans receivable — — 38,684 38,684 Total $ — $ — $ 156,368 $ 156,368 The following table details the Company’s assets measured at fair value on a recurring basis using Level 3 inputs (dollars in thousands): Investments in Real Estate Secured Loans Investments in Mezzanine Loans Balance at December 31, 2022 $ 117,684 $ 38,684 Loan originations 28,243 — Accrued interest, net (21) (163) Unrealized losses on other real estate related investments, net (1,714) (891) Repayments — (15,000) Balance as of June 30, 2023 $ 144,192 $ 22,630 Real estate secured and mezzanine loans receivable: The fair value of the secured and mezzanine loans receivables were estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements. As such, the Company classifies each instrument as Level 3 due to the significant unobservable inputs used in determining market interest rates for investments with similar terms. During the three months ended June 30, 2023, the Company recorded an unrealized loss of $1.9 million related to three mortgage loans and one mezzanine loan receivable due to rising interest rates and a $0.3 million loss due to a loan origination fee paid. During the six months ended June 30, 2023, the Company recorded an unrealized loss of $2.8 million related to three mortgage loans and one mezzanine loan receivable due to rising interest rates, partially offset by a reversal of a previously recognized unrealized loss of $0.5 million related to the repayment of one mezzanine loan receivable. Future changes in market interest rates or collateral value could materially impact the estimated discounted cash flows that are used to determine the fair value of the secured and mezzanine loans receivable. As of June 30, 2023 and December 31, 2022, the Company did not have any loans that were 90 days or more past due. The following table shows the quantitative information about unobservable inputs related to the Level 3 fair value measurements comprising the investments in secured and mezzanine loans receivables as of June 30, 2023: Type Book Value as of June 30, 2023 Valuation Technique Unobservable Inputs Range Mortgage secured loans receivable $ 144,192 Discounted cash flow Discount Rate 10% - 14% Mezzanine loan receivable 22,630 Discounted cash flow Discount Rate 12% - 14% For the six months ended June 30, 2023, there were no classification changes in assets and liabilities with Level 3 inputs in the fair value hierarchy. Items Disclosed at Fair Value Considerable judgment is necessary to estimate the fair value disclosure of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the face value, carrying amount and fair value of the Notes (as defined in Note 7, Debt, below) as of June 30, 2023 and December 31, 2022 using Level 2 inputs is as follows (dollars in thousands): June 30, 2023 December 31, 2022 Level Face Carrying Fair Face Carrying Fair Financial liabilities: Senior unsecured notes payable 2 $ 400,000 $ 395,594 $ 346,588 $ 400,000 $ 395,150 $ 345,036 Cash and cash equivalents, accounts and other receivables, accounts payable, and accrued liabilities: The carrying values for these instruments approximate their fair values due to the short-term nature of these instruments. Senior unsecured notes payable: The fair value of the Notes was determined using third-party quotes derived from orderly trades. Unsecured revolving credit facility and senior unsecured term loan: The fair values approximate their carrying values as the interest rates are variable and approximate prevailing market interest rates for similar debt arrangements. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The following table summarizes the balance of the Company’s indebtedness as of June 30, 2023 and December 31, 2022 (dollars in thousands): June 30, 2023 December 31, 2022 Principal Amount Deferred Loan Fees Carrying Value Principal Amount Deferred Loan Fees Carrying Value Senior unsecured notes payable $ 400,000 $ (4,406) $ 395,594 $ 400,000 $ (4,850) $ 395,150 Senior unsecured term loan 200,000 (546) 199,454 200,000 (652) 199,348 Unsecured revolving credit facility 280,000 — 280,000 125,000 — 125,000 $ 880,000 $ (4,952) $ 875,048 $ 725,000 $ (5,502) $ 719,498 Senior Unsecured Notes Payable 2028 Senior Notes. On June 17, 2021, the Company’s wholly owned subsidiary, CTR Partnership, L.P. (the “Operating Partnership”), and its wholly owned subsidiary, CareTrust Capital Corp. (together with the Operating Partnership, the “Issuers”), completed a private offering of $400.0 million aggregate principal amount of 3.875% Senior Notes due 2028 (the “Notes”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act of 1933, as amended. The Notes were issued at par, resulting in gross proceeds of $400.0 million and net proceeds of approximately $393.8 million after deducting underwriting fees and other offering expenses. The Notes mature on June 30, 2028. The Notes accrue interest at a rate of 3.875% per annum payable semiannually in arrears on June 30 and December 30 of each year, commencing on December 30, 2021. The Issuers may redeem some or all of the Notes at any time prior to March 30, 2028 at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest on the Notes, if any, to, but not including, the redemption date, plus a “make-whole” premium. At any time on or after March 30, 2028, the Issuers may redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed plus accrued interest on the Notes, if any, to, but not including, the redemption date. In addition, at any time on or prior to June 30, 2024, up to 40% of the aggregate principal amount of the Notes may be redeemed with the net proceeds of certain equity offerings at a redemption price of 103.875% of the aggregate principal amount of Notes to be redeemed plus accrued and unpaid interest on the Notes, if any, to, but not including, the redemption date. If certain changes of control of the Company occur, the Issuers will be required to make an offer to holders of the Notes to repurchase their Notes at a price of 101% of their principal amount plus accrued and unpaid interest, if any, to, but not including, the repurchase date. The obligations under the Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by the Company and all of CareTrust’s existing and future subsidiaries (other than the Issuers) that guarantee obligations under the Amended Credit Facility (as defined below); provided, however, that such guarantees are subject to automatic release under certain customary circumstances. The indenture governing the Notes contains customary covenants such as limiting the ability of the Company and its restricted subsidiaries to: incur or guarantee additional indebtedness; incur or guarantee secured indebtedness; pay dividends or distributions on, or redeem or repurchase, capital stock; make certain investments or other restricted payments; sell assets; enter into transactions with affiliates; merge or consolidate or sell all or substantially all of their assets; and create restrictions on the ability of the Issuers and their restricted subsidiaries to pay dividends or other amounts to the Issuers. The indenture governing the Notes also requires the Company and its restricted subsidiaries to maintain a specified ratio of unencumbered assets to unsecured indebtedness. These covenants are subject to a number of important and significant limitations, qualifications and exceptions. The indenture governing the Notes also contains customary events of default. As of June 30, 2023, the Company was in compliance with all applicable financial covenants under the indenture governing the Notes. Unsecured Revolving Credit Facility and Term Loan On December 16, 2022, the Operating Partnership, as the borrower, the Company, as guarantor, CareTrust GP, LLC, and certain of the Operating Partnership’s wholly owned subsidiaries, entered into a second amended and restated credit and guaranty agreement with KeyBank National Association, as administrative agent, an issuing bank and swingline lender (the “Second Amended Credit Agreement”). The Second Amended Credit Agreement, which amends and restates the Company’s amended and restated credit and guaranty agreement, dated as of February 8, 2019 (as amended, the “Prior Credit Agreement”) provides for: (i) an unsecured revolving credit facility (the “Revolving Facility”) with revolving commitments in an aggregate principal amount of $600.0 million, including a letter of credit subfacility for 10% of the then available revolving commitments and a swingline loan subfacility for 10% of the then available revolving commitments and (ii) the continuation of the unsecured term loan credit facility which was previously extended under the Prior Credit Agreement (the “Term Loan” and together with the Revolving Facility, the “Second Amended Credit Facility”) in an aggregate principal amount of $200.0 million. Future borrowings under the Second Amended Credit Facility will be used for working capital purposes, for capital expenditures, to fund acquisitions and for general corporate purposes. The interest rates applicable to loans under the Revolving Facility are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.10% to 0.55% per annum or Adjusted Term SOFR or Adjusted Daily Simple SOFR (each as defined in the Second Amended Credit Agreement) plus a margin ranging from 1.10% to 1.55% per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt). The interest rates applicable to loans under the Term Loan are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.50% to 1.20% per annum or Adjusted Term SOFR or Adjusted Daily Simple SOFR plus a margin ranging from 1.50% to 2.20% per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt). In addition, the Operating Partnership will pay a facility fee on the revolving commitments under the Revolving Facility ranging from 0.15% to 0.35% per annum, based on the debt to asset value ratio of the Company and its consolidated subsidiaries (unless the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt and the Operating Partnership elects to decrease the applicable margin as described above, in which case the Operating Partnership will pay a facility fee on the revolving commitments ranging from 0.125% to 0.30% per annum based on the credit ratings of the Company’s senior long-term unsecured debt). As of June 30, 2023, the Operating Partnership had $200.0 million of borrowings outstanding under the Term Loan and $280.0 million outstanding under the Revolving Facility. The Revolving Facility has a maturity date of February 9, 2027, and includes, at the sole discretion of the Operating Partnership, two six-month extension options. The Term Loan has a maturity date of February 8, 2026. The Second Amended Credit Facility is guaranteed, jointly and severally, by the Company and its wholly owned subsidiaries that are party to the Second Amended Credit Agreement (other than the Operating Partnership). The Second Amended Credit Agreement contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, amend organizational documents and pay certain dividends and other restricted payments. The Second Amended Credit Agreement requires the Company to comply with financial maintenance covenants to be tested quarterly, consisting of a maximum debt to asset value ratio, a minimum fixed charge coverage ratio, a minimum tangible net worth, a maximum cash distributions to operating income ratio, a maximum secured debt to asset value ratio, a maximum secured recourse debt to asset value ratio, a maximum unsecured debt to unencumbered properties asset value ratio, a minimum unsecured interest coverage ratio and a minimum rent coverage ratio. The Second Amended Credit Agreement also contains certain customary events of default, including the failure to make timely payments under the Second Amended Credit Facility or other material indebtedness, the failure to satisfy certain covenants (including the financial maintenance covenants), the occurrence of change of control and specified events of bankruptcy and insolvency. As of June 30, 2023, the Company was in compliance with all applicable financial covenants under the Second Amended Credit Agreement. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
EQUITY | EQUITY Common Stock At-The-Market Offering —On February 24, 2023, the Company entered into a new equity distribution agreement to issue and sell, from time to time, up to $500.0 million in aggregate offering price of its common stock through an “at-the-market” equity offering program (the “ATM Program”). In addition to the issuance and sale of shares of its common stock, the Company may also enter into one or more forward sales agreements (each, an “ATM forward contract”) with sales agents for the sale of the Company’s shares of common stock under the ATM Program. The Company expects to fully physically settle forward equity sales by delivery of shares of common stock to the forward purchaser and receive cash proceeds upon one or more settlement dates, which are typically a one-year term, at the Company’s discretion, prior to the final settlement date, at which time the Company expects to receive aggregate net cash proceeds at settlement equal to the number of shares sold on a forward basis multiplied by the relevant forward price per share. The weighted average forward sale price that the Company expects to receive upon physical settlement will be subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchaser’s stock borrowing costs and (iii) scheduled dividends through the settlement. During the three and six months ended June 30, 2023, the Company executed forward equity sales under the ATM Program with a financial institution acting as a forward purchaser to sell 6,736,089 shares of common stock at a weighted average sales price of $19.71 per share before commissions and offering expenses. The Company did not receive any proceeds from the sales of its shares of common stock by the forward sellers. As of June 30, 2023, the Company has not settled any portion of these forward equity sales. There was no ATM Program activity (or activity under any predecessor at-the-market equity offering programs) for the three and six months ended June 30, 2022. As of June 30, 2023, the Company had $367.2 million available for future issuances under the ATM Program. Dividends on Common Stock —The following table summarizes the cash dividends per share of common stock declared by the Company’s board of directors for the first six months of 2023 (dollars in thousands, except per share amounts): For the Three Months Ended March 31, 2023 June 30, 2023 Dividends declared per share $ 0.28 $ 0.28 Dividends payment date April 14, 2023 July 14, 2023 Dividends payable as of record date (1) $ 27,846 $ 27,853 Dividends record date March 31, 2023 June 30, 2023 (1) Dividends payable includes dividends on performance stock awards that will be paid if and when the shares subject to such awards vest if deemed probable of meeting their performance condition. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION All stock-based awards are subject to the terms of the CareTrust REIT, Inc. and CTR Partnership, L.P. Incentive Award Plan (the “Plan”). The Plan provides for the granting of stock-based compensation, including stock options, restricted stock, performance awards, restricted stock units, relative total stockholder return based stock awards and other incentive awards to officers, employees and directors in connection with their employment with or services provided to the Company. Under the Plan, 5,000,000 shares have been authorized for awards. Under the Plan, restricted stock awards (“RSAs”) vest in equal annual installments over a three year period for the RSAs granted in 2022 and 2021 and a four year period for the RSAs granted in 2020. RSAs granted to non-employee members of the board of directors (“Board Awards”) vest in full on the earlier to occur of the Company’s next Annual Meeting of Stockholders or one year. Performance stock awards (“PSA”) granted are subject to both time and performance based conditions and vest over a one one The following table summarizes the status of the restricted stock award and performance award activity for the six months ended June 30, 2023: Shares Weighted Average Share Price Unvested balance at December 31, 2022 573,609 $ 20.63 Granted: Board Awards 24,768 19.38 Vested (185,767) 20.94 Forfeited (61,680) 21.19 Unvested balance at June 30, 2023 350,930 $ 20.28 As of June 30, 2023, the weighted-average remaining vesting period of such awards w as 1.7 years. The following table summarizes the stock-based compensation expense recognized for the periods presented (dollars in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Stock-based compensation expense $ 924 $ 1,394 $ 1,860 $ 2,915 For the three and six months ended June 30, 2023 , approximately $0.6 million of previously recognized stock-based compensation expense related to the PSAs was reversed as the awards are not expected to meet the performance conditions. For the six months ended June 30, 2023 , approximately $0.9 million of previously recognized stock-based compensation expense was reversed due to forfeitures of stock awards. |
(LOSS) EARNINGS PER COMMON SHAR
(LOSS) EARNINGS PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
(LOSS) EARNINGS PER COMMON SHARE | (LOSS) EARNINGS PER COMMON SHARE The following table presents the calculation of basic and diluted (loss) earnings per common share (“EPS”) for the Company’s common stock for the three and six months ended June 30, 2023 and 2022, 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 (amounts in thousands, except per share amounts): For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net (loss) income $ (484) $ 20,669 $ 18,743 $ (22,595) Less: Net income allocated to participating securities (89) (94) (178) (211) Numerator for basic and diluted earnings available to common stockholders $ (573) $ 20,575 $ 18,565 $ (22,806) Denominator: Weighted-average basic common shares outstanding 99,117 96,564 99,090 96,487 Dilutive potential common shares - performance stock awards — 34 90 — Dilutive potential common shares - forward equity agreements — — 14 — Weighted-average diluted common shares outstanding 99,117 96,598 99,194 96,487 (Loss) earnings per common share, basic $ (0.01) $ 0.21 $ 0.19 $ (0.24) (Loss) earnings per common share, diluted $ (0.01) $ 0.21 $ 0.19 $ (0.24) Antidilutive unvested restricted stock awards, total shareholder return units, performance awards, and forward equity shares excluded from the computation 500 341 316 431 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company and its subsidiaries are and may become from time to time a party to various claims and lawsuits arising in the ordinary course of business, which are not individually or in the aggregate anticipated to have a material adverse effect on the Company’s results of operations, financial condition or cash flows. Claims and lawsuits may include matters involving general or professional liability asserted against the Company’s tenants, which are the responsibility of the Company’s tenants and for which the Company is entitled to be indemnified by its tenants under the insurance and indemnification provisions in the applicable leases. Capital expenditures for each property leased under the Company’s triple-net leases are generally the responsibility of the tenant, except that, for the facilities leased to subsidiaries of The Ensign Group, Inc., under multiple long-term leases, and Pennant, the tenant will have an option to require the Company to finance certain capital expenditures up to an aggregate of 20% of the Company’s initial investment in such property, subject to a corresponding rent increase at the time of funding. For the Company’s other triple-net master leases, the tenants also have the option to request capital expenditure funding that would generally be subject to a corresponding rent increase at the time of funding, which are subject to tenant compliance with the conditions to the Company’s approval and funding of their requests. As of June 30, 2023, the Company had committed to fund |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 6 Months Ended |
Jun. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF RISK | CONCENTRATION OF RISK Concentrations of credit risk arise when one or more tenants, operators, or obligors related to the Company’s investments are engaged in similar business activities or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. Major operator concentration - The Company has operators from which it derived 10% or more of its rental revenue for the three and six months ended June 30, 2023 and 2022. The following table sets forth information regarding the Company’s major operators as of June 30, 2023 and 2022: Number of Facilities Number of Beds/Units Percentage of Total Revenue (1) Operator SNF Campus ALF/ILF SNF Campus ALF/ILF Three Months Ended Six Months Ended June 30, 2023 Ensign (2) 83 8 7 8,741 997 661 36 % 36 % Priority Management Group 13 2 — 1,742 402 — 16 % 16 % June 30, 2022 Ensign (2) 83 8 7 8,756 997 678 35 % 35 % Priority Management Group 13 2 — 1,742 402 — 16 % 16 % (1) The Company’s rental income, exclusive of operating expense reimbursements and adjustments for collectibility. (2) Ensign is subject to the registration and reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Ensign’s financial statements, as filed with the SEC, can be found at http://www.sec.gov. The Company has not verified this information through an independent investigation or otherwise. Major geographic concentration – The following table provides information regarding the Company’s concentrations with respect to certain states, from which the Company derived 10% or more of its rental revenue for the three and six months ended June 30, 2023 and 2022: Number of Facilities Number of Beds/Units Percentage of Total Revenue (1) State SNF Campus ALF/ILF SNF Campus ALF/ILF Three Months Ended Six Months Ended June 30, 2023 CA 29 9 5 3,307 1,527 437 28 % 28 % TX 40 3 2 5,126 536 212 23 % 23 % June 30, 2022 CA 27 8 5 3,048 1,359 449 27 % 26 % TX 38 3 3 4,849 536 242 22 % 22 % (1) Represents the Company’s rental income, exclusive of operating expense reimbursements and adjustments for collectibility. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluates subsequent events in accordance with ASC 855, Subsequent Events . The Company evaluates subsequent events up until the date the condensed consolidated financial statements are issued. Recent Investments On July 17, 2023, the Company extended a $15.7 million mortgage secured loan to a skilled nursing real estate owner. The mortgage loan is secured by a two-facility skilled nursing portfolio in Florida, operated by a regional skilled nursing operator. The loan bears interest at 9.0%, payable monthly. The term loan is set to mature on August 1, 2028, with one five-year extension option and may (subject to certain restrictions) be prepaid in whole before the maturity date for an exit fee ranging from 2% to 3% of the loan plus unpaid interest payments; provided, however, that no exit fee is payable in connection with the loan being refinanced pursuant to a loan (or loans) provided by Fannie Mae, Freddie Mac, Federal Housing Administration, or a similar governmental authority. The investment was funded using proceeds from the Revolving Facility as well as cash on hand. At-The-Market Offering of Common Stock |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation —The accompanying condensed consolidated financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the disclosures required by GAAP for a complete set of annual audited financial statements. The 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 fiscal year ended December 31, 2022. In the opinion of management, all adjustments which are of a normal and recurring nature and considered necessary for a fair presentation of the results of the interim periods presented have been included. The results of operations for the interim periods are not necessarily indicative of results for the full year. All intercompany transactions and account balances within the Company have been eliminated. |
Fair Value Measurements | The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. GAAP guidance defines three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and, depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. The Company does not expect that changes in classifications between levels will be frequent. |
REAL ESTATE INVESTMENTS, NET (T
REAL ESTATE INVESTMENTS, NET (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Real Estate [Abstract] | |
Schedule of Investment in Owned Properties | The following table summarizes the Company’s investment in owned properties held for use at June 30, 2023 and December 31, 2022 (dollars in thousands): June 30, 2023 December 31, 2022 Land $ 266,010 $ 238,738 Buildings and improvements 1,575,661 1,483,133 Integral equipment, furniture and fixtures 97,755 97,199 Identified intangible assets 2,832 2,832 Real estate investments 1,942,258 1,821,902 Accumulated depreciation and amortization (414,024) (400,492) Real estate investments, net $ 1,528,234 $ 1,421,410 |
Schedule of Total Future Contractual Minimum Rental Income | As of June 30, 2023, the Company’s total future contractual minimum rental income for all of its tenants, excluding operating expense reimbursements and assets held for sale, was as follows (dollars in thousands): Year Amount 2023 (six months) $ 98,155 2024 197,155 2025 198,310 2026 198,853 2027 195,687 2028 193,433 Thereafter 941,966 Total $ 2,023,559 |
Schedule Of Tenant Purchase Options | Certain of the Company’s operators hold purchase options allowing them to acquire properties they currently lease from the Company. A summary of these purchase options is presented below (dollars in thousands): Asset Type (1) Properties Lease Expiration Option Period Open Date (2) Option Type (3) Current Cash Rent (4) SNF 1 March 2029 4/1/2022 (5) A / B (7) 832 SNF / Campus 2 (8) October 2032 1/1/2024 (6) A 1,097 SNF 4 November 2034 12/1/2024 (5) A 3,891 (1) Excludes a purchase option on an 11 building SNF portfolio classified as held for sale as of June 30, 2023 and representing $5.1 million of current cash rent. Tenant is currently not eligible to elect the option. (2) The Company has not received notice of exercise for the option periods that are currently open. (3) Option type includes: A - Fixed base price. B - Fixed capitalization rate on lease revenue. (4) Based on annualized cash revenue for contracts in place as of June 30, 2023. (5) Option window is open until the expiration of the lease term. (6) Option window is open for six months from the option period open date. (7) Purchase option reflects two option types. (8) Includes one property classified as held for sale as of June 30, 2023. |
Schedule Of Rental Income | The following table summarizes components of the Company’s rental income (dollars in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, Rental Income 2023 2022 2023 2022 Contractual rent due (1) $ 47,752 $ 46,801 $ 93,922 $ 93,779 Straight-line rent (7) 5 (14) 11 Adjustment for collectibility (2) — — — (977) Total $ 47,745 $ 46,806 $ 93,908 $ 92,813 (1) Includes initial cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. Tenant operating expense reimbursements for the three months ended June 30, 2023 and 2022 were $1.2 million and $0.7 million, respectively. Tenant operating expense reimbursements for the six months ended June 30, 2023 and 2022 were $1.9 million and $1.3 million, respectively. |
Schedule of Recent Real Estate Acquisitions | The following table summarizes the Company’s acquisitions for the six months ended June 30, 2023 (dollars in thousands): Type of Property Purchase Price (1) Initial Annual Cash Rent (2) Number of Properties Number of Beds/Units (3) Skilled nursing $ 107,858 $ 9,085 7 871 Multi-service campuses 25,276 1,916 1 168 Assisted living 39,319 3,495 4 241 Total $ 172,453 $ 14,496 12 1,280 (1) Purchase price includes capitalized acquisition costs. (2) Initial annual cash rent represents initial cash rent for the first twelve months excluding the impact of rent abatement in the first one to three months, if applicable. |
IMPAIRMENT OF REAL ESTATE INV_2
IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE, NET AND ASSET SALES - (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Asset Sales and Held for Sale Reclassifications | The following table summarizes the Company’s dispositions for the three and six months ended June 30, 2023 and 2022 (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Number of facilities 3 — 4 1 Net sales proceeds (1) $ 13,234 $ — $ 16,464 $ 959 Net carrying value 11,206 — 14,506 773 Net gain on sale $ 2,028 $ — $ 1,958 $ 186 (1) Net sales proceeds includes $2 million of seller financing in connection with the sale of one ALF in June 2023. The $2.0 million mortgage loan is included in other real estate related investments on the Company’s condensed consolidated balance sheets. The following table summarizes the Company’s assets held for sale activity for the periods presented (dollars in thousands): Net Carrying Value Number of Facilities December 31, 2022 $ 12,291 5 Additions to assets held for sale 47,047 14 Assets sold (14,506) (4) Impairment of real estate held for sale (23,278) — June 30, 2023 $ 21,554 15 |
OTHER REAL ESTATE RELATED AND_2
OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Investments, All Other Investments [Abstract] | |
Schedule of Other Real Estate Related Investments, at Fair Value | As of June 30, 2023 and December 31, 2022, the Company’s other real estate related investments, at fair value, consisted of the following (dollar amounts in thousands): As of June 30, 2023 Investment Facility Count and Type Principal Balance as of June 30, 2023 Book Value as of June 30, 2023 Book Value as of December 31, 2022 Weighted Average Contractual Interest Rate Maturity Date Senior mortgage secured loan receivable 18 SNF/Campus $ 75,000 $ 71,488 $ 72,543 8.4 % (1) 6/30/2027 Mortgage secured loan receivable 5 SNF 22,250 21,208 21,345 10.6 % (2) 8/1/2025 Mortgage secured loan receivable 4 SNF 24,900 23,503 23,796 9.0 % (2) 9/8/2025 Mortgage secured loan receivable (3) 1 ALF 2,000 2,000 — 9.0 % 5/31/2024 Mortgage secured loan receivable (4) 2 SNF Campus / ILF 25,993 25,993 — 9.0 % 6/29/2033 Mezzanine loan receivable (5) 9 SNF — — 14,672 — — Mezzanine loan receivable 18 SNF/Campus 25,000 22,630 24,012 11.0 % 6/30/2032 $ 175,143 $ 166,822 $ 156,368 (1) Rate is net of subservicing fee. (2) Term secured overnight financing rate (“SOFR”) used as of June 30, 2023 was 5.11%. Rates are net of subservicing fees. (3) In June 2023, the Company closed on the sale of one ALF. In connection with the sale, the Company provided affiliates of the purchaser of the properties with a $2.0 million mortgage loan. The mortgage loan is secured by the ALF. The mortgage loan has a one-year extension option and may be prepaid in whole before the maturity date. (4) In June 2023, the Company extended a $26.0 million mortgage loan to a skilled nursing real estate owner. The mortgage loan is secured by one SNF campus and one ILF. The mortgage loan is set to mature on June 29, 2033 and may (subject to certain restrictions) be prepaid in whole before the maturity date for an exit fee ranging from 0% to 3% of the loan plus unpaid interest payments. (5) Mezzanine loan was prepaid during the six months ended June 30, 2023. |
Schedule of Other Real Estate Related Investment Activity | The following table summarizes the Company’s other real estate related investments activity for the six months ended June 30, 2023 and 2022 (dollars in thousands): Six Months Ended June 30, 2023 2022 Origination of other real estate related investments $ 28,243 $ 100,000 Accrued interest, net (184) 13 Unrealized losses on other real estate related investments, net (2,605) — Repayments of other real estate related investments (15,000) — Net increase in other real estate related investments, at fair value $ 10,454 $ 100,013 As of June 30, 2023 and December 31, 2022, the Company’s other loans receivable, included in prepaid expenses and other assets, net on the Company’s condensed consolidated balance sheets, consisted of the following (dollars in thousands): As of June 30, 2023 Investment Principal Balance as of June 30, 2023 Book Value as of June 30, 2023 Book Value as of December 31, 2022 Weighted Average Contractual Interest Rate Maturity Date Other loans receivable $ 10,328 $ 10,333 $ 9,600 8.5 % 8/31/2023 - 9/30/2025 Expected credit loss — (2,094) (2,094) Total $ 10,328 $ 8,239 $ 7,506 |
Schedule of Loan Receivable Activity | The following table summarizes the Company’s other loans receivable activity for the six months ended June 30, 2023 and 2022 (dollars in thousands): Six Months Ended June 30, 2023 2022 Origination of loans receivable $ 1,019 $ 2,500 Principal payments (287) (276) Accrued interest, net 1 (2) Provision for loan losses, net — (4,594) Net increase (decrease) in other loans receivable $ 733 $ (2,372) |
Schedule of Interest and Other Income | The following table summarizes the interest and other income recognized from the Company’s loans receivable and other investments during the three and six months ended June 30, 2023 and 2022 (dollars in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, Investment 2023 2022 2023 2022 Mortgage secured loans receivable $ 2,762 $ 17 $ 5,466 $ 17 Mezzanine loans receivable 695 713 2,278 1,163 Other 351 17 507 36 Total $ 3,808 $ 747 $ 8,251 $ 1,216 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Items Measured at Fair Value on a Recurring Basis | The following table presents information about the Company’s assets measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022, aggregated by the level in the fair value hierarchy within which those instruments fall (dollars in thousands): Level 1 Level 2 Level 3 Balance as of June 30, 2023 Assets: Mortgage secured loans receivable $ — $ — $ 144,192 $ 144,192 Mezzanine loans receivable — — 22,630 22,630 Total $ — $ — $ 166,822 $ 166,822 Level 1 Level 2 Level 3 Balance as of December 31, 2022 Assets: Mortgage secured loans receivable $ — $ — $ 117,684 $ 117,684 Mezzanine loans receivable — — 38,684 38,684 Total $ — $ — $ 156,368 $ 156,368 |
Schedule of Assets Measured at Fair Value on a Recurring Basis Using Level 3 Inputs | The following table details the Company’s assets measured at fair value on a recurring basis using Level 3 inputs (dollars in thousands): Investments in Real Estate Secured Loans Investments in Mezzanine Loans Balance at December 31, 2022 $ 117,684 $ 38,684 Loan originations 28,243 — Accrued interest, net (21) (163) Unrealized losses on other real estate related investments, net (1,714) (891) Repayments — (15,000) Balance as of June 30, 2023 $ 144,192 $ 22,630 |
Schedule of Quantitative Information About Unobservable Inputs Related To Level 3 Fair Value Measurements | The following table shows the quantitative information about unobservable inputs related to the Level 3 fair value measurements comprising the investments in secured and mezzanine loans receivables as of June 30, 2023: Type Book Value as of June 30, 2023 Valuation Technique Unobservable Inputs Range Mortgage secured loans receivable $ 144,192 Discounted cash flow Discount Rate 10% - 14% Mezzanine loan receivable 22,630 Discounted cash flow Discount Rate 12% - 14% |
Schedule of Face Value, Carrying Amount and Fair Value of Financial Instruments | A summary of the face value, carrying amount and fair value of the Notes (as defined in Note 7, Debt, below) as of June 30, 2023 and December 31, 2022 using Level 2 inputs is as follows (dollars in thousands): June 30, 2023 December 31, 2022 Level Face Carrying Fair Face Carrying Fair Financial liabilities: Senior unsecured notes payable 2 $ 400,000 $ 395,594 $ 346,588 $ 400,000 $ 395,150 $ 345,036 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Instruments | The following table summarizes the balance of the Company’s indebtedness as of June 30, 2023 and December 31, 2022 (dollars in thousands): June 30, 2023 December 31, 2022 Principal Amount Deferred Loan Fees Carrying Value Principal Amount Deferred Loan Fees Carrying Value Senior unsecured notes payable $ 400,000 $ (4,406) $ 395,594 $ 400,000 $ (4,850) $ 395,150 Senior unsecured term loan 200,000 (546) 199,454 200,000 (652) 199,348 Unsecured revolving credit facility 280,000 — 280,000 125,000 — 125,000 $ 880,000 $ (4,952) $ 875,048 $ 725,000 $ (5,502) $ 719,498 |
EQUITY (Tables)
EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of Dividends on Common Stock | The following table summarizes the cash dividends per share of common stock declared by the Company’s board of directors for the first six months of 2023 (dollars in thousands, except per share amounts): For the Three Months Ended March 31, 2023 June 30, 2023 Dividends declared per share $ 0.28 $ 0.28 Dividends payment date April 14, 2023 July 14, 2023 Dividends payable as of record date (1) $ 27,846 $ 27,853 Dividends record date March 31, 2023 June 30, 2023 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock Award and Performance Award Activity | The following table summarizes the status of the restricted stock award and performance award activity for the six months ended June 30, 2023: Shares Weighted Average Share Price Unvested balance at December 31, 2022 573,609 $ 20.63 Granted: Board Awards 24,768 19.38 Vested (185,767) 20.94 Forfeited (61,680) 21.19 Unvested balance at June 30, 2023 350,930 $ 20.28 |
Schedule of Stock-Based Compensation Expense | The following table summarizes the stock-based compensation expense recognized for the periods presented (dollars in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Stock-based compensation expense $ 924 $ 1,394 $ 1,860 $ 2,915 |
(LOSS) EARNINGS PER COMMON SH_2
(LOSS) EARNINGS PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Weighted-Average Common Shares Outstanding Used in Calculation of Basic EPS to Diluted EPS | The following table presents the calculation of basic and diluted (loss) earnings per common share (“EPS”) for the Company’s common stock for the three and six months ended June 30, 2023 and 2022, 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 (amounts in thousands, except per share amounts): For the Three Months Ended June 30, For the Six Months Ended June 30, 2023 2022 2023 2022 Numerator: Net (loss) income $ (484) $ 20,669 $ 18,743 $ (22,595) Less: Net income allocated to participating securities (89) (94) (178) (211) Numerator for basic and diluted earnings available to common stockholders $ (573) $ 20,575 $ 18,565 $ (22,806) Denominator: Weighted-average basic common shares outstanding 99,117 96,564 99,090 96,487 Dilutive potential common shares - performance stock awards — 34 90 — Dilutive potential common shares - forward equity agreements — — 14 — Weighted-average diluted common shares outstanding 99,117 96,598 99,194 96,487 (Loss) earnings per common share, basic $ (0.01) $ 0.21 $ 0.19 $ (0.24) (Loss) earnings per common share, diluted $ (0.01) $ 0.21 $ 0.19 $ (0.24) Antidilutive unvested restricted stock awards, total shareholder return units, performance awards, and forward equity shares excluded from the computation 500 341 316 431 |
CONCENTRATION OF RISK (Tables)
CONCENTRATION OF RISK (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Schedules of Concentration of Risk | Major operator concentration - The Company has operators from which it derived 10% or more of its rental revenue for the three and six months ended June 30, 2023 and 2022. The following table sets forth information regarding the Company’s major operators as of June 30, 2023 and 2022: Number of Facilities Number of Beds/Units Percentage of Total Revenue (1) Operator SNF Campus ALF/ILF SNF Campus ALF/ILF Three Months Ended Six Months Ended June 30, 2023 Ensign (2) 83 8 7 8,741 997 661 36 % 36 % Priority Management Group 13 2 — 1,742 402 — 16 % 16 % June 30, 2022 Ensign (2) 83 8 7 8,756 997 678 35 % 35 % Priority Management Group 13 2 — 1,742 402 — 16 % 16 % (1) The Company’s rental income, exclusive of operating expense reimbursements and adjustments for collectibility. (2) Ensign is subject to the registration and reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Ensign’s financial statements, as filed with the SEC, can be found at http://www.sec.gov. The Company has not verified this information through an independent investigation or otherwise. Major geographic concentration – The following table provides information regarding the Company’s concentrations with respect to certain states, from which the Company derived 10% or more of its rental revenue for the three and six months ended June 30, 2023 and 2022: Number of Facilities Number of Beds/Units Percentage of Total Revenue (1) State SNF Campus ALF/ILF SNF Campus ALF/ILF Three Months Ended Six Months Ended June 30, 2023 CA 29 9 5 3,307 1,527 437 28 % 28 % TX 40 3 2 5,126 536 212 23 % 23 % June 30, 2022 CA 27 8 5 3,048 1,359 449 27 % 26 % TX 38 3 3 4,849 536 242 22 % 22 % (1) Represents the Company’s rental income, exclusive of operating expense reimbursements and adjustments for collectibility. |
ORGANIZATION (Details)
ORGANIZATION (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 USD ($) facility state bed loan | Dec. 31, 2022 USD ($) | |
Real Estate Properties [Line Items] | ||
Number of facilities | facility | 1 | |
Number of states with properties | state | 28 | |
Aggregate carrying value | $ | $ 166,822 | $ 156,368 |
Mortgage secured loans receivable | ||
Real Estate Properties [Line Items] | ||
Number of loans | loan | 5 | |
Mezzanine Loan Receivable | ||
Real Estate Properties [Line Items] | ||
Number of loans | loan | 1 | |
Skilled Nursing, Multi Service Campuses, Assisted Living, and Independent Living Facilities | ||
Real Estate Properties [Line Items] | ||
Number of facilities | facility | 224 | |
Number of operational beds and units in facilities | bed | 23,694 |
REAL ESTATE INVESTMENTS, NET -
REAL ESTATE INVESTMENTS, NET - Schedule of Investment in Owned Properties (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Real Estate [Abstract] | ||
Land | $ 266,010 | $ 238,738 |
Buildings and improvements | 1,575,661 | 1,483,133 |
Integral equipment, furniture and fixtures | 97,755 | 97,199 |
Identified intangible assets | 2,832 | 2,832 |
Real estate investments | 1,942,258 | 1,821,902 |
Accumulated depreciation and amortization | (414,024) | (400,492) |
Real estate investments, net | $ 1,528,234 | $ 1,421,410 |
REAL ESTATE INVESTMENTS, NET _2
REAL ESTATE INVESTMENTS, NET - Narrative (Details) | Jun. 30, 2023 facility |
Real Estate [Line Items] | |
Number of facilities | 1 |
Held for sale | |
Real Estate [Line Items] | |
Number of facilities | 15 |
Skilled nursing, multi-service campuses, assisted living and independent living facilities | |
Real Estate [Line Items] | |
Number of facilities | 224 |
Skilled nursing, multi-service campuses, assisted living and independent living facilities | Held for sale | |
Real Estate [Line Items] | |
Number of facilities | 15 |
Skilled nursing, multi-service campuses, assisted living and independent living facilities | Short-term lease | |
Real Estate [Line Items] | |
Number of facilities | 2 |
Skilled nursing, multi-service campuses, assisted living and independent living facilities | Triple-net Leases | Various other operators | |
Real Estate [Line Items] | |
Number of facilities | 222 |
REAL ESTATE INVESTMENTS, NET _3
REAL ESTATE INVESTMENTS, NET - Schedule of Total Future Contractual Minimum Rental Income (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Future Contractual Minimum Rental Income | |
2023 (six months) | $ 98,155 |
2024 | 197,155 |
2025 | 198,310 |
2026 | 198,853 |
2027 | 195,687 |
2028 | 193,433 |
Thereafter | 941,966 |
Total | $ 2,023,559 |
REAL ESTATE INVESTMENTS, NET _4
REAL ESTATE INVESTMENTS, NET - Schedule Of Tenant Purchase Options (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) property facility | |
Lessor, Lease, Description [Line Items] | |
Period of option window | 6 months |
Disposal Group, Held-for-sale, Not Discontinued Operations | |
Lessor, Lease, Description [Line Items] | |
Properties | property | 1 |
SNF | Lease Expiration March 2029, Next option 2022 | |
Lessor, Lease, Description [Line Items] | |
Properties | property | 1 |
Current Cash Rent | $ | $ 832 |
SNF | Lease Expiration November 2034, Next option 2024 | |
Lessor, Lease, Description [Line Items] | |
Properties | property | 4 |
Current Cash Rent | $ | $ 3,891 |
SNF | Properties With Purchase Option, Current Cash Rent | |
Lessor, Lease, Description [Line Items] | |
Properties | facility | 11 |
Current Cash Rent | $ | $ 5,100 |
SNF / Campus | Lease Expiration October 2032, Next option 2024 | |
Lessor, Lease, Description [Line Items] | |
Properties | property | 2 |
Current Cash Rent | $ | $ 1,097 |
REAL ESTATE INVESTMENTS, NET _5
REAL ESTATE INVESTMENTS, NET - Schedule Of Rental Income (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) operator | |
Rental Income | ||||
Contractual rent due | $ 47,752 | $ 46,801 | $ 93,922 | $ 93,779 |
Straight-line rent | (7) | 5 | (14) | 11 |
Adjustments for collectibility | 0 | 0 | 0 | (977) |
Total | 47,745 | 46,806 | 93,908 | 92,813 |
Tenant operating expense reimbursement | $ 1,200 | $ 700 | $ 1,900 | $ 1,300 |
Number of existing and former operators with doubtful collectability | operator | 4 | |||
Operating Expense Reimbursements | ||||
Rental Income | ||||
Adjustments for collectability, reversed | $ 700 | |||
Contractual Rent | ||||
Rental Income | ||||
Adjustments for collectability, reversed | 200 | |||
Straight-Line Rent | ||||
Rental Income | ||||
Adjustments for collectability, reversed | $ 100 |
REAL ESTATE INVESTMENTS, NET _6
REAL ESTATE INVESTMENTS, NET - Schedule of Real Estate Acquisitions (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) property bed | |
Business Acquisition [Line Items] | |
Purchase Price | $ 172,453 |
Initial Annual Cash Rent | $ 14,496 |
Number of Properties | property | 12 |
Number of Beds/Units | bed | 1,280 |
Skilled nursing | |
Business Acquisition [Line Items] | |
Purchase Price | $ 107,858 |
Initial Annual Cash Rent | $ 9,085 |
Number of Properties | property | 7 |
Number of Beds/Units | bed | 871 |
Multi-service campuses | |
Business Acquisition [Line Items] | |
Purchase Price | $ 25,276 |
Initial Annual Cash Rent | $ 1,916 |
Number of Properties | property | 1 |
Number of Beds/Units | bed | 168 |
Assisted living | |
Business Acquisition [Line Items] | |
Purchase Price | $ 39,319 |
Initial Annual Cash Rent | $ 3,495 |
Number of Properties | property | 4 |
Number of Beds/Units | bed | 241 |
REAL ESTATE INVESTMENTS, NET _7
REAL ESTATE INVESTMENTS, NET - Lease Amendments Narrative (Details) $ in Millions | Apr. 01, 2023 USD ($) facility renewal_option | Mar. 24, 2023 USD ($) renewal_option | Mar. 16, 2023 USD ($) renewal_option facility | Mar. 15, 2023 USD ($) | Jan. 01, 2023 USD ($) renewal_option |
Amended Premier Lease | |||||
Real Estate [Line Items] | |||||
Annual cash rent decrease under amended lease | $ 1.7 | ||||
Annual cash rent under amended lease | $ 2.6 | ||||
Initial lease term (in years) | 8 years | ||||
Number of renewal options | renewal_option | 2 | ||||
Lease renewal term (in years) | 5 years | ||||
Noble VA Lease Termination And New Pennant Lease | |||||
Real Estate [Line Items] | |||||
Annual cash rent under amended lease | $ 0.8 | $ 2.3 | |||
Initial lease term (in years) | 15 years | ||||
Number of renewal options | renewal_option | 2 | ||||
Lease renewal term (in years) | 5 years | ||||
Amended Hillstone Lease | |||||
Real Estate [Line Items] | |||||
Initial lease term (in years) | 7 years | ||||
Number of renewal options | renewal_option | 2 | ||||
Lease renewal term (in years) | 5 years | ||||
Deferred rent | $ 0.7 | ||||
Period of deferral | 12 months | ||||
Percentage of fixed rent escalator | 2% | ||||
Amended Momentum Lease | |||||
Real Estate [Line Items] | |||||
Annual cash rent increase under amended lease | $ 1 | ||||
Initial lease term (in years) | 15 years | ||||
Number of renewal options | renewal_option | 2 | ||||
Lease renewal term (in years) | 5 years | ||||
Assisted living | |||||
Real Estate [Line Items] | |||||
Leases with terminated operations | facility | 2 | ||||
Number of properties included | facility | 2 | ||||
Skilled nursing facility | |||||
Real Estate [Line Items] | |||||
Number of properties included | facility | 1 | ||||
Skilled nursing facility | Amended Momentum Lease | |||||
Real Estate [Line Items] | |||||
Number of facilities acquired | facility | 1 |
IMPAIRMENT OF REAL ESTATE INV_3
IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE, NET AND ASSET SALES - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) facility | Jun. 30, 2022 USD ($) facility | Jun. 30, 2023 USD ($) facility | Jun. 30, 2022 USD ($) facility | |
Real Estate [Line Items] | ||||
Number of facilities | 1 | 1 | ||
Minimum | Level 3 | Valuation, Market Approach | ||||
Real Estate [Line Items] | ||||
Prices per unit input | $ | $ 18 | $ 18 | ||
Maximum | Level 3 | Valuation, Market Approach | ||||
Real Estate [Line Items] | ||||
Prices per unit input | $ | 35 | 35 | ||
Weighted average | Level 3 | Valuation, Market Approach | ||||
Real Estate [Line Items] | ||||
Prices per unit input | $ | $ 21 | $ 21 | ||
Held for sale | ||||
Real Estate [Line Items] | ||||
Number of facilities | 15 | 15 | ||
Impairment expense to reduce carrying value to fair value less costs to sell | $ | $ 21,400 | $ 1,700 | $ 23,300 | $ 61,400 |
Held for sale | Minimum | ||||
Real Estate [Line Items] | ||||
Number of facilities | 12 | 12 | ||
Number of properties impaired | 1 | 1 | ||
Held for sale | Maximum | ||||
Real Estate [Line Items] | ||||
Number of facilities | 15 | 15 | ||
Number of properties impaired | 21 | 21 |
IMPAIRMENT OF REAL ESTATE INV_4
IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE, NET AND ASSET SALES - Schedule of Company's Dispositions (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) facility | Jun. 30, 2022 USD ($) facility | Jun. 30, 2023 USD ($) facility | Jun. 30, 2022 USD ($) facility | Dec. 31, 2022 facility | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net sales proceeds | $ 14,464 | $ 959 | |||
Net gain on sale | $ 2,028 | $ 0 | $ 1,958 | $ 186 | |
Number of facilities | facility | 1 | 1 | |||
Principal amount | $ 175,143 | $ 175,143 | |||
Disposed of by sale | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of facilities | facility | 3 | 0 | 4 | 1 | |
Net sales proceeds | $ 13,234 | $ 0 | $ 16,464 | $ 959 | |
Net carrying value | 11,206 | 0 | 14,506 | 773 | |
Net gain on sale | $ 2,028 | $ 0 | $ 1,958 | $ 186 | |
Disposed of by sale | Assisted Living Facilities | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of facilities | facility | 1 | 1 | |||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of facilities | facility | 15 | 15 | 5 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | Assisted Living Facilities | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Principal amount | $ 2,000 | $ 2,000 |
IMPAIRMENT OF REAL ESTATE INV_5
IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE, NET AND ASSET SALES - Company's Assets Held for Sale Activity (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) facility | |
Increase Decrease in Assets Held for Sale [Roll Forward] | |
Beginning balance, at cost | $ 1,821,902 |
Ending balance, at cost | $ 1,942,258 |
Number of facilities at end | facility | 1 |
Disposal Group, Held-for-sale, Not Discontinued Operations | |
Increase Decrease in Assets Held for Sale [Roll Forward] | |
Beginning balance, at cost | $ 12,291 |
Additions to assets held for sale | 47,047 |
Assets sold | (14,506) |
Impairment of real estate held for sale | (23,278) |
Ending balance, at cost | $ 21,554 |
Number of facilities at beginning | facility | 5 |
Number of facilities, Additions to assets held for sale | facility | 14 |
Number of facilities, Assets sold | facility | (4) |
Number of facilities, Impairment of real estate held for sale | facility | 0 |
Number of facilities at end | facility | 15 |
OTHER REAL ESTATE RELATED AND_3
OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS - Other Real Estate Related Investments, at Fair Value (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 USD ($) property facility | Dec. 31, 2022 USD ($) facility | |
Real Estate Properties [Line Items] | ||
Principal amount | $ 175,143 | |
Book Value | $ 166,822 | $ 156,368 |
Number of facilities | facility | 1 | |
Senior mortgage secured loan receivable | ||
Real Estate Properties [Line Items] | ||
Principal amount | $ 75,000 | |
Book Value | $ 71,488 | $ 72,543 |
Weighted Average Contractual Interest Rate | 8.40% | |
Senior mortgage secured loan receivable | Skilled nursing and campus facilities | ||
Real Estate Properties [Line Items] | ||
Facility Count and Type | facility | 18 | 18 |
Mortgage secured loan receivable | ||
Real Estate Properties [Line Items] | ||
Principal amount | $ 22,250 | |
Book Value | $ 21,208 | $ 21,345 |
Weighted Average Contractual Interest Rate | 10.60% | |
Mortgage secured loan receivable | Skilled nursing facility | ||
Real Estate Properties [Line Items] | ||
Facility Count and Type | facility | 5 | 5 |
Mortgage secured loan receivable | SOFR | ||
Real Estate Properties [Line Items] | ||
Basis spread on variable rate (percent) | 5.11% | |
Mortgage secured loan receivable | ||
Real Estate Properties [Line Items] | ||
Principal amount | $ 24,900 | |
Book Value | $ 23,503 | $ 23,796 |
Weighted Average Contractual Interest Rate | 9% | |
Mortgage secured loan receivable | Skilled nursing facility | ||
Real Estate Properties [Line Items] | ||
Facility Count and Type | facility | 4 | 4 |
Mortgage secured loan receivable | ||
Real Estate Properties [Line Items] | ||
Principal amount | $ 2,000 | |
Book Value | $ 2,000 | $ 0 |
Weighted Average Contractual Interest Rate | 9% | |
Extension option, term (year) | 1 year | |
Mortgage secured loan receivable | Assisted Living Facilities | ||
Real Estate Properties [Line Items] | ||
Facility Count and Type | facility | 1 | 1 |
Principal amount | $ 2,000 | |
Mortgage secured loan receivable | ||
Real Estate Properties [Line Items] | ||
Principal amount | 25,993 | |
Book Value | $ 25,993 | $ 0 |
Weighted Average Contractual Interest Rate | 9% | |
Mortgage secured loan receivable | Skilled nursing and campus facilities | ||
Real Estate Properties [Line Items] | ||
Facility Count and Type | facility | 2 | 2 |
Mortgage secured loan receivable | Skilled nursing facility | ||
Real Estate Properties [Line Items] | ||
Principal amount | $ 26,000 | |
Number of facilities | property | 1 | |
Mortgage secured loan receivable | Skilled nursing facility | Minimum | ||
Real Estate Properties [Line Items] | ||
Early termination fee | 0% | |
Mortgage secured loan receivable | Skilled nursing facility | Maximum | ||
Real Estate Properties [Line Items] | ||
Early termination fee | 3% | |
Mortgage secured loan receivable | Assisted and Independent Living Properties | ||
Real Estate Properties [Line Items] | ||
Number of facilities | property | 1 | |
Mezzanine loans receivable | ||
Real Estate Properties [Line Items] | ||
Principal amount | $ 0 | |
Book Value | $ 0 | $ 14,672 |
Weighted Average Contractual Interest Rate | 0% | |
Mezzanine loans receivable | Skilled nursing facility | ||
Real Estate Properties [Line Items] | ||
Facility Count and Type | facility | 9 | 9 |
Mezzanine loan receivable | ||
Real Estate Properties [Line Items] | ||
Principal amount | $ 25,000 | |
Book Value | $ 22,630 | $ 24,012 |
Weighted Average Contractual Interest Rate | 11% | |
Mezzanine loan receivable | Skilled nursing and campus facilities | ||
Real Estate Properties [Line Items] | ||
Facility Count and Type | facility | 18 | 18 |
Other | ||
Real Estate Properties [Line Items] | ||
Principal amount | $ 10,328 | |
Book Value | $ 10,333 | $ 9,600 |
Weighted Average Contractual Interest Rate | 8.50% | |
Expected credit loss | $ (2,094) | (2,094) |
Principal Balance | 10,328 | |
Net increase in other real estate related investments, at fair value | $ 8,239 | $ 7,506 |
OTHER REAL ESTATE RELATED AND_4
OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS - Other Real Estate Related Investment Activity (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Origination of other real estate related investments | $ 175,143 | |
Net increase (decrease) in other loans receivable | 733 | $ (2,372) |
Other Real Estate Related Investments | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Origination of other real estate related investments | 28,243 | 100,000 |
Accrued interest, net | (184) | 13 |
Unrealized losses on other real estate related investments, net | (2,605) | 0 |
Repayments of other real estate related investments | (15,000) | 0 |
Net increase (decrease) in other loans receivable | $ 10,454 | $ 100,013 |
OTHER REAL ESTATE RELATED AND_5
OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS - Schedule of Loan Receivable Activity (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Investments, All Other Investments [Abstract] | ||
Origination of loans receivable | $ 1,019 | $ 2,500 |
Principal payments | (287) | (276) |
Accrued interest, net | 1 | (2) |
Provision for loan losses, net | 0 | (4,594) |
Net increase (decrease) in other loans receivable | $ 733 | $ (2,372) |
OTHER REAL ESTATE RELATED AND_6
OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) loan | |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Provision for loan losses, net | $ 0 | $ 0 | $ 0 | $ 3,844,000 |
Other | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Provision for loan losses, net | $ 0 | $ 4,600,000 | ||
Number of loans receivable with provision | loan | 2 | |||
Unfunded loan commitment | $ 400,000 | |||
Loan loss recovery | $ 800,000 |
OTHER REAL ESTATE RELATED AND_7
OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS - Schedule of Interest and Other Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Real Estate Properties [Line Items] | ||||
Interest and other income | $ 3,808 | $ 747 | $ 8,251 | $ 1,216 |
Mortgage secured loans receivable | ||||
Real Estate Properties [Line Items] | ||||
Interest and other income | 2,762 | 17 | 5,466 | 17 |
Mezzanine loans receivable | ||||
Real Estate Properties [Line Items] | ||||
Interest and other income | 695 | 713 | 2,278 | 1,163 |
Other | ||||
Real Estate Properties [Line Items] | ||||
Interest and other income | $ 351 | $ 17 | $ 507 | $ 36 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Items Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Mortgage Secured and Mezzanine Loans Receivable | ||
Assets: | ||
Loan receivable | $ 166,822 | $ 156,368 |
Recurring | Mortgage secured loans receivable | ||
Assets: | ||
Loan receivable | 144,192 | 117,684 |
Recurring | Mezzanine Loan Receivable | ||
Assets: | ||
Loan receivable | 22,630 | 38,684 |
Recurring | Level 1 | Mortgage Secured and Mezzanine Loans Receivable | ||
Assets: | ||
Loan receivable | 0 | 0 |
Recurring | Level 1 | Mortgage secured loans receivable | ||
Assets: | ||
Loan receivable | 0 | 0 |
Recurring | Level 1 | Mezzanine Loan Receivable | ||
Assets: | ||
Loan receivable | 0 | 0 |
Recurring | Level 2 | Mortgage Secured and Mezzanine Loans Receivable | ||
Assets: | ||
Loan receivable | 0 | 0 |
Recurring | Level 2 | Mortgage secured loans receivable | ||
Assets: | ||
Loan receivable | 0 | 0 |
Recurring | Level 2 | Mezzanine Loan Receivable | ||
Assets: | ||
Loan receivable | 0 | 0 |
Recurring | Level 3 | Mortgage Secured and Mezzanine Loans Receivable | ||
Assets: | ||
Loan receivable | 166,822 | 156,368 |
Recurring | Level 3 | Mortgage secured loans receivable | ||
Assets: | ||
Loan receivable | 144,192 | 117,684 |
Recurring | Level 3 | Mezzanine Loan Receivable | ||
Assets: | ||
Loan receivable | $ 22,630 | $ 38,684 |
FAIR VALUE MEASUREMENTS - Sch_2
FAIR VALUE MEASUREMENTS - Schedule of Assets Measured at Fair Value on a Recurring Basis Using Level 3 Inputs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Unrealized losses on other real estate related investments, net | $ (2,151) | $ 0 | $ (2,605) | $ 0 |
Investments in Real Estate Secured Loans | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | 117,684 | |||
Loan originations | 28,243 | |||
Accrued interest, net | (21) | |||
Unrealized losses on other real estate related investments, net | (1,714) | |||
Repayments | 0 | |||
Balance at end of period | 144,192 | 144,192 | ||
Investments in Mezzanine Loans | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | 38,684 | |||
Loan originations | 0 | |||
Accrued interest, net | (163) | |||
Unrealized losses on other real estate related investments, net | (891) | |||
Repayments | (15,000) | |||
Balance at end of period | $ 22,630 | $ 22,630 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) loan | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) loan | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Financing Receivable, Past Due [Line Items] | |||||
Unrealized losses on other real estate related investments, net | $ 2,151,000 | $ 0 | $ 2,605,000 | $ 0 | |
Mortgage loan receivable | 166,822,000 | 166,822,000 | $ 156,368,000 | ||
Greater than 90 days past due | |||||
Financing Receivable, Past Due [Line Items] | |||||
Mortgage loan receivable | 0 | 0 | $ 0 | ||
Secured And Mezzanine Loans Receivable | |||||
Financing Receivable, Past Due [Line Items] | |||||
Unrealized losses on other real estate related investments, net | 1,900,000 | 2,800,000 | |||
Unrealized loss on origination fee paid | $ 300,000 | ||||
Partial offset loss | $ 500,000 | ||||
Real Estate Secured And Mortgage Loans Receivable | |||||
Financing Receivable, Past Due [Line Items] | |||||
Number of loans | loan | 3 | 3 | |||
Real estate secured and mezzanine loans receivable | |||||
Financing Receivable, Past Due [Line Items] | |||||
Number of loans | loan | 1 | 1 |
FAIR VALUE MEASUREMENTS - Sch_3
FAIR VALUE MEASUREMENTS - Schedule of Quantitative Information About Unobservable Inputs Related To Level 3 Fair Value Measurements (Details) - Level 3 - Discount Rate - Discounted cash flow $ in Thousands | Jun. 30, 2023 USD ($) |
Mortgage secured loans receivable | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Loans receivable, book value | $ 144,192 |
Mortgage secured loans receivable | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Loans receivable, measurement input | 0.10 |
Mortgage secured loans receivable | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Loans receivable, measurement input | 0.14 |
Mezzanine Loan Receivable | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Loans receivable, book value | $ 22,630 |
Mezzanine Loan Receivable | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Loans receivable, measurement input | 0.12 |
Mezzanine Loan Receivable | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Loans receivable, measurement input | 0.14 |
FAIR VALUE MEASUREMENTS - Sch_4
FAIR VALUE MEASUREMENTS - Schedule of Face Value, Carrying Amount and Fair Value of Financial Instruments (Details) - Level 2 - Senior unsecured notes payable - Senior unsecured notes payable - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financial liabilities: | ||
Face Value | $ 400,000 | $ 400,000 |
Carrying Amount | ||
Financial liabilities: | ||
Notes payable, fair value disclosure | 395,594 | 395,150 |
Fair Value | ||
Financial liabilities: | ||
Notes payable, fair value disclosure | $ 346,588 | $ 345,036 |
DEBT - Schedule of Debt Instrum
DEBT - Schedule of Debt Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Principal Amount | $ 880,000 | $ 725,000 |
Deferred Loan Fees | (4,952) | (5,502) |
Carrying Value | 875,048 | 719,498 |
Unsecured revolving credit facility | ||
Debt Instrument [Line Items] | ||
Principal Amount | 280,000 | 125,000 |
Deferred Loan Fees | 0 | 0 |
Carrying Value | 280,000 | 125,000 |
Notes payable | Senior unsecured notes payable | ||
Debt Instrument [Line Items] | ||
Principal Amount | 400,000 | 400,000 |
Deferred Loan Fees | (4,406) | (4,850) |
Carrying Value | 395,594 | 395,150 |
Term loan | Senior unsecured term loan | ||
Debt Instrument [Line Items] | ||
Principal Amount | 200,000 | 200,000 |
Deferred Loan Fees | (546) | (652) |
Carrying Value | $ 199,454 | $ 199,348 |
DEBT - Senior Unsecured Notes P
DEBT - Senior Unsecured Notes Payable Narrative (Details) - Notes payable - 2028 Senior Notes | Jun. 17, 2021 USD ($) |
Debt Instrument [Line Items] | |
Debt instrument face amount | $ 400,000,000 |
Interest rate (as percent) | 3.875% |
Gross proceeds from issuance | $ 400,000,000 |
Net proceeds from issuance | $ 393,800,000 |
Redemption price, percentage upon change of control (as percent) | 101% |
Period prior to March 30 2028 | |
Debt Instrument [Line Items] | |
Redemption price of notes (as percent) | 100% |
Period after March 30 2028 | |
Debt Instrument [Line Items] | |
Redemption price of notes (as percent) | 100% |
Period prior to June 30 2024 | |
Debt Instrument [Line Items] | |
Redemption price of notes (as percent) | 103.875% |
Percentage of principal amount (as percent) | 40% |
DEBT - Unsecured Revolving Cred
DEBT - Unsecured Revolving Credit Facility and Term Loan Narrative (Details) | Feb. 08, 2019 USD ($) extension_option | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Line of Credit Facility [Line Items] | |||
Outstanding amounts | $ 880,000,000 | $ 725,000,000 | |
Borrowings outstanding | 280,000,000 | 125,000,000 | |
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Credit facility borrowing capacity | $ 600,000,000 | ||
Outstanding amounts | 280,000,000 | 125,000,000 | |
Borrowings outstanding | 280,000,000 | ||
Number of extension options | extension_option | 2 | ||
Extension option term (in months) | 6 months | ||
Revolving Credit Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Facility fee on revolving commitment fees (as percent) | 0.15% | ||
Facility fee on revolving commitment fee based on investment grade ratings (as percent) | 0.125% | ||
Revolving Credit Facility | Minimum | Base Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as percent) | 0.10% | ||
Revolving Credit Facility | Minimum | Secured Overnight Financing Rate (SOFR) | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as percent) | 1.10% | ||
Revolving Credit Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Facility fee on revolving commitment fees (as percent) | 0.35% | ||
Facility fee on revolving commitment fee based on investment grade ratings (as percent) | 0.30% | ||
Revolving Credit Facility | Maximum | Base Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as percent) | 0.55% | ||
Revolving Credit Facility | Maximum | Secured Overnight Financing Rate (SOFR) | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as percent) | 1.55% | ||
Letter of credit | |||
Line of Credit Facility [Line Items] | |||
Subfacility capacity as percentage of available revolving commitments (as percent) | 10% | ||
Swingline loan | |||
Line of Credit Facility [Line Items] | |||
Subfacility capacity as percentage of available revolving commitments (as percent) | 10% | ||
Term loan | Senior unsecured term loan | |||
Line of Credit Facility [Line Items] | |||
Debt instrument face amount | $ 200,000,000 | ||
Outstanding amounts | $ 200,000,000 | $ 200,000,000 | |
Term loan | Senior unsecured term loan | Minimum | Base Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as percent) | 0.50% | ||
Term loan | Senior unsecured term loan | Minimum | Secured Overnight Financing Rate (SOFR) | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as percent) | 1.50% | ||
Term loan | Senior unsecured term loan | Maximum | Base Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as percent) | 1.20% | ||
Term loan | Senior unsecured term loan | Maximum | Secured Overnight Financing Rate (SOFR) | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as percent) | 2.20% |
EQUITY - Narrative (Details)
EQUITY - Narrative (Details) - ATM Program - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Feb. 24, 2023 | |
Class of Stock [Line Items] | |||||
Number of shares (in shares) | 6,736,089 | 6,736,089 | |||
Share price (in usd per share) | $ 19.71 | $ 19.71 | |||
Issuance of common stock, net (in shares) | 0 | 0 | |||
Remaining offering amount available | $ 367,200,000 | $ 367,200,000 | |||
Maximum | |||||
Class of Stock [Line Items] | |||||
Authorized aggregate offering price of common stock | $ 500,000,000 |
EQUITY - Schedule of Dividends
EQUITY - Schedule of Dividends on Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
Dividends on common stock | ||||
Dividends declared per share (in usd per share) | $ 0.28 | $ 0.28 | $ 0.275 | $ 0.275 |
Dividends payment date | Jul. 14, 2023 | Apr. 14, 2023 | ||
Dividends payable as of record date | $ 27,853 | $ 27,846 | ||
Dividends record date | Jun. 30, 2023 | Mar. 31, 2023 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized for awards (in shares) | 5,000,000 | 5,000,000 | |||
Value of forfeited stock awards | $ 0.9 | ||||
Unamortized stock-based compensation expense | $ 7.2 | $ 7.2 | |||
RSAs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 3 years | 3 years | 4 years | ||
RSAs | Board of Directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 1 year | ||||
Performance Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Value of forfeited stock awards | $ 0.6 | $ 0.6 | |||
Performance Stock Awards | Minimum | Vesting Period One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 1 year | ||||
Performance Stock Awards | Minimum | Vesting Period Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 1 year | ||||
Performance Stock Awards | Maximum | Vesting Period One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 3 years | ||||
Performance Stock Awards | Maximum | Vesting Period Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 4 years | ||||
Performance Shares T S R Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 3 years | 3 years | |||
Performance Shares T S R Units | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of original awards granted, TSR | 0% | ||||
Performance Shares T S R Units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of original awards granted, TSR | 200% | ||||
RSAs and PSAs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average remaining vesting period (in years) | 1 year 8 months 12 days |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Restricted Stock Award and Performance Award Activity (Details) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Shares | |
Unvested, beginning balance (in shares) | shares | 573,609 |
Vested (in shares) | shares | (185,767) |
Forfeited (in shares) | shares | (61,680) |
Unvested, ending balance (in shares) | shares | 350,930 |
Weighted Average Share Price | |
Unvested, beginning balance (in usd per share) | $ / shares | $ 20.63 |
Vested (in usd per share) | $ / shares | 20.94 |
Forfeited (in usd per share) | $ / shares | 21.19 |
Unvested, ending balance (in usd per share) | $ / shares | $ 20.28 |
Board Awards | |
Shares | |
Granted (in shares) | shares | 24,768 |
Weighted Average Share Price | |
Granted (in usd per share) | $ / shares | $ 19.38 |
STOCK-BASED COMPENSATION - Sc_2
STOCK-BASED COMPENSATION - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||||
Stock-based compensation expense | $ 924 | $ 1,394 | $ 1,860 | $ 2,915 |
(LOSS) EARNINGS PER COMMON SH_3
(LOSS) EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator: | ||||||
Net (loss) income | $ (484) | $ 19,227 | $ 20,669 | $ (43,264) | $ 18,743 | $ (22,595) |
Less: Net income allocated to participating securities | (89) | (94) | (178) | (211) | ||
Numerator for basic earnings available to common stockholders | (573) | 20,575 | 18,565 | (22,806) | ||
Numerator for diluted earnings available to common stockholders | $ (573) | $ 20,575 | $ 18,565 | $ (22,806) | ||
Denominator: | ||||||
Weighted-average basic common shares outstanding (in shares) | 99,117 | 96,564 | 99,090 | 96,487 | ||
Weighted-average diluted common shares outstanding (in shares) | 99,117 | 96,598 | 99,194 | 96,487 | ||
(Loss) earnings per common share, basic (in usd per share) | $ (0.01) | $ 0.21 | $ 0.19 | $ (0.24) | ||
(Loss) earnings per common share, diluted (in usd per share) | $ (0.01) | $ 0.21 | $ 0.19 | $ (0.24) | ||
Antidilutive unvested restricted stock awards, total shareholder return units, performance awards, and forward equity shares excluded from the computation (in shares) | 500 | 341 | 316 | 431 | ||
Performance Stock Awards | ||||||
Denominator: | ||||||
Dilutive performance stock awards (in shares) | 0 | 34 | 90 | 0 | ||
Forward Equity Agreements | ||||||
Denominator: | ||||||
Dilutive performance stock awards (in shares) | 0 | 0 | 14 | 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Certain capital improvements at triple-net leased facilities | |
Other Commitments [Line Items] | |
Funding commitment | $ 14.2 |
Portion of funding commitment subject to rent increase at time of funding | $ 2.7 |
Ensign and Pennant | |
Other Commitments [Line Items] | |
Aggregate required financing of capital expenditures as percentage of initial investment in property (as percent) | 20% |
CONCENTRATION OF RISK (Details)
CONCENTRATION OF RISK (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 facility unit_bed | Jun. 30, 2022 unit_bed facility | Jun. 30, 2023 facility unit_bed | Jun. 30, 2022 unit_bed facility | |
CA | SNF | ||||
Concentration Risk [Line Items] | ||||
Number of Facilities | facility | 29 | 27 | 29 | 27 |
Number of Beds/Units | unit_bed | 3,307 | 3,048 | 3,307 | 3,048 |
CA | Campus | ||||
Concentration Risk [Line Items] | ||||
Number of Facilities | facility | 9 | 8 | 9 | 8 |
Number of Beds/Units | unit_bed | 1,527 | 1,359 | 1,527 | 1,359 |
CA | ALF/ILF | ||||
Concentration Risk [Line Items] | ||||
Number of Facilities | facility | 5 | 5 | 5 | 5 |
Number of Beds/Units | unit_bed | 437 | 449 | 437 | 449 |
CA | Rental revenue | Geographic concentration risk | ||||
Concentration Risk [Line Items] | ||||
Percentage of Total Revenue | 28% | 27% | 28% | 26% |
TX | SNF | ||||
Concentration Risk [Line Items] | ||||
Number of Facilities | facility | 40 | 38 | 40 | 38 |
Number of Beds/Units | unit_bed | 5,126 | 4,849 | 5,126 | 4,849 |
TX | Campus | ||||
Concentration Risk [Line Items] | ||||
Number of Facilities | facility | 3 | 3 | 3 | 3 |
Number of Beds/Units | unit_bed | 536 | 536 | 536 | 536 |
TX | ALF/ILF | ||||
Concentration Risk [Line Items] | ||||
Number of Facilities | facility | 2 | 3 | 2 | 3 |
Number of Beds/Units | unit_bed | 212 | 242 | 212 | 242 |
TX | Rental revenue | Geographic concentration risk | ||||
Concentration Risk [Line Items] | ||||
Percentage of Total Revenue | 23% | 22% | 23% | 22% |
Ensign | SNF | ||||
Concentration Risk [Line Items] | ||||
Number of Facilities | facility | 83 | 83 | 83 | 83 |
Number of Beds/Units | unit_bed | 8,741 | 8,756 | 8,741 | 8,756 |
Ensign | Campus | ||||
Concentration Risk [Line Items] | ||||
Number of Facilities | facility | 8 | 8 | 8 | 8 |
Number of Beds/Units | unit_bed | 997 | 997 | 997 | 997 |
Ensign | ALF/ILF | ||||
Concentration Risk [Line Items] | ||||
Number of Facilities | facility | 7 | 7 | 7 | 7 |
Number of Beds/Units | unit_bed | 661 | 678 | 661 | 678 |
Ensign | Rental revenue | Customer concentration risk | ||||
Concentration Risk [Line Items] | ||||
Percentage of Total Revenue | 36% | 35% | 36% | 35% |
Priority Management Group | SNF | ||||
Concentration Risk [Line Items] | ||||
Number of Facilities | facility | 13 | 13 | 13 | 13 |
Number of Beds/Units | unit_bed | 1,742 | 1,742 | 1,742 | 1,742 |
Priority Management Group | Campus | ||||
Concentration Risk [Line Items] | ||||
Number of Facilities | facility | 2 | 2 | 2 | 2 |
Number of Beds/Units | unit_bed | 402 | 402 | 402 | 402 |
Priority Management Group | ALF/ILF | ||||
Concentration Risk [Line Items] | ||||
Number of Facilities | facility | 0 | 0 | 0 | 0 |
Number of Beds/Units | unit_bed | 0 | 0 | 0 | 0 |
Priority Management Group | Rental revenue | Customer concentration risk | ||||
Concentration Risk [Line Items] | ||||
Percentage of Total Revenue | 16% | 16% | 16% | 16% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Jul. 17, 2023 USD ($) facility extension_option | Jul. 31, 2023 $ / shares shares | Jun. 30, 2023 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) $ / shares shares | |
Subsequent Event [Line Items] | ||||
Principal amount | $ | $ 175,143 | $ 175,143 | ||
ATM Program | ||||
Subsequent Event [Line Items] | ||||
Number of shares (in shares) | shares | 6,736,089 | 6,736,089 | ||
Share price (in usd per share) | $ / shares | $ 19.71 | $ 19.71 | ||
Subsequent event | ATM Program | ||||
Subsequent Event [Line Items] | ||||
Number of shares (in shares) | shares | 3,839,348 | |||
Share price (in usd per share) | $ / shares | $ 19.94 | |||
Real Estate Secured Loan Receivable Member | Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Principal amount | $ | $ 15,700 | |||
Loan bears interest on monthly payments | 9% | |||
Financing receivable, number of option to extend | extension_option | 1 | |||
Financing receivable, renewal term | 5 years | |||
Real Estate Secured Loan Receivable Member | Subsequent event | Skilled nursing facility | ||||
Subsequent Event [Line Items] | ||||
Number of Facilities | facility | 2 | |||
Real Estate Secured Loan Receivable Member | Subsequent event | Maximum | ||||
Subsequent Event [Line Items] | ||||
Early termination fee | 3% | |||
Real Estate Secured Loan Receivable Member | Subsequent event | Minimum | ||||
Subsequent Event [Line Items] | ||||
Early termination fee | 2% |