Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 21, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Entity File Number | 1-11314 | |
Entity Registrant Name | LTC PROPERTIES INC | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 71-0720518 | |
Entity Address, Address Line One | 2829 Townsgate Road, Suite 350 | |
Entity Address, City or Town | Westlake Village | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91361 | |
City Area Code | 805 | |
Local Phone Number | 981-8655 | |
Title of 12(b) Security | Common stock, $.01 par value | |
Trading Symbol | LTC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 40,504,791 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0000887905 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Investments: | ||
Land | $ 125,786,000 | $ 123,239,000 |
Buildings and improvements | 1,284,151,000 | 1,285,318,000 |
Accumulated depreciation and amortization | (374,170,000) | (374,606,000) |
Real property investments, net | 1,035,767,000 | 1,033,951,000 |
Mortgage loans receivable, net of credit loss reserve: 2022-$3,830; 2021-$3,473 | 379,817,000 | 344,442,000 |
Real estate investments, net | 1,415,584,000 | 1,378,393,000 |
Notes receivable, net of credit loss reserve: 2022-$588; 2021-$286 | 58,206,000 | 28,337,000 |
Investments in unconsolidated joint ventures | 19,340,000 | 19,340,000 |
Investments, net | 1,493,130,000 | 1,426,070,000 |
Other assets: | ||
Cash and cash equivalents | 6,401,000 | 5,161,000 |
Debt issue costs related to revolving line of credit | 2,681,000 | 3,057,000 |
Interest receivable | 42,713,000 | 39,522,000 |
Straight-line rent receivable | 22,689,000 | 24,146,000 |
Lease incentives | 1,910,000 | 2,678,000 |
Prepaid expenses and other assets | 8,703,000 | 4,191,000 |
Total assets | 1,578,227,000 | 1,504,825,000 |
LIABILITIES | ||
Revolving line of credit | 56,000,000 | 110,900,000 |
Term loans, net of debt issue costs: 2022-$563; 2021-$637 | 99,437,000 | 99,363,000 |
Senior unsecured notes, net of debt issue costs: 2022-$1,549; 2021-$524 | 579,431,000 | 512,456,000 |
Accrued interest | 3,946,000 | 3,745,000 |
Accrued expenses and other liabilities | 28,917,000 | 33,234,000 |
Total liabilities | 767,731,000 | 759,698,000 |
Stockholders' equity: | ||
Common stock: $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2022-40,380; 2021-39,374 | 404,000 | 394,000 |
Capital in excess of par value | 893,154,000 | 856,895,000 |
Cumulative net income | 1,513,431,000 | 1,444,636,000 |
Accumulated other comprehensive income (loss) | 6,139,000 | (172,000) |
Cumulative distributions | (1,610,154,000) | (1,565,039,000) |
Total LTC Properties, Inc. stockholders' equity | 802,974,000 | 736,714,000 |
Non-controlling interests | 7,522,000 | 8,413,000 |
Total equity | 810,496,000 | 745,127,000 |
Total liabilities and equity | $ 1,578,227,000 | $ 1,504,825,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Mortgage loans receivable, loan loss reserve | $ 3,830 | $ 3,473 |
Notes receivable, loan loss reserve | $ 588 | $ 286 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 60,000 | 60,000 |
Common stock, shares issued | 40,380 | 39,374 |
Common stock, shares outstanding | 40,380 | 39,374 |
Term loans | ||
Debt issue costs, net | $ 563 | $ 637 |
Senior Unsecured Notes | ||
Debt issue costs, net | $ 1,549 | $ 524 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues: | ||||
Rental income | $ 31,628 | $ 29,804 | $ 61,952 | $ 61,777 |
Interest income from mortgage loans | 10,097 | 7,933 | 19,733 | 15,855 |
Interest and other income | 1,299 | 392 | 2,126 | 777 |
Total revenues | 43,024 | 38,129 | 83,811 | 78,409 |
Expenses: | ||||
Interest expense | 7,523 | 6,860 | 14,666 | 13,832 |
Depreciation and amortization | 9,379 | 9,508 | 18,817 | 19,385 |
Provision (recovery) for credit losses | 305 | 659 | (9) | |
Transaction costs | 67 | 133 | 99 | 225 |
Property tax expense | 4,019 | 3,800 | 8,001 | 7,781 |
General and administrative expenses | 5,711 | 5,337 | 11,519 | 10,370 |
Total expenses | 27,004 | 25,638 | 53,761 | 51,584 |
Other operating income: | ||||
Gain on sale of real estate, net | 38,094 | 5,463 | 38,196 | 4,690 |
Operating income | 54,114 | 17,954 | 68,246 | 31,515 |
Income from unconsolidated joint ventures | 376 | 376 | 751 | 665 |
Net income | 54,490 | 18,330 | 68,997 | 32,180 |
Income allocated to non-controlling interests | (107) | (91) | (202) | (179) |
Net income attributable to LTC Properties, Inc. | 54,383 | 18,239 | 68,795 | 32,001 |
Income allocated to participating securities | (318) | (113) | (407) | (233) |
Net income available to common stockholders | $ 54,065 | $ 18,126 | $ 68,388 | $ 31,768 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 1.37 | $ 0.46 | $ 1.74 | $ 0.81 |
Diluted (in dollars per share) | $ 1.36 | $ 0.46 | $ 1.73 | $ 0.81 |
Weighted average shares used to calculate earnings per common share: | ||||
Basic (in shares) | 39,492 | 39,169 | 39,347 | 39,135 |
Diluted (in shares) | 39,665 | 39,170 | 39,520 | 39,136 |
Dividends declared and paid per common share (in dollars per share) | $ 0.57 | $ 0.57 | $ 1.14 | $ 1.14 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 54,490 | $ 18,330 | $ 68,997 | $ 32,180 |
Unrealized gain on cash flow hedges before reclassification | 1,276 | 5,860 | ||
Losses reclassified from accumulated other comprehensive income to interest expense | 159 | 451 | ||
Comprehensive income | $ 55,925 | $ 18,330 | $ 75,308 | $ 32,180 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands | Parent | Common Stock | Capital in Excess of Par Value | Cumulative Net Income | Accumulated Other Comprehensive Income (Loss) | Cumulative Distributions | Non-controlling Interests | Total |
Balance at beginning of period at Dec. 31, 2020 | $ 767,402 | $ 392 | $ 852,780 | $ 1,388,775 | $ (1,474,545) | $ 8,404 | $ 775,806 | |
Balance (in shares) at Dec. 31, 2020 | 39,242 | |||||||
Equity activity | ||||||||
Common stock cash distributions | (22,405) | (22,405) | (22,405) | |||||
Vesting of performance-based stock units, including the payment of distributions | (764) | $ 1 | (1) | (764) | (764) | |||
Vesting of performance-based stock units, including the payment of distributions (in shares) | 109 | |||||||
Stock-based compensation expense | 1,852 | 1,852 | 1,852 | |||||
Net income | 13,762 | 13,762 | 88 | 13,850 | ||||
Non-controlling interest distributions | (88) | (88) | ||||||
Cash paid for taxes in lieu of common shares | (3,470) | (3,470) | (3,470) | |||||
Cash paid for taxes in lieu of common shares (in shares) | (84) | |||||||
Other | (10) | $ 1 | (11) | (10) | ||||
Other (in shares) | 95 | |||||||
Balance (in shares) at Mar. 31, 2021 | 39,362 | |||||||
Balance at end of period at Mar. 31, 2021 | 756,367 | $ 394 | 851,150 | 1,402,537 | (1,497,714) | 8,404 | 764,771 | |
Balance at beginning of period at Dec. 31, 2020 | 767,402 | $ 392 | 852,780 | 1,388,775 | (1,474,545) | 8,404 | 775,806 | |
Balance (in shares) at Dec. 31, 2020 | 39,242 | |||||||
Equity activity | ||||||||
Net income | 32,180 | |||||||
Balance (in shares) at Jun. 30, 2021 | 39,374 | |||||||
Balance at end of period at Jun. 30, 2021 | 753,976 | $ 394 | 852,959 | 1,420,776 | (1,520,153) | 8,404 | 762,380 | |
Balance at beginning of period at Mar. 31, 2021 | 756,367 | $ 394 | 851,150 | 1,402,537 | (1,497,714) | 8,404 | 764,771 | |
Balance (in shares) at Mar. 31, 2021 | 39,362 | |||||||
Equity activity | ||||||||
Common stock cash distributions | (22,439) | (22,439) | (22,439) | |||||
Stock-based compensation expense | 1,958 | 1,958 | 1,958 | |||||
Net income | 18,239 | 18,239 | 91 | 18,330 | ||||
Non-controlling interest distributions | (91) | (91) | ||||||
Cash paid for taxes in lieu of common shares | (103) | (103) | (103) | |||||
Cash paid for taxes in lieu of common shares (in shares) | (3) | |||||||
Other | (46) | (46) | (46) | |||||
Other (in shares) | 15 | |||||||
Balance (in shares) at Jun. 30, 2021 | 39,374 | |||||||
Balance at end of period at Jun. 30, 2021 | 753,976 | $ 394 | 852,959 | 1,420,776 | (1,520,153) | 8,404 | 762,380 | |
Equity activity | ||||||||
Common stock cash distributions | (22,443) | (22,443) | (22,443) | |||||
Stock-based compensation expense | 1,975 | 1,975 | 1,975 | |||||
Net income | 11,022 | 11,022 | 92 | 11,114 | ||||
Non-controlling interest distributions | (92) | (92) | ||||||
Non-controlling interests contributions | 9 | 9 | ||||||
Other | (13) | (13) | (13) | |||||
Balance (in shares) at Sep. 30, 2021 | 39,374 | |||||||
Balance at end of period at Sep. 30, 2021 | 744,517 | $ 394 | 854,921 | 1,431,798 | (1,542,596) | 8,413 | 752,930 | |
Equity activity | ||||||||
Common stock cash distributions | (22,443) | (22,443) | (22,443) | |||||
Stock-based compensation expense | 1,975 | 1,975 | 1,975 | |||||
Net income | 12,838 | 12,838 | 92 | 12,930 | ||||
Non-controlling interest distributions | (92) | (92) | ||||||
Fair market valuation adjustment for interest rate swap | (172) | $ (172) | (172) | |||||
Other | (1) | (1) | (1) | |||||
Balance (in shares) at Dec. 31, 2021 | 39,374 | |||||||
Balance at end of period at Dec. 31, 2021 | 736,714 | $ 394 | 856,895 | 1,444,636 | (172) | (1,565,039) | 8,413 | 745,127 |
Equity activity | ||||||||
Common stock cash distributions | (22,480) | (22,480) | (22,480) | |||||
Stock-based compensation expense | 1,925 | 1,925 | 1,925 | |||||
Net income | 14,412 | 14,412 | 95 | 14,507 | ||||
Non-controlling interest distributions | (95) | (95) | ||||||
Cash paid for taxes in lieu of common shares | (1,255) | (1,255) | (1,255) | |||||
Cash paid for taxes in lieu of common shares (in shares) | (37) | |||||||
Fair market valuation adjustment for interest rate swap | 4,876 | 4,876 | 4,876 | |||||
Other | (6) | $ 1 | (7) | (6) | ||||
Other (in shares) | 123 | |||||||
Balance (in shares) at Mar. 31, 2022 | 39,460 | |||||||
Balance at end of period at Mar. 31, 2022 | 734,186 | $ 395 | 857,558 | 1,459,048 | 4,704 | (1,587,519) | 8,413 | 742,599 |
Balance at beginning of period at Dec. 31, 2021 | 736,714 | $ 394 | 856,895 | 1,444,636 | (172) | (1,565,039) | 8,413 | 745,127 |
Balance (in shares) at Dec. 31, 2021 | 39,374 | |||||||
Equity activity | ||||||||
Net income | 68,997 | |||||||
Balance (in shares) at Jun. 30, 2022 | 40,380 | |||||||
Balance at end of period at Jun. 30, 2022 | 802,974 | $ 404 | 893,154 | 1,513,431 | 6,139 | (1,610,154) | 7,522 | 810,496 |
Balance at beginning of period at Mar. 31, 2022 | 734,186 | $ 395 | 857,558 | 1,459,048 | 4,704 | (1,587,519) | 8,413 | 742,599 |
Balance (in shares) at Mar. 31, 2022 | 39,460 | |||||||
Equity activity | ||||||||
Issuance of common stock | 33,693 | $ 9 | 33,684 | 33,693 | ||||
Issuance of common stock (in shares) | 910 | |||||||
Common stock cash distributions | (22,635) | (22,635) | (22,635) | |||||
Stock-based compensation expense | 2,012 | 2,012 | 2,012 | |||||
Net income | 54,383 | 54,383 | 107 | 54,490 | ||||
Non-controlling interest distributions | (998) | (998) | ||||||
Cash paid for taxes in lieu of common shares | (100) | (100) | (100) | |||||
Cash paid for taxes in lieu of common shares (in shares) | (2) | |||||||
Fair market valuation adjustment for interest rate swap | 1,435 | 1,435 | 1,435 | |||||
Other (in shares) | 12 | |||||||
Balance (in shares) at Jun. 30, 2022 | 40,380 | |||||||
Balance at end of period at Jun. 30, 2022 | $ 802,974 | $ 404 | $ 893,154 | $ 1,513,431 | $ 6,139 | $ (1,610,154) | $ 7,522 | $ 810,496 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
CONSOLIDATED STATEMENTS OF EQUITY | ||||||||
Common Stock cash distributions | $ 0.57 | $ 0.57 | $ 0.57 | $ 0.57 | $ 0.57 | $ 0.57 | $ 1.14 | $ 1.14 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
OPERATING ACTIVITIES: | ||
Net income | $ 68,997 | $ 32,180 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 18,817 | 19,385 |
Stock-based compensation expense | 3,937 | 3,810 |
Gain on sale of real estate, net | (38,196) | (4,690) |
Income from unconsolidated joint ventures | (751) | (665) |
Straight-line rental adjustment (income) | 527 | (663) |
Adjustment for collectability of rental income and lease incentives | 173 | 758 |
Amortization of lease incentives | 429 | 228 |
Provision (recovery) for credit losses | 659 | (9) |
Application of interest reserve | (2,451) | |
Amortization of debt issue costs | 547 | 518 |
Non-cash interest related to contingent liabilities | 547 | 518 |
Other non-cash items, net | 4 | 3 |
Change in operating assets and liabilities | ||
Lease incentives funded | (8) | (180) |
Increase in interest receivable | (3,191) | (3,231) |
Increase (decrease) in accrued interest payable | 201 | (123) |
Net change in other assets and liabilities | (1,250) | 1,323 |
Net cash provided by operating activities | 48,444 | 48,644 |
INVESTING ACTIVITIES: | ||
Investment in real estate properties | (51,815) | |
Investment in real estate capital improvements | (2,905) | (2,046) |
Proceeds from sale of real estate, net | 72,359 | 36,532 |
Investment in real estate mortgage loans receivable | (33,910) | (426) |
Principal payments received on mortgage loans receivable | 625 | 625 |
Investments in unconsolidated joint ventures | (5,676) | |
Advances and originations under notes receivable | (36,788) | (1,811) |
Principal payments received on notes receivable | 6,618 | 2,553 |
Net cash (used in) provided by investing activities | (45,816) | 29,751 |
FINANCING ACTIVITIES: | ||
Borrowings from revolving line of credit | 99,000 | 17,000 |
Repayment of revolving line of credit | (153,900) | (41,000) |
Proceeds from issuance of senior unsecured notes | 75,000 | |
Principal payments on senior unsecured notes | (7,000) | (7,000) |
Proceeds from common stock issued | 34,203 | |
Distributions paid to stockholders | (45,115) | (45,608) |
Distributions paid to non-controlling interests | (1,093) | (179) |
Financing costs paid | (1,122) | (35) |
Cash paid for taxes in lieu of shares upon vesting of restricted stock and performance-based stock units | (1,355) | (3,573) |
Other | (6) | (58) |
Net cash used in financing activities | (1,388) | (80,453) |
Increase (decrease) in cash and cash equivalents | 1,240 | (2,058) |
Cash and cash equivalents, beginning of period | 5,161 | 7,772 |
Cash and cash equivalents, end of period | 6,401 | 5,714 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 13,918 | 13,437 |
Non-cash investing and financing transactions: | ||
Preferred return reserve related to investments in unconsolidated joint ventures (See Footnote 3) | $ 2,324 | |
Application of interest reserve recorded as mortgage loan receivable | 2,451 | |
Increase in fair value of interest rate swap agreements (See Footnote 6) | $ 6,311 |
General
General | 6 Months Ended |
Jun. 30, 2022 | |
General | |
General | 1. Genera l LTC Properties, Inc., a health care real estate investment trust (“REIT”), was incorporated on May 12, 1992 in the State of Maryland and commenced operations on August 25, 1992. We invest primarily in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. We conduct and manage our business as one operating segment, rather than multiple operating segments, for internal reporting and internal decision-making purposes. Our primary objectives are to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), assisted living communities (“ALF”), independent living communities (“ILF”), memory care communities (“MC”) and combinations thereof. We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals. We have prepared consolidated financial statements included herein without audit and in the opinion of management have included all adjustments necessary for a fair presentation of the consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to rules and regulations governing the presentation of interim financial statements. The accompanying consolidated financial statements include the accounts of our company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six months ended June 30, 2022 and 2021 are not necessarily indicative of the results for a full year. No provision has been made for federal or state income taxes. Our company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As such, we generally are not taxed on income that is distributed to our stockholders. |
Real Estate Investments
Real Estate Investments | 6 Months Ended |
Jun. 30, 2022 | |
Real Estate Investments | |
Real Estate Investments | 2. Real Estate Investments Assisted living communities, independent living communities, memory care communities and combinations thereof are included in the assisted living property classification (collectively “ALF”). Any reference to the number of properties or facilities, number of units, number of beds, number of operators and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s review of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board. Owned Properties. The following table summarizes our investments in owned properties at June 30, 2022 (dollar amounts in thousands) Average Percentage Number Number of Investment Gross of of SNF ALF per Type of Property Investment Investment Properties (1) Beds Units Bed/Unit Assisted Living $ 797,556 56.6 % 99 — 5,492 $ 145.22 Skilled Nursing 600,701 42.6 % 53 6,348 236 $ 91.24 Other (2) 11,680 0.8 % 1 118 — — Total $ 1,409,937 100.0 % 153 6,466 5,728 (1) We own properties in 26 states that are leased to 25 different operators. (2) Includes three parcels of land held-for-use, and one behavioral health care hospital. Future minimum base rents receivable under the remaining non-cancelable terms of operating leases excluding the effects of straight-line rent receivable, amortization of lease incentives and renewal options are as follows (in thousands): Cash Rent (1) 2022 $ 57,820 2023 113,626 2024 93,786 2025 85,214 2026 68,753 Thereafter 269,038 (1) Represents contractual cash rent, except for certain master leases which are based on estimated cash payments . Includes rent from subsequent acquisitions and excludes rent from subsequent dispositions. See Footnote 12 for more information. We monitor the collectability of our receivable balances, including deferred rent receivable balances, on an ongoing basis. We write-off uncollectible operator receivable balances, including straight- line rent receivable and lease incentives balances, as a reduction to rental income in the period such balances are no longer probable of being collected. Therefore, recognition of rental income is limited to the lesser of the amount of cash collected or rental income reflected on a “straight-line” basis for those customer receivable balances deemed uncollectible. We wrote-off straight-line rent receivable and lease incentives balances of $173,000 and $758,000 for the six months ended June 30, 2022 and 2021, respectively. We continue to take into account the current financial condition of our operators, including consideration of the impact of COVID-19, in our estimation of uncollectible accounts and deferred rents receivable at June 30, 2022. We are closely monitoring the collectability of such rents and will adjust future estimations as appropriate as further information becomes known. The following table summarizes components of our rental income for the three and six months ended June 30, 2022 and 2021 (in thousands): Three Months Ended Six Months Ended June 30, June 30, Rental Income 2022 2021 2022 2021 Base cash rental income $ 28,108 (1) $ 26,410 $ 55,023 (1) $ 55,033 Variable cash rental income 4,019 (2) 3,529 (2) 8,058 (2) 7,067 (2) Straight-line rent (293) (3) (19) (3) (527) (3) 663 (3) Adjustment for collectability of rental income and lease incentives — — (173) (4) (758) (5) Amortization of lease incentives (206) (116) (429) (228) Total $ 31,628 $ 29,804 $ 61,952 $ 61,777 (1) Increased primarily due to a $1,181 lease termination fee received in connection with the sale of a 74 -unit ALF, rent received from properties transitioned from the former Senior Care Centers, LLC (“Senior Care”) and Senior Lifestyle Corporation (“Senior Lifestyle”) portfolios and rental income from completed development projects and annual rent escalations. (2) The variable rental income for the three and six months ended June 30, 2022, includes reimbursement of real estate taxes by our lessees of $4,019 and $8,001 , respectively and contingent rental income of $0 and $57 , respectively . The variable rental income for the three and six months ended June 30, 2021, only includes reimbursement of real estate taxes by our lessees of $3,529 and $7,067 . Increased primarily due to properties transitioned from Senior Care and new acquisitions. (3) Decreased primarily due to the impact of prior year’s 50% reduction of 2021 rent escalations for those leases accounted for on a straight-line basis. (4) Represents a lease incentive balance write-off related to a closed property and subsequent lease termination. (5) Represents a straight-line rent receivable write-off due to transitioning rental revenue recognition to cash basis for one lease in accordance with Accounting Standard Codification Topic 842, Leases . Some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. The following table summarizes information about purchase options included in our lease agreements (dollar amounts in thousands): Type Number of of Gross Carrying Option State Property Properties Investments Value Window California ALF/MC 2 $ 38,895 $ 34,189 2024-2029 Florida MC 1 15,201 12,728 2029 Kentucky and Ohio MC 2 30,421 26,191 2025 Nebraska ALF 3 7,633 3,067 TBD (1) South Carolina ALF/MC 1 11,680 9,341 2029 Texas SNF 4 51,815 51,485 2027-2029 (2) Total $ 155,645 $ 137,001 (1) Subject to the properties achieving certain coverage ratios . (2) During the second quarter of 2022, we purchased four skilled nursing centers and leased these properties under a 10-year lease with an existing operator. The lease provides either an earn-out payment or purchase option but not both. If neither option is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the earn-out see Footnote 8 . On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, and on March 13, 2020, the United States declared a national emergency with regard to COVID-19. At June 30, 2022, in conjunction with the continued levels of uncertainty related to the adverse effects of COVID-19, we assessed the probability of collecting substantially all of our lease payments through maturity and concluded that we did not have sufficient information available to evaluate the impact of COVID-19 on the collectability of our lease payments. The extent to which COVID-19 could impact our operators and the collectability of our future lease payments will depend on the future developments including the financial impact significance, government support and subsidies and the duration of the pandemic. In recognition of the pandemic’s ongoing impact affecting our operators, we have agreed to rent abatements totaling $1,891,000 and rent deferrals for certain operators totaling $1,987,000, net of repayments of $124,000, during the six months ended June 30, 2022. The $3,878,000 in rent abatements and deferrals, net of repayments during the six months ended June 30, 2022, represented approximately 5.2% of our contractual rent for the six months ended June 30, 2022. Acquisitions and Improvements: The following table summarizes our acquisitions for the six months ended June 30, 2022 and 2021 ( dollar amounts in thousands ): Total Number Number Purchase Transaction Acquisition of of Year Type of Property Price Costs Costs Properties Beds/Units 2022 SNF (1) $ 51,534 $ 281 $ 51,815 4 339 2021 n/a $ — $ — $ — — — (1) The properties are located in Texas and are leased to an affiliate of an existing operator under a 10-year lease with two 5-year renewal options. Additionally, the lease provides either an earn-out payment or purchase option but not both. If neither option is elected within the timeframe defined in the lease, both elections are terminated. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. The purchase option is available beginning in the sixth lease year through the end of the seventh lease year. The initial cash yield is 8% for the first year, increasing to 8.25% for the second year, then increases annually by 2.0% to 4.0% based on the change in the Medicare Market Basket Rate. In connection with the transaction, we provided the lessee a 10-year working capital loan for up to $2,000 , of which $1,867 has been funded, at 8% for first year, increasing to 8.25% for the second year, then increasing annually with the lease rate. During he following in improvement projects (in thousands) : Type of Property 2022 2021 Assisted Living Communities $ 1,964 $ 2,046 Skilled Nursing Centers 620 — Other 321 — Total $ 2,905 $ 2,046 Properties Sold. (dollar amounts in thousands): Type Number Number of of of Sales Carrying Net Year State Properties Properties Beds/Units Price Value Gain (loss) (1) 2022 California ALF 2 232 $ 43,715 $ 17,832 $ 25,867 California SNF 1 121 13,250 1,846 10,849 Virginia ALF 1 74 16,895 15,549 1,336 (2) n/a n/a — — — — 144 (3) Total 2022 4 427 $ 73,860 $ 35,227 $ 38,196 2021 Florida ALF 1 — $ 2,000 $ 2,625 $ (858) Nebraska ALF 1 40 900 1,079 (205) Wisconsin ALF 3 263 35,000 28,295 5,594 n/a n/a — — — — 159 (3) Total 2021 5 303 $ 37,900 $ 31,999 $ 4,690 ( (1) Calculation of net gain (loss) includes cost of sales. (2) In connection with this sale, the former operator paid us a lease termination fee of $1,181 which is not included in the gain on sale. (3) We recognized additional gain due to the reassessment adjustment of the holdbacks related to properties sold during 2019 and 2020, under the expected value model per Accounting Standard Codification (“ASC”) Topic 606, Contracts with Customers (“ASC 606”). Mortgage Loans. (dollar amounts in thousands) Type Percentage Number of Investment Gross of of SNF ALF per Interest Rate Maturity State Investment Property Investment Loans (1) Properties (2) Beds Units Bed/Unit 7.5% 2022 MO $ 1,780 OTH 0.5 % 1 — (3) — — $ n/a 7.5% 2024 LA 27,347 SNF 7.1 % 1 1 189 — $ 144.69 7.8% 2025 FL 12,779 ALF 3.3 % 1 1 — 68 $ 187.93 7.3% (4) 2025 NC/SC 50,889 ALF 13.3 % 1 13 — 523 $ 97.30 7.3% 2026 NC 31,539 ALF 8.2 % 1 4 — 217 $ 145.34 7.3% 2026 NC 766 OTH 0.2 % 1 — (5) — — $ — 10.4% (6) 2043 MI 184,854 SNF 48.2 % 1 15 1,875 — $ 98.59 9.5% (6) 2045 MI 39,068 SNF 10.2 % 1 4 501 — $ 77.98 9.8% (6) 2045 MI 19,750 SNF 5.1 % 1 2 205 — $ 96.34 10% (6) 2045 MI 14,875 SNF 3.9 % 1 1 146 — $ 101.88 Total $ 383,647 100.0 % 10 41 2,916 808 $ 103.02 (1) Some loans contain certain guarantees and provide for certain facility fees. (2) Our mortgage loans are secured by properties located in six states with five borrowers. (3) Represents a mortgage loan secured by a parcel of land for the future development of a 91 -bed post-acute SNF. (4) Represents the initial rate. This loan has an IRR of 8% . (5) Represents a mortgage loan secured by a parcel of land in North Carolina held for future development of a seniors housing community. (6) Mortgage loans provide for 2.25% annual increases in the interest rate after a certain time period. The following table summarizes our mortgage loan activity for the six months ended June 30, 2022 and 2021 (in thousands): Six Months Ended June 30, 2022 2021 Originations and funding under mortgage loans receivable $ 33,910 (1) $ 426 Application of interest reserve 2,451 — Scheduled principal payments received (625) (625) Mortgage loan premium amortization (3) (3) (Provision) recovery for loan loss reserve (358) 2 Net increase (decrease) in mortgage loans receivable $ 35,375 $ (200) (1) We originated two senior mortgage loans, secured by four ALFs operated by an existing operator, as well as a land parcel in North Carolina. The communities have a combined total of 217 units, with an average age of less than four years . The land parcel is approximately 7.6 acres adjacent to one of the ALFs and is being held for the future development of a seniors housing community. The mortgage loans have a four-year term, an interest rate of 7.25% and an IRR of 8% . We apply , Measurement of Credit Losses on Financial Instruments . As of June 30, 2022, the accrued interest receivable of $42,713,000 was not included in the measurement of expected credit losses on the mortgage loan receivable and notes receivable (see Note 4). We elected not to measure an allowance for expected credit losses on the related accrued interest receivable using the expected credit loss standard. Rather, we have elected to write-off accrued interest receivable by reversing interest income and/or recognizing credit loss expense as incurred. We review the collectability of the accrued interest receivable quarterly as part of our review of the mortgage loan or notes receivables including the performance of the underlying collateral and net worth of the borrower. For the six months ended June 30, 2022 and 2021, the Company did not write-off any accrued interest receivable. |
Investment in Unconsolidated Jo
Investment in Unconsolidated Joint Ventures | 6 Months Ended |
Jun. 30, 2022 | |
Investment in Unconsolidated Joint Ventures | |
Investment in Unconsolidated Joint Ventures | 3. Investment in Unconsolidated Joint Ventures We have preferred equity investments in two joint ventures (“JVs”). We determined that each of these JVs meets the accounting criteria to be considered a variable interest entity (“VIE”). We are not the primary beneficiary of the JVs as we do not have the power to direct the activities that most significantly affect the JVs’ economic performance. However, we do have significant influence over the JVs. Therefore, we have accounted for the JVs using the equity method of accounting. The following table provides information regarding these preferred equity investments (dollar amounts in thousands): Type Type Total Contractual Number of of Preferred Cash of Carrying State Properties Investment Return Portion Beds/ Units Value Washington ALF/MC Preferred Equity (1) 12 % 7 % 95 $ 6,340 (1) Washington UDP Preferred Equity (2) 12 % 8 % — 13,000 (2) Total 95 $ 19,340 (1) Represents preferred equity in an entity that developed and owns a 95 -unit ALF and MC in Washington. Our investment represents 15.5% of the total investment. The preferred equity investment earns an initial cash rate of 7% increasing to 9% in year four until the internal rate of return (“IRR”) is 8% . After achieving an 8% IRR, the cash rate drops to 8% until achieving an IRR ranging between 12% to 14% , depending upon timing of redemption. During the fourth quarter of 2021, the entity completed the development project and received its certificate of occupancy. We have the option to require the JV partner to purchase our preferred equity interest at any time between August 17, 2031 and December 31, 2036. (2) Represents preferred equity in an entity that will develop and own a 267 -unit ILF and ALF in Washington. Our investment represents 11.6% of the estimated total investment. The preferred equity investment earns an initial cash rate of 8% with an IRR of 12% . The JV partner has the option to buy out our investment at any time after August 31, 2023 at the IRR rate. Also, we have the option to require the JV partner to purchase our preferred equity interest at any time between August 31, 2027 and, upon project completion and leasing the property, prior to the end of the first renewal term of the lease. The following table summarizes our capital contributions, income recognized, and cash interest received related to our investments in unconsolidated joint ventures for the six months ended June 30, 2022 and 2021 (in thousands): Type of Capital Income Cash Interest Year Properties Contribution Recognized Earned 2022 ALF/MC $ — $ 224 $ 224 UDP (1) — 527 527 Total $ — $ 751 $ 751 2021 ALF/MC $ — $ 225 $ 187 UDP (1) 8,000 440 353 Total $ 8,000 $ 665 $ 540 (1) During 2021, we funded the remaining $8,000 related to a $13,000 preferred equity investment commitment in an entity that will develop and own a 267 -unit ILF and ALF in Washington. Additionally, we withheld $2,324 from the $8,000 funding for a total reserve of $3,777 related to this preferred equity investment. |
Notes Receivable
Notes Receivable | 6 Months Ended |
Jun. 30, 2022 | |
Notes Receivable. | |
Notes Receivable | 4. Notes Receivable Notes receivable consists of mezzanine loans and other loan arrangements. The following table is a summary of our notes receivable components as of June 30, 2022 and December 31, 2021 (in thousands): June 30, 2022 December 31, 2021 Mezzanine loans (1) $ 36,815 $ 11,815 Other loans 21,979 16,808 Notes receivable credit loss reserve (588) (286) Total $ 58,206 $ 28,337 (1) During the first quarter of 2022, we originated a $25,000 mezzanine loan for the recapitalization of a five -property seniors housing portfolio. The mezzanine loan has a term of approximately five years , with two one-year extension options and bears interest at 8% with an IRR of 11% . The five communities are located in Oregon and Montana, have a total of 621 units, and include independent living, assisted living and memory care. The following table summarizes our notes receivable activity for the six months ended June 30, 2022 and 2021 (in thousands): Six Months Ended June 30, 2022 2021 Advances under notes receivable $ 36,788 (1) $ 1,811 Principal payments received under notes receivable (6,618) (2,553) Provision for credit losses (301) 7 Net increase (decrease) in notes receivable $ 29,869 $ (735) (1) Includes origination of a $25,000 mezzanine loan for the recapitalization of five assisted living communities located in Oregon and Montana. Additionally includes origination of a working capital loan for a commitment of up to $2,000 , of which $1,867 has been funded and $9,541 of funding under a working capital loan to HMG Healthcare, LLC (“HMG”). |
Lease Incentives
Lease Incentives | 6 Months Ended |
Jun. 30, 2022 | |
Lease Incentives | |
Lease Incentives | 5. Lease Incentives Our non-contingent lease incentive balances at June 30, 2022 and December 31, 2021 were $1,910,000 and $2,678,000 . The following table summarizes our lease incentives activity for the six months ended June 30, 2022 and 2021 (in thousands) : Six Months Ended June 30, 2022 2021 Adjustment Funding Amortization Write-off Funding Amortization Non-contingent lease incentives $ (174) (1) $ 8 $ (429) $ (173) (2) $ 180 $ (228) (1) Primarily relates to the sale of two ALFs in California during the second quarter of 2022. (2) Represents the lease incentive balance write-off related to a closed property and subsequent lease termination. Non-contingent lease incentives represent payments made to our lessees for various reasons including entering into a new lease or lease amendments and extensions. Contingent lease incentives represent potential contingent earn-out payments that may be made to our lessees in the future, as part of our lease agreements. From time to time, we may commit to provide contingent payments to our lessees, upon our properties achieving certain rent coverage ratios. Once the contingent payment becomes probable and estimable, the contingent payment is recorded as a lease incentive. Lease incentives are amortized as a yield adjustment to rental income over the remaining life of the lease. |
Debt Obligations
Debt Obligations | 6 Months Ended |
Jun. 30, 2022 | |
Debt Obligations | |
Debt Obligations | 6. Debt Obligations Unsecured Credit Facility. We have an unsecured credit agreement (the “Credit Agreement”) that provides for an aggregate commitment of the lenders of up to $500,000,000 comprising of a $400,000,000 revolving credit facility (the “Revolving Line of Credit”) and two $50,000,000 term loans (the “Term Loans”). The Credit Agreement permits us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1,000,000,000 . The Revolving Line of Credit matures November 19, 2025 and provides for a one-year extension option at our discretion, subject to customary conditions. The Term Loans mature on November 19, 2025 and November 19, 2026. Based on our leverage at June 30, 2022, the facility provides for interest annually at LIBOR plus 115 basis points and a facility fee of 20 basis points. At June 30, 2022, we were in compliance with all covenants. Interest Rate Swap Agreements. In connection with entering into the Term Loans described above, we entered into two receive variable/pay fixed interest rate swap agreements (the “Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that serve to lock-in the forecasted interest payments on the borrowings under the Term Loans over their four and five year terms. The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value in prepaid expenses and other assets, with cumulative changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. During the six months ended June 30, 2022 and 2021, we recorded a $6,311,000 and $0 increase in fair value of Interest Rate Swaps. As of June 30, 2022 and December 31, 2021, the terms of the Interest Rate Swaps are as follows ( dollar amounts in thousands Notional Fair Value at Date Entered Maturity Date Swap Rate Rate Index Amount June 30, 2022 December 31, 2021 November 2021 November 19, 2025 2.56 % 1-month LIBOR $ 50,000 $ 2,824 $ (38) November 2021 November 19, 2026 2.69 % 1-month LIBOR 50,000 3,315 (134) $ 100,000 $ 6,139 $ (172) Senior Unsecured Notes. We have senior unsecured notes held by institutional investors with interest rates ranging from 3.66% to 5.03% . The senior unsecured notes mature between 2024 and 2033. During the six months ended June 30, 2022, we sold $75,000,000 aggregate principal amount of 3.66% senior unsecured notes. The notes have an average 10-year life, scheduled principal payments and mature in May 2033. The senior unsecured notes and the Credit Agreement, including the Revolving Line of Credit and the Term Loans, contain financial covenants, which are measured quarterly, that require us to maintain, among other things: ● a ratio of total indebtedness to total asset value not greater than 0.6 to 1.0; ● a ratio of secured debt to total asset value not greater than 0.35 to 1.0; ● a ratio of unsecured debt to the value of the unencumbered asset value not greater than 0.6 to 1.0; and ● a ratio of EBITDA, as calculated in the debt obligation, to fixed charges not less than 1.50 to 1.0. At June 30,2022, we were in compliance with all applicable financial covenants. These debt obligations also contain additional customary covenants and events of default that are subject to a number of important and significant limitations, qualifications and exceptions. The following table sets forth information regarding debt obligations by component as of June 30, 2022 and December 31, 2021 ( dollar amounts in thousands): At June 30, 2022 At December 31, 2021 Applicable Available Available Interest Outstanding for Outstanding for Debt Obligations Rate (1) Balance Borrowing Balance Borrowing Revolving line of credit (2) 2.67% $ 56,000 $ 344,000 $ 110,900 $ 289,100 Term loans, net of debt issue costs 2.63% 99,437 — 99,363 — Senior unsecured notes, net of debt issue costs (3) 4.28% 579,431 — 512,456 — Total 3.93% $ 734,868 $ 344,000 $ 722,719 $ 289,100 (1) Represents weighted average of interest rate as of June 30, 2022. (2) Subsequent to June 30, 2022, we borrowed $20,500 under the Revolving Line of Credit. Accordingly, we currently have $76,500 outstanding and $323,500 available for borrowing under the Revolving Line of Credit. (3) Subsequent to June 30, 2022, we paid $20,160 in regular scheduled principal payments under our senior unsecured notes. Accordingly, we currently have $559,271 outstanding under our senior unsecured notes, net of debt issue costs. Our borrowings and repayments are as follows (in thousands): Six Months Ended June 30, 2022 2021 Debt Obligations Borrowings Repayments Borrowings Repayments Revolving line of credit (1) $ 99,000 $ (153,900) $ 17,000 $ (41,000) Term loans — — — — Senior unsecured notes (2) 75,000 (7,000) — (7,000) Total $ 174,000 $ (160,900) $ 17,000 $ (48,000) (1) Subsequent to June 30, 2022, we borrowed $20,500 under the Revolving Line of Credit. Accordingly, we currently have $76,500 outstanding and $323,500 available for borrowing under the Revolving Line of Credit. (2) Subsequent to June 30, 2022, we paid $20,160 in regular scheduled principal payments under our senior unsecured notes. Accordingly, we currently have $559,271 outstanding under our senior unsecured notes, net of debt issue costs. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2022 | |
Equity | |
Equity | 7. Equity Non-controlling Interests. As of June 30, 2022, we have the following consolidated VIEs (in thousands): Gross Investment Property Consolidated Non-Controlling Year Purpose Type State Assets Interests 2018 Owned real estate ILF OR $ 14,470 $ 2,857 2018 Owned real estate and development ALF/MC OR 18,447 1,119 2017 Owned real estate and development ILF/ALF/MC WI 22,007 2,305 2017 Owned real estate ALF/MC SC 11,680 1,241 Total $ 66,604 $ 7,522 Common Stock. During the six months ended June 30, 2022 and 2021, we acquired 39,463 shares and 87,249 shares, respectively, of common stock held by employees who tendered owned shares to satisfy tax withholding obligations. Available Shelf Registration. Distributions. (in thousands) Six Months Ended June 30, 2022 2021 Declared Paid Declared Paid Common Stock (1) $ 45,115 $ 45,115 $ 45,608 (2) $ 45,608 (2) (1) Represents $0.19 per share per month for the six months ended June 30, 2022 and 2021. (2) Includes $764 of distributions that were paid as a result of the vesting of performance-based stock units. In July 2022, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of July , August and September 2022, payable on July 29, August 31, and September 30, 2022, respectively, to stockholders of record on July 21, August 23, and September 22, 2022, respectively. Stock-Based Compensation Participation Plan (“the 2015 Plan”). Under the 2021 Plan, 1,900,000 shares of common stock have been authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 Plan after December 31, 2020 and prior to adoption. In addition, any shares that are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan. Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2021 Plan and the 2015 Plan are set by our compensation committee at its discretion. At June 30, 2022, we had 10,000 stock options outstanding and exercisable. During the six months ended June 30, 2022, 5,000 stock options expired and were cancelled. During the six months ended June 30, 2022 and 2021, no stock options were granted or exercised. The following table summarizes our restricted stock activity for the six months ended June 30, 2022 and 2021 : Six Months Ended June 30, 2022 2021 Outstanding, January 1 197,422 180,440 Granted 135,210 110,348 Vested (103,396) (93,366) Outstanding, June 30 229,236 197,422 During the six months ended June 30, 2022 and 2021, we granted 86,332 and 71,892 , respectively, of performance-based stock units. Additionally, no performance-based stock units vested during the six months ended June 30, 2022 and 108,720 performance-based stock units vested during the six months ended June 30, 2021. During the six months ended June 30, 2022 and 2021, we granted restricted stock and performance-based stock units under the 2021 Plan and 2015 Plan as follows: No. of Price per Year Shares/Units Share Reward Type Vesting Period 2022 122,865 $ 33.94 Restricted stock ratably over 3 years 86,332 $ 33.94 Performance-based stock units TSR targets (1) 12,345 $ 38.48 Restricted stock May 25,2023 221,542 2021 95,293 $ 42.27 Restricted stock ratably over 3 years 71,892 $ 42.27 Performance-based stock units TSR targets (1) 12,055 $ 39.40 Restricted stock May 26, 2022 3,000 $ 43.14 Restricted stock April 1, 2022 182,240 (1) Vesting is based on achieving certain total shareholder return (“TSR”) targets in 4 years with acceleration opportunity in 3 years . Compensation expense recognized related to the vesting of restricted common stock and performance-based stock units for the six months ended June 30, 2022 and 2021 were $3,937,000 and $3,810,000 , respectively. At June 30, 2022, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (in thousands): Remaining Compensation Vesting Date Expense July - December 2022 $ 4,026 2023 5,603 2024 2,853 2025 309 Total $ 12,791 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. Commitments and Contingencies At June 30, 2022, we had commitments as follows (in thousands): Total Investment 2022 Commitment Remaining Commitment Funding Funded Commitment Real estate properties ote 2. Real Estate Investments $ 15,593 (1) $ 2,133 $ 3,771 $ 11,822 Accrued incentives and earn-out liabilities (Footnote 5. Lease Incentives) 12,000 (2) — — 12,000 Mortgage loans (Footn ote 2. Real Estate Investments 32,507 (3) 858 4,598 27,909 Notes receivable (Footn ote 4. Notes Receivable 27,380 11,788 15,558 11,822 Total $ 87,480 $ 14,779 $ 23,927 $ 63,553 (1) Represents commitments to purchase land and improvements, if applicable, and to develop, re-develop, renovate or expand seniors housing and skilled nursing properties. (2) Additionally, during the six months ended June 30, 2022, we purchased four skilled nursing centers in Texas and leased these properties under a 10-year lease with an existing operator. The lease provides either an earn-out payment up to $3,000 or a purchase option but not both. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. If neither option is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the purchase option see Footnote 2 . (3) Represents $14,507 of commitments for the expansion, renovation and working capital related to seniors housing and skilled nursing properties securing the mortgage loans and $18,000 of commitments which are contingent upon the borrower achieving certain coverage ratios. Also, during the second quarter of 2022, we committed to pay an operator a lease termination fee of $500,000 contingent upon certain conditions including cooperation and assistance in facilitating an orderly transition. These conditions were satisfied and the lease termination fee was paid subsequent to June 30, 2022. Additionally, some of our lease agreements provide purchase options allowing the lessee to purchase the properties they currently lease from us. See Footnote 2. Real Estate Investments We are a party from time to time to various general and professional liability claims and lawsuits asserted against the lessees or borrowers of our properties, which in our opinion are not singularly or in the aggregate material to our results of operations or financial condition. These types of claims and lawsuits may include matters involving general or professional liability, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder. We believe that these matters are the responsibility of our lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable leases or mortgages. We intend to continue to vigorously defend such claims. |
Major Operators
Major Operators | 6 Months Ended |
Jun. 30, 2022 | |
Major Operators | |
Major Operators | 9. Major Operators We have one operator that represents 10% or more of our combined rental revenue and interest income from mortgage loans. The following table sets forth information regarding our major operator as of June 30, 2022: Number of Number of Percentage of SNF ALF Total Total Operator SNF ALF Beds Units Revenue (1) Assets (2) Prestige Healthcare (3) 24 — 2,845 93 20.0 % 16.7 % (1) Includes rental income from owned properties and interest income from mortgage loans as of June 30, 2022. (2) Represents the net carrying value of the mortgage loans and properties we own divided by the Total assets on the Consolidated Balance Sheets. (3) The majority of the revenue derived from this operator relates to interest income from mortgage loans. Our financial position and ability to make distributions may be adversely affected if Prestige Healthcare or any of our lessees and borrowers face financial difficulties, including any bankruptcies, inability to emerge from bankruptcy, insolvency or general downturn in business of any such operator, continuing impact upon services or occupancy levels due to COVID-19, or in the event any such operator does not renew and/or extend its relationship with us. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings per Share | |
Earnings per Share | 10. Earnings per Share The following table sets forth the computation of basic and diluted net income per share ( in thousands, except per share amounts Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income $ 54,490 $ 18,330 $ 68,997 $ 32,180 Less income allocated to non-controlling interests (107) (91) (202) (179) Less income allocated to participating securities: Non-forfeitable dividends on participating securities (133) (113) (270) (233) Income allocated to participating securities (185) — (137) — Total net income allocated to participating securities (318) (113) (407) (233) Net income available to common stockholders 54,065 18,126 68,388 31,768 Effect of dilutive securities: Participating securities (1) — — — — Net income for diluted net income per share $ 54,065 $ 18,126 $ 68,388 $ 31,768 Shares for basic net income per share 39,492 39,169 39,347 39,135 Effect of dilutive securities: Stock options — (2) 1 — (2) 1 Performance-based stock units 173 — 173 — Participating securities (1) — — — — Total effect of dilutive securities 173 1 173 1 Shares for diluted net income per share 39,665 39,170 39,520 39,136 Basic net income per share $ 1.37 $ 0.46 $ 1.74 $ 0.81 Diluted net income per share $ 1.36 $ 0.46 $ 1.73 $ 0.81 (1) For the three and six months ended June 30, 2022, and 2021, the participating securities have been excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive. (2) For the three and six months ended June 30, 2022, stock options have been excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | 11. Fair Value Measurements In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses reported in earnings. We did not elect the fair value option for any of our financial assets and financial liabilities. As of June 30, 2022, we had two interest rate swaps related to our term loans that were designated as cash flow hedges of interest rate risk with a total notional amount of $100,000,000. See Footnote 6. Debt Obligations within our consolidated financial statements for further detail on our interest rate swaps. We record cash flow hedges either as an asset or a liability measured at fair value. We estimate the fair value of our interest rate swaps using the assistance of a third-party using inputs that are observable in the market which include forward yield curves and other relevant information. Although we have determined that the majority of the inputs used to value our derivative instruments fall within level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize level 3 inputs to evaluate the likelihood of default by us and our counterparties. The carrying amount of cash and cash equivalents, prepaid expenses and other assets, accrued interest, accrued expenses and other liabilities approximates fair value because of the short-term maturity of these instruments. We do not invest our cash in auction rate securities. The carrying value and estimated fair value of our financial instruments as of June 30, 2022 and December 31, 2021 were as follows ( in thousands ): At June 30, 2022 At December 31, 2021 Carrying Fair Carrying Fair Value Value Value Value Mortgage loans receivable, net of credit loss reserve $ 379,817 $ 444,125 (1) $ 344,442 $ 405,162 (1) Notes receivable, net of credit loss reserve 58,206 63,008 (2) 28,337 28,653 (2) Revolving line of credit 56,000 56,000 (3) 110,900 110,900 (3) Term loans, net of debt issue costs 99,437 100,000 (3) 99,363 100,000 (3) Senior unsecured notes, net of debt issue costs 579,431 531,880 (4) 512,456 540,045 (4) (1) Our investment in mortgage loans receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash inflows of the mortgage loans receivable at June 30, 2022 and December 31, 2021 was 9.3% and 9.5% , respectively. (2) Our investments in notes receivable are classified as Level 3. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash flows of the notes receivable at June 30, 2022 and December 31, 2021, were 6.6% and 5.6% , respectively. (3) Our revolving line of credit and term loans bear interest at a variable interest rate. The estimated fair value of our revolving line of credit and term loans approximated their carrying values at June 30, 2022 and December 31, 2021 based upon prevailing market interest rates for similar debt arrangements. (4) Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is measured based upon management’s estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities. At June 30, 2022, the discount rate used to value our future cash outflow of our senior unsecured notes was 5.75% for those maturing before year 2030 and 6.25% for those maturing at or beyond year 2030. At December 31, 2021, the discount rate used to value our future cash outflow of our senior unsecured notes was 3.00% for those maturing before year 2030 and 3.25% for those maturing at or beyond year 2030. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events | |
Subsequent Events | 12. Subsequent Events Subsequent to June 30, 2022 the following events occurred: Real Estate Investments: We terminated a master lease agreement covering 12 assisted living communities with a total of 625 units and transitioned the communities to an existing operator. In connection with the lease termination, we abated rent for June 2022 and have forgiven the former operator’s $7,066,000 outstanding unaccrued deferred rent balance. Subsequent to June 30, 2022 , we paid the former operator a $500,000 lease termination fee in exchange for cooperation and assistance in facilitating an orderly transition. The transitioned communities will be operated pursuant to a new two-year master lease with zero rent for the first four months . Thereafter, cash rent will be based on mutually agreed upon fair market rent. In connection with the new lease, we paid the new operator a $410,000 lease incentive payment which will be amortized as a yield adjustment to rental income over the two-year lease term. Abated and Deferred Rent: during COVID. Additionally, we provided $240,000 of abated rent in July 2022 and agreed to provide rent abatements up to $240,000 for each of August and September of 2022 to an operator pursuant to a master lease covering two assisted living communities. We are evaluating options for these communities. Debt: We borrowed $20,500,000 under our revolving line of credit. Accordingly, we have $76,500,000 outstanding and $323,500,000 available for borrowing under our revolving line of credit. Additionally, we paid $20,160,000 in regular scheduled principal payments under our senior unsecured notes. Accordingly, we have $559,271,000 outstanding under our senior unsecured notes, net of debt issue costs. Equity: We declared a monthly cash dividend of $0.19 per share on our common stock for the months of July , August and September 202 2, payable on July 29 , August 31 , and September 30 , 2022, respectively to stockholders of record on July 21 , August 23 , and September 22 , 2022, respectively. Additionally, we sold 125,200 shares of common stock for $4,754,000 of net proceeds under our Equity Distribution Agreements. Accordingly, we have $160,349,000 available under our Equity Distribution Agreements. |
General (Policies)
General (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
General | |
Basis of Presentation | We have prepared consolidated financial statements included herein without audit and in the opinion of management have included all adjustments necessary for a fair presentation of the consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to rules and regulations governing the presentation of interim financial statements. The accompanying consolidated financial statements include the accounts of our company and its wholly-owned subsidiaries. |
Reclassifications | All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six months ended June 30, 2022 and 2021 are not necessarily indicative of the results for a full year. |
Income taxes | No provision has been made for federal or state income taxes. Our company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As such, we generally are not taxed on income that is distributed to our stockholders. |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Real Estate Investments | |
Summary of investments in owned properties | The following table summarizes our investments in owned properties at June 30, 2022 (dollar amounts in thousands) Average Percentage Number Number of Investment Gross of of SNF ALF per Type of Property Investment Investment Properties (1) Beds Units Bed/Unit Assisted Living $ 797,556 56.6 % 99 — 5,492 $ 145.22 Skilled Nursing 600,701 42.6 % 53 6,348 236 $ 91.24 Other (2) 11,680 0.8 % 1 118 — — Total $ 1,409,937 100.0 % 153 6,466 5,728 (1) We own properties in 26 states that are leased to 25 different operators. (2) Includes three parcels of land held-for-use, and one behavioral health care hospital. |
Schedule of future minimum base rents receivable | Future minimum base rents receivable under the remaining non-cancelable terms of operating leases excluding the effects of straight-line rent receivable, amortization of lease incentives and renewal options are as follows (in thousands): Cash Rent (1) 2022 $ 57,820 2023 113,626 2024 93,786 2025 85,214 2026 68,753 Thereafter 269,038 (1) Represents contractual cash rent, except for certain master leases which are based on estimated cash payments . Includes rent from subsequent acquisitions and excludes rent from subsequent dispositions. See Footnote 12 for more information. |
Summary of components of our rental income | The following table summarizes components of our rental income for the three and six months ended June 30, 2022 and 2021 (in thousands): Three Months Ended Six Months Ended June 30, June 30, Rental Income 2022 2021 2022 2021 Base cash rental income $ 28,108 (1) $ 26,410 $ 55,023 (1) $ 55,033 Variable cash rental income 4,019 (2) 3,529 (2) 8,058 (2) 7,067 (2) Straight-line rent (293) (3) (19) (3) (527) (3) 663 (3) Adjustment for collectability of rental income and lease incentives — — (173) (4) (758) (5) Amortization of lease incentives (206) (116) (429) (228) Total $ 31,628 $ 29,804 $ 61,952 $ 61,777 (1) Increased primarily due to a $1,181 lease termination fee received in connection with the sale of a 74 -unit ALF, rent received from properties transitioned from the former Senior Care Centers, LLC (“Senior Care”) and Senior Lifestyle Corporation (“Senior Lifestyle”) portfolios and rental income from completed development projects and annual rent escalations. (2) The variable rental income for the three and six months ended June 30, 2022, includes reimbursement of real estate taxes by our lessees of $4,019 and $8,001 , respectively and contingent rental income of $0 and $57 , respectively . The variable rental income for the three and six months ended June 30, 2021, only includes reimbursement of real estate taxes by our lessees of $3,529 and $7,067 . Increased primarily due to properties transitioned from Senior Care and new acquisitions. (3) Decreased primarily due to the impact of prior year’s 50% reduction of 2021 rent escalations for those leases accounted for on a straight-line basis. (4) Represents a lease incentive balance write-off related to a closed property and subsequent lease termination. (5) Represents a straight-line rent receivable write-off due to transitioning rental revenue recognition to cash basis for one lease in accordance with Accounting Standard Codification Topic 842, Leases . |
Summary of information about purchase options included in our lease agreements | The following table summarizes information about purchase options included in our lease agreements (dollar amounts in thousands): Type Number of of Gross Carrying Option State Property Properties Investments Value Window California ALF/MC 2 $ 38,895 $ 34,189 2024-2029 Florida MC 1 15,201 12,728 2029 Kentucky and Ohio MC 2 30,421 26,191 2025 Nebraska ALF 3 7,633 3,067 TBD (1) South Carolina ALF/MC 1 11,680 9,341 2029 Texas SNF 4 51,815 51,485 2027-2029 (2) Total $ 155,645 $ 137,001 (1) Subject to the properties achieving certain coverage ratios . (2) During the second quarter of 2022, we purchased four skilled nursing centers and leased these properties under a 10-year lease with an existing operator. The lease provides either an earn-out payment or purchase option but not both. If neither option is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the earn-out see Footnote 8 . |
Summary of acquisitions | Total Number Number Purchase Transaction Acquisition of of Year Type of Property Price Costs Costs Properties Beds/Units 2022 SNF (1) $ 51,534 $ 281 $ 51,815 4 339 2021 n/a $ — $ — $ — — — (1) The properties are located in Texas and are leased to an affiliate of an existing operator under a 10-year lease with two 5-year renewal options. Additionally, the lease provides either an earn-out payment or purchase option but not both. If neither option is elected within the timeframe defined in the lease, both elections are terminated. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. The purchase option is available beginning in the sixth lease year through the end of the seventh lease year. The initial cash yield is 8% for the first year, increasing to 8.25% for the second year, then increases annually by 2.0% to 4.0% based on the change in the Medicare Market Basket Rate. In connection with the transaction, we provided the lessee a 10-year working capital loan for up to $2,000 , of which $1,867 has been funded, at 8% for first year, increasing to 8.25% for the second year, then increasing annually with the lease rate. |
Schedule of improvement projects | During he following in improvement projects (in thousands) : Type of Property 2022 2021 Assisted Living Communities $ 1,964 $ 2,046 Skilled Nursing Centers 620 — Other 321 — Total $ 2,905 $ 2,046 |
Schedule of property sold | Properties Sold. (dollar amounts in thousands): Type Number Number of of of Sales Carrying Net Year State Properties Properties Beds/Units Price Value Gain (loss) (1) 2022 California ALF 2 232 $ 43,715 $ 17,832 $ 25,867 California SNF 1 121 13,250 1,846 10,849 Virginia ALF 1 74 16,895 15,549 1,336 (2) n/a n/a — — — — 144 (3) Total 2022 4 427 $ 73,860 $ 35,227 $ 38,196 2021 Florida ALF 1 — $ 2,000 $ 2,625 $ (858) Nebraska ALF 1 40 900 1,079 (205) Wisconsin ALF 3 263 35,000 28,295 5,594 n/a n/a — — — — 159 (3) Total 2021 5 303 $ 37,900 $ 31,999 $ 4,690 ( (1) Calculation of net gain (loss) includes cost of sales. (2) In connection with this sale, the former operator paid us a lease termination fee of $1,181 which is not included in the gain on sale. (3) We recognized additional gain due to the reassessment adjustment of the holdbacks related to properties sold during 2019 and 2020, under the expected value model per Accounting Standard Codification (“ASC”) Topic 606, Contracts with Customers (“ASC 606”). |
Summary of investments in mortgage loans secured by first mortgages | Mortgage Loans. (dollar amounts in thousands) Type Percentage Number of Investment Gross of of SNF ALF per Interest Rate Maturity State Investment Property Investment Loans (1) Properties (2) Beds Units Bed/Unit 7.5% 2022 MO $ 1,780 OTH 0.5 % 1 — (3) — — $ n/a 7.5% 2024 LA 27,347 SNF 7.1 % 1 1 189 — $ 144.69 7.8% 2025 FL 12,779 ALF 3.3 % 1 1 — 68 $ 187.93 7.3% (4) 2025 NC/SC 50,889 ALF 13.3 % 1 13 — 523 $ 97.30 7.3% 2026 NC 31,539 ALF 8.2 % 1 4 — 217 $ 145.34 7.3% 2026 NC 766 OTH 0.2 % 1 — (5) — — $ — 10.4% (6) 2043 MI 184,854 SNF 48.2 % 1 15 1,875 — $ 98.59 9.5% (6) 2045 MI 39,068 SNF 10.2 % 1 4 501 — $ 77.98 9.8% (6) 2045 MI 19,750 SNF 5.1 % 1 2 205 — $ 96.34 10% (6) 2045 MI 14,875 SNF 3.9 % 1 1 146 — $ 101.88 Total $ 383,647 100.0 % 10 41 2,916 808 $ 103.02 (1) Some loans contain certain guarantees and provide for certain facility fees. (2) Our mortgage loans are secured by properties located in six states with five borrowers. (3) Represents a mortgage loan secured by a parcel of land for the future development of a 91 -bed post-acute SNF. (4) Represents the initial rate. This loan has an IRR of 8% . (5) Represents a mortgage loan secured by a parcel of land in North Carolina held for future development of a seniors housing community. (6) Mortgage loans provide for 2.25% annual increases in the interest rate after a certain time period. |
Schedule of mortgage loan activity | The following table summarizes our mortgage loan activity for the six months ended June 30, 2022 and 2021 (in thousands): Six Months Ended June 30, 2022 2021 Originations and funding under mortgage loans receivable $ 33,910 (1) $ 426 Application of interest reserve 2,451 — Scheduled principal payments received (625) (625) Mortgage loan premium amortization (3) (3) (Provision) recovery for loan loss reserve (358) 2 Net increase (decrease) in mortgage loans receivable $ 35,375 $ (200) (1) We originated two senior mortgage loans, secured by four ALFs operated by an existing operator, as well as a land parcel in North Carolina. The communities have a combined total of 217 units, with an average age of less than four years . The land parcel is approximately 7.6 acres adjacent to one of the ALFs and is being held for the future development of a seniors housing community. The mortgage loans have a four-year term, an interest rate of 7.25% and an IRR of 8% . |
Investment in Unconsolidated _2
Investment in Unconsolidated Joint Ventures (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Investment in Unconsolidated Joint Ventures | |
Summary of the preferred equity investments | The following table provides information regarding these preferred equity investments (dollar amounts in thousands): Type Type Total Contractual Number of of Preferred Cash of Carrying State Properties Investment Return Portion Beds/ Units Value Washington ALF/MC Preferred Equity (1) 12 % 7 % 95 $ 6,340 (1) Washington UDP Preferred Equity (2) 12 % 8 % — 13,000 (2) Total 95 $ 19,340 (1) Represents preferred equity in an entity that developed and owns a 95 -unit ALF and MC in Washington. Our investment represents 15.5% of the total investment. The preferred equity investment earns an initial cash rate of 7% increasing to 9% in year four until the internal rate of return (“IRR”) is 8% . After achieving an 8% IRR, the cash rate drops to 8% until achieving an IRR ranging between 12% to 14% , depending upon timing of redemption. During the fourth quarter of 2021, the entity completed the development project and received its certificate of occupancy. We have the option to require the JV partner to purchase our preferred equity interest at any time between August 17, 2031 and December 31, 2036. (2) Represents preferred equity in an entity that will develop and own a 267 -unit ILF and ALF in Washington. Our investment represents 11.6% of the estimated total investment. The preferred equity investment earns an initial cash rate of 8% with an IRR of 12% . The JV partner has the option to buy out our investment at any time after August 31, 2023 at the IRR rate. Also, we have the option to require the JV partner to purchase our preferred equity interest at any time between August 31, 2027 and, upon project completion and leasing the property, prior to the end of the first renewal term of the lease. |
Summary of capital contributions, income recognized and cash interest received from investments in unconsolidated joint ventures | The following table summarizes our capital contributions, income recognized, and cash interest received related to our investments in unconsolidated joint ventures for the six months ended June 30, 2022 and 2021 (in thousands): Type of Capital Income Cash Interest Year Properties Contribution Recognized Earned 2022 ALF/MC $ — $ 224 $ 224 UDP (1) — 527 527 Total $ — $ 751 $ 751 2021 ALF/MC $ — $ 225 $ 187 UDP (1) 8,000 440 353 Total $ 8,000 $ 665 $ 540 (1) During 2021, we funded the remaining $8,000 related to a $13,000 preferred equity investment commitment in an entity that will develop and own a 267 -unit ILF and ALF in Washington. Additionally, we withheld $2,324 from the $8,000 funding for a total reserve of $3,777 related to this preferred equity investment. |
Notes Receivable (Tables)
Notes Receivable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Notes Receivable. | |
Summary of mezzanine loans and other loan arrangements | The following table is a summary of our notes receivable components as of June 30, 2022 and December 31, 2021 (in thousands): June 30, 2022 December 31, 2021 Mezzanine loans (1) $ 36,815 $ 11,815 Other loans 21,979 16,808 Notes receivable credit loss reserve (588) (286) Total $ 58,206 $ 28,337 (1) During the first quarter of 2022, we originated a $25,000 mezzanine loan for the recapitalization of a five -property seniors housing portfolio. The mezzanine loan has a term of approximately five years , with two one-year extension options and bears interest at 8% with an IRR of 11% . The five communities are located in Oregon and Montana, have a total of 621 units, and include independent living, assisted living and memory care. |
Summary of notes receivable activity | The following table summarizes our notes receivable activity for the six months ended June 30, 2022 and 2021 (in thousands): Six Months Ended June 30, 2022 2021 Advances under notes receivable $ 36,788 (1) $ 1,811 Principal payments received under notes receivable (6,618) (2,553) Provision for credit losses (301) 7 Net increase (decrease) in notes receivable $ 29,869 $ (735) (1) Includes origination of a $25,000 mezzanine loan for the recapitalization of five assisted living communities located in Oregon and Montana. Additionally includes origination of a working capital loan for a commitment of up to $2,000 , of which $1,867 has been funded and $9,541 of funding under a working capital loan to HMG Healthcare, LLC (“HMG”). |
Lease Incentives (Tables)
Lease Incentives (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Lease Incentives | |
Summary of lease incentive activity | The following table summarizes our lease incentives activity for the six months ended June 30, 2022 and 2021 (in thousands) : Six Months Ended June 30, 2022 2021 Adjustment Funding Amortization Write-off Funding Amortization Non-contingent lease incentives $ (174) (1) $ 8 $ (429) $ (173) (2) $ 180 $ (228) (1) Primarily relates to the sale of two ALFs in California during the second quarter of 2022. (2) Represents the lease incentive balance write-off related to a closed property and subsequent lease termination. |
Debt Obligations (Tables)
Debt Obligations (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Obligations | |
Schedule of interest rate swaps | As of June 30, 2022 and December 31, 2021, the terms of the Interest Rate Swaps are as follows ( dollar amounts in thousands Notional Fair Value at Date Entered Maturity Date Swap Rate Rate Index Amount June 30, 2022 December 31, 2021 November 2021 November 19, 2025 2.56 % 1-month LIBOR $ 50,000 $ 2,824 $ (38) November 2021 November 19, 2026 2.69 % 1-month LIBOR 50,000 3,315 (134) $ 100,000 $ 6,139 $ (172) |
Schedule of Debt Obligations | The following table sets forth information regarding debt obligations by component as of June 30, 2022 and December 31, 2021 ( dollar amounts in thousands): At June 30, 2022 At December 31, 2021 Applicable Available Available Interest Outstanding for Outstanding for Debt Obligations Rate (1) Balance Borrowing Balance Borrowing Revolving line of credit (2) 2.67% $ 56,000 $ 344,000 $ 110,900 $ 289,100 Term loans, net of debt issue costs 2.63% 99,437 — 99,363 — Senior unsecured notes, net of debt issue costs (3) 4.28% 579,431 — 512,456 — Total 3.93% $ 734,868 $ 344,000 $ 722,719 $ 289,100 (1) Represents weighted average of interest rate as of June 30, 2022. (2) Subsequent to June 30, 2022, we borrowed $20,500 under the Revolving Line of Credit. Accordingly, we currently have $76,500 outstanding and $323,500 available for borrowing under the Revolving Line of Credit. (3) Subsequent to June 30, 2022, we paid $20,160 in regular scheduled principal payments under our senior unsecured notes. Accordingly, we currently have $559,271 outstanding under our senior unsecured notes, net of debt issue costs. |
Schedule of borrowings and repayments | Our borrowings and repayments are as follows (in thousands): Six Months Ended June 30, 2022 2021 Debt Obligations Borrowings Repayments Borrowings Repayments Revolving line of credit (1) $ 99,000 $ (153,900) $ 17,000 $ (41,000) Term loans — — — — Senior unsecured notes (2) 75,000 (7,000) — (7,000) Total $ 174,000 $ (160,900) $ 17,000 $ (48,000) (1) Subsequent to June 30, 2022, we borrowed $20,500 under the Revolving Line of Credit. Accordingly, we currently have $76,500 outstanding and $323,500 available for borrowing under the Revolving Line of Credit. (2) Subsequent to June 30, 2022, we paid $20,160 in regular scheduled principal payments under our senior unsecured notes. Accordingly, we currently have $559,271 outstanding under our senior unsecured notes, net of debt issue costs. |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Equity | |
Schedule of consolidated VIEs | As of June 30, 2022, we have the following consolidated VIEs (in thousands): Gross Investment Property Consolidated Non-Controlling Year Purpose Type State Assets Interests 2018 Owned real estate ILF OR $ 14,470 $ 2,857 2018 Owned real estate and development ALF/MC OR 18,447 1,119 2017 Owned real estate and development ILF/ALF/MC WI 22,007 2,305 2017 Owned real estate ALF/MC SC 11,680 1,241 Total $ 66,604 $ 7,522 |
Schedule of cash dividends declared and paid | Distributions. (in thousands) Six Months Ended June 30, 2022 2021 Declared Paid Declared Paid Common Stock (1) $ 45,115 $ 45,115 $ 45,608 (2) $ 45,608 (2) (1) Represents $0.19 per share per month for the six months ended June 30, 2022 and 2021. (2) Includes $764 of distributions that were paid as a result of the vesting of performance-based stock units. |
Schedule of restricted stock activity | The following table summarizes our restricted stock activity for the six months ended June 30, 2022 and 2021 : Six Months Ended June 30, 2022 2021 Outstanding, January 1 197,422 180,440 Granted 135,210 110,348 Vested (103,396) (93,366) Outstanding, June 30 229,236 197,422 |
Schedule of restricted stock granted | No. of Price per Year Shares/Units Share Reward Type Vesting Period 2022 122,865 $ 33.94 Restricted stock ratably over 3 years 86,332 $ 33.94 Performance-based stock units TSR targets (1) 12,345 $ 38.48 Restricted stock May 25,2023 221,542 2021 95,293 $ 42.27 Restricted stock ratably over 3 years 71,892 $ 42.27 Performance-based stock units TSR targets (1) 12,055 $ 39.40 Restricted stock May 26, 2022 3,000 $ 43.14 Restricted stock April 1, 2022 182,240 (1) Vesting is based on achieving certain total shareholder return (“TSR”) targets in 4 years with acceleration opportunity in 3 years . |
Schedule of restricted common stock and performance-based stock unit scheduled to vest and remaining compensation expense | At June 30, 2022, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (in thousands): Remaining Compensation Vesting Date Expense July - December 2022 $ 4,026 2023 5,603 2024 2,853 2025 309 Total $ 12,791 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies | |
Schedule of commitments | At June 30, 2022, we had commitments as follows (in thousands): Total Investment 2022 Commitment Remaining Commitment Funding Funded Commitment Real estate properties ote 2. Real Estate Investments $ 15,593 (1) $ 2,133 $ 3,771 $ 11,822 Accrued incentives and earn-out liabilities (Footnote 5. Lease Incentives) 12,000 (2) — — 12,000 Mortgage loans (Footn ote 2. Real Estate Investments 32,507 (3) 858 4,598 27,909 Notes receivable (Footn ote 4. Notes Receivable 27,380 11,788 15,558 11,822 Total $ 87,480 $ 14,779 $ 23,927 $ 63,553 (1) Represents commitments to purchase land and improvements, if applicable, and to develop, re-develop, renovate or expand seniors housing and skilled nursing properties. (2) Additionally, during the six months ended June 30, 2022, we purchased four skilled nursing centers in Texas and leased these properties under a 10-year lease with an existing operator. The lease provides either an earn-out payment up to $3,000 or a purchase option but not both. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. If neither option is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the purchase option see Footnote 2 . (3) Represents $14,507 of commitments for the expansion, renovation and working capital related to seniors housing and skilled nursing properties securing the mortgage loans and $18,000 of commitments which are contingent upon the borrower achieving certain coverage ratios. |
Major Operators (Tables)
Major Operators (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Major Operators | |
Schedule of concentration of risk by major operators | Number of Number of Percentage of SNF ALF Total Total Operator SNF ALF Beds Units Revenue (1) Assets (2) Prestige Healthcare (3) 24 — 2,845 93 20.0 % 16.7 % (1) Includes rental income from owned properties and interest income from mortgage loans as of June 30, 2022. (2) Represents the net carrying value of the mortgage loans and properties we own divided by the Total assets on the Consolidated Balance Sheets. (3) The majority of the revenue derived from this operator relates to interest income from mortgage loans. |
Earning per Share (Tables)
Earning per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings per Share | |
Schedule of basic and diluted net income per share | The following table sets forth the computation of basic and diluted net income per share ( in thousands, except per share amounts Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income $ 54,490 $ 18,330 $ 68,997 $ 32,180 Less income allocated to non-controlling interests (107) (91) (202) (179) Less income allocated to participating securities: Non-forfeitable dividends on participating securities (133) (113) (270) (233) Income allocated to participating securities (185) — (137) — Total net income allocated to participating securities (318) (113) (407) (233) Net income available to common stockholders 54,065 18,126 68,388 31,768 Effect of dilutive securities: Participating securities (1) — — — — Net income for diluted net income per share $ 54,065 $ 18,126 $ 68,388 $ 31,768 Shares for basic net income per share 39,492 39,169 39,347 39,135 Effect of dilutive securities: Stock options — (2) 1 — (2) 1 Performance-based stock units 173 — 173 — Participating securities (1) — — — — Total effect of dilutive securities 173 1 173 1 Shares for diluted net income per share 39,665 39,170 39,520 39,136 Basic net income per share $ 1.37 $ 0.46 $ 1.74 $ 0.81 Diluted net income per share $ 1.36 $ 0.46 $ 1.73 $ 0.81 (1) For the three and six months ended June 30, 2022, and 2021, the participating securities have been excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive. (2) For the three and six months ended June 30, 2022, stock options have been excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Measurements | |
Schedule of carrying value and fair value of the entity's financial instruments | The carrying value and estimated fair value of our financial instruments as of June 30, 2022 and December 31, 2021 were as follows ( in thousands ): At June 30, 2022 At December 31, 2021 Carrying Fair Carrying Fair Value Value Value Value Mortgage loans receivable, net of credit loss reserve $ 379,817 $ 444,125 (1) $ 344,442 $ 405,162 (1) Notes receivable, net of credit loss reserve 58,206 63,008 (2) 28,337 28,653 (2) Revolving line of credit 56,000 56,000 (3) 110,900 110,900 (3) Term loans, net of debt issue costs 99,437 100,000 (3) 99,363 100,000 (3) Senior unsecured notes, net of debt issue costs 579,431 531,880 (4) 512,456 540,045 (4) (1) Our investment in mortgage loans receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash inflows of the mortgage loans receivable at June 30, 2022 and December 31, 2021 was 9.3% and 9.5% , respectively. (2) Our investments in notes receivable are classified as Level 3. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash flows of the notes receivable at June 30, 2022 and December 31, 2021, were 6.6% and 5.6% , respectively. (3) Our revolving line of credit and term loans bear interest at a variable interest rate. The estimated fair value of our revolving line of credit and term loans approximated their carrying values at June 30, 2022 and December 31, 2021 based upon prevailing market interest rates for similar debt arrangements. (4) Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is measured based upon management’s estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities. At June 30, 2022, the discount rate used to value our future cash outflow of our senior unsecured notes was 5.75% for those maturing before year 2030 and 6.25% for those maturing at or beyond year 2030. At December 31, 2021, the discount rate used to value our future cash outflow of our senior unsecured notes was 3.00% for those maturing before year 2030 and 3.25% for those maturing at or beyond year 2030. |
General (Details)
General (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) segment | |
General | |
Number of operating segments | segment | 1 |
Provision for federal or state income taxes | $ | $ 0 |
Real Estate Investments - Owned
Real Estate Investments - Owned Properties (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) item property state $ / item | |
Real Estate [Line Items] | |
Number of beds/units | 217 |
Real Estate Investment | |
Real Estate [Line Items] | |
Gross Investment | $ | $ 1,409,937 |
Percentage of Investment | 100% |
Number of properties | property | 153 |
Number of states | state | 26 |
Number of operators | 25 |
Real Estate Investment | SNF Beds | |
Real Estate [Line Items] | |
Number of beds/units | 6,466 |
Real Estate Investment | ALF Units | |
Real Estate [Line Items] | |
Number of beds/units | 5,728 |
ALF | |
Real Estate [Line Items] | |
Number of properties | property | 4 |
Number of beds/units | 74 |
ALF | Real Estate Investment | |
Real Estate [Line Items] | |
Gross Investment | $ | $ 797,556 |
Percentage of Investment | 56.60% |
Number of properties | property | 99 |
Average Investment per Bed/Unit | $ / item | 145.22 |
ALF | Real Estate Investment | ALF Units | |
Real Estate [Line Items] | |
Number of beds/units | 5,492 |
SNF | Real Estate Investment | |
Real Estate [Line Items] | |
Gross Investment | $ | $ 600,701 |
Percentage of Investment | 42.60% |
Number of properties | property | 53 |
Average Investment per Bed/Unit | $ / item | 91.24 |
SNF | Real Estate Investment | SNF Beds | |
Real Estate [Line Items] | |
Number of beds/units | 6,348 |
SNF | Real Estate Investment | ALF Units | |
Real Estate [Line Items] | |
Number of beds/units | 236 |
Other | Real Estate Investment | |
Real Estate [Line Items] | |
Gross Investment | $ | $ 11,680 |
Percentage of Investment | 0.80% |
Number of properties | property | 1 |
Number of parcels of land | 3 |
Other | Real Estate Investment | SNF Beds | |
Real Estate [Line Items] | |
Number of beds/units | 118 |
Hospital | Real Estate Investment | |
Real Estate [Line Items] | |
Number of properties | property | 1 |
Real Estate Investments - Base
Real Estate Investments - Base Rents (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Future minimum base rents receivable | |
2022 | $ 57,820 |
2023 | 113,626 |
2024 | 93,786 |
2025 | 85,214 |
2026 | 68,753 |
Thereafter | $ 269,038 |
Real Estate Investments - Lease
Real Estate Investments - Lease (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 USD ($) property item | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) property item | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Real estate investments | |||||
Write-off of straight-line rent and lease incentives balances | $ 173,000 | $ 758,000 | |||
Carrying value | $ 1,035,767,000 | 1,035,767,000 | $ 1,033,951,000 | ||
Gain on sale of real estate, net | $ 38,094,000 | $ 5,463,000 | $ 38,196,000 | 4,690,000 | |
Number of units | item | 217 | 217 | |||
Income and Expenses, Lessor [Abstract] | |||||
Base cash rental income | $ 28,108,000 | 26,410,000 | $ 55,023,000 | 55,033,000 | |
Variable cash rental income | 4,019,000 | 3,529,000 | 8,058,000 | 7,067,000 | |
Straight-Line Rent | (293,000) | (19,000) | (527,000) | 663,000 | |
Adjustment for collectability of rental income and lease incentives | (173,000) | (758,000) | |||
Amortization of Lease Incentives | (206,000) | (116,000) | (429,000) | (228,000) | |
Total Rental Income | 31,628,000 | 29,804,000 | 61,952,000 | 61,777,000 | |
Real estate taxes reimbursed | 4,019,000 | $ 3,529,000 | 8,001,000 | $ 7,067,000 | |
Contingent rental income | 0 | 57,000 | |||
Rent abatements | 1,891,000 | ||||
Rent deferrals | 1,987,000 | 1,987,000 | |||
Repayments of rent deferrals | 124,000 | ||||
Rent abatements and deferrals | $ 3,878,000 | ||||
Percentage of contractual rent | 5.20% | ||||
Percentage of reduction in rent and interest escalations | 50% | ||||
Purchase Option in Lease Arrangements | |||||
Real estate investments | |||||
Gross Investment | 155,645,000 | $ 155,645,000 | |||
Carrying value | $ 137,001,000 | $ 137,001,000 | |||
ALF | |||||
Real estate investments | |||||
Number of properties | property | 4 | 4 | |||
Lease termination fee received | $ 1,181,000 | ||||
Number of units | item | 74 | 74 | |||
ALF | Purchase Option in Lease Arrangements | Nebraska | |||||
Real estate investments | |||||
Number of properties | property | 3 | 3 | |||
Gross Investment | $ 7,633,000 | $ 7,633,000 | |||
Carrying value | $ 3,067,000 | $ 3,067,000 | |||
MC | Purchase Option in Lease Arrangements | Florida | |||||
Real estate investments | |||||
Number of properties | property | 1 | 1 | |||
Gross Investment | $ 15,201,000 | $ 15,201,000 | |||
Carrying value | $ 12,728,000 | $ 12,728,000 | |||
MC | Purchase Option in Lease Arrangements | Kentucky and Ohio | |||||
Real estate investments | |||||
Number of properties | property | 2 | 2 | |||
Gross Investment | $ 30,421,000 | $ 30,421,000 | |||
Carrying value | $ 26,191,000 | $ 26,191,000 | |||
ALF & MC | Purchase Option in Lease Arrangements | California | |||||
Real estate investments | |||||
Number of properties | property | 2 | 2 | |||
Gross Investment | $ 38,895,000 | $ 38,895,000 | |||
Carrying value | $ 34,189,000 | $ 34,189,000 | |||
ALF & MC | Purchase Option in Lease Arrangements | South Carolina | |||||
Real estate investments | |||||
Number of properties | property | 1 | 1 | |||
Gross Investment | $ 11,680,000 | $ 11,680,000 | |||
Carrying value | $ 9,341,000 | $ 9,341,000 | |||
SNF | |||||
Income and Expenses, Lessor [Abstract] | |||||
Number of properties acquired | property | 4 | ||||
Acquisition Costs | $ 51,815,000 | ||||
Lease term | 10 years | 10 years | |||
SNF | Purchase Option in Lease Arrangements | |||||
Income and Expenses, Lessor [Abstract] | |||||
Number of properties acquired | item | 4 | ||||
Lease term | 10 years | 10 years | |||
SNF | Purchase Option in Lease Arrangements | Texas | |||||
Real estate investments | |||||
Number of properties | property | 4 | 4 | |||
Gross Investment | $ 51,815,000 | $ 51,815,000 | |||
Carrying value | $ 51,485,000 | $ 51,485,000 |
Real Estate Investments - Acqui
Real Estate Investments - Acquisitions and Improvements (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) property item | |
Maximum | |
Real estate investments | |
Annual increase in cash yield percentage | 4% |
SNF | |
Real estate investments | |
Purchase Price | $ 51,534 |
Transaction Costs | 281 |
Acquisition Costs | $ 51,815 |
Number of properties acquired | property | 4 |
Number of beds/units acquired | item | 339 |
Lease term | 10 years |
Renewal term | 5 years |
Number of options available for renewal | item | 2 |
Working Capital Loan Funded | $ 1,867 |
Cash yield percentage | 8% |
Cash yield percentage year two | 8.25% |
SNF | Minimum | |
Real estate investments | |
Annual increase in cash yield percentage | 2% |
SNF | Maximum | |
Real estate investments | |
Working Capital Loan Funded | $ 2,000 |
Real Estate Investments - Types
Real Estate Investments - Types of property Improvement (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Real estate investments | ||
Invested in projects | $ 14,779 | |
Improvements | ||
Real estate investments | ||
Invested in projects | 2,905 | $ 2,046 |
ALF | Improvements | ||
Real estate investments | ||
Invested in projects | 1,964 | $ 2,046 |
SNF | Improvements | ||
Real estate investments | ||
Invested in projects | 620 | |
Other | Improvements | ||
Real estate investments | ||
Invested in projects | $ 321 |
Real Estate Investments - Prope
Real Estate Investments - Properties Sold (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 USD ($) property | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) item property | Jun. 30, 2021 USD ($) item property | Dec. 31, 2021 USD ($) | |
Disposals and other | |||||
Carrying value | $ 1,035,767 | $ 1,035,767 | $ 1,033,951 | ||
Net Gain (loss) | $ 38,094 | $ 5,463 | $ 38,196 | $ 4,690 | |
ALF | |||||
Disposals and other | |||||
Number of properties | property | 4 | 4 | |||
ALF | Virginia | |||||
Disposals and other | |||||
Lease termination fee payable | $ 1,181 | $ 1,181 | |||
Properties sold | |||||
Disposals and other | |||||
Number of properties sold | property | 4 | 5 | |||
Number of beds or units in property sold | item | 427 | 303 | |||
Sales price | $ 73,860 | $ 37,900 | |||
Carrying value | 35,227 | 31,999 | 35,227 | 31,999 | |
Net Gain (loss) | 38,196 | 4,690 | |||
Net Gain (loss) | $ 144 | $ 159 | |||
Properties sold | SNF | California | |||||
Disposals and other | |||||
Number of properties sold | property | 1 | ||||
Number of beds or units in property sold | item | 121 | ||||
Sales price | $ 13,250 | ||||
Carrying value | 1,846 | 1,846 | |||
Net Gain (loss) | $ 10,849 | ||||
Properties sold | ALF | Florida | |||||
Disposals and other | |||||
Number of properties sold | property | 1 | ||||
Sales price | $ 2,000 | ||||
Carrying value | 2,625 | 2,625 | |||
Net Gain (loss) | $ (858) | ||||
Properties sold | ALF | Nebraska | |||||
Disposals and other | |||||
Number of properties sold | property | 1 | ||||
Number of beds or units in property sold | item | 40 | ||||
Sales price | $ 900 | ||||
Carrying value | 1,079 | 1,079 | |||
Net Gain (loss) | $ (205) | ||||
Properties sold | ALF | Wisconsin | |||||
Disposals and other | |||||
Number of properties sold | property | 3 | ||||
Number of beds or units in property sold | item | 263 | ||||
Sales price | $ 35,000 | ||||
Carrying value | $ 28,295 | 28,295 | |||
Net Gain (loss) | $ 5,594 | ||||
Properties sold | ALF | California | |||||
Disposals and other | |||||
Number of properties sold | property | 2 | ||||
Number of beds or units in property sold | item | 232 | ||||
Sales price | $ 43,715 | ||||
Carrying value | 17,832 | 17,832 | |||
Net Gain (loss) | $ 25,867 | ||||
Properties sold | ALF | Virginia | |||||
Disposals and other | |||||
Number of properties sold | property | 1 | ||||
Number of beds or units in property sold | item | 74 | ||||
Sales price | $ 16,895 | ||||
Carrying value | $ 15,549 | 15,549 | |||
Net Gain (loss) | $ 1,336 |
Real Estate Investments - Mortg
Real Estate Investments - Mortgage Loan (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) loan item property state $ / item | |
Real Estate [Line Items] | |
Interest rate (as a percent) | 7.25% |
Number of beds/units | 217 |
Internal Rate of Return | 8% |
ALF | |
Real Estate [Line Items] | |
Number of properties | property | 4 |
Number of beds/units | 74 |
Mortgage loans with 7.3% Interest Maturing 2025 | ALF | |
Real Estate [Line Items] | |
Internal Rate of Return | 8% |
Mortgage Loans | |
Real Estate [Line Items] | |
Gross Investment | $ | $ 383,647 |
Percentage of Investment | 100% |
Number of Loans | loan | 10 |
Number of properties | property | 41 |
Average Investment per Bed/Unit | $ / item | 103.02 |
Number of states | state | 6 |
Number of operators | 5 |
Mortgage Loans | SNF Beds | |
Real Estate [Line Items] | |
Number of beds/units | 2,916 |
Mortgage Loans | ALF Units | |
Real Estate [Line Items] | |
Number of beds/units | 808 |
Mortgage Loans | SNF | |
Real Estate [Line Items] | |
Interest rate (as a percent) | 2.25% |
Mortgage Loans | Mortgage loans with 7.5% Interest Maturing 2022 | OTH | |
Real Estate [Line Items] | |
Interest rate (as a percent) | 7.50% |
Gross Investment | $ | $ 1,780 |
Percentage of Investment | 0.50% |
Number of Loans | loan | 1 |
Mortgage Loans | Mortgage loans with 7.5% Interest Maturing 2022 | OTH | SNF Beds | |
Real Estate [Line Items] | |
Number of beds/units | 91 |
Mortgage Loans | Mortgage loans with 7.5% Interest Maturing 2024 | SNF | |
Real Estate [Line Items] | |
Interest rate (as a percent) | 7.50% |
Gross Investment | $ | $ 27,347 |
Percentage of Investment | 7.10% |
Number of Loans | loan | 1 |
Number of properties | property | 1 |
Average Investment per Bed/Unit | $ / item | 144.69 |
Mortgage Loans | Mortgage loans with 7.5% Interest Maturing 2024 | SNF | SNF Beds | |
Real Estate [Line Items] | |
Number of beds/units | 189 |
Mortgage Loans | Mortgage loans with 7.8% Interest Maturing 2025 | ALF | |
Real Estate [Line Items] | |
Interest rate (as a percent) | 7.80% |
Gross Investment | $ | $ 12,779 |
Percentage of Investment | 3.30% |
Number of Loans | loan | 1 |
Number of properties | property | 1 |
Average Investment per Bed/Unit | $ / item | 187.93 |
Mortgage Loans | Mortgage loans with 7.8% Interest Maturing 2025 | ALF | ALF Units | |
Real Estate [Line Items] | |
Number of beds/units | 68 |
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2025 | ALF | |
Real Estate [Line Items] | |
Interest rate (as a percent) | 7.30% |
Gross Investment | $ | $ 50,889 |
Percentage of Investment | 13.30% |
Number of Loans | loan | 1 |
Number of properties | property | 13 |
Average Investment per Bed/Unit | $ / item | 97.30 |
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2025 | ALF | ALF Units | |
Real Estate [Line Items] | |
Number of beds/units | 523 |
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2026 | OTH | |
Real Estate [Line Items] | |
Interest rate (as a percent) | 7.30% |
Gross Investment | $ | $ 766 |
Percentage of Investment | 0.20% |
Number of Loans | loan | 1 |
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2026 | ALF | |
Real Estate [Line Items] | |
Interest rate (as a percent) | 7.30% |
Gross Investment | $ | $ 31,539 |
Percentage of Investment | 8.20% |
Number of Loans | loan | 1 |
Number of properties | property | 4 |
Average Investment per Bed/Unit | $ / item | 145.34 |
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2026 | ALF | ALF Units | |
Real Estate [Line Items] | |
Number of beds/units | 217 |
Mortgage Loans | Mortgage loans with 10.4% Interest Maturing 2043 | SNF | |
Real Estate [Line Items] | |
Interest rate (as a percent) | 10.40% |
Gross Investment | $ | $ 184,854 |
Percentage of Investment | 48.20% |
Number of Loans | loan | 1 |
Number of properties | property | 15 |
Average Investment per Bed/Unit | $ / item | 98.59 |
Mortgage Loans | Mortgage loans with 10.4% Interest Maturing 2043 | SNF | SNF Beds | |
Real Estate [Line Items] | |
Number of beds/units | 1,875 |
Mortgage Loans | Mortgage loans with 9.5% Interest Maturing 2045 | SNF | |
Real Estate [Line Items] | |
Interest rate (as a percent) | 9.50% |
Gross Investment | $ | $ 39,068 |
Percentage of Investment | 10.20% |
Number of Loans | loan | 1 |
Number of properties | property | 4 |
Average Investment per Bed/Unit | $ / item | 77.98 |
Mortgage Loans | Mortgage loans with 9.5% Interest Maturing 2045 | SNF | SNF Beds | |
Real Estate [Line Items] | |
Number of beds/units | 501 |
Mortgage Loans | Mortgage loans with 9.8% Interest Maturing 2045 | SNF | |
Real Estate [Line Items] | |
Interest rate (as a percent) | 9.80% |
Gross Investment | $ | $ 19,750 |
Percentage of Investment | 5.10% |
Number of Loans | loan | 1 |
Number of properties | property | 2 |
Average Investment per Bed/Unit | $ / item | 96.34 |
Mortgage Loans | Mortgage loans with 9.8% Interest Maturing 2045 | SNF | SNF Beds | |
Real Estate [Line Items] | |
Number of beds/units | 205 |
Mortgage Loans | Mortgage loans with 10.0% Interest Maturing 2045 | SNF | |
Real Estate [Line Items] | |
Interest rate (as a percent) | 10% |
Gross Investment | $ | $ 14,875 |
Percentage of Investment | 3.90% |
Number of Loans | loan | 1 |
Number of properties | property | 1 |
Average Investment per Bed/Unit | $ / item | 101.88 |
Mortgage Loans | Mortgage loans with 10.0% Interest Maturing 2045 | SNF | SNF Beds | |
Real Estate [Line Items] | |
Number of beds/units | 146 |
Real Estate Investments - Mor_2
Real Estate Investments - Mortgage Loans Activity (Details) | 6 Months Ended | ||
Jun. 30, 2022 USD ($) a loan item property | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Mortgage Loans | |||
Originations and funding under mortgage loans receivable | $ 33,910,000 | $ 426,000 | |
Application of interest reserve | 2,451,000 | ||
Scheduled principal payments received | (625,000) | (625,000) | |
Mortgage loan premium amortization | (3,000) | (3,000) | |
Provision (recovery) for loan loss reserve | (358,000) | 2,000 | |
Net increase (decrease) in mortgage loans receivable | $ 35,375,000 | (200,000) | |
Number of senior mortgage loans | loan | 2 | ||
Number of beds/units | item | 217 | ||
Area of land | a | 7.6 | ||
Loan Term | 4 years | ||
Interest rate (as a percent) | 7.25% | ||
Internal Rate of Return | 8% | ||
Interest receivable | $ 42,713,000 | $ 39,522,000 | |
Write-off of accrued interest receivable | $ 0 | $ 0 | |
Maximum | |||
Mortgage Loans | |||
Loan Term | 4 years | ||
ALF | |||
Mortgage Loans | |||
Number of properties | property | 4 | ||
Number of beds/units | item | 74 |
Investment in Unconsolidated _3
Investment in Unconsolidated Joint Ventures - Investment (Details) | 6 Months Ended | ||
Jun. 30, 2022 USD ($) item | Jun. 30, 2021 USD ($) item | Dec. 31, 2021 USD ($) | |
Investment in Unconsolidated Joint Ventures | |||
Number of beds/units | item | 217 | ||
Carrying Value | $ 19,340,000 | $ 19,340,000 | |
Income Recognized | 751,000 | $ 665,000 | |
Joint Venture | Not primary beneficiary | |||
Investment in Unconsolidated Joint Ventures | |||
Capital Contributions | 8,000,000 | ||
Income Recognized | 751,000 | 665,000 | |
Cash Interest Received | $ 751,000 | 540,000 | |
Preferred Equity Investment | Joint Venture | Not primary beneficiary | |||
Investment in Unconsolidated Joint Ventures | |||
Number of beds/units | item | 95 | ||
Carrying Value | $ 19,340,000 | ||
UDP | Preferred Equity Investment | Joint Venture | Not primary beneficiary | |||
Investment in Unconsolidated Joint Ventures | |||
Capital Contributions | 8,000,000 | ||
Income Recognized | 527,000 | 440,000 | |
Cash Interest Received | $ 527,000 | 353,000 | |
UDP | Preferred Equity Investment | Joint Venture | Not primary beneficiary | Washington | |||
Investment in Unconsolidated Joint Ventures | |||
Preferred return percentage | 12% | ||
Contractual cash portion | 8% | ||
Number of beds/units | item | 267 | ||
Carrying Value | $ 13,000,000 | ||
Percentage of Investment | 11.60% | ||
Percentage of cash return | 8% | ||
Percentage of internal rate of return | 12% | ||
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary | |||
Investment in Unconsolidated Joint Ventures | |||
Income Recognized | $ 224,000 | 225,000 | |
Cash Interest Received | $ 224,000 | $ 187,000 | |
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary | Internal Rate of Return is Until Eight Percent | |||
Investment in Unconsolidated Joint Ventures | |||
Percentage of internal rate of return | 8% | ||
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary | The Internal Rate of Return is Between Twelve and Fourteen Percent | Minimum | |||
Investment in Unconsolidated Joint Ventures | |||
Percentage of internal rate of return | 12% | ||
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary | The Internal Rate of Return is Between Twelve and Fourteen Percent | Maximum | |||
Investment in Unconsolidated Joint Ventures | |||
Percentage of internal rate of return | 14% | ||
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary | Washington | |||
Investment in Unconsolidated Joint Ventures | |||
Preferred return percentage | 12% | ||
Contractual cash portion | 7% | ||
Number of beds/units | item | 95 | ||
Carrying Value | $ 6,340,000 | ||
Percentage of Investment | 15.50% | ||
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary | Washington | Internal Rate of Return is Until Eight Percent | Minimum | |||
Investment in Unconsolidated Joint Ventures | |||
Percentage of cash return | 7% | ||
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary | Washington | Internal Rate of Return is Until Eight Percent | Maximum | |||
Investment in Unconsolidated Joint Ventures | |||
Percentage of cash return | 9% | ||
Combination ILF/ALF | Preferred Equity Investment | Joint Venture | Not primary beneficiary | Washington | |||
Investment in Unconsolidated Joint Ventures | |||
Number of beds/units | item | 267 | ||
Reserve withheld | $ 2,324 | ||
Additional preferred capital contributions in joint venture committed | 8,000,000 | ||
Amount of joint venture investment | 13,000,000 | ||
Reserve for preferred equity investment | $ 3,777 |
Notes Receivable - Components (
Notes Receivable - Components (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Notes receivable activities | ||
Notes receivable loan loss reserve | $ (588) | $ (286) |
Total | 58,206 | 28,337 |
Mezzanine loan | ||
Notes receivable activities | ||
Mezzanine loan | 36,815 | 11,815 |
Other loans | ||
Notes receivable activities | ||
Mezzanine loan | $ 21,979 | $ 16,808 |
Notes Receivable - Notes Receiv
Notes Receivable - Notes Receivable Activity (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Notes receivable activities | ||
Advances under notes receivable | $ 36,788 | $ 1,811 |
Principal payments received under notes receivable | (6,618) | (2,553) |
Provision for credit losses | (301) | 7 |
Net increase (decrease) in notes receivable | $ 29,869 | $ (735) |
Notes Receivable (Details)
Notes Receivable (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2022 USD ($) property item | Jun. 30, 2022 USD ($) item property | Jun. 30, 2021 USD ($) | |
Notes receivable activities | |||
Amounts funded | $ 36,788 | $ 1,811 | |
Loan Term | 4 years | ||
Interest rate (as a percent) | 7.25% | ||
Number of units | item | 217 | ||
Maximum | |||
Notes receivable activities | |||
Loan Term | 4 years | ||
Mezzanine loan | |||
Notes receivable activities | |||
Amounts funded | $ 25,000 | $ 25,000 | |
Number of property | property | 5 | 5 | |
Loan Term | 5 years | ||
Extension term number of options | item | 2 | ||
Extension term | 1 year | ||
Interest rate (as a percent) | 8% | ||
IRR on mortgage loan on real estate property | 11% | ||
Number of real estate property communities | property | 5 | ||
Number of units | property | 621 | ||
Mezzanine loan | Adjustment | |||
Notes receivable activities | |||
Working capital loan funded | $ 1,867 | ||
Mezzanine loan | Maximum | |||
Notes receivable activities | |||
Working capital loan funded | 2,000 | ||
HMG Healthcare, LLC | Mezzanine loan | |||
Notes receivable activities | |||
Funded under working capital | $ 9,541 |
Lease Incentives (Details)
Lease Incentives (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 USD ($) property | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Lease Incentives | ||||
Non-contingent lease incentives | $ 1,910,000 | $ 1,910,000 | $ 2,678,000 | |
Non-contingent lease incentives, Adjustment | (174,000) | |||
Non-contingent lease incentives, funding | 8,000 | $ 180,000 | ||
Non-contingent lease incentives, Amortization | (429,000) | $ (228,000) | ||
Contingent lease incentives, Write off | $ (173,000) | |||
Number of properties with lease incentive adjustment | property | 2 |
Debt Obligations - Bank Borrowi
Debt Obligations - Bank Borrowings (Details) | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Revolving line of credit | |
Debt Obligations | |
Unused commitment fee (as a percent) | 0.20% |
Financial covenants | |
Maximum ratio of total indebtedness to total asset value | 0.6 |
Maximum ratio of secured debt to total asset value | 0.35 |
Maximum ratio of unsecured debt to the value of the unencumbered asset pool | 0.6 |
Minimum ratio of EBITDA to fixed charges | 1.50 |
Revolving line of credit | LIBOR | |
Debt Obligations | |
Basis spread over base rate (as a percent) | 1.15% |
Credit Agreement | |
Debt Obligations | |
Maximum available under facility | $ 500,000,000 |
Contingent increase in maximum borrowing capacity | $ 1,000,000,000 |
Additional extension period option | 1 year |
Revolving Credit Facility | |
Debt Obligations | |
Maximum available under facility | $ 400,000,000 |
Term loans | |
Debt Obligations | |
Maximum available under facility | $ 50,000,000 |
Debt Obligations - Interest Rat
Debt Obligations - Interest Rate Swap Agreement (Details) | 6 Months Ended | ||
Jun. 30, 2022 USD ($) item | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Obligations | |||
Number of interest rate swaps | item | 2 | ||
Notional Amount | $ 100,000,000 | ||
Fair Value | $ 6,139,000 | $ 172,000 | |
Interest Rate Swap | |||
Debt Obligations | |||
Number of interest rate swaps | item | 2 | ||
Interest Rate Swap | Minimum | |||
Debt Obligations | |||
Debt instrument term | 4 years | ||
Interest Rate Swap | Maximum | |||
Debt Obligations | |||
Debt instrument term | 5 years | ||
Interest Rate Swap | Cash Flow Hedging | |||
Debt Obligations | |||
Increase in fair value | $ 6,311,000 | $ 0 | |
Interest Rate Swap | Cash Flow Hedging | Maturing on November 19, 2025 | |||
Debt Obligations | |||
Notional Amount | 50,000,000 | ||
Fair Value | 2,824,000 | 38,000 | |
Interest Rate Swap | Cash Flow Hedging | Maturing on November 19, 2026 | |||
Debt Obligations | |||
Notional Amount | 50,000,000 | ||
Fair Value | $ 3,315,000 | $ 134 | |
Interest Rate Swap | Cash Flow Hedging | LIBOR | Maturing on November 19, 2025 | |||
Debt Obligations | |||
Swap rate (in percentage) | 2.56% | ||
Interest Rate Swap | Cash Flow Hedging | LIBOR | Maturing on November 19, 2026 | |||
Debt Obligations | |||
Swap rate (in percentage) | 2.69% |
Debt Obligations - Component (D
Debt Obligations - Component (Details) - USD ($) | 6 Months Ended | |||
Jul. 29, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Debt Obligations | ||||
Interest rate (as a percent) | 7.25% | |||
Applicable Interest Rate (as a percent) | 3.93% | |||
Amount borrowed | $ 99,000,000 | $ 17,000,000 | ||
Repayment paid | 153,900,000 | 41,000,000 | ||
Term loans, net of debt issue cost | 734,868,000 | $ 722,719,000 | ||
Available for borrowing | $ 344,000,000 | 289,100,000 | ||
Revolving line of credit | ||||
Debt Obligations | ||||
Applicable Interest Rate (as a percent) | 2.67% | |||
Amount borrowed | $ 99,000,000 | 17,000,000 | ||
Repayment paid | 153,900,000 | $ 41,000,000 | ||
Term loans, net of debt issue cost | 56,000,000 | 110,900,000 | ||
Available for borrowing | $ 344,000,000 | 289,100,000 | ||
Term loans | ||||
Debt Obligations | ||||
Applicable Interest Rate (as a percent) | 2.63% | |||
Term loans, net of debt issue cost | $ 99,437,000 | 99,363,000 | ||
Senior Unsecured Notes | ||||
Debt Obligations | ||||
Applicable Interest Rate (as a percent) | 4.28% | |||
Term loans, net of debt issue cost | $ 579,431,000 | $ 512,456,000 | ||
Senior Unsecured Notes | Minimum | ||||
Debt Obligations | ||||
Interest rate (as a percent) | 3.66% | |||
Senior Unsecured Notes | Maximum | ||||
Debt Obligations | ||||
Interest rate (as a percent) | 5.03% | |||
Subsequent Event | Revolving line of credit | ||||
Debt Obligations | ||||
Amount borrowed | $ 20,500,000 | |||
Term loans, net of debt issue cost | 76,500,000 | |||
Available for borrowing | 323,500,000 | |||
Subsequent Event | Senior Unsecured Notes | ||||
Debt Obligations | ||||
Repayment paid | 20,160,000 | |||
Term loans, net of debt issue cost | $ 559,271,000 |
Debt Obligations - Borrowings a
Debt Obligations - Borrowings and Repayments (Details) - USD ($) | 6 Months Ended | |||
Jul. 29, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Borrowings | ||||
Borrowings from revolving line of credit | $ 99,000,000 | $ 17,000,000 | ||
Total | 174,000,000 | 17,000,000 | ||
Repayments | ||||
Revolving line of credit | (153,900,000) | (41,000,000) | ||
Senior unsecured notes | (7,000,000) | (7,000,000) | ||
Total | (160,900,000) | (48,000,000) | ||
Term loans, net of debt issue cost | 734,868,000 | $ 722,719,000 | ||
Repayment paid | 153,900,000 | 41,000,000 | ||
Available for borrowing | 344,000,000 | 289,100,000 | ||
Revolving line of credit | ||||
Borrowings | ||||
Borrowings from revolving line of credit | 99,000,000 | 17,000,000 | ||
Repayments | ||||
Revolving line of credit | (153,900,000) | (41,000,000) | ||
Term loans, net of debt issue cost | 56,000,000 | 110,900,000 | ||
Repayment paid | 153,900,000 | 41,000,000 | ||
Available for borrowing | 344,000,000 | 289,100,000 | ||
Senior Unsecured Notes | ||||
Borrowings | ||||
Senior unsecured notes | 75,000,000 | |||
Repayments | ||||
Senior unsecured notes | (7,000,000) | $ (7,000,000) | ||
Term loans, net of debt issue cost | $ 579,431,000 | $ 512,456,000 | ||
Debt instrument term | 10 years | |||
Face amount of debt | $ 75,000,000 | |||
Fixed interest rate (as a percent) | 3.66% | |||
Subsequent Event | Revolving line of credit | ||||
Borrowings | ||||
Borrowings from revolving line of credit | $ 20,500,000 | |||
Repayments | ||||
Term loans, net of debt issue cost | 76,500,000 | |||
Available for borrowing | 323,500,000 | |||
Subsequent Event | Senior Unsecured Notes | ||||
Repayments | ||||
Revolving line of credit | (20,160,000) | |||
Senior unsecured notes | (20,160,000) | |||
Term loans, net of debt issue cost | 559,271,000 | |||
Repayment paid | $ 20,160,000 |
Equity - Noncontrolling Interes
Equity - Noncontrolling Interest (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2022 USD ($) item | Jul. 29, 2022 item | Dec. 31, 2021 USD ($) | |
Noncontrolling interest | |||
Gross Consolidated Assets | $ 1,578,227 | $ 1,504,825 | |
Non-controlling interests | $ 7,522 | 8,413 | |
Number of units | item | 217 | ||
Carrying value | $ 1,035,767 | $ 1,033,951 | |
SNF | |||
Noncontrolling interest | |||
Purchase Price | $ 51,534 | ||
ALF | |||
Noncontrolling interest | |||
Number of units | item | 74 | ||
Partnership | |||
Noncontrolling interest | |||
Gross Consolidated Assets | $ 66,604 | ||
Non-controlling interests | 7,522 | ||
Oregon | 2018 Acquisitions | Partnership | ALF & MC | |||
Noncontrolling interest | |||
Gross Consolidated Assets | 18,447 | ||
Non-controlling interests | 1,119 | ||
Oregon | 2018 Acquisitions | Partnership | ILF | |||
Noncontrolling interest | |||
Gross Consolidated Assets | 14,470 | ||
Non-controlling interests | 2,857 | ||
Wisconsin | 2017 Acquisitions | Partnership | ALF/ILF/MC | |||
Noncontrolling interest | |||
Gross Consolidated Assets | 22,007 | ||
Non-controlling interests | 2,305 | ||
South Carolina | 2017 Acquisitions | Partnership | ALF & MC | |||
Noncontrolling interest | |||
Gross Consolidated Assets | 11,680 | ||
Non-controlling interests | $ 1,241 | ||
Subsequent Event | ALF | |||
Noncontrolling interest | |||
Number of units | item | 625 |
Equity - Common Stock (Details)
Equity - Common Stock (Details) - USD ($) | 6 Months Ended | ||
Jul. 29, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Equity | |||
Proceeds from common stock issued | $ 34,203,000 | ||
Equity Distribution Agreements | Subsequent Event | |||
Equity | |||
Shares common stock sold | 125,200 | ||
Proceeds from common stock issued | $ 4,754,000 | ||
Amount available under effective shelf registration statement | $ 160,349,000 | ||
Common Stock | |||
Equity | |||
Number of shares repurchased | 39,463 | 87,249 | |
Common Stock | Equity Distribution Agreements | |||
Equity | |||
Maximum offering capacity under shelf registration statement | $ 200,000,000 | ||
Shares common stock sold | 909,800 | ||
Proceeds from common stock issued | $ 34,203,000 | ||
Compensation paid to sales agents | 609,000 | ||
Reclassification of accumulated costs to additional paid in capital | $ 511,000 | ||
Common Stock | Equity Distribution Agreements | Subsequent Event | |||
Equity | |||
Shares common stock sold | 125,200 |
Equity - Distributions (Details
Equity - Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
Sep. 30, 2022 | Aug. 31, 2022 | Jul. 29, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Dividend Distributions | |||||||||||
Paid | $ 45,115 | $ 45,608 | |||||||||
Common Stock cash distributions | $ 0.57 | $ 0.57 | $ 0.57 | $ 0.57 | $ 0.57 | $ 0.57 | $ 1.14 | $ 1.14 | |||
Subsequent Event | Dividend Payable, July 29, 2022 | |||||||||||
Dividend Distributions | |||||||||||
Dividends declared and paid per common share | $ 0.19 | ||||||||||
Subsequent Event | Dividend Payable, August 31, 2022 | |||||||||||
Dividend Distributions | |||||||||||
Dividends declared and paid per common share | $ 0.19 | ||||||||||
Subsequent Event | Dividend Payable, September 30, 2022 | |||||||||||
Dividend Distributions | |||||||||||
Dividends declared and paid per common share | $ 0.19 | ||||||||||
Common Stock | |||||||||||
Dividend Distributions | |||||||||||
Declared | $ 45,115 | $ 45,608 | $ 45,115 | $ 45,608 | |||||||
Paid | $ 45,115 | $ 45,608 | |||||||||
Common Stock cash distributions | $ 0.19 | $ 0.19 | |||||||||
Common Stock | Subsequent Event | Dividend Payable, July 29, 2022 | |||||||||||
Dividend Distributions | |||||||||||
Dividends declared and paid per common share | $ 0.19 | ||||||||||
Common Stock | Subsequent Event | Dividend Payable, August 31, 2022 | |||||||||||
Dividend Distributions | |||||||||||
Dividends declared and paid per common share | $ 0.19 | ||||||||||
Common Stock | Subsequent Event | Dividend Payable, September 30, 2022 | |||||||||||
Dividend Distributions | |||||||||||
Dividends declared and paid per common share | $ 0.19 | ||||||||||
Common Stock | Performance-based stock units | |||||||||||
Dividend Distributions | |||||||||||
Paid | $ 764 |
Equity - Stock-Based Compensati
Equity - Stock-Based Compensation (Details) | 6 Months Ended | |
Jun. 30, 2022 shares | Jun. 30, 2021 shares | |
Stock Based Compensation Plans | ||
Options outstanding (in shares) | 10,000 | |
Options exercisable (in shares) | 10,000 | |
Options expired and cancelled (in shares) | 5,000 | |
Stock options granted (in shares) | 0 | 0 |
2015 Plan | ||
Stock Based Compensation Plans | ||
Ratio of shares subject to award granted | 1 | |
2021 Plan | ||
Stock Based Compensation Plans | ||
Total shares reserved for issuance of common stock related to the conversion of preferred stock | 1,900,000 |
Equity - Restricted Stock and p
Equity - Restricted Stock and performance-based stock units (Details) - shares | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Stock Based Compensation Plans | ||
Stock options granted (in shares) | 0 | 0 |
Restricted stock | ||
Restricted stock and performance based stock units activity | ||
Outstanding at the beginning of the period (in shares) | 197,422 | 180,440 |
Granted (in shares) | 135,210 | 110,348 |
Vested (in shares) | (103,396) | (93,366) |
Outstanding at the end of the period (in shares) | 229,236 | 197,422 |
Equity - Restricted Stock (Deta
Equity - Restricted Stock (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Restricted stock | ||
Restricted stock awards | ||
Number of shares granted | 135,210 | 110,348 |
Number of vesting of performance-based stock units (in shares) | 103,396 | 93,366 |
Performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 86,332 | 71,892 |
Number of vesting of performance-based stock units (in shares) | 0 | 108,720 |
Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 221,542 | 182,240 |
Compensation expense related to share-based award | $ 3,937,000 | $ 3,810,000 |
Nonvested awards | ||
Remaining compensation expense | 12,791,000 | |
July - December 2022 | Restricted stock and performance-based stock units | ||
Nonvested awards | ||
Remaining compensation expense | 4,026,000 | |
2023 | Restricted stock and performance-based stock units | ||
Nonvested awards | ||
Remaining compensation expense | 5,603,000 | |
2024 | Restricted stock and performance-based stock units | ||
Nonvested awards | ||
Remaining compensation expense | 2,853,000 | |
2025 | Restricted stock and performance-based stock units | ||
Nonvested awards | ||
Remaining compensation expense | $ 309,000 | |
Grant Date Price $33.94 | Three year vesting | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 122,865 | |
Granted (in dollars per share) | $ 33.94 | |
Vesting period | 3 years | |
Grant Date Price $33.94 | TSR Targets | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 86,332 | |
Granted (in dollars per share) | $ 33.94 | |
Vesting period | 4 years | |
Grant Date Price $33.94 | Accelerated TSR Targets | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Vesting period | 3 years | |
Grant Date Price $38.48 | Vesting Date, May 25, 2023 | Restricted stock | ||
Restricted stock awards | ||
Number of shares granted | 12,345 | |
Granted (in dollars per share) | $ 38.48 | |
Grant Date Price $42.27 | Three year vesting | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 95,293 | |
Granted (in dollars per share) | $ 42.27 | |
Vesting period | 3 years | |
Grant Date Price $42.27 | TSR Targets | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 71,892 | |
Granted (in dollars per share) | $ 42.27 | |
Vesting period | 4 years | |
Grant Date Price $42.27 | Accelerated TSR Targets | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Vesting period | 3 years | |
Grant Date Price $39.40 | Vesting Date, May 26, 20222 | Restricted stock | ||
Restricted stock awards | ||
Number of shares granted | 12,055 | |
Granted (in dollars per share) | $ 39.40 | |
Grant Date Price $43.14 | Vesting Date, April 1, 20222 | Restricted stock | ||
Restricted stock awards | ||
Number of shares granted | 3,000 | |
Granted (in dollars per share) | $ 43.14 |
Commitments and Contingencies -
Commitments and Contingencies - Summary of Commitments (Details) | 6 Months Ended |
Jun. 30, 2022 USD ($) property | |
Commitments and Contingencies | |
Investment Commitment | $ 87,480,000 |
2022 Funding | 14,779,000 |
Total Commitment funded | 23,927,000 |
Remaining commitment | 63,553,000 |
Skilled Nursing Centers | |
Commitments and Contingencies | |
Fair value of earn-out liability | 3,000,000 |
Lease termination fee payable | $ 500,000 |
Number of properties acquired | property | 4 |
Initial lease term | 10 years |
Real estate properties | |
Commitments and Contingencies | |
Investment Commitment | $ 15,593,000 |
2022 Funding | 2,133,000 |
Total Commitment funded | 3,771,000 |
Remaining commitment | 11,822,000 |
Accrued incentives and earn-out liabilities | |
Commitments and Contingencies | |
Investment Commitment | 12,000,000 |
Remaining commitment | 12,000,000 |
Mortgage loans | |
Commitments and Contingencies | |
Investment Commitment | 32,507,000 |
2022 Funding | 858,000 |
Total Commitment funded | 4,598,000 |
Remaining commitment | 27,909,000 |
Commitments To Expand and Renovate Properties | |
Commitments and Contingencies | |
Investment Commitment | 14,507,000 |
Contingent Funding Commitments | |
Commitments and Contingencies | |
Investment Commitment | 18,000,000 |
Notes receivable | |
Commitments and Contingencies | |
Investment Commitment | 27,380,000 |
2022 Funding | 11,788,000 |
Total Commitment funded | 15,558,000 |
Remaining commitment | $ 11,822,000 |
Major Operators (Details)
Major Operators (Details) | 6 Months Ended |
Jun. 30, 2022 item property | |
Major Operators | |
Number of major operators | 1 |
Number of beds/units | 217 |
ALF | |
Major Operators | |
Number of beds/units | 74 |
Prestige Healthcare | SNF | |
Major Operators | |
Number of beds | property | 24 |
Number of beds/units | 2,845 |
Prestige Healthcare | ALF | |
Major Operators | |
Number of beds/units | 93 |
Total Revenue | Operator Concentration Risk | Prestige Healthcare | |
Major Operators | |
Concentration risk (as a percent) | 20% |
Total Assets | Credit Concentration Risk | Prestige Healthcare | |
Major Operators | |
Concentration risk (as a percent) | 16.70% |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Net income | $ 54,490 | $ 14,507 | $ 12,930 | $ 11,114 | $ 18,330 | $ 13,850 | $ 68,997 | $ 32,180 |
Less income allocated to non-controlling interests | (107) | (91) | (202) | (179) | ||||
Less income allocated to participating securities: | ||||||||
Non-forfeitable dividends on participating securities | (133) | (113) | (270) | (233) | ||||
Income allocated to participating securities | (185) | (137) | ||||||
Total net income allocated to participating securities | (318) | (113) | (407) | (233) | ||||
Net income available to common stockholders | 54,065 | 18,126 | 68,388 | 31,768 | ||||
Net income for diluted net income per share | $ 54,065 | $ 18,126 | $ 68,388 | $ 31,768 | ||||
Reconciliation of shares | ||||||||
Shares for basic net income per share | 39,492 | 39,169 | 39,347 | 39,135 | ||||
Effect of dilutive securities: | ||||||||
Total effect of dilutive securities (in shares) | 173 | 1 | 173 | 1 | ||||
Shares for diluted net income per share | 39,665 | 39,170 | 39,520 | 39,136 | ||||
Basic net income per share (in dollars per share) | $ 1.37 | $ 0.46 | $ 1.74 | $ 0.81 | ||||
Diluted net income per share (in dollars per share) | $ 1.36 | $ 0.46 | $ 1.73 | $ 0.81 | ||||
Stock options | ||||||||
Effect of dilutive securities: | ||||||||
Stock options and performance-based stock units (in shares) | 1 | 1 | ||||||
Performance-based stock units | ||||||||
Effect of dilutive securities: | ||||||||
Stock options and performance-based stock units (in shares) | 173 | 173 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) | Jun. 30, 2022 USD ($) item | Dec. 31, 2021 USD ($) item |
Fair value measurements | ||
Number of interest rate swaps | item | 2 | |
Notional Amount | $ 100,000,000 | |
Mortgage loans receivable, net of loan loss reserve | 379,817,000 | $ 344,442,000 |
Notes receivable, net of loan loss reserve | 58,206,000 | 28,337,000 |
Term loans, net of debt issue cost | 734,868,000 | 722,719,000 |
Senior unsecured notes, net of debt issue costs | $ 579,431,000 | $ 512,456,000 |
Level 3 | Senior Unsecured Notes maturing before 2030 | Discount Rate | ||
Fair value measurements | ||
Future cash outflows discount rate (as a percent) | item | 0.0575 | 0.0300 |
Level 3 | Senior Unsecured Notes maturing 2030 and after | Discount Rate | ||
Fair value measurements | ||
Future cash outflows discount rate (as a percent) | item | 0.0625 | 0.0325 |
Level 3 | Mortgage Loans Receivable | Discount Rate | ||
Fair value measurements | ||
Future cash inflows discount rate (as a percent) | 0.093 | 0.095 |
Level 3 | Notes Receivable | Discount Rate | ||
Fair value measurements | ||
Future cash inflows discount rate (as a percent) | item | 0.066 | 0.056 |
Carrying Value | ||
Fair value measurements | ||
Mortgage loans receivable, net of loan loss reserve | $ 379,817,000 | $ 344,442,000 |
Notes receivable, net of loan loss reserve | 58,206,000 | 28,337,000 |
Revolving line of credit | 56,000,000 | 110,900,000 |
Term loans, net of debt issue cost | 99,437,000 | 99,363,000 |
Senior unsecured notes, net of debt issue costs | 579,431,000 | 512,456,000 |
Fair Value | ||
Fair value measurements | ||
Revolving line of credit | 56,000,000 | 110,900,000 |
Term loans, net of debt issue cost | 100,000,000 | 100,000,000 |
Fair Value | Level 3 | ||
Fair value measurements | ||
Mortgage loans receivable, net of loan loss reserve | 444,125,000 | 405,162,000 |
Notes receivable, net of loan loss reserve | 63,008,000 | 28,653,000 |
Senior unsecured notes, net of debt issue costs | $ 531,880,000 | $ 540,045,000 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | 2 Months Ended | 6 Months Ended | ||||||
Jul. 29, 2022 USD ($) item property shares | Sep. 30, 2022 USD ($) property $ / shares | Aug. 31, 2022 USD ($) property $ / shares | Jul. 31, 2022 USD ($) | Jul. 29, 2022 USD ($) item property $ / shares | Sep. 30, 2022 USD ($) property | Jun. 30, 2022 USD ($) item property shares | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Real Estate Investments | |||||||||
Number of Units in Real Estate Property | item | 217 | ||||||||
Deferred rent | $ 22,689,000 | $ 24,146,000 | |||||||
Debt: | |||||||||
Amount borrowed | 99,000,000 | $ 17,000,000 | |||||||
Repayment paid | 153,900,000 | 41,000,000 | |||||||
Term loans, net of debt issue cost | 734,868,000 | 722,719,000 | |||||||
Available for borrowing | 344,000,000 | 289,100,000 | |||||||
Unsecured revolving line of credit | 56,000,000 | 110,900,000 | |||||||
Equity | |||||||||
Proceeds from common stock issued | $ 34,203,000 | ||||||||
Common Stock | Equity Distribution Agreements | |||||||||
Equity | |||||||||
Shares common stock sold | shares | 909,800 | ||||||||
Proceeds from common stock issued | $ 34,203,000 | ||||||||
Revolving line of credit | |||||||||
Debt: | |||||||||
Amount borrowed | 99,000,000 | 17,000,000 | |||||||
Repayment paid | 153,900,000 | $ 41,000,000 | |||||||
Term loans, net of debt issue cost | 56,000,000 | 110,900,000 | |||||||
Available for borrowing | 344,000,000 | 289,100,000 | |||||||
Senior Unsecured Notes | |||||||||
Debt: | |||||||||
Term loans, net of debt issue cost | $ 579,431,000 | $ 512,456,000 | |||||||
ALF | |||||||||
Real Estate Investments | |||||||||
Number of properties | property | 4 | ||||||||
Number of Units in Real Estate Property | item | 74 | ||||||||
Subsequent Event | Dividend Payable, July 29, 2022 | |||||||||
Equity | |||||||||
Dividends declared and paid per common share | $ / shares | $ 0.19 | ||||||||
Subsequent Event | Dividend Payable, August 31, 2022 | |||||||||
Equity | |||||||||
Dividends declared and paid per common share | $ / shares | $ 0.19 | ||||||||
Subsequent Event | Dividend Payable, September 30, 2022 | |||||||||
Equity | |||||||||
Dividends declared and paid per common share | $ / shares | $ 0.19 | ||||||||
Subsequent Event | Equity Distribution Agreements | |||||||||
Equity | |||||||||
Shares common stock sold | shares | 125,200 | ||||||||
Proceeds from common stock issued | $ 4,754,000 | ||||||||
Amount available under effective shelf registration statement | $ 160,349,000 | $ 160,349,000 | |||||||
Subsequent Event | Common Stock | Dividend Payable, July 29, 2022 | |||||||||
Equity | |||||||||
Dividends declared and paid per common share | $ / shares | $ 0.19 | ||||||||
Subsequent Event | Common Stock | Dividend Payable, August 31, 2022 | |||||||||
Equity | |||||||||
Dividends declared and paid per common share | $ / shares | $ 0.19 | ||||||||
Subsequent Event | Common Stock | Dividend Payable, September 30, 2022 | |||||||||
Equity | |||||||||
Dividends declared and paid per common share | $ / shares | $ 0.19 | ||||||||
Subsequent Event | Common Stock | Equity Distribution Agreements | |||||||||
Equity | |||||||||
Shares common stock sold | shares | 125,200 | ||||||||
Subsequent Event | Revolving line of credit | |||||||||
Debt: | |||||||||
Amount borrowed | $ 20,500,000 | ||||||||
Term loans, net of debt issue cost | 76,500,000 | $ 76,500,000 | |||||||
Available for borrowing | 323,500,000 | 323,500,000 | |||||||
Subsequent Event | Senior Unsecured Notes | |||||||||
Debt: | |||||||||
Repayment paid | 20,160,000 | ||||||||
Term loans, net of debt issue cost | $ 559,271,000 | $ 559,271,000 | |||||||
Subsequent Event | ALF | |||||||||
Real Estate Investments | |||||||||
Number of properties | property | 12 | 12 | |||||||
Number of Units in Real Estate Property | item | 625 | 625 | |||||||
Deferred rent receivable forgiven | $ 7,066,000 | ||||||||
Lease termination fee | $ 500,000 | ||||||||
Master lease agreement term in a lessor operating lease | 2 years | ||||||||
Initial term of lessor operating lease with zero rent | 4 months | ||||||||
Lease incentive payment | $ 410,000 | ||||||||
Deferred rent | $ 150,000 | $ 150,000 | |||||||
Monthly contractual rent | 445,000 | $ 445,000 | |||||||
Number of properties rent deferred | property | 8 | ||||||||
Rent abated | $ 240,000 | ||||||||
Rent abatements agreed | $ 240,000 | $ 240,000 | $ 240,000 | ||||||
Number of property rent abatement agreed | property | 2 | 2 |