Assets representing rights to receive money on demand or at fixed or determinable dates are referred to as finance receivables. Our finance receivables portfolio consists of our Net investments in finance leases and loans receivable (net of allowance for credit losses). Operating leases are not included in finance receivables.


	Maturity Date	March 31, 2024		December 31, 2023
Net investments in direct financing leases (a)	2024 – 2036	$	326,590	$	431,328
Sale-leaseback transactions accounted for as loans receivable (b)	2038 – 2052	312,903		236,611
Net investments in sales-type leases (c)	2024	21,092		835,734
Secured loans receivable (d)	N/A	—		11,250
		$	660,585	$	1,514,923

(b)These investments are accounted for as loans receivable in accordance with ASC 310, Receivables and ASC 842, Leases. Maturity dates reflect the current lease maturity dates. Amounts are net of allowance for credit losses of $6.1 million and $0.8 million as of March 31, 2024 and December 31, 2023, respectively.

(d)Amounts are net of allowance for credit losses of $2.1 million as of December 31, 2023. See below under Loans Receivable for discussion of the repayment of this secured loan receivable.


	March 31, 2024		December 31, 2023
Lease payments receivable	$	206,230	$	285,512
Unguaranteed residual value	309,214		434,234
	515,444		719,746
Less: unearned income	(175,997)		(251,441)
Less: allowance for credit losses (a)	(12,857)		(36,977)
	$	326,590	$	431,328

(a)During the three months ended March 31, 2024 and 2023, we recorded a net release of allowance for credit losses of $7.1 million and $3.4 million, respectively, on our net investments in direct financing leases due to changes in expected economic conditions, which was included within Other gains and (losses) in our consolidated statements of income. In addition, during the three months ended March 31, 2024, we reduced the allowance for credit losses balance by $17.0 million, in connection with the reclassification of certain properties from Net investments in finance leases and loans receivable to Land, buildings and improvements — net lease and other, as described below.

Income from direct financing leases, which is included in Income from finance leases and loans receivable in the consolidated financial statements, was $8.9 million and $12.7 million for the three months ended March 31, 2024 and 2023, respectively.

During the three months ended March 31, 2024, we reclassified 14 properties with an aggregate carrying value of $105.5 million from Net investments in finance leases and loans receivable to Land, buildings and improvements — net lease and other in connection with changes in lease classifications due to extensions of the underlying leases or entering into a new lease. During the three months ended March 31, 2024, the U.S. dollar strengthened against the euro, resulting in a $12.2 million decrease in the carrying value of Net investments in finance leases and loans receivable from December 31, 2023 to March 31, 2024.

During the three months ended March 31, 2024, we entered into the following sale-leaseback, which was deemed to be a loan receivable in accordance with ASC 310, Receivables and ASC 842, Leases (dollars in thousands):


Property Location(s)	Number of Properties	Date of Acquisition	Property Type	Total Investment
Various, Italy (a)	4	3/26/2024	Industrial, Warehouse	$	83,890
	4			$	83,890

In March 2024, a secured loan receivable was repaid to us for $24.0 million. In connection with this repayment, we recorded a release of allowance for credit losses of $2.1 million since the loan principal was fully repaid. In addition, we collected $1.4 million of unpaid interest related to a prior year upon repayment of this secured loan receivable, which was included in Income from finance leases and loans receivable on the consolidated statements of income for the three months ended March 31, 2024.

Earnings from our loans receivable are included in Income from finance leases and loans receivable in the consolidated financial statements, and totaled $5.9 million and $4.8 million for the three months ended March 31, 2024 and 2023, respectively.

During the three months ended March 31, 2024, we completed the sale of a portfolio of 78 net-lease self-storage properties located in the United States, which was accounted for as net investments in sales-type leases and included in Net investments in finance leases and loans receivable in the consolidated balance sheets. As a result, the carrying value of Net investments in finance leases and loans receivable decreased by $451.4 million from December 31, 2023 to March 31, 2024 (Note 14). The tenant had previously provided notice of its intention to exercise its option to repurchase the properties during the first quarter of 2023. We recognized an aggregate Gain on sale of real estate, net, of $176.2 million during the three months ended March 31, 2023 related to this transaction.

During the three months ended March 31, 2024, we completed the sale of a portfolio of 70 net-lease office properties located in Andalusia, Spain, to the tenant occupying the properties, which was accounted for as net investments in sales-type leases and included in Net investments in finance leases and loans receivable in the consolidated balance sheets. As a result, the carrying value of Net investments in finance leases and loans receivable decreased by $359.3 million from December 31, 2023 to March 31, 2024 (Note 14). We had previously entered into an agreement to sell the portfolio to the tenant occupying the properties during the fourth quarter of 2023. We recognized an aggregate Gain on sale of real estate, net, of $59.1 million during the three months ended December 31, 2023 related to this transaction.

Earnings from our net investments in sales-type leases are included in Income from finance leases and loans receivable in the consolidated financial statements, and totaled $11.0 million and $3.2 million for the three months ended March 31, 2024 and 2023, respectively. Prior to the respective reclassifications to net investments in sales-type leases, earnings from such investments were recognized in Lease revenues in the consolidated financial statements.

We generally invest in facilities that we believe are critical to a tenant’s business and therefore have a lower risk of tenant default. At both March 31, 2024 and December 31, 2023, no material balances of our finance receivables were past due. Other than the lease extensions and new lease noted under Net Investments in Direct Financing Leases above, there were no material modifications of finance receivables during the three months ended March 31, 2024.

We evaluate the credit quality of our finance receivables utilizing an internal five-point credit rating scale, with one representing the highest credit quality and five representing the lowest. A credit quality of one through three indicates a range of investment grade to stable. A credit quality of four through five indicates a range of inclusion on the watch list to risk of default. The credit quality evaluation of our finance receivables is updated quarterly.


	Number of Tenants / Obligors at		Carrying Value at
Internal Credit Quality Indicator	March 31, 2024	December 31, 2023	March 31, 2024		December 31, 2023
1 – 3	17	18	$	601,490	$	1,338,877
4	6	8	78,022		215,953
5	—	—	—		—
			$	679,512	$	1,554,830