QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State of Incorporation) | (I.R.S. Employer Identification No.) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Page Numbers | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 6. | ||||||||
ITEM 1. | FINANCIAL STATEMENTS |
March 31, 2023 | December 31, 2022 | ||||||||||
(unaudited) | |||||||||||
Assets | |||||||||||
Real estate investments, net of accumulated depreciation of $ | $ | $ | |||||||||
Loans receivable and other investments, net | |||||||||||
Investment in unconsolidated joint ventures | |||||||||||
Cash and cash equivalents | |||||||||||
Restricted cash | |||||||||||
Lease intangible assets, net | |||||||||||
Accounts receivable, prepaid expenses and other assets, net | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities | |||||||||||
Secured debt, net | $ | $ | |||||||||
Revolving credit facility | |||||||||||
Term loans, net | |||||||||||
Senior unsecured notes, net | |||||||||||
Accounts payable and accrued liabilities | |||||||||||
Lease intangible liabilities, net | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 12) | |||||||||||
Equity | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Cumulative distributions in excess of net income | ( | ( | |||||||||
Accumulated other comprehensive income | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenues: | |||||||||||
Rental and related revenues (Note 4) | $ | $ | |||||||||
Interest and other income | |||||||||||
Total revenues | |||||||||||
Expenses: | |||||||||||
Depreciation and amortization | |||||||||||
Interest | |||||||||||
Triple-net portfolio operating expenses | |||||||||||
Senior housing - managed portfolio operating expenses | |||||||||||
General and administrative | |||||||||||
(Recovery of) provision for loan losses and other reserves | ( | ||||||||||
Impairment of real estate | |||||||||||
Total expenses | |||||||||||
Other (expense) income: | |||||||||||
Loss on extinguishment of debt | ( | ( | |||||||||
Other income | |||||||||||
Net loss on sales of real estate | ( | ||||||||||
Total other expense | ( | ( | |||||||||
(Loss) income before loss from unconsolidated joint ventures and income tax expense | ( | ||||||||||
Loss from unconsolidated joint ventures | ( | ( | |||||||||
Income tax expense | ( | ( | |||||||||
Net (loss) income | $ | ( | $ | ||||||||
Net (loss) income, per: | |||||||||||
Basic common share | $ | ( | $ | ||||||||
Diluted common share | $ | ( | $ | ||||||||
Weighted average number of common shares outstanding, basic | |||||||||||
Weighted average number of common shares outstanding, diluted | |||||||||||
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Other comprehensive (loss) income: | |||||||||||
Unrealized gain (loss), net of tax: | |||||||||||
Foreign currency translation loss | ( | ( | |||||||||
Unrealized (loss) gain on cash flow hedges | ( | ||||||||||
Total other comprehensive (loss) income | ( | ||||||||||
Comprehensive (loss) income | $ | ( | $ | ||||||||
Three Months Ended March 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Cumulative Distributions in Excess of Net Income | Accumulated Other Comprehensive (Loss) Income | Total Equity | ||||||||||||||||||||||||||||||||||
Shares | Amounts | |||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Amortization of stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock issuance, net | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Common dividends ($ | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | ||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Cumulative Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Total Equity | ||||||||||||||||||||||||||||||||||
Shares | Amounts | |||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Amortization of stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Common stock issuance, net | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Common dividends ($ | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Non-cash rental and related revenues | ( | ( | |||||||||
Non-cash interest income | ( | ( | |||||||||
Non-cash interest expense | |||||||||||
Stock-based compensation expense | |||||||||||
Loss on extinguishment of debt | |||||||||||
Provision for loan losses and other reserves | ( | ||||||||||
Net loss on sales of real estate | |||||||||||
Impairment of real estate | |||||||||||
Loss from unconsolidated joint ventures | |||||||||||
Distributions of earnings from unconsolidated joint ventures | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable, prepaid expenses and other assets, net | ( | ( | |||||||||
Accounts payable and accrued liabilities | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Acquisition of real estate | ( | ( | |||||||||
Origination and fundings of loans receivable | ( | ||||||||||
Origination and fundings of preferred equity investments | ( | ( | |||||||||
Additions to real estate | ( | ( | |||||||||
Escrow deposits for potential investments | ( | ||||||||||
Repayments of loans receivable | |||||||||||
Repayments of preferred equity investments | |||||||||||
Investment in unconsolidated joint ventures | ( | ||||||||||
Net proceeds from the sales of real estate | |||||||||||
Net proceeds from sales-type lease | |||||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Net (repayments of) borrowings from revolving credit facility | ( | ||||||||||
Proceeds from term loans | |||||||||||
Principal payments on term loans | ( | ||||||||||
Principal payments on secured debt | ( | ( | |||||||||
Payments of deferred financing costs | ( | ( | |||||||||
Issuance of common stock, net | ( | ( | |||||||||
Dividends paid on common stock | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Net decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Effect of foreign currency translation on cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Interest paid | $ | $ | |||||||||
Supplemental disclosure of non-cash investing activities: | |||||||||||
Decrease in loans receivable and other investments due to acquisition of real estate | $ | $ | |||||||||
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Land | $ | $ | ||||||||||||
Building and improvements | ||||||||||||||
Tenant origination and absorption costs intangible assets | ||||||||||||||
Tenant relationship intangible assets | ||||||||||||||
Total consideration | $ | $ | ||||||||||||
Property Type | Number of Properties | Number of Beds/Units | Total Real Estate at Cost | Accumulated Depreciation | Total Real Estate Investments, Net | |||||||||||||||||||||||||||
Skilled Nursing/Transitional Care | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Senior Housing - Leased | ( | |||||||||||||||||||||||||||||||
Senior Housing - Managed | ( | |||||||||||||||||||||||||||||||
Behavioral Health | ( | |||||||||||||||||||||||||||||||
Specialty Hospitals and Other | ( | |||||||||||||||||||||||||||||||
( | ||||||||||||||||||||||||||||||||
Corporate Level | ( | |||||||||||||||||||||||||||||||
$ | $ | ( | $ |
Property Type | Number of Properties | Number of Beds/Units | Total Real Estate at Cost | Accumulated Depreciation | Total Real Estate Investments, Net | |||||||||||||||||||||||||||
Skilled Nursing/Transitional Care | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Senior Housing - Leased | ( | |||||||||||||||||||||||||||||||
Senior Housing - Managed | ( | |||||||||||||||||||||||||||||||
Behavioral Health | ( | |||||||||||||||||||||||||||||||
Specialty Hospitals and Other | ( | |||||||||||||||||||||||||||||||
( | ||||||||||||||||||||||||||||||||
Corporate Level | ( | |||||||||||||||||||||||||||||||
$ | $ | ( | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
Building and improvements | $ | $ | |||||||||
Furniture and equipment | |||||||||||
Land improvements | |||||||||||
Land | |||||||||||
Total real estate at cost | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Total real estate investments, net | $ | $ |
April 1 through December 31, 2023 | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
$ |
Property Type | Number of Properties as of March 31, 2023 | Ownership as of March 31, 2023 (1) | Book Value | |||||||||||||||||||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||
Sienna Joint Venture | Senior Housing - Managed | % | $ | $ | ||||||||||||||||||||||||||||
Marlin Spring Joint Venture | Senior Housing - Managed | % | ||||||||||||||||||||||||||||||
$ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Number of facilities | ||||||||||||||
Consideration, net of closing costs | $ | $ | ||||||||||||
Net carrying value | ||||||||||||||
Net loss on sale | $ | ( | $ | |||||||||||
Net (loss) income | $ | ( | $ |
As of March 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Investment | Quantity as of March 31, 2023 | Property Type | Principal Balance as of March 31, 2023 (1) | Book Value as of March 31, 2023 | Book Value as of December 31, 2022 | Weighted Average Contractual Interest Rate / Rate of Return | Weighted Average Annualized Effective Interest Rate / Rate of Return | Maturity Date as of March 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||
Loans Receivable: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage | Behavioral Health | $ | $ | $ | % | % | 11/01/26 - 01/31/27 | |||||||||||||||||||||||||||||||||||||||||||
Other | Multiple | % | % | 08/31/23 - 08/31/28 | ||||||||||||||||||||||||||||||||||||||||||||||
% | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Investments: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Equity | Skilled Nursing / Senior Housing | % | % | N/A | ||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | % | % |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Allowance for loan losses: | ||||||||||||||
Balance at beginning of the period | $ | $ | ||||||||||||
(Recovery of) provision for loan losses | ( | |||||||||||||
Balance at end of the period | $ | $ | ||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||
Deteriorated credit quality: | ||||||||||||||
Number of loans receivable investments | ||||||||||||||
Principal balance | $ | $ | ||||||||||||
Book value | ||||||||||||||
Nonaccrual status: | ||||||||||||||
Number of loans receivable investments | ||||||||||||||
Book value | $ | $ |
As of March 31, 2023 | ||||||||||||||||||||||||||||||||
Interest Rate Type | Principal Balance as of March 31, 2023 (1) | Principal Balance as of December 31, 2022 (1) | Weighted Average Interest Rate | Weighted Average Effective Interest Rate (2) | Maturity Date | |||||||||||||||||||||||||||
Fixed Rate | $ | $ | % | % | May 2031 - August 2051 | |||||||||||||||||||||||||||
Principal Balance as of | ||||||||||||||||||||
Title | Maturity Date | March 31, 2023 (1) | December 31, 2022 (1) | |||||||||||||||||
August 15, 2026 | $ | $ | ||||||||||||||||||
May 17, 2027 | ||||||||||||||||||||
October 15, 2029 | ||||||||||||||||||||
December 1, 2031 | ||||||||||||||||||||
$ | $ |
Secured Indebtedness | Revolving Credit Facility (1) | Term Loans | Senior Notes | Total | ||||||||||||||||||||||||||||
April 1 through December 31, 2023 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
2024 | ||||||||||||||||||||||||||||||||
2025 | ||||||||||||||||||||||||||||||||
2026 | ||||||||||||||||||||||||||||||||
2027 | ||||||||||||||||||||||||||||||||
Thereafter | ||||||||||||||||||||||||||||||||
Total Debt | ||||||||||||||||||||||||||||||||
Discount, net | ( | ( | ||||||||||||||||||||||||||||||
Deferred financing costs, net | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Total Debt, Net | $ | $ | $ | $ | $ |
March 31, 2023 | December 31, 2022 | |||||||||||||
Derivatives designated as cash flow hedges: | ||||||||||||||
Denominated in U.S. Dollars (1) | $ | $ | ||||||||||||
Denominated in Canadian Dollars (2) | $ | $ | ||||||||||||
Derivatives designated as net investment hedges: | ||||||||||||||
Denominated in Canadian Dollars | $ | $ | ||||||||||||
Financial instruments designated as net investment hedges: | ||||||||||||||
Denominated in Canadian Dollars | $ | $ | ||||||||||||
Derivatives not designated as net investment hedges: | ||||||||||||||
Denominated in Canadian Dollars | $ | $ |
Count as of March 31, 2023 | Fair Value as of | Maturity Dates | ||||||||||||||||||||||||||||||||||||
Type | Designation | March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Cash flow | $ | $ | 2024 - 2028 | Accounts receivable, prepaid expenses and other assets, net | |||||||||||||||||||||||||||||||||
Interest rate collars | Cash flow | 2024 | Accounts receivable, prepaid expenses and other assets, net | |||||||||||||||||||||||||||||||||||
Forward starting interest rate swaps | Cash flow | 2028 | Accounts receivable, prepaid expenses and other assets, net | |||||||||||||||||||||||||||||||||||
Cross currency interest rate swaps | Net investment | 2025 | Accounts receivable, prepaid expenses and other assets, net | |||||||||||||||||||||||||||||||||||
$ | $ | |||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||
CAD borrowings under Revolving Credit Facility | Net investment | 2027 | Revolving credit facility | |||||||||||||||||||||||||||||||||||
CAD Term Loan | Net investment | 2028 | Term loans, net | |||||||||||||||||||||||||||||||||||
$ | $ |
Gain (Loss) Recognized in Other Comprehensive Income | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Cash Flow Hedges: | ||||||||||||||
Interest rate products | $ | $ | ||||||||||||
Net Investment Hedges: | ||||||||||||||
Foreign currency products | ( | ( | ||||||||||||
CAD borrowings under Revolving Credit Facility | ( | |||||||||||||
CAD term loan | ( | ( | ||||||||||||
$ | $ |
Loss Reclassified from Accumulated Other Comprehensive Income into Income | ||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||
Income Statement Location | 2023 | 2022 | ||||||||||||||||||
Cash Flow Hedges: | ||||||||||||||||||||
Interest rate products | Interest expense | $ | $ | ( | ||||||||||||||||
As of March 31, 2023 | ||||||||||||||||||||||||||||||||||||||
Gross Amounts of Recognized Assets / Liabilities | Gross Amounts Offset in the Balance Sheet | Net Amounts of Assets / Liabilities presented in the Balance Sheet | Gross Amounts Not Offset in the Balance Sheet | |||||||||||||||||||||||||||||||||||
Financial Instruments | Cash Collateral Received | Net Amount | ||||||||||||||||||||||||||||||||||||
Offsetting Assets: | ||||||||||||||||||||||||||||||||||||||
Derivatives | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Offsetting Liabilities: | ||||||||||||||||||||||||||||||||||||||
Derivatives | $ | $ | $ | $ | $ | $ |
As of December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Gross Amounts of Recognized Assets / Liabilities | Gross Amounts Offset in the Balance Sheet | Net Amounts of Assets / Liabilities presented in the Balance Sheet | Gross Amounts Not Offset in the Balance Sheet | |||||||||||||||||||||||||||||||||||
Financial Instruments | Cash Collateral Received | Net Amount | ||||||||||||||||||||||||||||||||||||
Offsetting Assets: | ||||||||||||||||||||||||||||||||||||||
Derivatives | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Offsetting Liabilities: | ||||||||||||||||||||||||||||||||||||||
Derivatives | $ | $ | $ | $ | $ | $ |
As of March 31, 2023 | As of December 31, 2022 | ||||||||||||||||||||||||||||||||||
Face Value (1) | Carrying Amount (2) | Fair Value | Face Value (1) | Carrying Amount (2) | Fair Value | ||||||||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||||||||
Loans receivable | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Preferred equity investments | |||||||||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||||||||
Senior Notes | |||||||||||||||||||||||||||||||||||
Secured indebtedness |
Fair Value Measurements Using | |||||||||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||
Loans receivable | $ | $ | $ | $ | |||||||||||||||||||
Preferred equity investments | |||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||
Senior Notes | |||||||||||||||||||||||
Secured indebtedness | |||||||||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
Recurring Basis: | |||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | |||||||||||||||||||
Interest rate collars | |||||||||||||||||||||||
Forward starting interest rate swaps | |||||||||||||||||||||||
Cross currency interest rate swaps | |||||||||||||||||||||||
Declaration Date | Record Date | Amount Per Share | Dividend Payable Date | |||||||||||||||||
February 1, 2023 | February 13, 2023 | $ | February 28, 2022 | |||||||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||
Foreign currency translation (loss) gain | $ | ( | $ | |||||||||||
Unrealized gain on cash flow hedges | ||||||||||||||
Total accumulated other comprehensive income | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Numerator | ||||||||||||||
Net (loss) income | $ | ( | $ | |||||||||||
Denominator | ||||||||||||||
Basic weighted average common shares and common equivalents | ||||||||||||||
Dilutive restricted stock units | ||||||||||||||
Diluted weighted average common shares | ||||||||||||||
Net (loss) income, per: | ||||||||||||||
Basic common share | $ | ( | $ | |||||||||||
Diluted common share | $ | ( | $ |
Three Months Ended March 31, | Increase / (Decrease) | Percentage Difference | Variance due to Acquisitions, Originations and Dispositions (1) | Remaining Variance (2) | |||||||||||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||
Rental and related revenues | $ | 95,870 | $ | 109,886 | $ | (14,016) | (13) | % | $ | (5,704) | $ | (8,312) | |||||||||||||||||||||||
Resident fees and services | 56,721 | 42,227 | 14,494 | 34 | % | 6,239 | 8,255 | ||||||||||||||||||||||||||||
Interest and other income | 8,733 | 10,992 | (2,259) | (21) | % | (2,598) | 339 | ||||||||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | 52,827 | 45,256 | 7,571 | 17 | % | (1,180) | 8,751 | ||||||||||||||||||||||||||||
Interest | 28,540 | 24,972 | 3,568 | 14 | % | — | 3,568 | ||||||||||||||||||||||||||||
Triple-net portfolio operating expenses | 4,168 | 5,011 | (843) | (17) | % | (243) | (600) | ||||||||||||||||||||||||||||
Senior housing - managed portfolio operating expenses | 43,637 | 33,104 | 10,533 | 32 | % | 4,096 | 6,437 | ||||||||||||||||||||||||||||
General and administrative | 10,502 | 10,396 | 106 | 1 | % | — | 106 | ||||||||||||||||||||||||||||
(Recovery of) provision for loan losses and other reserves | (208) | 475 | (683) | (144) | % | 48 | (731) | ||||||||||||||||||||||||||||
Impairment of real estate | 7,064 | — | 7,064 | 100 | % | — | 7,064 | ||||||||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | (1,541) | (271) | (1,270) | 469 | % | — | (1,270) | ||||||||||||||||||||||||||||
Other income | 341 | 68 | 273 | 401 | % | — | 273 | ||||||||||||||||||||||||||||
Net loss on sales of real estate | (21,515) | — | (21,515) | 100 | % | (21,515) | — | ||||||||||||||||||||||||||||
Loss from unconsolidated joint ventures | (838) | (2,802) | 1,964 | (70) | % | (838) | 2,802 | ||||||||||||||||||||||||||||
Income tax expense | (728) | (284) | (444) | 156 | % | — | (444) |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Net (loss) income | $ | (9,487) | $ | 40,602 | |||||||
Depreciation and amortization of real estate assets | 52,827 | 45,256 | |||||||||
Depreciation, amortization and impairment of real estate assets related to unconsolidated joint ventures | 2,048 | 4,633 | |||||||||
Net loss on sales of real estate | 21,515 | — | |||||||||
Impairment of real estate | 7,064 | — | |||||||||
FFO | 73,967 | 90,491 | |||||||||
Stock-based compensation expense | 2,229 | 2,456 | |||||||||
Non-cash rental and related revenues | (2,398) | (4,474) | |||||||||
Non-cash interest income | (392) | (547) | |||||||||
Non-cash interest expense | 3,014 | 2,698 | |||||||||
Non-cash portion of loss on extinguishment of debt | 1,541 | 271 | |||||||||
(Recovery of) provision for loan losses and other reserves | (208) | 475 | |||||||||
Other adjustments related to unconsolidated joint ventures | 69 | (986) | |||||||||
Other adjustments | 106 | 183 | |||||||||
AFFO | $ | 77,928 | $ | 90,567 | |||||||
FFO per diluted common share | $ | 0.32 | $ | 0.39 | |||||||
AFFO per diluted common share | $ | 0.33 | $ | 0.39 | |||||||
Weighted average number of common shares outstanding, diluted: | |||||||||||
FFO | 231,892,769 | 231,564,970 | |||||||||
AFFO | 233,168,932 | 232,484,734 | |||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||
Net (Loss) Income | FFO | AFFO | |||||||||||||||||||||||||||||||||
Rental and related revenues: | |||||||||||||||||||||||||||||||||||
Non-cash rental and related revenue write-offs | $ | 0.5 | $ | (0.2) | $ | 0.5 | $ | (0.2) | $ | — | $ | — | |||||||||||||||||||||||
Interest and other income: | |||||||||||||||||||||||||||||||||||
Lease termination income | — | 2.3 | — | 2.3 | — | 2.3 | |||||||||||||||||||||||||||||
(Recovery of) provision for loan losses and other reserves | (0.2) | 0.5 | (0.2) | 0.5 | — | — | |||||||||||||||||||||||||||||
Loss on extinguishment of debt | 1.5 | 0.3 | 1.5 | 0.3 | — | — | |||||||||||||||||||||||||||||
Other income | 0.3 | 0.1 | 0.3 | 0.1 | 0.3 | 0.2 | |||||||||||||||||||||||||||||
Loss from unconsolidated joint ventures: | |||||||||||||||||||||||||||||||||||
Deferred income tax benefit | — | 0.1 | — | 0.1 | — | — | |||||||||||||||||||||||||||||
Title | Maturity Date | Principal Balance (1) | ||||||||||||
5.125% senior unsecured notes due 2026 (the “2026 Notes”) | August 15, 2026 | $ | 500,000 | |||||||||||
5.88% senior unsecured notes due 2027 (the “2027 Notes”) | May 17, 2027 | 100,000 | ||||||||||||
3.90% senior unsecured notes due 2029 (the “2029 Notes”) | October 15, 2029 | 350,000 | ||||||||||||
3.20% senior unsecured notes due 2031 (the “2031 Notes”) | December 1, 2031 | 800,000 | ||||||||||||
$ | 1,750,000 |
Interest Rate Type | Principal Balance (1) | Weighted Average Interest Rate | Maturity Date | |||||||||||||||||
Fixed Rate | $ | 49,633 | 2.84 | % | May 2031 - August 2051 | |||||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||
Total assets | $ | 68,745 | $ | 74,063 | ||||||||||
Total liabilities | 2,227,420 | 2,275,511 | ||||||||||||
Three Months Ended March 31, 2023 | ||||||||||||||
Total revenues | $ | 18 | ||||||||||||
Total expenses | 32,905 | |||||||||||||
Net loss | (35,020) | |||||||||||||
Ex. | Description | |||||||
3.1 | ||||||||
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3.1.2 | ||||||||
3.1.3 | ||||||||
3.2 | ||||||||
10.1 | ||||||||
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22.1 | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
32.2** | ||||||||
Ex. | Description | |||||||
101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH* | XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
104* | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
* | Filed herewith. | ||||
** | Furnished herewith. |
SABRA HEALTH CARE REIT, INC. | ||||||||
Date: May 3, 2023 | By: | /S/ RICHARD K. MATROS | ||||||
Richard K. Matros | ||||||||
Chief Executive Officer, President and Chair | ||||||||
(Principal Executive Officer) | ||||||||
Date: May 3, 2023 | By: | /S/ MICHAEL COSTA | ||||||
Michael Costa | ||||||||
Chief Financial Officer, Secretary and Executive Vice President | ||||||||
(Principal Financial Officer) |
/S/ RICHARD K. MATROS | ||
Richard K. Matros | ||
Chief Executive Officer, President and Chair |
/S/ MICHAEL COSTA | ||
Michael Costa | ||
Chief Financial Officer, Secretary and Executive Vice President |
/S/ RICHARD K. MATROS | ||
Richard K. Matros | ||
Chief Executive Officer, President and Chair |
/S/ MICHAEL COSTA | ||
Michael Costa | ||
Chief Financial Officer, Secretary and Executive Vice President |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Assets | ||
Accumulated depreciation | $ 952,791 | $ 913,345 |
Preferred Stock, Number of Shares, Par Value and Other Disclosure [Abstract] | ||
Par value (in dollars per share) | $ 0.01 | $ 0.01 |
Shares authorized (in shares) | 10,000,000 | 10,000,000 |
Shares issued (in shares) | 0 | 0 |
Shares outstanding (in shares) | 0 | 0 |
Common Stock, Number of Shares, Par Value and Other Disclosure [Abstract] | ||
Par value (in dollars per share) | $ 0.01 | $ 0.01 |
Shares authorized (in shares) | 500,000,000 | 500,000,000 |
Shares issued (in shares) | 231,195,148 | 231,009,295 |
Shares outstanding (in shares) | 231,195,148 | 231,009,295 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (9,487) | $ 40,602 |
Unrealized gain (loss), net of tax: | ||
Foreign currency translation loss | (1,623) | (644) |
Unrealized (loss) gain on cash flow hedges | (2) | 12,339 |
Total other comprehensive (loss) income | (1,625) | 11,695 |
Comprehensive (loss) income | $ (11,112) | $ 52,297 |
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Feb. 01, 2023 |
Mar. 31, 2023 |
Mar. 31, 2022 |
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Statement of Stockholders' Equity [Abstract] | |||
Common dividends (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.30 |
Common stock issuance, net | $ (1,933) | $ (3,484) |
BUSINESS |
3 Months Ended |
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Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | BUSINESS Overview Sabra Health Care REIT, Inc. (“Sabra” or the “Company”) was incorporated on May 10, 2010 as a wholly owned subsidiary of Sun Healthcare Group, Inc. (“Sun”) and commenced operations on November 15, 2010 following Sabra’s separation from Sun. Sabra elected to be treated as a real estate investment trust (“REIT”) with the filing of its United States (“U.S.”) federal income tax return for the taxable year beginning January 1, 2011. Sabra believes that it has been organized and operated, and it intends to continue to operate, in a manner to qualify as a REIT. Sabra’s primary business consists of acquiring, financing and owning real estate property to be leased to third-party tenants in the healthcare sector. Sabra primarily generates revenues by leasing properties to tenants throughout the U.S. and Canada. Sabra owns substantially all of its assets and properties and conducts its operations through Sabra Health Care Limited Partnership, a Delaware limited partnership (the “Operating Partnership”), of which Sabra is the sole general partner and a wholly owned subsidiary of Sabra is currently the only limited partner, or by subsidiaries of the Operating Partnership. The Company’s investment portfolio is primarily comprised of skilled nursing/transitional care facilities, senior housing communities (“Senior Housing - Leased”), behavioral health facilities and specialty hospitals and other facilities, in each case leased to tenants who are responsible for the operations of these facilities; senior housing communities operated by third-party property managers pursuant to property management agreements (“Senior Housing - Managed”); investments in joint ventures; investments in loans receivable; and preferred equity investments.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
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Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of Sabra and its wholly owned subsidiaries as of March 31, 2023 and December 31, 2022 and for the three month periods ended March 31, 2023 and 2022. All significant intercompany transactions and balances have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair statement of the results for such periods. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. For further information, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC. GAAP requires the Company to identify entities for which control is achieved through voting rights or other means and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. If the Company were determined to be the primary beneficiary of the VIE, the Company would consolidate investments in the VIE. The Company may change its original assessment of a VIE due to events such as modifications of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposal of all or a portion of an interest held by the primary beneficiary. The Company identifies the primary beneficiary of a VIE as the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. The Company performs this analysis on an ongoing basis. As of March 31, 2023, the Company determined that it was not the primary beneficiary of any VIEs. As it relates to investments in loans, in addition to the Company’s assessment of VIEs and whether the Company is the primary beneficiary of those VIEs, the Company evaluates the loan terms and other pertinent facts to determine whether the loan investment should be accounted for as a loan or as a real estate joint venture. If an investment has the characteristics of a real estate joint venture, including if the Company participates in the majority of the borrower’s expected residual profit, the Company would account for the investment as an investment in a real estate joint venture and not as a loan investment. Expected residual profit is defined as the amount of profit, whether called interest or another name, such as an equity kicker, above a reasonable amount of interest and fees expected to be earned by a lender. At March 31, 2023, none of the Company’s investments in loans were accounted for as real estate joint ventures. As it relates to investments in joint ventures, the Company assesses any partners’ rights and their impact on the presumption of control of the partnership by any single partner. The Company also applies this guidance to managing member interests in limited liability companies. The Company reassesses its determination of which entity controls the joint venture if: there is a change to the terms or in the exercisability of the rights of any partners or members, the general partner or managing member increases or decreases its ownership interests, or there is an increase or decrease in the number of outstanding ownership interests. As of March 31, 2023, the Company’s determination of which entity controls its investments in joint ventures has not changed as a result of any reassessment. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates.
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RECENT REAL ESTATE ACQUISITIONS (CONSOLIDATED) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RECENT REAL ESTATE ACQUISITIONS (CONSOLIDATED) | RECENT REAL ESTATE ACQUISITIONS (CONSOLIDATED) During the three months ended March 31, 2023, the Company acquired one Senior Housing - Leased community and one Senior Housing - Managed community. During the three months ended March 31, 2022, the Company acquired one Senior Housing - Managed community. The Senior Housing - Managed communities acquired during the three months ended March 31, 2023 and 2022 were part of the Company’s proprietary development pipeline and were previously reflected as preferred equity investments which had a book value of $4.6 million and $5.6 million, respectively, at the time of acquisition. The consideration was allocated as follows (in thousands):
The tenant origination and absorption costs intangible assets and tenant relationship intangible assets had a weighted average amortization periods as of the respective dates of acquisition of one year and 22 years, respectively, for the acquisitions completed during the three months ended March 31, 2023. The tenant origination and absorption costs intangible assets had an amortization period as of the date of acquisition of one year for the acquisition completed during the three months ended March 31, 2022. For the three months ended March 31, 2023, the Company recognized $1.7 million of total revenues and $0.2 million of net income from the facilities acquired during the three months ended March 31, 2023. For the three months ended March 31, 2022, the Company recognized $0.9 million of total revenues and $0.1 million of net income from the facility acquired during the three months ended March 31, 2022. The Company is required to pay additional consideration related to two Senior Housing - Managed communities if certain performance metrics are achieved, and as of March 31, 2023, based on the improved performance of these facilities, the aggregate additional consideration is estimated to be $17.4 million and is included in real estate investments, net of accumulated depreciation and accounts payable and accrued liabilities on the accompanying consolidated balance sheets.
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INVESTMENT IN REAL ESTATE PROPERTIES |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT IN REAL ESTATE PROPERTIES | INVESTMENT IN REAL ESTATE PROPERTIES The Company’s real estate properties held for investment consisted of the following (dollars in thousands): As of March 31, 2023
As of December 31, 2022
Operating Leases As of March 31, 2023, the substantial majority of the Company’s real estate properties (excluding 59 Senior Housing - Managed communities) were leased under triple-net operating leases with expirations ranging from less than one year to 20 years. As of March 31, 2023, the leases had a weighted average remaining term of eight years. The leases generally include provisions to extend the lease terms and other negotiated terms and conditions. The Company, through its subsidiaries, retains substantially all of the risks and benefits of ownership of the real estate assets leased to the tenants. The Company may receive additional security under these operating leases in the form of letters of credit and security deposits from the lessee or guarantees from the parent of the lessee. Security deposits received in cash related to tenant leases are included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets and totaled $14.0 million and $13.1 million as of March 31, 2023 and December 31, 2022, respectively, and letters of credit deposited with the Company totaled approximately $59 million and $57 million as of March 31, 2023 and December 31, 2022, respectively. In addition, the Company’s tenants have deposited with the Company $13.6 million and $13.3 million as of March 31, 2023 and December 31, 2022, respectively, for future real estate taxes, insurance expenditures and tenant improvements related to the Company’s properties and their operations, and these amounts are included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets. Lessor costs that are paid by the lessor and reimbursed by the lessee are included in the measurement of variable lease revenue and the associated expense. As a result, the Company recognized variable lease revenue and the associated expense of $3.8 million and $5.1 million during the three months ended March 31, 2023 and 2022, respectively. The Company monitors the creditworthiness of its tenants by evaluating the ability of the tenants to meet their lease obligations to the Company based on the tenants’ financial performance, including, as applicable and appropriate, the evaluation of any parent guarantees (or the guarantees of other related parties) of such lease obligations. The primary basis for the Company’s evaluation of the credit quality of its tenants (and more specifically the tenant’s ability to pay their rent obligations to the Company) is the tenant’s lease coverage ratio as supplemented by the parent’s fixed charge coverage ratio for those entities with a parent guarantee. These coverage ratios include earnings before interest, taxes, depreciation, amortization and rent (“EBITDAR”) to rent and earnings before interest, taxes, depreciation, amortization, rent and management fees (“EBITDARM”) to rent at the lease level and consolidated EBITDAR to total fixed charges at the parent guarantor level when such a guarantee exists. The Company obtains various financial and operational information from the majority of its tenants each month and reviews this information in conjunction with the above-described coverage metrics to identify financial and operational trends, evaluate the impact of the industry’s operational and financial environment (including the impact of government reimbursement), and evaluate the management of the tenant’s operations. These metrics help the Company identify potential areas of concern relative to its tenants’ credit quality and ultimately the tenant’s ability to generate sufficient liquidity to meet its obligations, including its obligation to continue to pay the rent due to the Company. During the third quarter of 2022, the Company concluded that its leases with North American Health Care, Inc. (“North American”) should no longer be accounted for on an accrual basis and wrote off $15.6 million of straight-line rent receivable balances related to these leases. The facilities were transitioned to the Ensign Group or Avamere, as applicable, effective February 1, 2023. For the three months ended March 31, 2023, no tenant relationship represented 10% or more of the Company’s total revenues. As of March 31, 2023, the future minimum rental payments from the Company’s properties held for investment under non-cancelable operating leases were as follows and may materially differ from actual future rental payments received (in thousands):
Senior Housing - Managed Communities The Company’s Senior Housing - Managed communities offer residents certain ancillary services that are not contemplated in the lease with each resident (i.e., housekeeping, laundry, guest meals, etc.). These services are provided and paid for in addition to the standard services included in each resident lease (i.e., room and board, standard meals, etc.). The Company bills residents for ancillary services one month in arrears and recognizes revenue as the services are provided, as the Company has no continuing performance obligation related to those services. Resident fees and services include ancillary service revenue of $0.5 million and $0.3 million for the three months ended March 31, 2023 and 2022, respectively. Capital and Other Expenditures As of March 31, 2023, the Company’s aggregate commitment for future capital and other expenditures associated with facilities leased under triple-net operating leases was approximately $65 million. These commitments are principally for improvements to its facilities. Investment in Unconsolidated Joint Ventures The following is a summary of the Company’s investment in unconsolidated joint ventures (dollars in thousands):
(1) These investments are not consolidated because the Company does not control, through voting rights or other means, the joint ventures. During the three months ended March 31, 2023, the Company’s joint venture with Marlin Spring (the “Marlin Spring Joint Venture”) completed the acquisition of one additional senior housing community that is being managed by a third-party property manager. The gross investment in the additional acquisition was CAD $30.0 million, excluding acquisition costs. In addition, the Marlin Spring Joint Venture assumed and financed an aggregate CAD $23.6 million of debt associated with the additional acquisition. During the fourth quarter of 2022, due to the confluence of labor shortages, increased labor costs, elevated interest rates and a slower than anticipated recovery in the operating performance of the underlying facilities, the Company concluded that the estimated fair value of its investment in its joint venture with affiliates of TPG Real Estate, the real estate platform of TPG (the “Enlivant Joint Venture”) had declined to zero based on updated future cash flow analyses. This decline was deemed to be other-than-temporary, and the Company recorded an impairment charge totaling $57.8 million during the three months ended December 31, 2022. The Company has not guaranteed any obligations of and is not committed to provide any support to the Enlivant Joint Venture. The Company has discontinued applying the equity method of accounting to the Enlivant Joint Venture, in which it has a 49% equity interest, and will resume application if, during the period in which application of the equity method of accounting has been discontinued, the Company’s share of unrecognized net income exceeds its share of unrecognized net losses. Net Investment in Sales-Type Lease As of December 31, 2022, the Company had a $25.5 million net investment in one skilled nursing/transitional care facility leased to a tenant under a sales-type lease, as the tenant is obligated to purchase the property at the end of the lease term. During the three months ended March 31, 2023, the tenant purchased the skilled nursing/transitional care facility for net proceeds of $25.5 million as obligated under the terms of the lease.
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IMPAIRMENT OF REAL ESTATE AND DISPOSITIONS |
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IMPAIRMENT OF REAL ESTATE AND DISPOSITIONS | IMPAIRMENT OF REAL ESTATE AND DISPOSITIONS Impairment of Real Estate During the three months ended March 31, 2023, the Company recognized $7.1 million of real estate impairment related to one skilled nursing/transitional care facility that is under contract to sell. During the three months ended March 31, 2022, the Company recognized no real estate impairment. To estimate the fair value of the impaired facility, the Company utilized a market approach which considered the binding sale agreement (Level 3 measurement). The Company continues to evaluate additional assets for sale as part of its initiative to recycle capital and further improve its portfolio quality. This could lead to a shorter hold period and could result in the determination that the full amount of the Company’s investment is not recoverable, resulting in an impairment charge which could be material. Dispositions The following table summarizes the Company’s dispositions for the periods presented (dollars in millions):
The sale of the disposition facilities does not represent a strategic shift that has or will have a major effect on the Company’s operations and financial results, and therefore the results of operations attributable to these facilities have remained in continuing operations.
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LOANS RECEIVABLE AND OTHER INVESTMENTS |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS RECEIVABLE AND OTHER INVESTMENTS | LOANS RECEIVABLE AND OTHER INVESTMENTS As of March 31, 2023 and December 31, 2022, the Company’s loans receivable and other investments consisted of the following (dollars in thousands):
(1) Principal balance includes amounts funded and accrued but unpaid interest / preferred return and excludes capitalizable fees. As of March 31, 2023, the Company has committed to provide up to $28.0 million of future funding related to two preferred equity investments and one loan receivable investment that matures in June 2024. Additional information regarding the Company’s loans receivable is as follows (dollars in thousands):
As of March 31, 2023 and December 31, 2022, the Company did not consider any preferred equity investments to be impaired, and no preferred equity investments were on nonaccrual status.
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DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Secured Indebtedness The Company’s secured debt consists of the following (dollars in thousands):
(1) Principal balance does not include deferred financing costs, net of $0.9 million as of each of March 31, 2023 and December 31, 2022. (2) Weighted average interest rate includes private mortgage insurance. Senior Unsecured Notes The Company’s senior unsecured notes consist of the following (dollars in thousands):
(1) Principal balance does not include discount, net of $3.7 million and deferred financing costs, net of $11.6 million as of March 31, 2023 and does not include discount, net of $3.5 million and deferred financing costs, net of $12.0 million as of December 31, 2022. In addition, the weighted average effective interest rate as of March 31, 2023 was 4.01%. The 2026 Notes and the 2027 Notes were assumed as a result of the Company’s merger with Care Capital Properties, Inc. in 2017 and accrue interest at a rate of 5.125% and 5.88%, respectively, per annum. Interest is payable semiannually on February 15 and August 15 of each year for the 2026 Notes and on May 17 and November 17 of each year for the 2027 Notes. The 2029 Notes were issued by the Operating Partnership and, until redemption of the Company’s previously outstanding 5.375% senior notes due 2023 in October 2019, Sabra Capital Corporation, wholly owned subsidiaries of the Company, and accrue interest at a rate of 3.90% per annum. Interest is payable semiannually on April 15 and October 15 of each year. The 2031 Notes were issued by the Operating Partnership, a wholly owned subsidiary of the Company, and accrue interest at a rate of 3.20% per annum. Interest is payable semiannually on June 1 and December 1 of each year, commencing on June 1, 2022. The obligations under the 2027 Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by Sabra and one of its non-operating subsidiaries, subject to release under certain customary circumstances. The obligations under the 2026 Notes, 2029 Notes and 2031 Notes are fully and unconditionally guaranteed, on an unsecured basis, by Sabra; provided, however, that such guarantee is subject to release under certain customary circumstances. The indentures and agreements (the “Senior Notes Indentures”) governing the 2026 Notes, 2027 Notes, 2029 Notes and 2031 Notes (collectively, the “Senior Notes”) include customary events of default and require the Company to comply with specified restrictive covenants. As of March 31, 2023, the Company was in compliance with all applicable financial covenants under the Senior Notes Indentures. Credit Agreement On September 9, 2019, the Operating Partnership and Sabra Canadian Holdings, LLC (together, the “Borrowers”), Sabra and the other parties thereto entered into a fifth amended and restated unsecured credit agreement (the “Prior Credit Agreement”). The Prior Credit Agreement included a $1.0 billion revolving credit facility (the “Prior Revolving Credit Facility”), a $436.3 million U.S. dollar term loan and a CAD $125.0 million Canadian dollar term loan (collectively, the “Prior Term Loans”). Further, up to $175.0 million of the Prior Revolving Credit Facility could be used for borrowings in certain foreign currencies. The Prior Credit Agreement also contained an accordion feature that allowed for an increase in the total available borrowings to $2.75 billion, subject to terms and conditions. During the three months ended March 31, 2022, the Company recognized $0.3 million of loss on extinguishment of debt related to write-offs of deferred financing costs in connection with the partial pay downs of the U.S. dollar Prior Term Loan. Borrowings under the Prior Revolving Credit Facility bore interest on the outstanding principal amount at a rate equal to a ratings-based applicable interest margin plus, Canadian Dollar Offered Rate (“CDOR”) for Canadian dollar borrowings, or at the Operating Partnership’s option for U.S. dollar borrowings, either (a) LIBOR or (b) a base rate determined as the greater of (i) the federal funds rate plus 0.5%, (ii) the prime rate, and (iii) one-month LIBOR plus 1.0% (the “Prior Base Rate”). The ratings-based applicable interest margin for borrowings varied based on the Debt Ratings, as defined in the Prior Credit Agreement, and ranged from 0.775% to 1.45% per annum for CDOR or LIBOR based borrowings and 0.00% to 0.45% per annum for borrowings at the Prior Base Rate. In addition, the Operating Partnership paid a facility fee ranging between 0.125% and 0.300% per annum based on the aggregate amount of commitments under the Prior Revolving Credit Facility regardless of amounts outstanding thereunder. The U.S. dollar Prior Term Loan bore interest on the outstanding principal amount at a rate equal to a ratings-based applicable interest margin plus, at the Operating Partnership’s option, either (a) LIBOR or (b) the Prior Base Rate. The ratings-based applicable interest margin for borrowings varied based on the Debt Ratings and ranged from 0.85% to 1.65% per annum for LIBOR based borrowings and 0.00% to 0.65% per annum for borrowings at the Prior Base Rate. The Canadian dollar Prior Term Loan bore interest on the outstanding principal amount at a rate equal to CDOR plus an interest margin that ranged from 0.85% to 1.65% depending on the Debt Ratings. On January 4, 2023, the Borrowers, and the other parties thereto entered into a sixth amended and restated unsecured credit agreement (the “Credit Agreement”). During the three months ended March 31, 2023, the Company recorded $18.1 million of deferred financing costs related to the Credit Agreement and recognized $1.5 million of loss on extinguishment of debt related to write-offs of deferred financing costs in connection with amending and restating the Prior Credit Agreement. The Credit Agreement includes a $1.0 billion revolving credit facility (the “Revolving Credit Facility”), a $430.0 million U.S. dollar term loan and a CAD $150.0 million Canadian dollar term loan (collectively, the “Term Loans”). Further, up to $350.0 million of the Revolving Credit Facility may be used for borrowings in certain foreign currencies. The Credit Agreement also contains an accordion feature that can increase the total available borrowings to $2.75 billion, subject to terms and conditions. The Revolving Credit Facility has a maturity date of January 4, 2027, and includes two six-month extension options. The Term Loans have a maturity date of January 4, 2028. As of March 31, 2023, there was $79.6 million (including CAD $86.0 million) outstanding under the Revolving Credit Facility and $920.4 million available for borrowing. Borrowings under the Revolving Credit Facility bear interest on the outstanding principal amount at a rate equal to a ratings-based applicable interest margin plus, CDOR for Canadian dollar borrowings, or at the Operating Partnership’s option for U.S. dollar borrowings, either (a) Daily Simple SOFR, as defined in the Credit Agreement, or (b) a base rate determined as the greater of (i) the federal funds rate plus 0.5%, (ii) the prime rate, (iii) Term SOFR, as defined in the Credit Agreement, plus 1.0% (the “Base Rate”), and (iv) 1.00%. The ratings-based applicable interest margin for borrowings will vary based on the Debt Ratings, as defined in the Credit Agreement, and will range from 0.775% to 1.450% per annum for Daily Simple SOFR based borrowings and 0.00% to 0.450% per annum for borrowings at the Base Rate. As of March 31, 2023, the weighted average interest rate on the Revolving Credit Facility was 6.05%. In addition, the Operating Partnership pays a facility fee ranging between 0.125% and 0.300% per annum based on the aggregate amount of commitments under the Revolving Credit Facility regardless of amounts outstanding thereunder. The U.S. dollar Term Loan bears interest on the outstanding principal amount at a ratings-based applicable interest margin plus, at the Operating Partnership’s option, either (a) Term SOFR or (b) the Base Rate. The ratings-based applicable interest margin for borrowings will vary based on the Debt Ratings and will range from 0.850% to 1.650% per annum for Term SOFR based borrowings and 0.00% to 0.650% per annum for borrowings at the Base Rate. As of March 31, 2023, the interest rate on the U.S. dollar Term Loan was 6.22%. The Canadian dollar Term Loan bears interest on the outstanding principal amount at a rate equal CDOR plus an interest margin that will range from 0.850% to 1.650% depending on the Debt Ratings. As of March 31, 2023, the interest rate on the Canadian dollar Term Loan was 6.20%. The Company has interest rate swaps and interest rate collars that fix and set a cap and floor, respectively, for the SOFR portion of the interest rate for $430.0 million of SOFR-based borrowings under its U.S. dollar Term Loan at a weighted average rate of 1.51% and interest rate swaps that fix the CDOR portion of the interest rate for CAD $150.0 million of CDOR-based borrowings under its Canadian dollar Term Loan at a rate of 1.63%. As of March 31, 2023, the effective interest rate on the U.S. dollar and Canadian dollar Term Loans was 3.85% and 2.88%, respectively. In addition, the Canadian dollar Term Loan and the CAD $86.0 million outstanding under the Revolving Credit Facility are designated as net investment hedges. See Note 8, “Derivative and Hedging Instruments,” for further information. The obligations of the Borrowers under the Credit Agreement are guaranteed by the Company and certain of its subsidiaries. The Credit Agreement contains customary covenants that include restrictions or limitations on the ability to pay dividends, incur additional indebtedness, engage in non-healthcare related business activities, enter into transactions with affiliates and sell or otherwise transfer certain assets as well as customary events of default. The Credit Agreement also requires Sabra, through the Operating Partnership, to comply with specified financial covenants, which include a maximum total leverage ratio, a maximum secured debt leverage ratio, a minimum fixed charge coverage ratio, a maximum unsecured leverage ratio, a minimum tangible net worth requirement and a minimum unsecured interest coverage ratio. As of March 31, 2023, the Company was in compliance with all applicable financial covenants under the Credit Agreement. Interest Expense The Company incurred interest expense of $28.5 million and $25.0 million during the three months ended March 31, 2023 and 2022, respectively. Interest expense includes non-cash interest expense of $3.0 million and $2.7 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023 and December 31, 2022, the Company had $21.4 million and $18.2 million, respectively, of accrued interest included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets. Maturities The following is a schedule of maturities for the Company’s outstanding debt as of March 31, 2023 (in thousands):
(1) Revolving Credit Facility is subject to two six-month extension options.
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DERIVATIVE AND HEDGING INSTRUMENTS |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE AND HEDGING INSTRUMENTS | DERIVATIVE AND HEDGING INSTRUMENTS The Company is exposed to various market risks, including the potential loss arising from adverse changes in interest rates and foreign exchange rates. The Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates and foreign exchange rates. The Company’s derivative financial instruments are used to manage differences in the amount of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings. Certain of the Company’s foreign operations expose the Company to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value in the Company’s functional currency, the U.S. dollar, of the Company’s investment in foreign operations, the cash receipts and payments related to these foreign operations and payments of interest and principal under Canadian dollar denominated debt. The Company enters into derivative financial instruments to protect the value of its foreign investments and fix a portion of the interest payments for certain debt obligations. The Company does not enter into derivatives for speculative purposes. Cash Flow Hedges The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps and collars as part of its interest rate risk management strategy. As of March 31, 2023, approximately $5.4 million of gains, which are included in accumulated other comprehensive income, are expected to be reclassified into earnings in the next 12 months. Net Investment Hedges The Company is exposed to fluctuations in foreign exchange rates on investments it holds in Canada. The Company uses cross currency interest rate swaps to hedge its exposure to changes in foreign exchange rates on these foreign investments. The following presents the notional amount of derivative instruments as of the dates indicated (in thousands):
(1) Balance as of March 31, 2023 includes two forward starting interest rate swaps with an effective date of August 2024 and an aggregate notional amount of $323.8 million. (2) Balance as of March 31, 2023 includes two forward starting interest rate swaps with an effective date of September 2024 and an aggregate notional amount of CAD $150.0 million. Derivative and Financial Instruments Designated as Hedging Instruments The following is a summary of the derivative and financial instruments designated as hedging instruments held by the Company at March 31, 2023 and December 31, 2022 (dollars in thousands):
The following presents the effect of the Company’s derivative and financial instruments designated as hedging instruments on the consolidated statements of (loss) income and the consolidated statements of equity for the three months ended March 31, 2023 and 2022 (in thousands):
During the three months ended March 31, 2023 and 2022, no cash flow hedges were determined to be ineffective. Derivatives Not Designated as Hedging Instruments As of March 31, 2023, the Company’s derivatives were all designated as hedging instruments. During the three months ended March 31, 2022, the Company recorded $0.1 million of other expense related to the portion of derivatives not designated as hedging instruments and no such expense was recorded during the three months ended March 31, 2023. Offsetting Derivatives The Company enters into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of March 31, 2023 and December 31, 2022 (in thousands):
Credit Risk-related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision pursuant to which the Company could be declared in default on the derivative obligation if the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender. As of March 31, 2023, the Company had no derivatives in a net liability position related to these agreements.
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FAIR VALUE DISCLOSURES |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: •Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; •Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and •Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. Financial Instruments The fair value for certain financial instruments is derived using a combination of market quotes, pricing models and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and whose markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments whose markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The carrying values of cash and cash equivalents, restricted cash, accounts payable, accrued liabilities and the Credit Agreement are reasonable estimates of fair value because of the short-term maturities of these instruments. Fair values for other financial instruments are derived as follows: Loans receivable: These instruments are presented on the accompanying consolidated balance sheets at their amortized cost and not at fair value. The fair values of the loans receivable were estimated using an internal valuation model that considered the expected cash flows for the loans receivable, as well as the underlying collateral value and other credit enhancements as applicable. The Company utilized discount rates ranging from 7% to 16% with a weighted average rate of 7% in its fair value calculation. As such, the Company classifies these instruments as Level 3. Preferred equity investments: These instruments are presented on the accompanying consolidated balance sheets at their cost and not at fair value. The fair values of the preferred equity investments were estimated using an internal valuation model that considered the expected future cash flows for the preferred equity investments, the underlying collateral value and other credit enhancements. The Company utilized discount rates ranging from 10% to 15% with a weighted average rate of 11% in its fair value calculation. As such, the Company classifies these instruments as Level 3. Derivative instruments: The Company’s derivative instruments are presented at fair value on the accompanying consolidated balance sheets. The Company estimates the fair value of derivative instruments, including its interest rate swaps, interest rate collars and cross currency 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 the Company has determined that the majority of the inputs used to value its derivative financial instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivative financial instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivative financial instruments. As a result, the Company has determined that its derivative financial instruments valuations in their entirety are classified in Level 2 of the fair value hierarchy. Senior Notes: These instruments are presented on the accompanying consolidated balance sheets at their outstanding principal balance, net of unamortized deferred financing costs and premiums/discounts and not at fair value. The fair values of the Senior Notes were determined using third-party market quotes derived from orderly trades. As such, the Company classifies these instruments as Level 2. Secured indebtedness: These instruments are presented on the accompanying consolidated balance sheets at their outstanding principal balance, net of unamortized deferred financing costs and premiums/discounts and not at fair value. The fair values of the Company’s secured debt were estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. The Company utilized a rate of 6% in its fair value calculation. As such, the Company classifies these instruments as Level 3. The following are the face values, carrying amounts and fair values of the Company’s financial instruments as of March 31, 2023 and December 31, 2022 whose carrying amounts do not approximate their fair value (in thousands):
(1) Face value represents amounts contractually due under the terms of the respective agreements. (2) Carrying amount represents the book value of financial instruments, including unamortized premiums/discounts and deferred financing costs. The Company determined the fair value of financial instruments as of March 31, 2023 whose carrying amounts do not approximate their fair value with valuation methods utilizing the following types of inputs (in thousands):
Disclosure of the fair value of financial instruments is based on pertinent information available to the Company at the applicable dates and requires a significant amount of judgment. Transaction volume for certain of the Company’s financial instruments remains relatively low, which has made the estimation of fair values difficult. Therefore, both the actual results and the Company’s estimate of fair value at a future date could be materially different. Items Measured at Fair Value on a Recurring Basis During the three months ended March 31, 2023, the Company recorded the following amounts measured at fair value (in thousands):
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EQUITY |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY | EQUITY Common Stock On February 23, 2023, the Company established an at-the-market equity offering program (the “ATM Program”) pursuant to which shares of its common stock having an aggregate gross sales price of up to $500.0 million may be sold from time to time (i) by the Company through a consortium of banks acting as sales agents or directly to the banks acting as principals or (ii) by a consortium of banks acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement. The use of a forward sale agreement would allow the Company to lock in a share price on the sale of shares at the time the agreement is effective, but defer receiving the proceeds from the sale of the shares until a later date. The Company may also elect to cash settle or net share settle all or a portion of its obligations under any forward sale agreement. The forward sale agreements have a one year term during which time the Company may settle the forward sales by delivery of physical shares of common stock to the forward purchasers or, at the Company’s election, in cash or net shares. The forward sale price that the Company expects to receive upon settlement will be the initial forward price established upon the effective date, subject to adjustments for (i) the forward purchasers’ stock borrowing costs and (ii) certain fixed price reductions during the term of the agreement. During the three months ended March 31, 2023, no shares were sold under the ATM Program and the Company did not utilize the forward feature of the ATM Program. As of March 31, 2023, the Company had $500.0 million available under the ATM Program. The following table lists the cash dividends on common stock declared and paid by the Company during the three months ended March 31, 2023:
During the three months ended March 31, 2023, the Company issued 0.2 million shares of common stock as a result of restricted stock unit vestings. Upon any payment of shares to team members as a result of restricted stock unit vestings, the team members’ related tax withholding obligation will generally be satisfied by the Company reducing the number of shares to be delivered by a number of shares necessary to satisfy the related applicable tax withholding obligation. During the three months ended March 31, 2023 and 2022, the Company incurred $1.4 million and $3.3 million, respectively, in tax withholding obligations on behalf of its team members that were satisfied through a reduction in the number of shares delivered to those participants. Accumulated Other Comprehensive Income The following is a summary of the Company’s accumulated other comprehensive income (in thousands):
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EARNINGS PER COMMON SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE The following table illustrates the computation of basic and diluted earnings per share for the three months ended March 31, 2023 and 2022 (in thousands, except share and per share amounts):
During the three months ended March 31, 2023 and 2022, approximately 0.7 million and 13,100 restricted stock units, respectively, were not included in computing diluted earnings per share because they were considered anti-dilutive.
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COMMITMENTS AND CONTINGENCIES |
3 Months Ended |
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Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. The Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities. As of March 31, 2023, the Company does not expect that compliance with existing environmental laws will have a material adverse effect on the Company’s financial condition and results of operations. Legal Matters From time to time, the Company and its subsidiaries are party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings where the likelihood of a loss contingency is reasonably possible and the amount or range of reasonably possible losses is material to the Company’s results of operations, financial condition or cash flows.
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SUBSEQUENT EVENTS |
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Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSThe Company evaluates subsequent events up until the date the consolidated financial statements are issued. Dividend Declaration On May 3, 2023, the Company’s board of directors declared a quarterly cash dividend of $0.30 per share of common stock. The dividend will be paid on May 31, 2023 to common stockholders of record as of the close of business on May 16, 2023.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The accompanying consolidated financial statements include the accounts of Sabra and its wholly owned subsidiaries as of March 31, 2023 and December 31, 2022 and for the three month periods ended March 31, 2023 and 2022. All significant intercompany transactions and balances have been eliminated in consolidation. |
Basis of Presentation | The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair statement of the results for such periods. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. For further information, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC. |
Variable Interest Entities | GAAP requires the Company to identify entities for which control is achieved through voting rights or other means and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. If the Company were determined to be the primary beneficiary of the VIE, the Company would consolidate investments in the VIE. The Company may change its original assessment of a VIE due to events such as modifications of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposal of all or a portion of an interest held by the primary beneficiary. The Company identifies the primary beneficiary of a VIE as the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. The Company performs this analysis on an ongoing basis. As of March 31, 2023, the Company determined that it was not the primary beneficiary of any VIEs. As it relates to investments in loans, in addition to the Company’s assessment of VIEs and whether the Company is the primary beneficiary of those VIEs, the Company evaluates the loan terms and other pertinent facts to determine whether the loan investment should be accounted for as a loan or as a real estate joint venture. If an investment has the characteristics of a real estate joint venture, including if the Company participates in the majority of the borrower’s expected residual profit, the Company would account for the investment as an investment in a real estate joint venture and not as a loan investment. Expected residual profit is defined as the amount of profit, whether called interest or another name, such as an equity kicker, above a reasonable amount of interest and fees expected to be earned by a lender. At March 31, 2023, none of the Company’s investments in loans were accounted for as real estate joint ventures. As it relates to investments in joint ventures, the Company assesses any partners’ rights and their impact on the presumption of control of the partnership by any single partner. The Company also applies this guidance to managing member interests in limited liability companies. The Company reassesses its determination of which entity controls the joint venture if: there is a change to the terms or in the exercisability of the rights of any partners or members, the general partner or managing member increases or decreases its ownership interests, or there is an increase or decrease in the number of outstanding ownership interests.
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Use of Estimates | The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
Fair Value of Financial Instruments | Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: •Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; •Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and •Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. Financial Instruments The fair value for certain financial instruments is derived using a combination of market quotes, pricing models and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and whose markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments whose markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The carrying values of cash and cash equivalents, restricted cash, accounts payable, accrued liabilities and the Credit Agreement are reasonable estimates of fair value because of the short-term maturities of these instruments. Fair values for other financial instruments are derived as follows: Loans receivable: These instruments are presented on the accompanying consolidated balance sheets at their amortized cost and not at fair value. The fair values of the loans receivable were estimated using an internal valuation model that considered the expected cash flows for the loans receivable, as well as the underlying collateral value and other credit enhancements as applicable. The Company utilized discount rates ranging from 7% to 16% with a weighted average rate of 7% in its fair value calculation. As such, the Company classifies these instruments as Level 3. Preferred equity investments: These instruments are presented on the accompanying consolidated balance sheets at their cost and not at fair value. The fair values of the preferred equity investments were estimated using an internal valuation model that considered the expected future cash flows for the preferred equity investments, the underlying collateral value and other credit enhancements. The Company utilized discount rates ranging from 10% to 15% with a weighted average rate of 11% in its fair value calculation. As such, the Company classifies these instruments as Level 3. Derivative instruments: The Company’s derivative instruments are presented at fair value on the accompanying consolidated balance sheets. The Company estimates the fair value of derivative instruments, including its interest rate swaps, interest rate collars and cross currency 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 the Company has determined that the majority of the inputs used to value its derivative financial instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivative financial instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivative financial instruments. As a result, the Company has determined that its derivative financial instruments valuations in their entirety are classified in Level 2 of the fair value hierarchy. Senior Notes: These instruments are presented on the accompanying consolidated balance sheets at their outstanding principal balance, net of unamortized deferred financing costs and premiums/discounts and not at fair value. The fair values of the Senior Notes were determined using third-party market quotes derived from orderly trades. As such, the Company classifies these instruments as Level 2. Secured indebtedness: These instruments are presented on the accompanying consolidated balance sheets at their outstanding principal balance, net of unamortized deferred financing costs and premiums/discounts and not at fair value. The fair values of the Company’s secured debt were estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. The Company utilized a rate of 6% in its fair value calculation. As such, the Company classifies these instruments as Level 3.
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RECENT REAL ESTATE ACQUISITIONS (CONSOLIDATED) (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Allocation | The consideration was allocated as follows (in thousands):
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INVESTMENT IN REAL ESTATE PROPERTIES (Tables) |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Properties Held for Investment | The Company’s real estate properties held for investment consisted of the following (dollars in thousands): As of March 31, 2023
As of December 31, 2022
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Schedule of Future Minimum Rental Payments from Non-Cancelable Operating Leases | As of March 31, 2023, the future minimum rental payments from the Company’s properties held for investment under non-cancelable operating leases were as follows and may materially differ from actual future rental payments received (in thousands):
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Schedule of Investment in Joint Ventures | The following is a summary of the Company’s investment in unconsolidated joint ventures (dollars in thousands):
(1) These investments are not consolidated because the Company does not control, through voting rights or other means, the joint ventures.
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IMPAIRMENT OF REAL ESTATE AND DISPOSITIONS (Tables) |
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Schedule of Dispositions | The following table summarizes the Company’s dispositions for the periods presented (dollars in millions):
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LOANS RECEIVABLE AND OTHER INVESTMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans Receivable and Other Investments | As of March 31, 2023 and December 31, 2022, the Company’s loans receivable and other investments consisted of the following (dollars in thousands):
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Schedule of Additional Information Regarding the Company's Loans Receivable | Additional information regarding the Company’s loans receivable is as follows (dollars in thousands):
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DEBT (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The Company’s secured debt consists of the following (dollars in thousands):
(1) Principal balance does not include deferred financing costs, net of $0.9 million as of each of March 31, 2023 and December 31, 2022. (2) Weighted average interest rate includes private mortgage insurance. The Company’s senior unsecured notes consist of the following (dollars in thousands):
(1) Principal balance does not include discount, net of $3.7 million and deferred financing costs, net of $11.6 million as of March 31, 2023 and does not include discount, net of $3.5 million and deferred financing costs, net of $12.0 million as of December 31, 2022. In addition, the weighted average effective interest rate as of March 31, 2023 was 4.01%.
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Schedule of Maturities for Outstanding Debt | The following is a schedule of maturities for the Company’s outstanding debt as of March 31, 2023 (in thousands):
(1) Revolving Credit Facility is subject to two six-month extension options.
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DERIVATIVE AND HEDGING INSTRUMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amount of Derivatives Instruments | The following presents the notional amount of derivative instruments as of the dates indicated (in thousands):
(1) Balance as of March 31, 2023 includes two forward starting interest rate swaps with an effective date of August 2024 and an aggregate notional amount of $323.8 million. (2) Balance as of March 31, 2023 includes two forward starting interest rate swaps with an effective date of September 2024 and an aggregate notional amount of CAD $150.0 million.
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Schedule of Derivative and Financial Instruments Designated as Hedging Instruments | The following is a summary of the derivative and financial instruments designated as hedging instruments held by the Company at March 31, 2023 and December 31, 2022 (dollars in thousands):
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Effect of Derivative Financial Instruments on the Condensed Consolidated Statements of (Loss) Income and Condensed Consolidated Statements of Equity | The following presents the effect of the Company’s derivative and financial instruments designated as hedging instruments on the consolidated statements of (loss) income and the consolidated statements of equity for the three months ended March 31, 2023 and 2022 (in thousands):
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Gross Presentation, Effects of Offsetting, and Net Presentation of Derivatives - Assets | The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of March 31, 2023 and December 31, 2022 (in thousands):
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Gross Presentation, Effects of Offsetting, and Net Presentation of Derivatives - Liabilities | The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of March 31, 2023 and December 31, 2022 (in thousands):
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FAIR VALUE DISCLOSURES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Face Values, Carrying Amounts and Fair Values of Financial Instruments | The following are the face values, carrying amounts and fair values of the Company’s financial instruments as of March 31, 2023 and December 31, 2022 whose carrying amounts do not approximate their fair value (in thousands):
(1) Face value represents amounts contractually due under the terms of the respective agreements. (2) Carrying amount represents the book value of financial instruments, including unamortized premiums/discounts and deferred financing costs.
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Schedule of Fair Value of Financial Instruments | The Company determined the fair value of financial instruments as of March 31, 2023 whose carrying amounts do not approximate their fair value with valuation methods utilizing the following types of inputs (in thousands):
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Schedule of Items Measured at Fair Value on a Recurring Basis | During the three months ended March 31, 2023, the Company recorded the following amounts measured at fair value (in thousands):
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EQUITY (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash Dividends on Common Stock Declared and Paid | The following table lists the cash dividends on common stock declared and paid by the Company during the three months ended March 31, 2023:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income | The following is a summary of the Company’s accumulated other comprehensive income (in thousands):
|
EARNINGS PER COMMON SHARE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | The following table illustrates the computation of basic and diluted earnings per share for the three months ended March 31, 2023 and 2022 (in thousands, except share and per share amounts):
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) |
Mar. 31, 2023
variableInterestEntity
investment
|
---|---|
Accounting Policies [Line Items] | |
Number of investments in loans accounted for as real estate joint ventures | investment | 0 |
Primary beneficiary | |
Accounting Policies [Line Items] | |
Number of variable interest entities | variableInterestEntity | 0 |
RECENT REAL ESTATE ACQUISITIONS (CONSOLIDATED) - Narrative (Details) - Recent Real Estate Acquisitions $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023
USD ($)
property
|
Mar. 31, 2022
USD ($)
property
|
|
Business Acquisition [Line Items] | ||
Total revenues | $ 1.7 | $ 0.9 |
Net income | $ 0.2 | $ 0.1 |
Tenant origination and absorption costs | ||
Business Acquisition [Line Items] | ||
Weighted-average amortization period of intangible assets | 1 year | 1 year |
Tenant relationships | ||
Business Acquisition [Line Items] | ||
Weighted-average amortization period of intangible assets | 22 years | |
Senior Housing - Leased | ||
Business Acquisition [Line Items] | ||
Number of acquired properties | property | 1 | |
Senior Housing - Managed | ||
Business Acquisition [Line Items] | ||
Number of acquired properties | property | 1 | 1 |
Preferred equity investment book value at acquisition | $ 4.6 | $ 5.6 |
Number of properties | property | 2 | |
Aggregate additional consideration | $ 17.4 |
RECENT REAL ESTATE ACQUISITIONS (CONSOLIDATED) - Purchase Price Allocation for Recent Real Estate Acquisitions (Details) - Recent Real Estate Acquisitions - USD ($) $ in Thousands |
Mar. 31, 2023 |
Mar. 31, 2022 |
---|---|---|
Business Acquisition [Line Items] | ||
Land | $ 3,415 | $ 3,691 |
Building and improvements | 45,333 | 21,168 |
Total consideration | 51,474 | 26,196 |
Tenant origination and absorption costs intangible assets | ||
Business Acquisition [Line Items] | ||
Tenant intangible assets | 2,706 | 1,337 |
Tenant relationship intangible assets | ||
Business Acquisition [Line Items] | ||
Tenant intangible assets | $ 20 | $ 0 |
INVESTMENT IN REAL ESTATE PROPERTIES - Future Minimum Rental Payments Receivable for Properties Held for Investment Under Non-Cancelable Operating Leases (Details) $ in Thousands |
Mar. 31, 2023
USD ($)
|
---|---|
Future minimum rental payments from the Company’s properties held for investment under non-cancelable operating leases: | |
April 1 through December 31, 2023 | $ 279,989 |
2024 | 380,057 |
2025 | 375,286 |
2026 | 360,133 |
2027 | 337,235 |
Thereafter | 1,535,962 |
Total | $ 3,268,662 |
INVESTMENT IN REAL ESTATE PROPERTIES - Senior Housing - Managed Communities Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Disaggregation of Revenue [Line Items] | ||
Resident fees and services | $ 56,721 | $ 42,227 |
Ancillary services | ||
Disaggregation of Revenue [Line Items] | ||
Resident fees and services | $ 500 | $ 300 |
INVESTMENT IN REAL ESTATE PROPERTIES - Capital and Other Expenditures Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Real Estate [Abstract] | |
Future capital expenditures | $ 65 |
INVESTMENT IN REAL ESTATE PROPERTIES - Schedule of Investment in Joint Ventures (Details) $ in Thousands |
Mar. 31, 2023
USD ($)
property
|
Dec. 31, 2022
USD ($)
|
---|---|---|
Unconsolidated Joint Venture | ||
Book value | $ 139,402 | $ 134,962 |
Sienna Joint Venture | ||
Unconsolidated Joint Venture | ||
Ownership | 50.00% | |
Book value | $ 119,824 | 120,269 |
Marlin Spring Joint Venture | ||
Unconsolidated Joint Venture | ||
Ownership | 85.00% | |
Book value | $ 19,578 | $ 14,693 |
Senior Housing - Managed | Sienna Joint Venture | ||
Unconsolidated Joint Venture | ||
Number of properties | property | 12 | |
Senior Housing - Managed | Marlin Spring Joint Venture | ||
Unconsolidated Joint Venture | ||
Number of properties | property | 4 |
INVESTMENT IN REAL ESTATE PROPERTIES - Investment in Unconsolidated Joint Venture Narrative (Details) $ in Millions, $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023
CAD ($)
property
|
Dec. 31, 2022
USD ($)
|
Mar. 31, 2022 |
|
Marlin Spring Joint Venture | |||
Unconsolidated Joint Venture | |||
Equity interest in joint venture | 85.00% | ||
Marlin Spring Joint Venture | Senior Housing - Managed | |||
Unconsolidated Joint Venture | |||
Number of acquired properties | property | 1 | ||
Payments to acquire buildings | $ 30.0 | ||
Enlivant Joint Venture | |||
Unconsolidated Joint Venture | |||
Equity interest, investment basis amount | $ 0.0 | ||
Other-than-temporary impairment of unconsolidated joint ventures | $ 57.8 | ||
Equity interest in joint venture | 49.00% | ||
Marlin Spring Joint Venture | Marlin Spring Joint Venture | Senior Housing - Managed | |||
Unconsolidated Joint Venture | |||
Debt assumed | $ 23.6 |
INVESTMENT IN REAL ESTATE PROPERTIES - Net Investment in Sales-Type Lease Narrative (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023
USD ($)
|
Mar. 31, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
property
|
|
Real Estate Properties [Line Items] | |||
Net proceeds from sales-type lease | $ 25,490 | $ 0 | |
Skilled nursing transitional care facility | |||
Real Estate Properties [Line Items] | |||
Net investment in sales type lease | $ 25,500 | ||
Properties in sales-type | property | 1 | ||
Net proceeds from sales-type lease | $ 25,500 |
IMPAIRMENT OF REAL ESTATE AND DISPOSITIONS - Narrative (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023
USD ($)
facility
|
Mar. 31, 2022
USD ($)
|
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Impairment of real estate | $ | $ 7,064 | $ 0 |
Held-for-sale or sold | Skilled nursing transitional care facility | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of properties | facility | 1 |
IMPAIRMENT OF REAL ESTATE AND DISPOSITIONS - Dispositions (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023
USD ($)
facility
|
Mar. 31, 2022
USD ($)
facility
|
|
Dispositions: | ||
Number of facilities | facility | 8 | 0 |
Consideration, net of closing costs | $ 160.3 | $ 0.0 |
Net carrying value | 181.8 | 0.0 |
Net loss on sale | (21.5) | 0.0 |
Net (loss) income | $ (22.1) | $ 0.1 |
LOANS RECEIVABLE AND OTHER INVESTMENTS - Narrative (Details) - Future funding on investment $ in Millions |
Mar. 31, 2023
USD ($)
investment
|
---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Future funding commitment | $ | $ 28.0 |
Number of preferred equity investments for funding commitment | 2 |
Number of loan receivable investments for funding commitment | 1 |
LOANS RECEIVABLE AND OTHER INVESTMENTS - Schedule of Additional Information Regarding the Company's Loans Receivable (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023
USD ($)
loan
|
Mar. 31, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
loan
|
|
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of the period | $ 6,611 | $ 6,344 | |
(Recovery of) provision for loan losses | (208) | 507 | |
Balance at end of the period | 6,403 | $ 6,851 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal balance | 366,200 | $ 370,364 | |
Book value | $ 356,365 | $ 360,325 | |
Nonaccrual status | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of loans receivable investments | loan | 3 | 3 | |
Book value | $ 0 | $ 0 | |
Receivables with deteriorated credit quality | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of loans receivable investments | loan | 1 | 1 | |
Principal balance | $ 1,214 | $ 1,214 | |
Book value | $ 0 | $ 0 |
DEBT - Secured Indebtedness (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Deferred financing costs | $ 19,724 | |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Deferred financing costs | 879 | $ 900 |
Secured Debt | Fixed Rate | ||
Debt Instrument [Line Items] | ||
Principal balance | $ 49,633 | $ 50,123 |
Weighted average interest rate (percent) | 2.84% | |
Weighted average effective interest rate (percent) | 3.34% |
DEBT - Interest Expense Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Debt Disclosure [Abstract] | |||
Interest expense | $ 28,540 | $ 24,972 | |
Non-cash interest expense | 3,014 | $ 2,698 | |
Accrued interest | $ 21,400 | $ 18,200 |
DERIVATIVE AND HEDGING INSTRUMENTS - Narrative (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Derivative [Line Items] | |||
Fair value of derivatives in a net liability position | $ 0 | $ 0 | |
Credit risk-related contingent features | |||
Derivative [Line Items] | |||
Fair value of derivatives in a net liability position | 0 | ||
Cash flow hedges | Interest rate swaps | |||
Derivative [Line Items] | |||
Ineffectiveness on cash flow hedges | 0 | $ 0 | |
Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Fair value of derivatives in a net liability position | 174,428,000 | $ 243,270,000 | |
Designated as Hedging Instrument | Cash flow hedges | |||
Derivative [Line Items] | |||
Gains included in accumulated other comprehensive income expected to be reclassified into retained earnings in the next 12 months | 5,400,000 | ||
Not Designated as Hedging Instrument | Cross currency interest rate swaps | |||
Derivative [Line Items] | |||
Other expense related to derivatives | $ 0 | $ 100,000 |
DERIVATIVE AND HEDGING INSTRUMENTS - Gross Presentation, Effects of Offsetting, and Net Presentation of Derivatives (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Offsetting Assets: | ||
Gross Amounts of Recognized Assets / Liabilities | $ 19,823 | $ 21,477 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Assets / Liabilities presented in the Balance Sheet | 19,823 | 21,477 |
Financial Instruments | 0 | 0 |
Cash Collateral Received | 0 | 0 |
Net Amount | 19,823 | 21,477 |
Offsetting Liabilities: | ||
Gross Amounts of Recognized Assets / Liabilities | 0 | 0 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Assets / Liabilities presented in the Balance Sheet | 0 | 0 |
Financial Instruments | 0 | 0 |
Cash Collateral Received | 0 | 0 |
Net Amount | $ 0 | $ 0 |
EQUITY - Common Stock (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Feb. 23, 2023 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Tax withholding obligations incurred on behalf of employees | $ 1,400,000 | $ 3,300,000 | |
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares issued upon vesting (in shares) | 200,000 | ||
ATM Program | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate gross proceeds possible from sales of common stock under equity offering program | $ 500,000,000 | ||
Forward sale agreements term | 1 year | ||
Shares issued (in shares) | 0 | ||
Amount available for issuance | $ 500,000,000 |
EQUITY - Cash Dividends on Common Stock Declared and Paid (Details) - $ / shares |
3 Months Ended | ||
---|---|---|---|
Feb. 01, 2023 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Equity [Abstract] | |||
Common dividends (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.30 |
EQUITY - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|
Total Equity [Line Items] | ||||
Accumulated other comprehensive income (loss) | $ 2,976,227 | $ 3,056,395 | $ 3,361,523 | $ 3,379,530 |
Total accumulated other comprehensive income | ||||
Total Equity [Line Items] | ||||
Accumulated other comprehensive income (loss) | 17,438 | 19,063 | $ 1,674 | $ (10,021) |
Foreign currency translation (loss) gain | ||||
Total Equity [Line Items] | ||||
Accumulated other comprehensive income (loss) | (455) | 1,168 | ||
Unrealized gain on cash flow hedges | ||||
Total Equity [Line Items] | ||||
Accumulated other comprehensive income (loss) | $ 17,893 | $ 17,895 |
EARNINGS PER COMMON SHARE - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Numerator | ||
Net (loss) income | $ (9,487) | $ 40,602 |
Denominator | ||
Basic weighted average common shares and common equivalents (in shares) | 231,164,876 | 230,859,993 |
Dilutive restricted stock units (in shares) | 0 | 704,977 |
Diluted weighted average common shares (in shares) | 231,164,876 | 231,564,970 |
Net (loss) income, per: | ||
Basic common share (in dollars per share) | $ (0.04) | $ 0.18 |
Diluted common share (in dollars per share) | $ (0.04) | $ 0.18 |
EARNINGS PER COMMON SHARE - Narrative (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities not included in computation of diluted earnings per share (in shares) | 700,000 | 13,100 |
SUBSEQUENT EVENTS (Details) - $ / shares |
3 Months Ended | |||
---|---|---|---|---|
May 03, 2023 |
Feb. 01, 2023 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Subsequent Event [Line Items] | ||||
Quarterly cash dividend declared on common stock (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.30 | |
Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Quarterly cash dividend declared on common stock (in dollars per share) | $ 0.30 |
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