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Investment in leases, financing receivables, net
 6 Months Ended
Jun. 30, 2023
Investments, All Other Investments [Abstract]  
Receivables Investment in leases, financing receivables, net
In connection with the Maryland Live! Lease that became effective on December 29, 2021 and the Pennsylvania Live! Master Lease that became effective March 1, 2022, the Company recorded an Investment in leases, financing receivables, net, as the sale lease back transactions were accounted for as failed sale leasebacks. The following is a summary of the balances of the Company's Investment in leases, financing receivables, net.


June 30,
2023		December 31,
2022
(in thousands)
Minimum lease payments receivable$6,612,922 $6,676,528 
Estimated residual values of lease property (unguaranteed)940,885 940,885 
Total7,553,807 7,617,413 
Less: Unearned income(5,620,495)(5,695,094)
Less: Allowance for credit losses(41,523)(19,124)
Investment in leases - financing receivables, net$1,891,789 $1,903,195 


The present value of the net investment in the lease payment receivable and unguaranteed residual value at June 30, 2023 was $1,880.5 million and $52.8 million compared to $1,871.5 million and $50.8 million at December 31, 2022.

At June 30, 2023, minimum lease payments owed to us for each of the five succeeding years under the Company's financing receivables were as follows (in thousands):
Year ending December 31,Future Minimum Lease Payments
2023 (remainder of year)$63,616 
2024129,286 
2025131,532 
2026133,816 
2027136,141 
Thereafter6,018,531 
Total$6,612,922 
The Company follows ASC 326 “Credit Losses”, which requires that the Company measure and record current expected credit losses (“CECL”), the scope of which includes our Investment in leases, financing receivables, net. The Company has elected to use an econometric default and loss rate model to estimate the allowance for credit losses, or CECL allowance. This model requires us to calculate and input lease and property-specific credit and performance metrics which in conjunction with forward-looking economic forecasts, project estimated credit losses over the life of the lease. The Company then records a CECL allowance based on the expected loss rate multiplied by the outstanding investment in lease balance.

Expected losses within our cash flows are determined by estimating the probability of default (“PD”) and loss given default (“LGD”) of our Investment in leases financing receivables, net. We have engaged a nationally recognized data analytics firm to assist us with estimating both the PD and LGD. The PD and LGD are estimated during the initial term of the leases and real estate loans. The PD and LGD estimates for the lease term were developed using current financial condition forecasts. The PD and LGD predictive model was developed using the average historical default rates and historical loss rates, respectively, of over 100,000 commercial real estate loans dating back to 1998 that have similar credit profiles or characteristics to the real estate underlying the Company's financing receivables and real estate loans. Management will monitor the credit risk related to its financing receivable by obtaining the rent coverage on the lease on a periodic basis. The Company also monitors legislative changes to assess whether it would have an impact on the underlying performance of its tenant. We are unable to use our
historical data to estimate losses as the Company has no loss history to date on its lease portfolio. Our tenants were current on all of their rental obligations as of June 30, 2023 and December 31, 2022.

The change in the allowance for credit losses for the Company's financing receivables is illustrated below (in thousands):

Maryland Live! LeasePennsylvania Live! Master LeaseTotal
Balance at December 31, 2022$4,095 $15,029 $19,124 
Change in allowance(881)(4,772)(5,653)
Ending balance at March 31, 2023$3,214 $10,257 $13,471 
Change in allowance8,142 19,910 28,052 
Ending balance at June 30, 2023$11,356 $30,167 $41,523 


Maryland Live! LeasePennsylvania Live! Master LeaseTotal
Balance at December 31, 2021$12,226 $— $12,226 
Change in allowance(5,621)32,277 26,656 
Ending balance at March 31, 2022$6,605 $32,277 $38,882 
Change in allowance1,783 439 2,222 
Ending balance at June 30, 2022$8,388 $32,716 $41,104 


The amortized cost basis of the Company's investment in leases, financing receivables by year of origination is shown below as of June 30, 2023 (in thousands):

Origination year
20222021Total
Investment in leases, financing receivables$700,216 $1,233,096 $1,933,312 
Allowance for credit losses(30,167)(11,356)(41,523)
Amortized cost basis at June 30, 2023
$670,049 $1,221,740 $1,891,789 
Allowance as a percentage of outstanding financing receivable(4.31)%(0.92)%(2.15)%

During the three months ended June 30, 2023, a significant provision for credit losses was recorded on both the Maryland Live! Lease and Pennsylvania Live! Master Lease as the result of a decline in the estimated real estate values underlying the Company's Investment in leases, financing receivables. These values are estimated based on long term projections of the Commercial Real Estate Price Index which, as of June 30, 2023 declined and are anticipated to remain at depressed levels for several quarters based on the third party economic forecast the Company's utilizes to calculate its reserve for credit losses.

During the six months ended June 30, 2022, the Company recorded a provision for credit losses, net of $28.9 million This was primarily due to an initial allowance for credit losses of $32.3 million on the Pennsylvania Live! Master Lease which was originated on March 1, 2022. This was partially offset by a benefit recorded on the Maryland Live! Lease due to improved performance at that facility compared to previous expectations. This resulted in an improved rent coverage ratio in the Company's reserve calculation which led to a reduction in the Maryland Live! Lease reserve at June 30, 2022 compared to December 31, 2021.
The reason for the higher allowance for credit losses as a percentage of the outstanding investment in leases for the Pennsylvania Live! Master Lease compared to the Maryland Live! Lease is primarily due to the significantly higher rent coverage ratio on the Maryland Live! Lease compared to the Pennsylvania Live! Master Lease. Future changes in economic probability factors, changes in the estimated value of our real estate property leased to Cordish and earnings assumptions at the underlying facilities may result in non-cash provisions or recoveries in future periods that could materially impact our results of operations.