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OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS
3 Months Ended
Mar. 31, 2024
Investments, All Other Investments [Abstract]  
OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS
As of March 31, 2024 and December 31, 2023, the Company’s other real estate related investments consisted of the following (dollar amounts in thousands):
Facility Count and Type
As of March 31, 2024
Loans Receivable, at Fair Value:SNFCampusALFILF
Principal Balance as of March 31, 2024
Fair Value as of March 31, 2024
Fair Value as of December 31, 2023
Weighted Average Contractual Interest RateMaturity Date
Mortgage secured loans receivable31141$166,197 $157,265 $156,769 8.9 %
(1), (2)
5/31/2024 - 6/29/2033
Mezzanine loans receivable4032— 77,165 74,276 21,799 12.8 %
(1), (2)
7/25/2027 - 6/30/2032
$243,362 $231,541 $178,568 
(1) Rates are net of subservicing fee, if applicable.
(2) Two mortgage secured loans receivable and two mezzanine loans receivable use term secured overnight financing rate (“SOFR”), which are subject to a floor for certain of the loans. Term SOFR used as of March 31, 2024 was 5.33%.
Facility Count and Type
As of March 31, 2024
Other Investments:SNFCampusALFILF
Principal Balance as of March 31, 2024
Book Value as of March 31, 2024
Book Value as of December 31, 2023
Weighted Average Contractual Interest RateMaturity Date
Preferred Equity3— — — 1,782 1,805 1,801 15.0 %N/A
Total$1,782 $1,805 $1,801 
The following table summarizes the Company’s other real estate related investments activity for the three months ended March 31, 2024 and 2023 (dollars in thousands):
Three Months Ended March 31,
2024
2023
Origination of other real estate related investments$53,165 $— 
Accrued interest, net425 (150)
Unrealized losses on other real estate related investments, net(612)(454)
Prepayments of other real estate related investments— (15,000)
Net change in other real estate related investments$52,978 $(15,604)
2024 Other Real Estate Related Investment Transactions
On January 1, 2024, the Company closed on the sale of one ALF. In connection with the sale, the Company provided affiliates of the purchaser of the property with a $1.0 million mortgage loan which bears interest at a rate of 9.0%. The mortgage loan is secured by the ALF and is set to mature on January 1, 2027. The mortgage loan may be prepaid in whole before the maturity date. The Company elected the fair value option for the mortgage loan.
On January 25, 2024, the Company extended a $9.8 million mezzanine loan for a portfolio of ten SNFs located in Missouri secured by a pledge of membership interests in an up-tier holding company of the borrower group. The Company participated in the loan alongside a co-lender pursuant to a participation agreement entered into between the Company and the co-lender. Pursuant to such agreement, the Company provided $9.8 million in mezzanine loan proceeds and the co-lender provided the remaining $10.2 million of loan proceeds. As a participant in the loan, and subject to limited exceptions, the Company is entitled to receive its proportionate share of loan payments made by the borrower with each co-lender’s proportionate share being given equal weight. The loan bears interest at term SOFR plus 8.75%, with a term SOFR floor of 6%, payable monthly and net of a 0.75% subservicing fee. Commencing on February 1, 2026, monthly principal payments shall be due. The mezzanine loan is set to mature on July 25, 2027, with two six-month extension options and may (subject to certain restrictions) be prepaid in whole before the maturity date for an exit fee ranging from 1% to 2% of the loan plus unpaid interest payments equal to 24 months (less the amount of monthly interest payments made by the borrower through the date of prepayment). The Company elected the fair value option for the mezzanine loan.
On February 1, 2024, the Company extended a $7.4 million mezzanine loan for one SNF located in California secured by a pledge of membership interests in an up-tier holding company of the borrower group. The loan bears interest at 11.5%, payable monthly. The mezzanine loan is set to mature on January 31, 2029, and may not (subject to certain limited exceptions) be prepaid prior to the date that is 18 months following the loan closing. The Company elected the fair value option for the mezzanine loan.
On February 2, 2024, the Company extended a $35.0 million mezzanine loan for a portfilio of 15 SNFs located in Virginia secured by a pledge of membership interests in an up-tier holding company of the borrower group. The Company participated in the loan alongside a co-lender pursuant to a participation agreement entered into between the Company and the co-lender. Pursuant to such agreement, the Company provided $35.0 million in mezzanine loan proceeds and the co-lender provided the remaining $50.0 million of loan proceeds. As a participant in the loan, and subject to limited exceptions, the Company is entitled to receive its proportionate share of loan payments made by the borrower with each co-lender’s proportionate share being given equal weight. The loan bears interest at term SOFR plus 8.75%, with a term SOFR floor of 6%, payable monthly and net of a 0.75% subservicing fee. Commencing on February 2, 2026, monthly principal payments shall be due. The mezzanine loan is set to mature on August 1, 2027, with two six-month extension options and may (subject to certain restrictions) be prepaid in whole before the maturity date for an exit fee ranging from 1% to 2% of the loan plus unpaid interest payments equal to 18 months (less the amount of monthly interest payments made by the borrower through the date of prepayment). The Company elected the fair value option for the mezzanine loan.
Other Loans Receivables
As of March 31, 2024 and December 31, 2023, the Company’s other loans receivable, included in prepaid expenses and other assets, net on the Company’s condensed consolidated balance sheets, consisted of the following (dollars in thousands):
As of March 31, 2024
Investment
Principal Balance as of March 31, 2024
Book Value as of March 31, 2024
Book Value as of December 31, 2023
Weighted Average Contractual Interest RateMaturity Date
Other loans receivable$17,094 $17,156 $17,156 8.8 %6/30/2024 - 5/31/2026
Expected credit loss— (2,094)(2,094)
Total$17,094 $15,062 $15,062 
The following table summarizes the Company’s other loans receivable activity for the three months ended March 31, 2024 and 2023 (dollars in thousands):
Three Months Ended March 31,
2024
2023
Principal payments$— $(143)
Accrued interest, net— (1)
Net change in other loans receivable$— $(144)
Expected credit losses and recoveries are recorded in provision for loan losses, net in the condensed consolidated income statements. During both the three months ended March 31, 2024 and 2023, the Company had no additional expected credit loss and did not consider any loan receivable investments to be impaired.
The following table summarizes the interest and other income recognized from the Company’s loans receivable and other investments during the three months ended March 31, 2024 and 2023 (dollars in thousands):
For the Three Months Ended March 31,
Investment20242023
Mortgage secured loans receivable$3,772 $2,704 
Mezzanine loans receivable1,895 1,583 
Preferred equity investment68 — 
Other loans receivable331 156 
Other(1)
3,502 — 
Total$9,568 $4,443 
(1) Other income is comprised of interest income on money market funds.