LOANS RECEIVABLE AND INVESTMENTS

6 Months Ended

Jun. 30, 2023

Loans Receivable And Investments [Abstract]

NOTE 5—LOANS RECEIVABLE AND INVESTMENTS

As of June 30, 2023 and December 31, 2022, we had $52.2 million and $561.4 million, respectively, of loans receivable and investments, net of allowance, relating to senior housing and healthcare operators or properties. The following is a summary of our loans receivable and investments, net, including amortized cost, fair value and unrealized gains or losses on available for sale investments (dollars in thousands):


	Amortized Cost		Allowance		Carrying Amount		Fair Value
As of June 30, 2023:
Secured/mortgage loans and other, net (1)	$	27,749	$	—	$	27,749	$	27,790


Non-mortgage loans receivable, net (2)	28,992		(4,492)		24,500		23,626

Total loans receivable and investments, net	$	56,741	$	(4,492)	$	52,249	$	51,416
As of December 31, 2022:
Secured/mortgage loans and other, net (3)	$	513,669	$	(20,000)	$	493,669	$	493,627
Government-sponsored pooled loan investments, net (4)	43,406		—		43,406		43,406
Total investments reported as secured loans receivable and investments, net	557,075		(20,000)		537,075		537,033
Non-mortgage loans receivable, net (2)	28,959		(4,621)		24,338		23,416
Total loans receivable and investments, net	$	586,034	$	(24,621)	$	561,413	$	560,449

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(1)Investments have contractual maturities in 2024 and 2027.

(2)Included in other assets on our Consolidated Balance Sheets.

(3)Includes the Company’s cash-pay non-recourse mezzanine loan to Santerre Health Investors (the “Santerre Mezzanine Loan”), which was no longer outstanding as of June 30, 2023. Other included investments have contractual maturities in 2024 and 2027.

(4)Repaid at par in February 2023.

On May 1, 2023, we took ownership of the properties that secured the Santerre Mezzanine Loan by converting the outstanding principal amount of the Santerre Mezzanine Loan to equity, with no additional consideration being paid. As a result, the Santerre Mezzanine Loan is no longer outstanding. The properties consisted of a diverse pool of outpatient medical buildings, senior housing operating portfolio communities, triple-net leased skilled nursing facilities and hospital assets in the United States, which, at the time, also secured a $1 billion non-recourse senior mortgage loan issued under the CHC Commercial Mortgage Trust 2019-CHC (the “CHC Mortgage Loan”). For additional information regarding the CHC Mortgage Loan, see “Note 9 – Senior Notes Payable And Other Debt.”

As of December 31, 2022, we recognized a $20.0 million allowance on the Santerre Mezzanine Loan in our Consolidated Statements of Income. The allowance for the Santerre Mezzanine Loan was calculated using the “current expected credit loss”, or “CECL”, model, which considers relevant information about past events, current conditions and reasonable and supportable forecasts to estimate expected losses as of the most recent balance sheet date. During the three months ended March 31, 2023, we recorded an $8.0 million partial reversal of the allowance in our Consolidated Statements of Income resulting in a $12.0 million allowance as of March 31, 2023. In connection with our equitization of the Santerre Mezzanine Loan on May 1, 2023, we recognized $41.1 million in valuation-related items in our Consolidated Statements of Income consisting of: (a) the reversal of the $12.0 million and $20.0 million of allowances on the Santerre Mezzanine Loan for the three and six months ended June 30, 2023, respectively, and (b) a gain on foreclosure of real estate of $29.1 million for the three and six months ended June 30, 2023. The gain is the fair value of the properties that secured the Santerre Mezzanine Loan, less the fair value of the CHC Mortgage Loan, less the principal amount of the Santerre Mezzanine Loan on May 1, 2023 (after the reversal of previously recorded allowances), and net of non-real estate assets and liabilities and transaction costs. For additional information, see “Note 10 – Fair Value Measurements”.