XML 32 R13.htm IDEA: XBRL DOCUMENT v3.24.0.1
Loans Receivable
 12 Months Ended
Dec. 31, 2023
Receivables [Abstract]  
Loans Receivable Loans Receivable
Loans receivable are recorded on our Consolidated Balance Sheets in real estate loans receivable, net of allowance for credit losses, or for non-real estate loans receivable, in receivables and other assets, net of allowance for credit losses.
Accrued interest receivable was $31,798,000 and $22,878,000 as of December 31, 2023 and December 31, 2022, respectively, and is included in receivables and other assets on the Consolidated Balance Sheets. The following is a summary of our loans receivable (in thousands):
 Year Ended December 31,
 20232022
Mortgage loans$1,057,516 $707,464 
Other real estate loans324,660 195,566 
Allowance for credit losses on real estate loans receivable(20,589)(12,186)
Real estate loans receivable, net of credit allowance1,361,587 890,844 
Non-real estate loans503,993 441,231 
Allowance for credit losses on non-real estate loans receivable(173,874)(152,063)
Non-real estate loans receivable, net of credit allowance330,119 289,168 
Total loans receivable, net of credit allowance$1,691,706 $1,180,012 
The following is a summary of our loan activity for the periods presented (in thousands):
 Year Ended
 December 31, 2023December 31, 2022December 31, 2021
Advances on loans receivable$490,736 $156,045 $997,449 
Less: Receipts on loans receivable90,215 196,310 343,260 
Net cash advances (receipts) on loans receivable$400,521 $(40,265)$654,189 
During the year ended December 31, 2021, we provided £540 million (approximately $750,330,000 based on the Sterling/ U.S. Dollar exchange rate as of the date of funding) of senior loan financing and a £30 million delayed facility for working capital and capital expenditures to affiliates of Safanad, a global real estate and private equity firm, as part of the recapitalization of its investment in HC-One Group ("HC-One"). During the year ended December 31, 2023, we amended the loan agreement to provide an additional £65 million of financing relating to HC-One's acquisition of an operating platform and extended the maturity to October 2028. As of December 31, 2023, the outstanding principal balance on the expanded loan is £611,453,000 (approximately $779,175,000 based on the Sterling/U.S. Dollar exchange rate as of December 31, 2023). As part of the original loan and as part of the 2023 expansion, we received equity warrants, which provide us the right to participate in the capital appreciation of HC-One above a designated price upon liquidation. See Note 12 for additional details.
The following is a summary of our loans by credit loss category (in thousands):
December 31, 2023
Loan categoryYears of OriginationLoan Carrying ValueAllowance for Credit LossNet Loan BalanceNo. of Loans
Deteriorated loans 2007 - 2023 $215,283 $(172,045)$43,238 9
Collective loan pool 2007 - 2018 227,810 (3,028)224,782 14
Collective loan pool201923,960 (319)23,641 4
Collective loan pool202034,938 (464)34,474 5
Collective loan pool2021871,754 (11,794)859,960 11
Collective loan pool2022126,324 (1,680)124,644 18
Collective loan pool2023386,100 (5,133)380,967 17
Total loans$1,886,169 $(194,463)$1,691,706 78 
During the year ended December 31, 2021, we entered into definitive agreements to substantially exit our operating relationship with Genesis primarily through the transition of 51 properties to other operators. To effectuate this transition, we agreed to provide Genesis a lease termination fee of $86,310,000 upon successful transition of all properties, which was to be used to immediately repay indebtedness to us. These property transitions substantially occurred throughout 2021, and as of December 31, 2023, $85,043,000 of the lease termination fee has been earned by Genesis and repaid to us to reduce substantially all of the outstanding balance of this indebtedness.
Additionally, upon achievement of certain restructuring milestones, we agreed to reduce the balance of Genesis' unsecured notes payable to us by an additional $169,771,000 in exchange for an equity interest in Genesis. As of December 31, 2023, the amount of the potential reduction of the balance of these unsecured notes has increased to $238,104,000 due to accrued unpaid interest. The maturity date on the unsecured notes has been extended to March 29, 2024. The unsecured notes are included in the deteriorated loan category, and per our policy have had no interest recognized in the three years ended December 31, 2023. The achievement of milestones required for forgiveness has not yet occurred and as of December 31, 2023, the outstanding contractual balance of the unsecured notes, before potential debt reduction, is $290,296,000 and the carrying value is $24,246,000 after application of an allowance for credit losses and consideration of unrecognized interest.
During the year ended December 31, 2023, certain secured indebtedness payable by Genesis to us, which has a carrying value of $166,859,000, was modified to extend the maturity date to March 29, 2024, with no other changes to the terms. Both the unsecured and the secured notes with Genesis are included in non-real estate loans receivable.
The total allowance for credit losses is deemed to be sufficient to absorb expected losses relating to our loan portfolio. The following is a summary of the allowance for credit losses on loans receivable for the periods presented (in thousands):
 Year Ended December 31,
 202320222021
Balance at beginning of year$164,249 $166,785 $224,036 
Provision for loan losses, net(1)
8,797 (1,394)7,270 
Loan write-offs(2)
— — (64,075)
Purchased deteriorated loan19,077 — — 
Reserve for unrecognized interest added to principal2,066 — — 
Foreign currency translation274 (1,142)(446)
Balance at end of year$194,463 $164,249 $166,785 
(1) Excludes the provision for loan loss on held-to-maturity debt securities.
(2) Includes $64,075,000 related to the Genesis lease terminations for the twelve months ended December 31, 2021.
The following is a summary of our deteriorated loans (in thousands):
 Year Ended December 31,
 202320222021
Balance of deteriorated loans at end of year$215,283 $174,841 $178,369 
Allowance for credit losses(172,045)(148,438)(148,438)
Balance of deteriorated loans not reserved$43,238 $26,403 $29,931 
Interest recognized on deteriorated loans(1)
$1,681 $— $3,185 
(1 Represents cash interest recognized in the period.