Credit Losses on Financial Assets and Other Instruments

3 Months Ended

Mar. 31, 2024

Credit Loss [Abstract]

Credit Losses on Financial Assets and Other Instruments

Credit Losses on Financial Assets and Other Instruments

The table below sets forth the activity for our allowance for credit losses for the three months ended March 31, 2024 and 2023 (in thousands):

	Investing Receivables		Tenant Notes Receivable (1)		Other Assets (2)		Total
December 31, 2023	$	2,377	$	666	$	153	$	3,196
Credit loss expense (recoveries) (3)	(16)		116		(78)		22
March 31, 2024	$	2,361	$	782	$	75	$	3,218
December 31, 2022	$	2,794	$	778	$	268	$	3,840
Credit loss expense (recoveries) (3)	143		(19)		(57)		67
Write-offs	—		(33)		—		(33)
March 31, 2023	$	2,937	$	726	$	211	$	3,874

(1)Included in the line entitled “accounts receivable, net” on our consolidated balance sheets.

(2)The balance as of March 31, 2024 and December 31, 2023 included $16,000 and $87,000, respectively, in the line entitled “accounts receivable, net” and $59,000 and $66,000, respectively, in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheets.

(3)Included in the line entitled “interest and other income, net” on our consolidated statements of operations.

The following table presents the amortized cost basis of our investing receivables, tenant notes receivable and sales-type lease receivables by credit risk classification, by origination year as of March 31, 2024 (in thousands):

	Origination Year
	2019 and Earlier		2020		2021		2022		2023		2024		Total
Investing receivables:
Credit risk classification:
Investment grade	$	65,932	$	2,529	$	9,291	$	—	$	265	$	—	$	78,017
Non-investment grade	—		—		—		6,867		—		—		6,867
Total	$	65,932	$	2,529	$	9,291	$	6,867	$	265	$	—	$	84,884
Tenant notes receivable:
Credit risk classification:
Investment grade	$	658	$	94	$	—	$	—	$	—	$	—	$	752
Non-investment grade	151		1,400		—		—		—		487		2,038
Total	$	809	$	1,494	$	—	$	—	$	—	$	487	$	2,790
Sales-type lease receivables:
Credit risk classification:
Investment grade	$	—	$	4,949	$	—	$	—	$	—	$	1,160	$	6,109

Our investment grade credit risk classification represents entities with investment grade credit ratings from ratings agencies (such as S&P Global Ratings, Moody’s Investors Service, Inc. or Fitch Ratings, Inc.), meaning that they are considered to have

at least an adequate capacity to meet their financial commitments, with credit risk ranging from minimal to moderate. Our non-investment grade credit risk classification represents entities with either no credit agency credit ratings or ratings deemed to be sub-investment grade; we believe that there is significantly more credit risk associated with this classification. The credit risk classifications of our investing receivables and tenant notes receivable were last updated in March 2024.

An insignificant portion of the tenant notes receivable set forth above was past due, which we define as being delinquent by more than three months from the due date.

Tenant notes receivable on nonaccrual status as of March 31, 2024 and December 31, 2023 were not significant. We did not recognize any interest income on tenant notes receivable on nonaccrual status during the three months ended March 31, 2024 and 2023.