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Real Estate (Narrative) (Details)
$ in Thousands

3 Months Ended

6 Months Ended

Aug. 05, 2021

USD ($)

beds_or_units

Jul. 15, 2021

USD ($)

Jun. 30, 2021

USD ($)

beds_or_units

properties

renewalOptions

Jun. 30, 2020

USD ($)

Jun. 30, 2021

USD ($)

beds_or_units

properties

renewalOptions

Jun. 30, 2020

USD ($)

Dec. 31, 2020

USD ($)

Number of Real Estate Properties | properties

222

Number of States in which Entity Operates

Operating Leases, Income Statement, Lease Revenue

$ 68,351

$ 77,917

$ 143,101

$ 154,444

Property, Plant and Equipment, Net

2,618,756

$ 2,667,432

Loans and Leases Receivable, Gross

289,348

Loans and Leases Receivable, Commitments, Fixed Rates

274,700

Gains (Losses) on Sales of Investment Real Estate

$ 6,484

21,007

Minimum Holding Period After Purchase Option Exercise

1 year

Real Estate Disclosure [Text Block]

Note 3. Real Estate Properties and Investments

During the six months ended June 30, 2021, we completed the following real estate acquisitions as described below ($ in thousands):


Operator	Date	Properties	Asset Class	Land		Building & Improvements		Total
Vizion Health	Q2 2021	1	HOSP	$	1,470	$	38,780	$	40,250
Navion Senior Solutions	Q2 2021	1	SHO	531		6,069		6,600
				$	2,001	$	44,849	$	46,850

Vizion Health

In May 2021, we acquired a 64-bed specialty behavioral hospital located in Oklahoma for a total purchase price of $40.3 million, including $0.3 million in closing costs. In May 2021, we leased the hospital to an affiliate of Vizion Health. The 15-year master lease, which includes two five-year extension options, has an initial lease rate of 8.5% with fixed annual escalators of 2.5%. We have committed to additional funding of capital improvements for the hospital of up to $2.0 million which will be added to the lease base as funded.

Navion Senior Solutions

In June 2021, we acquired a 48-unit assisted living and memory care community in Tennessee for a purchase price of $6.6 million, including closing costs of $0.1 million. The community was added to an existing master lease with Navion Senior Solutions (“Navion”) whose term was reset for 12 years, has a lease rate of 7.5% with fixed annual escalators of 2.5% and offers two optional extensions of five years each.

Tenant Concentration

The following table contains information regarding tenant concentration in our portfolio, excluding $2.6 million for our corporate office and a credit loss reserve balance of $5.2 million, based on the percentage of revenues for the six months ended June 30, 2021 and 2020, related to tenants or affiliates of tenants, that exceed 10% of total revenue ($ in thousands):


	as of June 30, 2021						Revenues1
	Asset	Number of	Real		Notes		Six Months Ended June 30,
	Class	Properties	Estate		Receivable		2021			2020

Senior Living Communities	EFC	10	$	573,631	$	44,411	$	25,420	16%	$	26,140	16%
Holiday Retirement	ILF	26	532,672		—		19,188		12%	20,353		12%
National HealthCare Corporation (NHC)	SNF	42	171,188		—		18,844		12%	18,904		11%
Bickford Senior Living	ALF	42	490,308		36,875		16,893		11%	27,526		16%
All others, net2	Various		1,471,301		208,062		70,533		45%	71,166		43%
Escrow funds received from tenants
for property operating expenses	Various		—		—		4,337		4%	3,182		2%
			$	3,239,100	$	289,348	$	155,215		$	167,271

1 includes interest income on notes receivable

2 includes prior period amounts for disposals or transitioned to new operators

At June 30, 2021, the one state in which we had an investment concentration of 10% or more was South Carolina (10.4%).

Two of our board members, including our chairman, are also members of NHC’s board of directors.

Assets Held for Sale

We have identified a behavioral hospital located in Tennessee for disposal, pursuant to the exercise of an option to purchase, and have classified the asset as available for sale on the Condensed Consolidated Balance Sheet at June 30, 2021. In July 2021, we sold this property for cash consideration of $31.2 million and recorded a gain of $8.6 million. Rental income was $0.7 million and $1.4 million, for both the three and six months ended June 30, 2021 and 2020, respectively.

Tenant Purchase Options

Certain of our leases contain purchase options allowing tenants to acquire the leased properties. At June 30, 2021, we had a net investment of $18.9 million in five real estate properties which are subject to exercisable tenant purchase options. Tenant purchase options on 11 properties in which we had an aggregate net investment of $100.3 million at June 30, 2021, become exercisable between 2022 and 2028. Rental income from leased properties with tenant purchase options either currently exercisable or exercisable in the future was $4.3 million and $8.7 million for the three and six months ended June 30, 2021, respectively, and $4.2 million and $7.9 million for the three and six months ended June 30, 2020, respectively.

In June 2021, we received notification of a tenant’s intention to acquire, pursuant to a purchase option, a hospital located in California. The purchase option calls for a minimum purchase price of $15.0 million with any appreciation above $15.0 million to be split evenly between the parties. The net investment at June 30, 2021 was $9.5 million. Rental income was $0.5 million and $0.9 million, for both the three and six months ended June 30, 2021 and 2020, respectively. The transaction will close no earlier than one year after the receipt of the notice of exercise.

We cannot reasonably estimate at this time the probability that any other purchase options will be exercised in the future. Consideration to be received from the exercise of any tenant purchase option is expected to exceed our net investment in the leased property or properties.

Other Portfolio Activity

Tenant Transitioning

Nine properties were transitioned during 2019 to five new tenants following a period of non-compliance by the former operators. Two leases with new tenants for six of these properties specify periods during which rental income is based on operating income, net of management fees. We recognized rental income from these nine properties of $0.8 million and $1.6 million for the three and six months ended June 30, 2021, respectively, and $1.3 million and $2.8 million for the three and six months ended June 30, 2020, respectively.

Asset Dispositions

Bickford

During the second quarter of 2021, we sold to affiliates of Bickford a portfolio of six properties that were being leased to Bickford for a purchase price of $52.9 million. We received approximately $39.9 million in cash consideration upon sale and originated a second mortgage note receivable for the remaining purchase price of $13.0 million. A gain was not recognized related to the $13.0 million second mortgage note receivable, which is discussed in more detail in Note 4. We recorded a gain upon completion of this transaction totaling approximately $3.5 million representing the excess of the $39.9 million cash consideration received over the net book value of the assets sold of $34.5 million and the write off of straight-line rents receivable of approximately $1.9 million. Rental income from this portfolio was $1.6 million and $3.0 million for the six months ended June 30, 2021 and 2020, respectively.

Upon completion of the sale, Bickford satisfied the terms of our prior agreement that contingently waived $2.1 million in rental income for the third quarter of 2020. These properties were part of our ongoing negotiations for the sale to Bickford of nine properties being leased to Bickford. We continue to explore our options for the remaining three properties, which could include a sale to a third party, re-tenanting, or retaining the existing lease with Bickford.

Florida Medical Office Building

During the second quarter of 2021, we also sold a medical office building for approximately $4.3 million in cash consideration resulting in a gain of $3.0 million. Revenue for this property was $0.1 million and $0.2 million for the six months ended June 30, 2021 and 2020 respectively.

Holiday Disposition

In July 2021, we signed a non-binding letter of intent to sell a portfolio of nine properties that is leased to Holiday with an aggregate net book value of $133.5 million. We anticipate closing this transaction in August 2021 for total cash consideration of $129.8 million and will recognize an impairment of approximately $3.7 million in the third quarter of 2021 associated with this transaction. Rental income was $2.9 million and $5.8 million, for both the three and six months ended June 30, 2021 and 2020, respectively.

Future Minimum Base Rent

Future minimum lease payments to be received by us under our operating leases at June 30, 2021, are as follows ($ in thousands):


Remainder of 2021	$	142,729
2022	284,690
2023	280,864
2024	275,808
2025	276,974
2026	281,289
Thereafter	1,203,183
	$	2,745,537

We assess the collectability of lease payments to be received from our tenants, which includes receivables, consisting primarily of straight-line rents receivable, based on several factors, including payment history, the financial strength of the tenant and any guarantors, historical operations and operating trends of the property, and current economic conditions. If our evaluation of these factors indicates it is not probable that we will be able to collect substantially all of the lease payments, we recognize lease payments on a cash basis and de-recognize all rents receivable, including the straight-line rent receivable and record as a reduction in rental revenue.

Variable Lease Payments

Most of our existing leases contain annual escalators in rent payments. For financial statement purposes, rental income is recognized on a straight-line basis over the term of the lease where the lease contains fixed escalators. Some of our leases contain escalators that are determined annually based on a variable index or other factor that is indeterminable at the inception of the lease. The table below indicates the revenue recognized as a result of fixed and variable lease escalators ($ in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Lease payments based on fixed escalators, net of deferrals	$	61,394	$	69,918	$	128,982	$	138,588
Lease payments based on variable escalators	894		1,400		1,913		2,764
Straight-line rent income	4,150		5,218		8,391		10,395
Escrow funds received from tenants for property operating expenses	2,175		1,630		4,337		3,182
Amortization of lease incentives	(262)		(249)		(522)		(485)
Rental income	$	68,351	$	77,917	$	143,101	$	154,444