
Operator	Date	Properties	Asset Class	Land		Building and 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

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, and concurrently 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. At September 30, 2021, no funds have been drawn.

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.


Operator	Date	Properties	Asset Class	Net Proceeds		Net Real Estate Investment		Other1				Gain/(Impairment)2
Bickford	Q2 2021	6	SHO	$	39,924	$	34,485	$	1,871	$	3,568	$	3,568
Community Health Systems	Q2 2021	1	MOB	3,887		946		62				2,879
TrustPoint Hospital	Q3 2021	1	HOSP	31,215		21,018		1,562				8,635
Holiday	Q3 2021	8	SHO	114,133		113,611		(1,360)				1,882
Quorum Health	Q3 2021	1	HOSP	8,314		9,568		—				(1,254)
Senior Living Management	Q3 2021	1	SHO	12,847		3,212		210				9,425
Holiday	Q3 2021	1	SHO	5,666		10,388		(81)				(4,641)
				$	215,986	$	193,228	$	2,264			$	20,494

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 $3.6 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 $4.5 million for the nine months ended September 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. Reference Note 7 for discussion of additional contingent consideration associated with this disposition that was not included in the transaction price at the time of closing.

During the second quarter of 2021, we sold a medical office building located in Florida for approximately $4.3 million in cash consideration, and incurred $0.4 million of transaction costs, resulting in a gain of approximately $2.9 million. Revenue for this property was $0.1 million and $0.3 million for the nine months ended September 30, 2021 and 2020, respectively.

In July 2021, we sold a behavioral hospital located in Tennessee for cash consideration of $31.2 million and recorded a gain of approximately $8.6 million. Rental income was $0.1 million and $1.4 million, for the three and nine months ended September 30, 2021, respectively, and $0.7 million and $2.0 million for the three and nine months ended September 30, 2020, respectively.

In August 2021, we sold a portfolio of eight properties that was leased to Holiday with an aggregate net book value of $113.6 million for total cash consideration of $115.0 million, and incurred transaction costs of $0.9 million, and recognized a gain of approximately $1.9 million associated with this transaction. Rental income was $0.9 million and $5.9 million, for the three and nine months ended September 30, 2021, respectively, and $2.5 million and $7.5 million for the three and nine months ended September 30, 2020, respectively.

In September 2021, we sold a property that was leased to Holiday located in Indiana with a net book value of $10.4 million for total cash consideration of $5.8 million, incurred transactions costs of $0.1 million, and recognized an impairment of approximately $4.6 million associated with this transaction. Rental income was $0.1 million and $0.4 million, for the three and nine months ended September 30, 2021, respectively and $0.2 million and $0.5 million for the three and nine months ended September 30, 2020, respectively.

In September 2021, we sold an acute care hospital located in Kentucky for cash consideration of $9.0 million, incurred $0.7 million of transaction costs, and recorded an impairment charge of approximately $1.3 million. Rental income was $0.7 million and $2.5 million, for the three and nine months ended September 30, 2021, respectively, and $0.9 million and $2.3 million, for the three and nine months ended September 30, 2020, respectively.

On September 30 2021, we sold a senior living community located in Florida for cash consideration of $14.0 million that was received October 1, 2021, incurred transaction costs of $1.2 million and recorded a gain of approximately $9.4 million. Rental income was $0.3 million and $0.8 million, for the three and nine months ended September 30, 2021, respectively, and $0.3 million and $1.0 million for the three and nine months ended September 30, 2020, respectively. The consideration receivable for the sale is included in “Other assets” in our Condensed Consolidated Balance Sheet as of September 30, 2021.

During the third quarter of 2021, we reclassified three transition properties to assets held for sale on our Condensed Consolidated Balance Sheet as of September 30, 2021 and recorded impairment charges of approximately $16.6 million to reduce their net book values to estimated fair values less estimated transaction costs. Two of the properties are located in Texas and one property is located in Tennessee. Rental income for these properties was based on operating income, net of management fees, and did not generate significant revenues for either the nine months ended September 30, 2021 or the nine months ended September 30, 2020.

As discussed above, we recognized real estate impairment charges of approximately $5.9 million during the three and nine months ended September 30, 2021, related to the disposition of one Holiday property located in Indiana and an acute care hospital located in Kentucky.

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 $5.1 million, based on the percentage of revenues for the nine months ended September 30, 2021 and 2020, related to tenants or affiliates of tenants, that exceed 10% of total revenue ($ in thousands):


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

Senior Living Communities	EFC	10	$	573,631	$	42,609	$	38,094	17%	$	38,972	15%
National HealthCare Corporation (NHC)	SNF	42	171,188		—		28,290		12%	28,362		11%
Bickford Senior Living	ALF	42	490,308		38,751		26,224		11%	39,142		16%
Holiday	ILF	17	377,735		—		22,811		10%	30,529		12%
All others, net2	Various		1,406,251		208,387		106,110		46%	107,377		43%
Escrow funds received from tenants
for property operating expenses	Various		—		—		7,519		4%	7,190		3%
			$	3,019,113	$	289,747	$	229,048		$	251,572

Certain of our leases contain purchase options allowing tenants to acquire the leased properties. At September 30, 2021, we had a net investment of $18.8 million in five real estate properties which are subject to exercisable tenant purchase options. Tenant purchase options on 10 properties in which we had an aggregate net investment of $90.5 million at September 30, 2021, become exercisable between 2025 and 2028. Rental income from all leased properties with tenant purchase options was $3.4 million and $10.3 million for the three and nine months ended September 30, 2021, respectively, and $3.4 million and $10.0 million for the three and nine months ended September 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 September 30, 2021 was $9.5 million. Rental income was $0.5 million and $1.4 million, for both the three and nine months ended September 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.

Nine properties were transitioned during 2019 to five new tenants following a period of non-compliance by the former operators. We recognized rental income from these nine properties of $0.7 million and $2.4 million for the three and nine months ended September 30, 2021, respectively, and $0.9 million and $3.7 million for the three and nine months ended September 30, 2020, respectively. Three of the properties were reclassified to assets held for sale on our Condensed Consolidated Balance Sheet as of September 30, 2021, as noted above.

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				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Lease payments based on fixed escalators, net of deferrals	$	59,027	$	67,592	$	188,008	$	206,179
Lease payments based on variable escalators	1,288		1,386		3,201		4,151
Straight-line rent income	3,798		5,086		12,189		15,481
Escrow funds received from tenants for property operating expenses	3,182		4,007		7,519		7,190
Amortization of lease incentives	(252)		(250)		(774)		(735)
Rental income	$	67,043	$	77,821	$	210,143	$	232,266