Segment Reporting

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

We evaluate our business and make resource allocations on our two operating segments: Real Estate Investments and SHOP. Our Real Estate Investments segment includes real estate investments and mortgage and other notes receivables in independent living facilities, assisted living facilities, entrance-fee communities, senior living campuses, skilled nursing facilities and a hospital. Under the Real Estate Investments segment, we invest in seniors housing and health-care real estate through acquisition and financing of primarily single- tenant properties. Properties acquired are primarily leased under triple-net leases, and we are not involved in the management of the property. SHOP includes multi-tenant independent living facilities. The SHOP properties and related operations are controlled by the Company and are operated by property managers in exchange for a management fee (reference Note 5).

We formed the SHOP segment effective April 1, 2022 upon termination of the triple-net lease for the legacy Holiday portfolio at which time the operations and properties of 15 ILFs were transferred into two separate ventures, as discussed further in Notes 5 and 8. The results associated with the prior triple-net lease structure for these properties are included in the Real Estate Investments segment and the results from operating these SHOP properties after the transition are included in our new SHOP segment. There is no impact to the prior year’s presentation.

Our chief operating decision maker evaluates performance based upon segment NOI. We define NOI as total revenues, less tenant reimbursements and property operating expenses. We use NOI to make decisions about resource allocations and to assess the property level performance of our properties. There were no intersegment transactions for the year ended December 31, 2022. Capital expenditures for the year ended December 31, 2022 were approximately $30.8 million for the Real Estate Investments segment and $3.3 million for the SHOP segment.

Non-segment revenue consists mainly of other income. Non-segment assets consist of corporate assets including cash, deferred loan expenses and corporate offices and equipment among others. Non-property specific revenues and expenses are not allocated to individual segments in determining NOI.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2). The results of operations for all acquisitions described in Notes 3 and 4 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments.

Summary information for the reportable segments during the year ended December 31, 2022 is as follows ($ in thousands):

For the year ended December 31, 2022:	Real Estate Investments		SHOP		Non-segment/Corporate		Total
Rental income	$	217,700	$	—	$	—	$	217,700
Resident fees and services	—		35,796		—		35,796
Interest income and other	24,383		—		315		24,698
Total revenues	242,083		35,796		315		278,194
Senior housing operating expenses	—		28,193		—		28,193
Taxes and insurance on leased properties	9,788		—		—		9,788
NOI	232,295		7,603		315		240,213
Depreciation	64,407		6,408		65		70,880
Interest	3,089		—		41,828		44,917
Legal	—		—		2,555		2,555
Franchise, excise and other taxes	—		—		844		844
General and administrative	—		—		22,768		22,768
Loan and realty losses	61,911		—		—		61,911
Gains on sales of real estate, net	(28,342)		—		—		(28,342)
Loss on operations transfer, net	710		—		—		710
Gain on note receivable payoff	(1,113)		—		—		(1,113)
Loss on early retirement of debt	—		—		151		151
Gains from equity method investment	(569)		—		—		(569)
Net income	$	132,202	$	1,195	$	(67,896)	$	65,501
Total assets	$	2,225,176	$	274,135	$	8,113	$	2,507,424