
Operator	Date	Properties	Asset Class	Land		Building and Improvements		Total
Silverado Senior Living	Q1 2023	2	ALF	$	3,894	$	33,599	$	37,493
Bickford	Q1 2023	1	ALF	1,746		15,542		17,288
				$	5,640	$	49,141	$	54,781

In February 2023, we acquired two memory care communities operated by Silverado Senior Living for approximately $37.5 million. The newly developed properties opened in 2022 and include a 60-unit community in Summerlin, Nevada and a 60-unit community in Frederick, Maryland. They are leased pursuant to 20-year leases with a first-year lease rate of 7.5% and annual escalators of 2.0%.

In February 2023, we also acquired a 64-unit assisted living and memory care community in Chesapeake, Virginia from Bickford. The acquisition price was $17.3 million, including the satisfaction of an outstanding construction note receivable of $14.2 million including interest, cash consideration of $0.5 million and approximately $0.1 million in closing costs. The acquisition price also included a reduction of $2.5 million in Bickford’s outstanding pandemic-related deferrals that has been recognized in “Rental income.” We added the community to an existing master lease with Bickford at an initial rate of 8.0%.

During the six months ended June 30, 2023, we completed the following dispositions of real estate properties within our Real Estate Investments portfolio as described below ($ in thousands):


Operator	Date	Properties	Asset Class	Net Proceeds		Net Real Estate Investment		Gain		Impairment2
BAKA Enterprises, LLC1,3	Q1 2023	1	ALF	$	7,478	$	7,505	$	—	$	(27)
Bickford1	Q1 2023	1	ALF	2,553		1,421		1,132		—
Chancellor Senior Living1,3	Q2 2023	1	ALF	2,355		1,977		378		—
Milestone Retirement1,3,4	Q2 2023	2	ALF	3,803		3,934		—		(131)
Chancellor Senior Living1,3	Q2 2023	1	ALF	7,633		6,140		1,493		—
Milestone Retirement1,3,4	Q2 2023	1	ALF	1,602		1,452		150		—
Chancellor Senior Living	Q2 2023	1	ALF	23,724		14,476		9,248		—
				$	49,148	$	36,905	$	12,401	$	(158)

2 Impairments are included in “Loan and realty losses (gains)” in the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2023.

4 The Company provided aggregate financing of approximately $0.7 million, net of discounts, on these transactions in the form of notes receivable.

Rental income associated with assets held for sale totaled $0.6 million and $1.6 million for the three and six months ended June 30, 2023, respectively, and $0.4 million and $1.1 million for the three and six months ended June 30, 2022, respectively. During the first quarter of 2023, one property in our Real Estate Investments portfolio was classified as held for sale with a net real estate balance of $5.0 million and two properties, previously classified as held for sale with an aggregate net real estate balance of $12.3 million, were reclassified as held for use.

During the three and six months ended June 30, 2023, we recorded impairment charges of approximately $0.1 million on two properties and approximately $0.5 million on three properties, respectively, which were sold or classified as held for sale related to our Real Estate Investments portfolio. The impairment charges are included in “Loan and realty losses (gains)” in the Condensed Consolidated Statements of Income.

We reduce the carrying value of impaired properties to their estimated fair value or, with respect to the properties classified as held for sale, to estimated fair value less costs to sell. To estimate the fair values of the properties, we utilized a market approach which considered binding agreements for sales (Level 1 inputs), non-binding offers to purchase from unrelated third parties and/or broker quotes of estimated values (Level 3 inputs), and/or independent third-party valuations (Level 1 and 3 inputs).

During the third quarter of 2023, we sold one ALF located in Oregon for approximately $2.9 million in cash consideration, net of transaction costs. The property was classified in assets held for sale on the Condensed Consolidated Balance Sheet as of June 30, 2023 with an aggregate book value of $2.3 million. Prior impairment charges recognized on the property totaled $3.1 million.

The following table contains information regarding concentration in our Real Estate Investments portfolio of tenants or affiliates of tenants, that exceed 10% of total revenues for the six months ended June 30, 2023 and 2022, excluding $2.6 million for our corporate office, a credit loss reserve of $15.0 million and $341.0 million in assets for the SHOP segment ($ in thousands):


	as of June 30, 2023					Revenues1
	Asset	Gross Real		Notes		Six Months Ended June 30,
	Class	Estate		Receivable		2023			2022

Senior Living Communities, LLC (“Senior Living”)	EFC	$	573,631	$	48,950	$	25,658	16%	$	25,549	19%
Bickford2	ALF	430,217		16,875		19,977		12%	N/A		N/A
National HealthCare Corporation (“NHC”)	SNF	133,770		—		18,983		12%	18,597		14%
Holiday Retirement3	ILF	—		—		N/A		N/A	16,680		13%
All others, net	Various	1,292,606		173,044		66,323		41%	53,214		41%
Escrow funds received from tenants
for property operating expenses	Various	—		—		5,830		4%	5,195		4%
		$	2,430,224	$	238,869	136,771			119,235
Resident fees and services4						23,493		15%	11,992		9%
						$	160,264		$	131,227

3 Revenues for the six months ended June 30, 2022 include an $8.8 million lease deposit recognized in the first quarter of 2022 and $6.9 million in escrow cash received in the second quarter of 2022.

At June 30, 2023, the two states in which we had an investment concentration of 10% or more were South Carolina (12.1%) and Texas (10.7%).

As of June 30, 2023, we leased ten retirement communities to Senior Living. We recognized straight-line rent revenue of $(0.6) million and $0.2 million from Senior Living for six months ended June 30, 2023 and 2022, respectively.

As of June 30, 2023, we leased three ILFs and 32 SNFs to NHC, a publicly held company, under a master lease (four of which are subleased to other parties for whom the lease payments are guaranteed to us by NHC). Straight-line rent of $(0.6) million was recognized for NHC for the six months ended June 30, 2023. For the six months ended June 30, 2022, NHC rent escalations were based primarily on a percentage increase in revenue over a base year that did not give rise to non-cash, straight-line rental income.

As of June 30, 2023, we leased 39 facilities under four leases to Bickford. During the second quarter of 2022, we converted Bickford to the cash basis of revenue recognition based upon information obtained from Bickford regarding its financial condition that raised substantial doubt as to its ability to continue as a going concern. As a result, we wrote off approximately $18.1 million of straight-line rents receivable and $7.1 million of lease incentives, that were included in “Other assets” on the Condensed Consolidated Balance Sheet, to rental income in the second quarter of 2022.

During the three and six months ended June 30, 2023, Bickford repaid $0.4 million and $0.6 million, respectively, of its outstanding pandemic-related deferrals in addition to the reduction in deferrals of $2.5 million recognized in connection with the acquisition of the ALF located in Chesapeake, Virginia from Bickford. As of June 30, 2023, Bickford’s outstanding pandemic-related deferrals were $19.8 million.

Cash rent received from Bickford for the three and six months ended June 30, 2023 was $8.1 million and $15.9 million, respectively, which excludes $2.5 million of rental income related to the reduction of pandemic-related rent deferrals recognized in connection with the acquisition of the ALF in the first quarter of 2023 located in Chesapeake, Virginia discussed above.

We placed two additional operators on the cash basis of accounting for their leases during 2022. Rental income associated with these tenants totaled $2.3 million and $6.5 million for the three and six months ended June 30, 2023, respectively.

Certain of our leases contain purchase options allowing tenants to acquire the leased properties. At June 30, 2023, we had tenant purchase options on three properties with an aggregate net investment of $59.2 million that will become exercisable between 2027 and 2028. Rental income from these properties with tenant purchase options was $1.8 million and $3.6 million for the three and six months ended June 30, 2023, respectively, and $1.7 million and $3.5 million for the three and six months ended June 30, 2022, respectively.

We cannot reasonably estimate at this time the probability that any 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.

Most of our existing leases contain annual escalators in rent payments. Some of our leases contain escalators that are determined annually based on a variable index or other factors that are 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,
	2023		2022		2023		2022
Lease payments based on fixed escalators	$	53,538	$	58,648	$	112,827	$	118,115
Lease payments based on variable escalators	2,103		1,258		3,696		2,486
Straight-line rent income, net of write-offs	2,875		(14,915)		4,972		(13,836)
Escrow funds received from tenants for property operating expenses	3,212		2,157		5,830		5,195
Amortization and write-off of lease incentives	(776)		(7,166)		(1,075)		(7,419)
Rental income	$	60,952	$	39,982	$	126,250	$	104,541