XML 40 R26.htm IDEA: XBRL DOCUMENT v3.24.0.1
Variable Interest Entities
12 Months Ended
Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Variable Interest Entities Variable Interest Entities
Consolidated Variable Interest Entities

SHOP - The assets of the SHOP ventures primarily consist of real estate properties, cash and cash equivalents, and resident fees and services (accounts receivable). The obligations of the ventures primarily consist of operating expenses of the ILFs (accounts payable and accrued expenses) and capital expenditures for the properties. Aggregate assets of the consolidated SHOP ventures that can be used only to settle obligations of each respective SHOP venture primarily include approximately $260.7 million and $260.6 million of real estate properties, net, $7.7 million and $6.9 million of cash and cash equivalents, $0.9 million and $0.7 million of other assets, and $0.8 million and $0.7 million of accounts receivable, net as of December 31, 2023 and 2022, respectively. Liabilities of the consolidated SHOP ventures for which creditors do not have recourse to the general credit of the Company are $4.7 million and $3.3 million as of December 31, 2023 and 2022, respectively. Reference Note 5 for further discussion of these ventures.

Real Estate Partnerships - The aggregate assets of the two consolidated real estate partnerships that can be used only to settle obligations of each respective partnership for the years ended December 31, 2023 and 2022 include approximately $252.5 million and $259.2 million of real estate properties, net, $9.7 million and $7.1 million in straight-line rents receivable, $3.2 million and $3.4 million of cash and cash equivalents and $7.8 million and less than $0.1 million of other assets, respectively. Liabilities of these partnerships for which creditors do not have recourse to the general credit of the Company are not material.

Unconsolidated Variable Interest Entities

The Company’s unconsolidated VIEs are summarized below by date of initial involvement. For further discussion of the nature of the relationships, including the sources of exposure to these VIEs, see the notes cross-referenced below ($ in thousands).
DateNameSource of ExposureCarrying Amount Maximum Exposure to LossNote Reference
2014Senior LivingNotes and straight-line receivable$89,406 $93,156 Notes 3, 4
2016Senior Living ManagementNotes$24,500 $24,500 
2018BickfordNotes and funding commitment$16,909 $29,550 Notes 3, 4
2019Encore Senior Living
Various1
$56,578 $57,432 
2020Timber Ridge OpCo
Various2
$1,348 $6,348 Notes 6, 7
2020Watermark RetirementNotes and straight-line receivable$9,551 $11,574 
2021Montecito Medical Real EstateNotes and funding commitment$20,509 $50,254 Note 4
2021Vizion HealthNotes and straight-line receivable$16,481 $16,481 
2021Navion Senior Solutions
Various3
$7,992 $7,992 
2023Kindcare Senior Living
Notes4
$751 $751 

1 Notes, straight-line rents receivable, and lease receivables
2 Loan commitment, equity method investment, straight-line rents receivable and unamortized lease incentive
3 Notes, loan commitments, straight-line rents receivable, and unamortized lease incentive
4 Represents two mezzanine loans originated from the sales of real estate

We are not obligated to provide support beyond our stated commitments to these tenants and borrowers whom we classify as VIEs, and accordingly, our maximum exposure to loss as a result of these relationships is limited to the amount of our commitments, as shown above and discussed in the notes. Economic loss on a lease, in excess of what is presented in the table above, if any, would be limited to that resulting from any period of non-payment of rent before we are able to take effective remedial action, as well as costs incurred in transitioning the lease to a new tenant. The potential extent of such loss would be dependent upon individual facts and circumstances, and is therefore not included in the table above.

In the future, NHI may be deemed the primary beneficiary of the operations if the tenants or borrowers do not have adequate liquidity to accept the risks and rewards as the tenants and operators of the properties and NHI may be required to consolidate the financial position and results of operations of the tenants or borrowers into our consolidated financial statements.