Notes Receivable

9 Months Ended

Sep. 30, 2021

Notes Receivable.

Notes Receivable

4. Notes Receivable

Notes receivable consists of mezzanine loans and other loan arrangements. The following table is a summary of our notes receivable components as of September 30, 2021 and December 31, 2020 (in thousands):

	September 30, 2021			December 31, 2020
Mezzanine loans	$	11,816	(1)	$	8,445
Other loans		7,048	(2)		6,166
Notes receivable loan loss reserve		(189)			(146)
Total	$	18,675		$	14,465

(1) During the three months ended September 30, 2021, we originated a $4,355 mezzanine loan and held back a $353 interest reserve. The mezzanine loan has a three-year term with two 12-month extensions. The initial rate is 8.0% for the first 18 months increasing to 10.5% thereafter with an internal rate of return (“IRR”) of 10.5%.

(2) Subsequent to September 30, 2021, we provided HMG Healthcare, LLC (“HMG”) a $25,000 secured working capital loan maturing in September 2022 to facilitate the transition of the 11 properties from Senior Care and Abri Health.

The following table summarizes our notes receivable activity for the nine months ended September 30, 2021 and 2020 (in thousands):

	Nine Months Ended September 30,
		2021			2020
Advances under notes receivable	$	6,453	(1)	$	1,366
Interest reserve withheld		353			—
Principal payments received under notes receivable		(2,553)			(4,732)
Reclassified to lease incentives		—			(300)	(2)
Notes receivable reserve		43			36
Net increase (decrease) in notes receivable	$	4,296		$	(3,630)

(1) Funding under working capital notes and mezzanine loans with interest ranging between 5% and 8% and maturities between 2022 and 2030.

(2) Represents interim working capital loans related to development projects which matured upon completion of the development projects and commencement of the master leases.