Investment in Unconsolidated Joint Ventures (Tables)

3 Months Ended

Mar. 31, 2022

Investment in Unconsolidated Joint Ventures

Summary of the preferred equity investments

The following table provides information regarding these preferred equity investments (dollar amounts in thousands):

	Type	Type		Total		Contractual		Number
	of	of		Preferred		Cash		of		Carrying
State	Properties	Investment		Return		Portion		Beds/ Units		Value
Washington	ALF/MC	Preferred Equity	(1)	12	%	7	%	95	$	6,340	(1)
Washington	UDP	Preferred Equity	(2)	12	%	8	%	—		13,000	(2)
Total								95	$	19,340

(1) Invested preferred equity in an entity that developed and owns a 95-unit ALF and MC in Washington. Our investment represents 15.5% of the total investment. The preferred equity investment earns an initial cash rate of 7% increasing to 9% in year four until the internal rate of return (“IRR”) is 8%. After achieving an 8% IRR, the cash rate drops to 8% until achieving an IRR ranging between 12% to 14%, depending upon timing of redemption. During the fourth quarter of 2021, the entity completed the development project and received its certificate of occupancy. We have the option to require the JV partner to purchase our preferred equity interest at any time between August 17, 2031 and December 31, 2036.

(2) Invested preferred equity in an entity that will develop and own a 267-unit ILF and ALF in Washington. Our investment represents 11.6% of the estimated total investment. The preferred equity investment earns an initial cash rate of 8% with an IRR of 12%. The JV partner has the option to buy out our investment at any time after August 31, 2023 at the IRR rate. Also, we have the option to require the JV partner to purchase our preferred equity interest at any time between August 31, 2027 and, upon project completion and leasing the property, prior to the end of the first renewal term of the lease.

Summary of capital contributions, income recognized and cash interest received from investments in unconsolidated joint ventures

The following table summarizes our capital contributions, income recognized, and cash interest received related to our investments in unconsolidated joint ventures for the three months ended March 31, 2022 and 2021 (in thousands):

	Type
	of		Capital		Income		Cash Interest
Year	Properties		Contribution		Recognized		Earned
2022	ALF/MC	$	—	$	112	$	112
	UDP (1)		—		263		263
Total		$	-	$	375	$	375
2021	ALF/MC	$	—	$	112	$	75
	UDP (1)		8,000		177		89
Total		$	8,000	$	289	$	164

(1) During 2021, we funded the remaining $8,000 related to a $13,000 preferred equity investment commitment in an entity that will develop and own a 267-unit ILF and ALF in Washington. Additionally, we withheld $2,324 from the $8,000 funding for a total reserve of $3,777 related to this preferred equity investment.