10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)
☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 1-11314

LTC PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

Maryland
(State or other jurisdiction of incorporation or
organization) 71-0720518
(I.R.S. Employer Identification No.)

2829 Townsgate Road, Suite 350

Westlake Village, California 91361

(Address of principal executive offices)

Registrant’s telephone number, including area code: (805) 981-8655

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading symbol	Name of Each Exchange on Which Registered
Common stock, $.01 Par Value	LTC	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act  ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was approximately $1,515,770,000 as of June 30, 2022 (the last business day of the registrant’s most recently completed second fiscal quarter).

The number of shares of common stock outstanding as of February 9, 2023 was 41,372,589.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement relating to its 2023 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated.

Cautionary Statement on Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, adopted pursuant to the Private Securities Litigation Reform Act of 1995. Statements that are not purely historical may be forward-looking. You can identify some of the forward-looking statements by their use of forward-looking words, such as “believes,” “expects,” “may,” “will,” “could,” “would,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates,” or the negative of those words or similar words. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position. A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward- looking statements, including, but not limited to, our dependence on our operators for revenue and cash flow; the duration and extent of the effects of the COVID-19 pandemic; government regulation of the health care industry; federal and state health care cost containment measures including reductions in reimbursement from third-party payors such as Medicare and Medicaid; required regulatory approvals for operation of health care facilities; a failure to comply with federal, state, or local regulations for the operation of health care facilities; the adequacy of insurance coverage maintained by our operators; our reliance on a few major operators; our ability to renew leases or enter into favorable terms of renewals or new leases; the impact of inflation; operator financial or legal difficulties; the sufficiency of collateral securing mortgage loans; an impairment of our real estate investments; the relative illiquidity of our real estate investments; our ability to develop and complete construction projects; our ability to invest cash proceeds for health care properties; a failure to qualify as a REIT; our ability to grow if access to capital is limited; and a failure to maintain or increase our dividend. For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion under “Risk Factors” contained in this report and in other information contained in this report and our publicly available filings with the Securities and Exchange Commission. We do not undertake any responsibility to update or revise any of these factors or to announce publicly any revisions to forward-looking statements, whether as a result of new information, future events or otherwise.

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LTC Properties, Inc.

Table of Contents

		Page
Part I
Item 1.	Business	4
Item 1A.	Risk Factors	18
Item 1B.	Unresolved Staff Comments	27
Item 2.	Properties	28
Item 3.	Legal Proceedings	30
Item 4.	Mine Safety Disclosures	30
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	30
Item 6.	Reserved	32
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	51
Item 8.	Financial Statements	53
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	97
Item 9A.	Controls and Procedures	97
Item 9B.	Other Information	100
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	100
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	100
Item 11.	Executive Compensation	100
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	100
Item 13.	Certain Relationships and Related Transactions, and Director Independence	100
Item 14.	Principal Accountant Fees and Services	100
Part IV
Item 15.	Exhibits and Financial Statement Schedules	101
Item 16.	Form 10-K Summary	102
SIGNATURES		103

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PART I

Item 1. BUSINESS

General

LTC Properties, Inc. is a real estate investment trust (“REIT”) that invests in seniors housing and health care properties through sale-leasebacks, mortgage financing, joint ventures, construction financing and structured finance solutions including preferred equity and mezzanine lending. Our investments in owned properties, mortgage loans, mezzanine loans and preferred equity investments represent our primary source of income. We depend upon the performance of our operators with respect to the daily management and marketing of long-term health care services offered at our properties.

Our real estate investments include the following types of properties:

● Skilled nursing centers (“SNF”) provide restorative, rehabilitative and nursing care for people not requiring the extensive treatment available at acute care hospitals. Many skilled nursing facilities provide ancillary services that include occupational, speech, physical, respiratory and medical therapies, as well as sub-acute care services which are paid either by the patient, the patient’s family, private health insurance, or through the federal Medicare or state Medicaid programs.

● Assisted living communities (“ALF”) serve people who require assistance with activities of daily living, but do not require the degree of supervision that skilled nursing facilities provide. Services are usually available 24 hours a day and include personal supervision and assistance with eating, bathing, grooming and administering medication. Many assisted living facilities provide a combination of housing, supportive services, personalized assistance and health care designed to respond to individual needs.

● Independent living communities (“ILF”), also known as retirement communities or senior apartments, offer a sense of community and numerous levels of service, such as laundry, housekeeping, dining options/meal plans, exercise and wellness programs, transportation, social, cultural and recreational activities, on-site security and emergency response programs. Many independent living communities offer on-site conveniences like beauty/barber shops, fitness facilities, game rooms, libraries and activity centers.

● Memory care communities (“MC”) offer specialized options for people with Alzheimer’s disease and other forms of dementia. These purpose built, free-standing facilities offer an alternative for private-pay residents affected by memory loss in comparison to other accommodations that typically have been provided within a secured unit of an assisted living or skilled nursing facility. Memory care facilities offer dedicated care, with staff usually available 24 hours a day, and specialized programming for various conditions relating to memory loss in an environment that is typically smaller in scale and more residential in nature than traditional assisted living and skilled nursing facilities.

● Other property types (“OTH”) we also invest in other types of properties such as land parcels, projects under development (“UDP”) and behavioral health care hospitals.

We include independent living facilities and memory care as part of the assisted living property classification in some parts of this Annual Report on Form 10-K. Unless otherwise expressly stated or the context otherwise requires, when we refer to “we,” “our,” “us,” “registrant,” “the company,” or similar terms in this Annual Report on Form 10-K, we mean LTC Properties, Inc. and its consolidated subsidiaries.

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Portfolio

The following table summarizes our real estate investment portfolio as of December 31, 2022 (dollar amounts in thousands):

								Twelve Months Ended
								December 31, 2022
		Number of				Percentage					Percentage
	Number of	SNF	ALF	Gross		of		Rental			of Total
Owned Properties	Properties (1)	Beds (2)	Units (2)	Investments		Investments		Revenue			Revenues
Assisted Living	99	—	5,497	$	797,813	40.7	%	$	53,923		34.1	%
Skilled Nursing	52	6,348	236		600,974	30.7	%		55,126		34.8	%
Other (3)	1	118	—		11,918	0.6	%		991		0.6	%
Total Owned Properties	152	6,466	5,733		1,410,705	72.0	%		110,040	(5)​	69.5	%
		Number of				Percentage		Interest Income			Percentage
	Number of	SNF	ALF		Gross	of		from Financing			of Total
Financing Receivable	Properties (1)	Beds	Units		Investments	Investments		Receivable			Revenues
Skilled Nursing	3	299	—		76,767	3.9	%		1,762		1.1	%
Total Financing Receivable	3	299	—		76,767	3.9	%		1,762		1.1	%
		Number of				Percentage		Interest Income			Percentage
	Number of	SNF	ALF		Gross	of		from Mortgage			of Total
Mortgage Loans	Properties (1)	Beds	Units		Investments	Investments		Loans			Revenues
Assisted Living	18	—	808		103,626	5.4	%		6,730		4.3	%
Skilled Nursing	23	2,891	—		287,349	14.6	%		33,692		21.3	%
Other (4)	—	—	—		2,683	0.1	%		178		0.1	%
Total Mortgage Loans	41	2,891	808		393,658	20.1	%		40,600		25.7	%
		Number of				Percentage		Interest			Percentage
	Number of	SNF	ALF		Gross	of		and other			of Total
Notes Receivable	Properties (1)	Beds	Units		Investments	Investments		Income			Revenues
Assisted Living	7	—	961		43,662	2.2	%		3,590		2.3	%
Skilled Nursing	—	—	—		15,311	0.8	%		720		0.4	%
Total Notes Receivable	7	—	961		58,973	3.0	%		4,310		2.7	%
		Number of				Percentage		Income from			Percentage
	Number of	SNF	ALF		Gross	of		Unconsolidated			of Total
Unconsolidated Joint Ventures	Properties (1)	Beds	Units		Investments	Investments		Joint Ventures			Revenues
Assisted Living	1	—	95		6,340	0.3	%		450		0.3	%
Under Development	—	—	—		13,000	0.7	%		1,054		0.7	%
Total Unconsolidated Joint Ventures	1	—	95		19,340	1.0	%		1,504		1.0	%
Total Portfolio	204	9,656	7,597	$	1,959,443	100.0	%	$	158,216		100.0	%

	Number	Number of				Percentage
	of	SNF	ALF	Gross		of
Summary of Properties by Type	Properties (1)	Beds (2)	Units (2)	Investments		Investments
Skilled Nursing	78	9,538	236	$	980,401	50.0	%
Assisted Living	125	—	7,361		951,441	48.6	%
Under Development	—	—	—		13,000	0.7	%
Other (3) (4)	1	118	—		14,601	0.7	%
Total Portfolio	204	9,656	7,597	$	1,959,443	100.0	%

(1) We have investments in owned properties, financing receivable, mortgage loans, notes receivable and unconsolidated joint ventures in 29 states to 32 different operators.

(2) See Item 2. Properties for discussion of bed/unit count.

(3) Includes three parcels of land held-for-use and one behavioral health care hospital.

(4) Includes one parcel of land in Missouri securing a first mortgage held for future development of a post-acute SNF and one parcel of land in North Carolina securing a first mortgage held for future development of a seniors housing community.

(5) Excludes $15,459 variable rental income from lessee reimbursement of our real estate taxes and $2,745 rental income from sold properties.

As of December 31, 2022, our total investment portfolio included $1.6 billion in carrying value of net investments consisting of $1.0 billion or 65.2% invested in owned and leased properties, $76.0 million or 4.9% invested in financing receivable, $0.4 billion or 24.9% invested in mortgage loans secured by first mortgages, $58.4 million or 3.7% in notes receivable and $19.3 million or 1.3% in unconsolidated joint ventures.

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Owned Properties. The following table summarizes our investment in owned properties at December 31, 2022 (dollar amounts in thousands):

								Average
			Percentage		Number	Number of		Investment
	Gross		of		of	SNF	ALF	per
Type of Property	Investment		Investment		Properties (1)	Beds (2)	Units (2)	Bed/Unit
Assisted Living	$	797,813	56.6	%	99	—	5,497	$	145.14
Skilled Nursing		600,974	42.6	%	52	6,348	236	$	91.28
Other (3)		11,918	0.8	%	1	118	—		—
Total	$	1,410,705	100.0	%	152	6,466	5,733

(1) We have investments in 26 states leased to 24 different operators.

(2) See Item 2. Properties for discussion of bed/unit count.

(3) Includes three parcels of land held-for-use and one behavioral health care hospital.

Owned properties are leased pursuant to non-cancelable operating leases generally with an initial term of 2 to 15 years. Many of the leases contain renewal options. Each lease is a triple net lease which requires the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities. Many of the leases contain renewal options and provide for fixed minimum base rent during the initial and renewal periods. The majority of our leases contain provisions for specified annual increases over the rents of the prior year and that increase is generally computed in one of four ways depending on specific provisions of each lease:

(i) a specified percentage increase over the prior year’s rent, generally between 2.0% and 3.0%;

(ii) a calculation based on the Consumer Price Index or Medicare Market Basket Rate;

(iii) as a percentage of facility revenues in excess of base amounts; or

(iv) specific dollar increases.

Our leases that contain fixed annual rental escalations and/or have annual rental escalations that are contingent upon changes in the Consumer Price Index or the Medicare Market Basket Rate, are generally recognized on a straight-line basis over the minimum lease period. Certain leases have annual rental escalations that are contingent upon changes in the gross operating revenues of the property. This revenue is not recognized until the appropriate contingencies have been resolved.

Generally, our leases provide for one or more of the following: security deposits, property tax impounds, repair and maintenance, escrows and credit enhancements such as corporate or personal guarantees or letters of credit. In addition, our leases are typically structured as master leases and multiple master leases with one operator, and are generally cross defaulted.

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The following table summarizes the concentration of our top ten operators of owned properties for 2022 and percentage of rental revenue, excluding rental income from properties sold, variable rental income due to lessee reimbursement of our real estate taxes, and adjustment for collectability of rental income for those operators for 2022 and 2021:

		Percent of
		Rental Revenue
Lessee	Property Type	2022		2021
Brookdale Senior Living Communities, Inc.	ALF/MC	13.5	%	13.4	%
Carespring Healthcare Management, LLC	SNF	10.2	%	10.4	%
Anthem Memory Care	MC	9.8	%	10.1	%
Genesis Healthcare	ALF/SNF	7.9	%	7.8	%
Fundamental Long Term Care Company	SNF/OTH	7.7	%	7.8	%
Ark Post Acute Network	ILF/ALF/SNF	7.5	%	7.7	%
HMG Partners	SNF	7.2	%	1.8	%
Juniper Communities, LLC	ALF/MC	5.9	%	6.1	%
Ignite	SNF	4.9	%	3.0	%
Randall Residence	ILF/ALF/MC	4.6	%	4.0	%

Financing Receivable. During 2022, we entered into a joint venture and contributed $61.7 million into the JV that purchased three skilled nursing centers located in Florida for $75.8 million. Our JV partner contributed the remaining $14.3 million of equity. The JV leased the centers back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year. Accordingly, the transaction has been accounted for as a Financing receivable on our Consolidated Balance Sheets. During 2022, we recognized $1.8 million of Interest income from financing receivable on our Consolidated Statements of Income. Additionally, in conjunction with the origination of this investment, we recorded $0.8 million provision for expected loan losses.

Subsequent to December 31, 2022, we entered into a $121.3 million JV with an affiliate of an existing operator and contributed $117.9 million into the JV that purchased 11 assisted living and memory care communities from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit Internal Rate of Return (“IRR”) of 9.0%. In accordance with GAAP, the communities acquired by the JV are required to be presented as a Financing receivable on our Consolidated Balance Sheets.

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Mortgage Loans. As part of our strategy of making investments in properties used in the provision of long-term health care services, we provide mortgage financing on such properties based on our established investment underwriting criteria. We have also provided construction loans that by their terms convert into purchase/lease transactions or permanent financing mortgage loans upon completion of construction. The following table summarizes our investments in mortgage loans secured by first mortgages at December 31, 2022 (dollar amounts in thousands):

					Type	Percentage		Number of					Investment
			Gross		of	of					SNF	ALF	per
Interest Rate	Maturity (1)	State	Investment		Property	Investment		Loans (2)	Properties (3)		Beds	Units	Bed/Unit
7.5%	2023	MO	$	1,886	OTH	0.5	%	1	—	(4)​	—	—	$	n/a
7.5%	2024	LA		29,347	SNF	7.5	%	1	1		189	—	$	155.28
7.8%	2025	FL		14,308	ALF	3.6	%	1	1		—	68	$	210.41
7.3% (5)	2025	NC/SC		56,317	ALF	14.3	%	1	13		—	523	$	107.68
7.3%	2026	NC		33,001	ALF	8.4	%	1	4		—	217	$	152.08
7.3%	2026	NC		797	OTH	0.2	%	1	—	(6)​	—	—	$	—
10.4% (7)	2043	MI		184,351	SNF	46.8	%	1	15		1,875	—	$	98.32
9.5% (7)	2045	MI		39,026	SNF	9.9	%	1	4		480	—	$	81.30
9.9% (7)	2045	MI		19,750	SNF	5.0	%	1	2		201	—	$	98.26
10% (7)	2045	MI		14,875	SNF	3.8	%	1	1		146	—	$	101.88
Total			$	393,658		100.0	%	10	41		2,891	808	$	106.42

(1) Subsequent to December 31, 2022, we originated a $10,750 mortgage loan secured by a MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%.

(2) Some loans contain certain guarantees and/or provide for certain facility fees.

(3) Our mortgage loans are secured by properties located in six states with five borrowers.

(4) Represents a mortgage loan secured by a parcel of land for the future development of a 91-bed post-acute SNF.

(5) Represents the initial rate. This loan has an IRR of 8%.

(6) Represents a mortgage loan secured by a parcel of land in North Carolina held for future development of a seniors housing community.

(7) Mortgage loans provide for 2.25% annual increases in the interest rate after a certain time period.

In general, the mortgage loans may not be prepaid except in the event of the sale of the collateral property to a third-party that is not affiliated with the borrower, although partial prepayments (including any prepayment premium) are often permitted where a mortgage loan is secured by more than one property upon a sale of one or more, but not all, of the collateral properties to a third-party which is not an affiliate of the borrower. The terms of the mortgage loans generally impose a premium upon prepayment of the loans depending upon the period in which the prepayment occurs, whether such prepayment was permitted or required, and certain other conditions such as upon the sale of the property under a pre-existing purchase option, destruction or condemnation, or other circumstances as approved by us. The prepayment premium is based on a yield maintenance formula. In addition to a lien on the mortgaged property, the loans are generally secured by certain non-real estate assets of the properties and contain certain other security provisions in the form of letters of credit and/or security deposits.

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Notes Receivable. Our investment in notes receivable consists of mezzanine loans and other loan arrangements. The following table summarizes our investments in notes receivable at December 31, 2022 (dollar amounts in thousands):

Interest			Type of	Gross				Type of
Rate	IRR	Maturity	Loan	Investment			# of loans	Property
5.0%	—	2023	Working capital	$	380		1	ALF
7.0%	—	2023	Working capital		500		1	ALF
8.0%	12.0%	2023	Mezzanine		7,460		1	ALF
5.0%	—	2024	Working capital		184		1	ALF
8.0%	10.5%	2024	Mezzanine		4,355	(1)​	1	ILF
4.0%	—	2024	Working capital		13,531		1	SNF
5.0%	—	2025	Working capital		932		1	ALF
7.5%	—	2027	Working capital		550		1	ALF
8.0%	11.0%	2027	Mezzanine		25,000		1	ALF
6.5%	—	2030	Working capital		138		1	SNF
7.1%	—	2030	Working capital		1,607		2	ALF
7.0%	—	2031	Working capital		2,693		1	ALF
8.0%	—	2032	Working capital		1,642		1	SNF
				$	58,972		14

(1) Subsequent to December 31, 2022, we received $4,545 which includes a prepayment fee and the exit IRR totaling $190, from a mezzanine loan early payoff. The mezzanine loan was on a 136-unit in Oregon.

Unconsolidated Joint Ventures. From time to time, we provide funding to third-party operators for the acquisition, development and construction (“ADC”) of a property. If the ADC arrangement characteristics are more similar to a jointly-owned investment or partnership, we account for the ADC arrangement as an investment in an unconsolidated joint venture under the equity method of accounting. The following table summarizes our investment in unconsolidated joint ventures at December 31, 2022 (dollar amounts in thousands):

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

(1) Subsequent to December 31, 2022, we received a notice of intent to redeem our $13,000 preferred equity investment in a joint venture to develop a 267-unit ILF and ALF in Washington. We anticipate receiving $1,675 of additional income in 2023 associated with the redemption representing the 14% exit IRR.

Investment Policies and Strategies

Our investment policy is to invest primarily in seniors housing and health care properties. Over the past three years, we have underwritten investments in seniors housing communities and health care centers for a total of approximately $320.7 million. Additionally, during the past three years, we have disposed of properties for a total sales price of $194.7 million.

Historically our investments have consisted of:

● fee ownership of seniors housing and skilled nursing properties that are leased to operators;

● mortgage loans secured by seniors housing and skilled nursing properties; or

● participation in such investments indirectly through investments in mezzanine loans and real estate partnerships or other entities that themselves make direct investments in such loans or properties.

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In evaluating potential investments, we consider factors such as:

● type of property;

● location;

● competition within the local market and evaluation of the impact resulting from any potential new development projects in construction or anticipated to be approved by local authorities;

● construction quality, condition and design of the property;

● current and anticipated cash flow of the property and its adequacy to meet operational needs and lease obligations or debt service obligations;

● experience, reputation and solvency of the operating companies providing services;

● payor mix of private, managed care, Medicare and Medicaid patients;

● growth, tax and regulatory environments of the communities in which the properties are located;

● occupancy and demand for similar properties in the area surrounding the property; and

● Medicaid reimbursement policies and plans of the state in which the property is located.

Prior to an investment, we conduct a property site review to assess the general physical condition of the property and the potential of additional services. In addition, we review third-party environmental reports, land surveys, and market studies (if applicable) as well as conduct a financial due diligence review of the property before the investment is made.

We seek to diversify our portfolio by operator, by property type, and geographically. Our primary marketing and business development strategy is to increase awareness of our presence and build long-term relationships in the seniors housing and health care industry by supporting targeted industry trade organizations, attending industry specific conferences and events attended by seniors housing and care providers, and seeking out speaking engagements at industry related events as well as interviews in industry publications. We believe this targeted marketing and business development effort has provided deal flow opportunities and will continue to provide opportunities for new investments in 2023. Since competition from investors as well as other capital providers for large transactions consisting of fully-marketed, multi-property portfolios generally result in valuations above our targeted investment criteria, our marketing and business development efforts focus on sourcing relationships with regionally based operating companies to execute on single property transactions (for acquisition, mortgage or structured financing or development), or smaller multi-property portfolios that are not broadly marketed by third-party intermediaries which complement our historic investment execution and are priced at yields that are accretive to our stockholders.

It is our current policy, and we intend to continue this policy, that all borrowers of funds from us and lessees of any of our properties secure adequate comprehensive property and general and professional liability insurance that covers us as well as the borrower and/or lessee. Although we actively monitor and seek to ensure compliance with our policies, we may be subject to loss for any number of reasons, such as, noncompliance on the part of our lessees/borrowers, losses that exceed covered limits or that are not covered, inability of lessees/borrowers to obtain insurance on commercially reasonable terms, bankruptcy of a carrier, or insufficient tail coverage.  For investments in which we own fee simple title to the property and lease it to a third-party tenant, we are a non-possessory landlord and are not responsible for what takes place on such property. Nonetheless, claims including those pertaining to general and professional liability may be asserted against us which may result in costs and exposure for which insurance is not available.

Competition

In the health care industry, we compete for real property investments with health care providers, other health care related REITs, real estate partnerships, banks, private equity funds, venture capital funds and other investors. Many of our competitors are significantly larger and have greater financial resources and lower cost of capital than we have available to us. Our ability to compete successfully for real property investments will be determined by numerous

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factors, including our ability to identify suitable acquisition targets, our ability to negotiate acceptable terms for any such acquisition and the availability and our cost of capital.

The lessees and borrowers of our properties compete on a local, regional and, in some instances, national basis with other health care providers. The ability of the lessee or borrower to compete successfully for patients or residents at our properties depends upon several factors, including the levels of care and services provided by the lessees or borrowers, the reputation of the providers, physician referral patterns, physical appearances of the properties, family preferences, financial condition of the operator and other competitive systems of health care delivery within the community, population and demographics.

REIT Tax Status

We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, or the Code. To maintain our qualification as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we annually distribute to our shareholders at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains. As a REIT, we generally are not subject to U.S. federal income tax on the taxable income we distribute to our shareholders. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax at the generally applicable corporate tax rate. Even if we qualify for taxation as a REIT, we may be subject to U.S. federal income tax provisions on certain specific transactions and property, as well as certain state and local taxes on our income, property or net worth and U.S. federal income and excise taxes on our undistributed income.

Health Care Regulation

Overview

The health care industry is heavily regulated by the government. Our borrowers and lessees who operate health care facilities are subject to extensive regulation by federal, state and local governments. These laws and regulations are subject to frequent and substantial changes resulting from legislation, adoption of rules and regulations, and administrative and judicial interpretations of existing law. These changes may have a dramatic effect on the definition of permissible or impermissible activities, the relative costs associated with doing business and the amount of reimbursement by both government and other third-party payors. These changes may be applied retroactively. The ultimate timing or effect of these changes cannot be predicted. The failure of any borrower of funds from us or lessee of any of our properties to comply with such laws, requirements and regulations could result in sanctions or remedies such as denials of payment for new Medicare and Medicaid admissions, civil monetary penalties, state oversight and loss of Medicare and Medicaid participation or licensure. Such action could affect our borrower’s or lessee’s ability to operate its facility or facilities and could adversely affect such borrower’s or lessee’s ability to make debt or lease payments to us.

The properties we own and the manner in which they are operated are affected by changes in the reimbursement, licensing and certification policies of federal, state and local governments. Properties may also be affected by changes in accreditation standards or procedures of accrediting agencies. In addition, expansion (including the addition of new beds or services or acquisition of medical equipment) and occasionally the discontinuation of services of health care facilities are, in some states, subjected to state and regulatory approval through “certificate of need” laws and regulations.

Health Care Reform and Other Legislative Developments

Federal health care reform, including the Patient Protection and Affordable Care Act, as amended (the “Affordable Care Act”), has expanded access to health insurance, reduced health care costs, and instituted various health policy reforms. Among other things, the Affordable Care Act: reduced Medicare skilled nursing facility reimbursement by a so-called “productivity adjustment” based on economy-wide productivity gains; required the development of a value-based purchasing program for Medicare skilled nursing facility services; authorized bundled payment programs, which can include post-acute services; and provided incentives to state Medicaid programs to promote community-based care as an alternative to institutional long-term care services. In addition, the Affordable Care Act impacts both us and

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our lessees and borrowers as employers, including requirements related to the health insurance we offer to our respective employees. Many aspects of the Affordable Care Act have been implemented through regulations and sub-regulatory guidance. In December 2017, President Trump signed into law a tax reform bill that repeals the Affordable Care Act’s penalty for individuals who fail to maintain health coverage meeting certain minimum standards. While there have been efforts to repeal the law and enact alternative reforms, the Biden Administration has indicated it will support and expand upon the Affordable Care Act. Additional revisions of the Affordable Care Act could be made in future, although the details and timing of any such actions are unknown at this time. There can be no assurance that the implementation of the Affordable Care Act or any subsequent modifications or related legal challenges will not adversely impact the operations, cash flows or financial condition of our lessees and borrowers, which subsequently could materially adversely impact our revenue and operations.

The Protecting Access to Medicare Act of 2014 required the Secretary of the Department of Health and Human Services to develop a skilled nursing facility “value-based purchasing program” tying Medicare payments to skilled nursing facilities to their performance on certain new readmissions measures, applicable to services furnished beginning October 1, 2018. The Medicare Access and CHIP Reauthorization Act of 2015 set the annual skilled nursing facility prospective payment system update for fiscal year 2018 at 1%, and the Bipartisan Budget Act of 2018 established an update of 2.4% for fiscal year 2019. Additional reforms affecting the payment for and availability of health care services have been proposed at the state level and adopted by certain states.

President Biden, Congress and state legislatures can be expected to continue to review and assess alternative health care delivery systems and payment methodologies, including potential changes in Medicare and Medicaid payment policy for skilled nursing facility services and other types of post-acute care. Additional changes in laws, new interpretations of existing laws, or other changes in payment methodologies may have a dramatic effect on the definition of permissible or impermissible activities, the relative costs associated with doing business and the amount of reimbursement by the government and other third-party payors. There can be no assurances that enacted or future legislation will not have an adverse impact on the financial condition of our borrowers and lessees, which subsequently could materially adversely impact our company.

Reimbursement

The ability of our borrowers and lessees to generate revenue and profit determines the underlying value of that property to us. Revenues of our borrowers and lessees of skilled nursing centers are generally derived from payments for patient care. Sources of such payments for skilled nursing facilities include the federal Medicare program, state Medicaid programs, private insurance carriers, managed care organizations, preferred provider arrangements, and self-insured employers, as well as the patients themselves.

A significant portion of the revenue of our skilled nursing center borrowers and lessees is derived from governmentally-funded reimbursement programs, such as Medicare and Medicaid. Because of significant health care costs paid by such government programs, both federal and state governments have adopted and continue to consider various health care reform proposals to control health care costs. In many instances, revenues from Medicaid programs are insufficient to cover the actual costs incurred in providing care to Medicaid patients. In addition, all states have been making changes to their long-term care delivery systems that emphasize home and community-based long-term care services, in some cases coupled with cost-controls for institutional providers. Increasingly, state Medicaid programs are providing coverage through managed care programs under contracts with private health plans, which is intended to decrease state Medicaid costs. The federal government also has adopted various policies to promote community-based alternatives to institutional services. The Trump Administration and Congress considered revising federal payments to state Medicaid programs to establish block grants or impose per capita limits on federal Medicaid payments to states. On January 30, 2020, the Trump Administration announced that states could apply to participate in a new Medicaid “Healthy Adult Opportunity” (“HAO”) Demonstration project, which would reimburse participating states under a capped aggregate or per-capita federal financial participation financing model in exchange for the states gaining greater flexibility in the scope and administration of their Medicaid programs for certain beneficiary populations (individuals qualifying for Medicaid based on need for long-term care services and supports would be exempt). As states and the federal government continue to respond to budget pressures, future reduction in Medicaid payments for skilled nursing facility services could have an adverse effect on the financial condition of our borrowers and lessees which could, in turn, adversely impact the timing or level of their payments to us.

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With regard to the Medicare program, over the years there have been efforts to contain Medicare fee-for-service spending, promote Medicare managed care, and, more recently, tie reimbursement to quality and value of care. CMS annually updates Medicare skilled nursing facility prospective payment system rates and other policies. On July 31, 2018, CMS issued a final rule updating skilled nursing facility rates and policies for fiscal year 2019. The final rule includes a 2.4% payment increase, which CMS projected will increase overall payments to skilled nursing facilities by $820 million in fiscal year 2019 compared with fiscal year 2018 levels. The final rule also replaced the existing Resource Utilization Groups, Version IV (“RUG–IV”) case mix classification system with a new model beginning in fiscal year 2020, which began October 1, 2019. The new case mix classification system, called the “Patient-Driven Payment Model,” bases Medicare payment on resident needs rather than the amount of therapy a resident receives. On July 30, 2019, CMS issued its final fiscal year 2020 Medicare skilled nursing facility update. Under the final rule, CMS projected Medicare aggregate payments to skilled nursing facilities would increase by $851 million, or 2.4%, for fiscal year 2020 compared with fiscal year 2019. The final rule also addressed implementation of the Patient-Driven Payment Model case mix classification system that became effective on October 1, 2019, changes to the group therapy definition in the skilled nursing facility setting, and various skilled nursing facility Value-Based Purchasing (“VBP”) and quality reporting program policies.

On April 10, 2020, CMS issued a proposed rule to update SNF rates and policies for fiscal year 2021, which started October 1, 2020, and issued the final rule on July 31, 2020. CMS estimates that payments to SNFs would increase by $750 million, or 2.2%, for fiscal year 2021 compared to fiscal year 2020. CMS also adopted revised geographic delineations to identify a provider’s status as an urban or rural facility and to calculate the wage index, applying a 5% cap on any decreases in a provider’s wage index from fiscal year 2020 to fiscal year 2021. Finally, CMS also finalized updates to the SNF value-based purchasing program to reflect previously finalized policies, updated the 30-day phase one review and correction deadline for the baseline period quality measure quarterly report, and announced performance periods and performance standards for the fiscal year 2023 program year. On April 8, 2021, CMS issued a proposed rule to update SNF rates and policies for fiscal year 2022, which started October 1, 2021, and issued the final rule on July 29, 2021. CMS estimated that the aggregate impact of the payment policies in the final rule would result in an increase of approximately $410 million in Medicare Part A payments to SNFs in fiscal year 2022. The final rule also includes several policies that update the SNF Quality Reporting Program and the SNF Value-Based Program for fiscal year 2022. On April 11, 2022, CMS issued a proposed rule to update SNF rates and policies for fiscal year 2023. CMS estimated that the aggregate impact of the payment policies in the proposed rule would result in a decrease of approximately $320 million in Medicare Part A payments to SNFs in fiscal year 2023 compared to fiscal year 2022. CMS also sought input on the effects of direct care staffing requirements to improve long-term care requirements for participation and promote thoughtful, informed staffing plans and decisions within facilities to meet residents’ needs, including maintaining or improving resident function and quality of life. Specifically, CMS sought input on establishing minimum staffing requirements for long-term care facilities. On June 29, 2022, CMS issued updates to guidance on minimum health and safety standards that long-term care facilities must meet to participate in Medicare and Medicaid and updated and developed new guidance in the State Operations Manual to address issues that significantly affect residents of long-term care facilities. On July 29, 2022, CMS issued a final rule to update SNF rates and policies for fiscal year 2023. CMS estimated that the aggregate impact of the payment policies in the final rule would result in an increase of 2.7%, or approximately $904 million, in Medicare Part A payments to SNFs in fiscal year 2023 compared to fiscal year 2022. CMS also finalized a permanent 5% cap on annual wage index decreases to smooth year-to-year changes in providers’ wage index payments. In addition, CMS indicated that it would continue to review the comments it received in response to its request for information on establishing minimum staffing requirements for long-term care facilities, and that it intends to issue proposed rules on a minimum staffing level measure within one year.

There can be no assurance that these rules or future regulations modifying Medicare skilled nursing facility payment rates or other requirements for Medicare and/or Medicaid participation will not have an adverse effect on the financial condition of our borrowers and lessees which could, in turn, adversely impact the timing or level of their payments to us.

Since the announcement of the COVID-19 pandemic and beginning as of March 13, 2020, CMS has issued numerous temporary regulatory waivers and new rules to assist health care providers, including SNFs, in response to the COVID-19 pandemic. These include, waiving the SNFs 3-day qualifying inpatient hospital stay requirement, flexibility in calculating a new Medicare benefit period, waiving timing for completing functional assessments, waiving requirements for health care professional licensure, survey and certification, provider enrollment, and reimbursement for

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services performed by telehealth, among many others. CMS also announced a temporary expansion of its Accelerated and Advance Payment Program to allow SNFs and certain other Medicare providers to request accelerated or advance payments in an amount up to 100% of the Medicare Part A payments they received from October–December 2019; this expansion was suspended April 26, 2020 in light of other CARES Act funding relief. The Continuing Appropriations Acts, 2021 and Other Extensions Act, enacted on October 1, 2020, amended the repayment terms for all providers and suppliers that requested and received accelerated and advance payments during the COVID-19 public health emergency. Specifically, Congress gave providers and suppliers that received Medicare accelerated and advance payment(s) one year from when the first loan payment was made to begin making repayments. In addition, CMS enhanced requirements for nursing facilities to report COVID-19 infections to local, state and federal authorities. On January 11, 2023, Department of Health and Human Services (“HHS”) Secretary Becerra announced that he had renewed, effective January 16, 2022, the declared public health emergency for an additional 90-day period.

On March 26, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), sweeping legislation intended to bolster the nation’s response to the COVID-19 pandemic. In addition to offering economic relief to individuals and impacted businesses, the law expands coverage of COVID-19 testing and preventative services, addresses health care workforce needs, eases restrictions on telehealth services during the crisis, and increases Medicare regulatory flexibility, among many other provisions. Notably, the CARES Act temporarily suspended the 2% across-the-board “sequestration” reduction of all Medicare Fee-For-Service (“FFS”) payments under the Medicare program that had previously been in effect since April 1, 2013, for the period May 1, 2020 through December 31, 2020, and extended the current Medicare sequester requirement through fiscal year 2030. In addition, the law provides $100 billion in grants to eligible health care providers for health care related expenses or lost revenues that are attributable to COVID-19. On April 10, 2020, CMS announced the distribution of $30 billion in funds to Medicare providers based upon their 2019 Medicare fee for service revenues. Eligible providers were required to agree to certain terms and conditions in receiving these grants. In addition, HHS authorized $20 billion of additional funding for providers that have already received funds from the initial distribution of $30 billion. Unlike the first round of funds, which came automatically, providers were required to apply for these additional funds and submit the required supporting documentation, using the online portal provided by HHS. Providers were required to attest to and agree to specific terms and conditions for the use of such funds. HHS expressed a goal of allocating the whole $50 billion proportionally across all providers based on those providers’ proportional share of 2018 net Medicare fee-for-service revenue, so that some providers would not be eligible for additional funds. On May 22, 2020, HHS announced that it had begun distributing $4.9 billion in additional relief funds to SNFs to offset revenue losses and assist nursing homes with additional costs related to responding to the COVID-19 public health emergency and the shipments of personal protective equipment provided to nursing homes by the Federal Emergency Management Agency. On June 9, 2020, HHS announced that it expected to distribute approximately $15 billion to eligible providers that participate in state Medicaid and Children’s Health Insurance Program (“CHIP”) programs and have not received a payment from the Provider Relief Fund General Allocation. On July 22, 2020, President Trump announced that HHS would devote $5 billion in Provider Relief Funds to Medicare-certified long-term care facilities and state veterans’ homes to build nursing home skills and enhance nursing homes’ response to COVID-19, including enhanced infection control. Nursing homes must participate in the Nursing Home COVID-19 training to be qualified to receive this funding. On August 27, 2020, HHS announced that it had distributed almost $2.5 billion to nursing homes to support increased testing, staffing, and personal protective equipment needs. On September 3, 2020, HHS announced a $2 billion performance-based incentive payment distribution to nursing homes and SNFs. Finally, on October 1, 2020, HHS announced $20 billion in new funding for several types of providers, including those who previously received, rejected, or accepted a general distribution provider relief fund payment. The application deadline for these Phase 3 funds was November 6, 2020.

On December 27, 2020, President Trump signed the Consolidated Appropriations Act, 2021 (H.R. 133). The $1.4 trillion omnibus appropriations legislation funds the government through September 30, 2021 and was attached to a $900 billion COVID-19 relief package. Of the $900 billion in COVID-19 relief, $73 billion was allocated to HHS. Notably, the bill adds an additional $3 billion to the Provider Relief Fund, includes language specific to reporting requirements, and allows providers to use any reasonable method to calculate lost revenue, including the difference between such provider’s budgeted and actual revenue budget if such budget had been established and approved prior to March 27, 2020. This change reverts to HHS’ previous guidance from June 2020 on how to calculate lost revenues. In addition, the Consolidated Appropriations Act, 2021 also extended the CARES Act’s sequestration suspension to March 31, 2021. On January 15, 2021, HHS announced that it would be amending the reporting timeline for Provider Relief Funds and indicated that it was working to update the Provider Relief Fund requirements to be consistent with the

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passage of the Consolidated Appropriations Act, 2021.

On June 11, 2021, HHS issued revised reporting requirements for recipients of Provider Relief Fund payments. The announcement included expanding the amount of time providers would have to report information, aimed to reduce burdens on smaller providers, and extended key deadlines for expending Provider Relief Fund payments for recipients who received payments after June 30, 2020. The revised reporting requirements are applicable to providers who received one or more payments exceeding, in the aggregate, $10,000 during a single Payment Received Period from the PRF General Distributions, Targeted Distributions, and/or Skilled Nursing Facility and Nursing Home Infection Control Distributions. On July 1, 2021, HHS, through the Health Resources and Services Administration (“HRSA”), notified recipients of Provider Relief Fund payments by e-mail that the Provider Relief Fund Reporting Portal was open for recipients who were required to report on the use of funds in Reporting Period 1, as described by HHS’s June 11, 2021 update to the reporting requirements. On September 10, 2021, HHS announced a final 60-day grace period of the September 30, 2021 reporting deadline for Provider Relief Funds exceeding $10,000 in aggregate payments received from April 10, 2020 to June 30, 2020. Although the September 30, 2021 reporting deadline remained in place, HHS explained that recoupment or other enforcement actions would not be initiated during the 60-day grace period, which began on October 1, 2021 and ended on November 30, 2021.

Reporting Period 2, for providers who received one or more payments exceeding $10,000, in the aggregate, from July 1, 2020, to December 31, 2020, was from January 1, 2022, to March 31, 2022. Reporting Period 3, for providers who received one or more payments exceeding $10,000, in the aggregate, from January 1, 2021, to June 30, 2021, was from July 1, 2022, to September 30, 2022. Reporting Period 4, for providers who received one or more payments exceeding $10,000, in the aggregate, from July 1, 2021, to December 31, 2021, opened on January 1, 2023, and extends to March 31, 2023. Reporting Period 5, for providers who received one or more payments exceeding $10,000, in the aggregate, from January 1, 2022, to June 30, 2022, opens on July 1, 2023.

On September 10, 2021, the Biden Administration announced $25.5 billion in new funding for health care providers affected by the COVID-19 pandemic, including $8.5 billion in American Rescue Plan (“ARP”) resources for providers who serve rural Medicaid, CHIP, or Medicare patients, and an additional $17 billion for Phase 4 Provider Relief Funds for a broad range of providers who could document revenue loss and expenses associated with the pandemic, including assisted living facilities that were state-licensed/certified on or before December 31, 2020. Approximately 25% of the Phase 4 allocation was for bonus payments based on the amount and type of services provided to Medicaid, CHIP, and Medicare beneficiaries from January 1, 2019 through September 30, 2020. On December 14, 2021, HHS announced the distribution of approximately $9 billion in Provider Relief Fund Phase 4 payments to health care providers who have experienced revenue losses and expenses related to the COVID-19 pandemic. Further, on January 25, 2022, HHS announced that it would be making more than $2 billion in Provider Relief Fund Phase 4 General Distribution payments to more than 7,600 providers across the country that same week. On March 22, 2022, HHS announced more than $413 million in Provider Relief Fund Phase 4 payments to more than 3,600 providers across the country. On April 13, 2022, HRSA announced the disbursement of more than $1.75 billion in Provider Relief Fund payments to 3,680 providers across the country.

Following prior legislation in 2021 suspending sequestration, on December 10, 2021, President Biden signed the Protecting Medicare and American Farmers from Sequester Cuts Act, which suspended the Medicare 2% sequestration reduction through March 31, 2022, and then reduced the sequestration cuts to 1% from April through June 2022. As of July 1, 2022, cuts of 2% were re-imposed.

CMS also has implemented a variety of Medicare bundled payment programs that seek to promote greater care coordination and more efficient use of resources. Certain of these models, such as the Medicare Comprehensive Care for Joint Replacement and Bundled Payments for Care Improvement Advanced models, have impacted post-acute care, including skilled nursing facility services. There can be no assurances that new Medicare payment models will not adversely affect revenues of our skilled nursing center borrowers and lessees and thereby adversely affect those borrowers’ and lessees’ abilities to make their debt or lease payments to us.

Moreover, health care facilities continue to experience pressures from private payors attempting to control costs; reimbursement from private payors has in some cases fallen relative to government payors. Governmental and public concern regarding health care costs may result in significant reductions in payment to health care facilities, and

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there can be no assurance that future payment rates for either governmental or private payors will be sufficient to cover cost increases in providing services to patients. Any changes in reimbursement policies which reduce reimbursement to levels that are insufficient to cover the cost of providing patient care could adversely affect revenues of our skilled nursing center borrowers and lessees and to a much lesser extent our assisted living community borrowers and lessees and thereby adversely affect those borrowers’ and lessees’ abilities to make their debt or lease payments to us. Failure of the borrowers or lessees to make their debt or lease payments would have a direct and material adverse impact on us.

Fraud and Abuse Enforcement

Various federal and state laws govern financial and other arrangements between health care providers that participate in, receive payments from, or make or receive referrals for work in connection with government funded health care programs, including Medicare and Medicaid. These laws, known as the fraud and abuse laws, include the federal anti-kickback statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration directly or indirectly in return for, or to induce, the referral, or arrange for the referral, of an individual to a person for the furnishing of an item or service for which payment may be made under federal health care programs. In addition, the federal physician self-referral law, commonly known as the Stark Law, prohibits physicians and certain other types of practitioners from making referrals for certain designated health services paid in whole or in part by Medicare and Medicaid to entities with which the practitioner or a member of the practitioner’s immediate family has a financial relationship, unless the financial relationship fits within an applicable exception to the Stark Law. The Stark Law also prohibits the entity receiving the referral from seeking payment under the Medicare program for services rendered pursuant to a prohibited referral. Sanctions for violating the Stark Law include civil monetary penalties of up to $25,820 per prohibited service provided, assessments equal to three times the dollar value of each such service provided and exclusion from the Medicare and Medicaid programs. Many states have enacted similar fraud and abuse laws which are not necessarily limited to items and services for which payment is made by federal health care programs. Violations of these laws may result in fines, imprisonment, denial of payment for services, and exclusion from federal and/or other state-funded programs. Other federal and state laws authorize the imposition of penalties, including criminal and civil fines and exclusion from participation in federal health care programs for submitting false claims, improper billing and other offenses. Federal and state government agencies have continued rigorous enforcement of criminal and civil fraud and abuse laws in the health care arena. Our borrowers and lessees are subject to many of these laws, and some of them could in the future become the subject of a governmental enforcement action.

Environmental Regulation

Under various federal, state and local environmental laws, ordinances and regulations, an owner of real property or a secured lender (such as us) may be liable for the costs of removal or remediation of hazardous or toxic substances at, under or disposed of in connection with such property, as well as other potential costs relating to hazardous or toxic substances (including government fines and damages for injuries to persons and adjacent property). Such laws often impose such liability without regard to whether the owner or secured lender knew of, or was responsible for, the presence or disposal of such substances and may be imposed on the owner or secured lender in connection with the activities of an operator of the property. The cost of any required remediation, removal, fines or personal or property damages and the owner’s or secured lender’s liability therefore could exceed the value of the property, and/or the assets of the owner or secured lender. In addition, the presence of such substances, or the failure to properly dispose of or remediate such substances, may adversely affect the owner’s ability to sell or rent such property or to borrow using such property as collateral which, in turn, would reduce our revenues.

Although the mortgage loans that we provide and leases covering our properties require the borrower and the lessee to indemnify us for certain environmental liabilities, the scope of such obligations may be limited and we cannot assure that any such borrower or lessee would be able to fulfill its indemnification obligations.

Human Capital

LTC recognizes the value of our employees and strives to cultivate a cohesive company culture. We are committed to being a workplace that encourages respect, collaboration, communication, transparency, and integrity. We seek to hire employees with diverse backgrounds and perspectives.

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Our success starts and ends with having the best talent, and as a result, we are focused on attracting, developing and retaining our employees. The average tenure of our employees is more than 10 years with LTC.

We offer employees a competitive and comprehensive benefits package that we believe meets or exceeds market standards. LTC fully pays heath care premiums for employees and all eligible dependents. For qualified employees, we offer a 401(k) retirement plan with an employer contribution matching program.

We support employees attending industry conferences. For employees with at least one year of service, we grant up to three days leave to take professional licensing examinations. We also pay their annual renewal fees for professional licenses.

As of December 31, 2022, we employed 24 people. Our employees are not members of any labor union, and we consider our relations with our employees to be excellent.

Investor Information

We make available to the public free of charge through our internet website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the Securities and Exchange Commission (“SEC”). Our internet website address is www.LTCreit.com. We are not including the information contained on our website as part of, or incorporating it by reference into, this Annual Report on Form 10-K.

The SEC also maintains an internet website that contains reports, proxy statements and other information we file. The internet address of the SEC website is www.sec.gov.

You may contact our Investor Relations Department at:

LTC Properties, Inc.

2829 Townsgate Road, Suite 350

Westlake Village, California 91361

Attn: Investor Relations

(805) 981-8655

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Item 1A. RISK FACTORS

This section discusses risk factors that could affect our business, operations, and financial condition. If any of these risks, as well as other risks and uncertainties that we have not yet identified or that we currently believe are not material, actually occur, we could be materially adversely affected and the value of our securities could decline. In addition, these risk factors contain “forward-looking statements” as discussed above under the “Cautionary Statement on Forward-Looking Statements.” The following information should be read in conjunction with Management’s Discussion and Analysis, and the consolidated financial statements and related notes in this Annual Report on Form 10-K.

Risks Related to Our Business and Industry

We are dependent on our operators for revenue and cash flow.

Substantially all of our revenue and sources of cash flows are derived from operating lease rentals and interest earned on outstanding financing receivables, loans receivable and income from our preferred equity investments in unconsolidated joint ventures. Our investments in owned properties, mortgage loans, mezzanine loans, financing receivables and preferred equity investments represent our primary source of liquidity to fund distributions. We do not implement operational decisions with respect to the daily management and marketing of care services offered at our properties. We therefore are dependent upon the performance of our operators and the income and rates we earn on leases and loans. A decrease in occupancy and/or increase in operating costs could have an adverse effect on our lessees and borrowers. For example, due to the COVID-19 pandemic and related public health measures, our lessees and borrowers have experienced a decrease in occupancy and an increase in operating costs. There can be no assurance that our lessees and borrowers will have sufficient assets, income, and access to financing to enable them to satisfy, in full, their respective obligations to us. Our financial condition and ability to pay dividends could be adversely affected by financial difficulties experienced by any of our lessees or borrowers, or in the event any such operator does not renew and/or extend its relationship with us at similar or better financial terms.

The duration and extent of the effects of the COVID-19 pandemic remains uncertain.

The COVID-19 pandemic and related public health measures have adversely affected our operations through the affect it has had on the financial results of our operators. The operations and occupancy levels at the seniors housing and health care facilities of our lessees and borrowers have been adversely affected by COVID-19 and could be further adversely affected by COVID-19 or another pandemic especially if there are infections on a large scale at our properties. The impact of COVID-19 has included, and another pandemic could include early resident move-outs, our operators delaying accepting new residents due to quarantines, potential occupants postponing moves to our operators’ facilities, and/or hospitals cancelling or significantly reducing elective surgeries thereby reducing the number of people in need of skilled nursing care. Operating costs of our lessees and borrowers also have risen due to the impact of COVID-19, including cost increases in staffing and pay, purchases of additional personal protective equipment (“PPE”), and implementation of additional safety protocols and higher than normal inflationary pressures.

Additionally, health orders, rent moratoriums, and other initiatives by federal, state, and local authorities could affect our operators and our ability to collect rent and/or enforce remedies for the failure to pay rent. The extent to which COVID-19 or another pandemic could impact our operations and those of our operators will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration, spread and severity of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures. Further, if COVID-19 results in an extended adverse trend away from seniors housing and health care facilities to at-home and alternative care services, the occupancy rates of our operators and the value of our real estate investments could be negatively impacted.

The health care industry is heavily regulated by the government.

Our borrowers and lessees who operate health care facilities are subject to extensive regulation by federal, state and local governments. These laws and regulations are subject to frequent and substantial changes resulting from legislation, adoption of rules and regulations, and administrative and judicial interpretations of existing law. These

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changes may have a dramatic effect on the definition of permissible or impermissible activities, the relative costs associated with doing business and the amount of reimbursement by both government and other third-party payors. These changes may be applied retroactively. The ultimate timing or effect of these changes cannot be predicted. For instance, the Patient Protection and Affordable Care Act, as amended (the “Affordable Care Act”) may be subject to revision, replacement, repeal or expansion. In addition, CMS has adopted regulations that impose new standards for long-term care facilities participating in the Medicare and Medicaid programs. See Item 1. Business—Health Care Regulation. The failure of any borrower of funds from us or lessee of any of our properties to comply with such laws, requirements and regulations could affect its ability to operate its facility or facilities and could adversely affect such lessee’s or borrower’s ability to make lease or debt payments to us.

Federal and state health care cost containment measures including reductions in reimbursement from third-party payors such as Medicare and Medicaid could adversely affect us and the ability of our operators to make payments to us.

The ability of our borrowers and lessees to generate revenue and profit determines the underlying value of that property to us. Revenues of our borrowers and skilled nursing center lessees are generally derived from payments for patient care. Sources of such payments include the federal Medicare program, state Medicaid programs, private insurance carriers, health care service plans, health maintenance organizations, preferred provider arrangements, self-insured employers, as well as the patients themselves.

The health care industry continues to face increased government and private payor pressure on health care providers to control costs. Federal legislative and regulatory policies have been adopted and may continue to be proposed that would reduce Medicare and/or Medicaid payments to nursing facilities. Moreover, state budget pressures continue to result in adoption of Medicaid provider payment reductions in some states. Increasingly, state Medicaid programs are providing coverage through managed care programs under contracts with private health plans, which is intended to decrease state Medicaid costs. In light of continuing federal and state Medicaid program reforms, budget cuts, and regulatory initiatives, no assurance can be given that the implementation of such regulations and reforms will not have an adverse effect on the financial condition or results of operations of our lessees and/or borrowers which, in turn, could affect their ability to meet their contractual obligations to us.

Required regulatory approvals could delay operation of health care facilities. 

Operators of skilled nursing and other health care facilities must be licensed under applicable state law and, depending upon the type of facility, certified or approved under the Medicare and/or Medicaid programs. A new operator in certain states also must receive change-of-ownership approvals under certificate of need laws. Delays in an operator receiving regulatory approvals from the applicable federal, state, or local government agencies, or the inability of an operator to receive such approvals, could prolong the period during which we are unable to receive lease or loan payments. We also could incur expenses in connection with any licensing, certification, or change-of-ownership proceedings. 

Failure to comply with federal, state, or local regulations could prohibit operation of health care facilities.

The failure of our operators to comply with federal, state, or local regulations could result in penalties which could include loss or restriction of license, loss of accreditation, denial of reimbursement, imposition of fines, suspension or decertification from federal and state health care programs, or closure of the facility. These regulations have increased in response to COVID-19. The loss or imposition of restrictions on any required license, registration, certificate of need, provider agreement or certification would prevent a facility from operating in the manner intended by the operator. Additionally, failure by any of our operators to comply with applicable laws and regulations could result in adverse publicity and reputational harm, and therefore could harm our business. 

Insurance coverage maintained by our operators could be inadequate to protect against contingencies.

Operators of health care facilities may become subject to claims that their services have resulted in injury or other adverse effects. For example, due to the enhanced danger to senior citizens, COVID-19 infections at our properties

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could lead to increased legal claims against our operators. As a non-possessory landlord, we contend we are not generally responsible for what takes place at properties we do not possess. Although we require our operators to secure adequate comprehensive liability insurance that covers us as well as the operator, we could be subject to losses due to noncompliance or insufficient coverage. In addition, certain risks could be uninsurable or unavailable. There can be no assurance that we or our operators will have adequate insurance or funds to cover all contingencies. If an uninsured loss occurs or a loss exceeds policy limits, we could lose both invested capital and anticipated revenue from a property.

We rely on a few major operators.

During the year ended December 31, 2022, approximately 33.4% of our revenues from leases and interest income from real estate investments were generated from three operators. The failure, inability, or unwillingness of any of these operators to meet their obligations to us could materially reduce our cash flow as well as our results of operations.

Inflation could adversely impact the operating expenses of our tenants.

Inflation, both real or anticipated as well as any resulting governmental policies, could adversely affect the economy and the costs of labor, goods and services to our tenants. Because tenants are typically required to pay all property operating expenses, increases in property-level expenses at our leased properties generally do not directly affect us. Increased operating costs could have an adverse impact on our tenants if increases in their operating expenses exceed increases in their revenue, which may adversely affect our tenants’ ability to pay rent owed to us. An increase in our tenants’ expenses and a failure of their revenues to increase at least with inflation could adversely impact our tenants’ and our financial condition and our results of operations.

Inflation could rise at rates that outpace contractual or actual increases in rental income.

Our long-term leases and loans typically contain provisions, such as rent escalators, designed to mitigate the adverse impact of inflation. However, in 2021 we provided deferred and abated rent to certain operators and reduced 2021 rent and interest escalations by 50% to support eligible operators during the continuing COVID-19 crisis. If the contractual or actual increases in rental income we receive from our operators do not keep pace with a rise in inflation, our financial condition and our results of operations could be adversely impacted.

We may be unable to renew leases, or the terms of renewals or new leases could be less favorable than current leases.

Approximately 73.2% of our revenue for the year ended December 31, 2022, was derived from operating lease rentals. There can be no assurance that a lessee will operate its lease through expiration or that a lessee will exercise an option to renew its lease upon expiration. In such scenarios, there can be no assurance that we would be able to find a suitable replacement operator, re-lease the property on substantially equivalent or better terms than the prior lease, if at all. Additionally, to retain current or attract new operators, we could be asked to provide rent concessions or undertake capital expenditures to improve properties.

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Operator financial or legal difficulties could delay or prevent collection of rent.

If a lessee experiences financial or legal difficulties, it could fail to pay us rent when due, assert counterclaims, or seek bankruptcy protection. In the case of a master lease, this risk is magnified, as a default could reduce or eliminate rental revenue from several properties. Over the past three years, five of our operators have had or continue to have financial or legal difficulties resulting in non-payment of rent or bankruptcy. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview—Portfolio Overview—Update on Certain Operators for further discussion. Additionally, the COVID-19 pandemic has caused, and depending on its scope and duration could continue to cause, financial and legal difficulties for certain of our lessees. If an operator is unable to comply with the terms of its leases, we could be asked to defer rent or be forced to modify the leases in ways that are unfavorable to us. Alternatively, the failure of an operator to perform its obligations under a lease or other agreements with us could force us to declare a default and terminate the lease. There can be no assurance that we would be able to find a suitable replacement operator, re-lease the property on substantially equivalent or better terms than the prior lease, if at all. If a lessee seeks bankruptcy protection, it could delay our efforts to collect past due amounts owed to us under the applicable lease and ultimately preclude collection of all or a portion of those amounts.

Collateral securing mortgage loans could be insufficient.

If a borrower defaults under a mortgage loan, we could be obligated to foreclose on or otherwise protect our investment by acquiring title to the property. In such a scenario, the borrower could contest enforcement of foreclosure, assert counterclaims, or seek bankruptcy protection. This could limit or delay our ability to recover unpaid principal and/or interest and exercise other rights and remedies. Declines in the value of the property could prevent us from realizing an amount equal to our investment. Additionally, it could be difficult to expeditiously find a suitable replacement operator, if at all, or otherwise successfully operate or occupy the property, which could adversely affect our ability to recover our investment.

Our real estate investments could become impaired.

We periodically, but not less than quarterly, evaluate our real estate investments and other assets for impairment indicators. The judgment regarding the existence of impairment indicators is based on factors such as market conditions, operator performance, and legal structure. If we determine that an impairment has occurred, we would be required to make an adjustment to the net carrying value of the asset which could have an adverse effect on our results of operations in the period in which the write-off occurs.

Our real estate investments are relatively illiquid and could be difficult to sell for book value.

Real estate investments are relatively illiquid and therefore tend to limit our ability to vary our portfolio promptly in response to changes in economic or other conditions. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates, and other factors, including supply and demand, that are beyond our control. All of our real estate investments are special purpose properties that cannot be readily converted to other health care related services, general residential, retail, or office use. Transfers of operations of health care facilities are subject to regulatory approvals not required for transfers of other types of commercial operations and other types of real estate. If the operation of any of our properties becomes unprofitable or a lessee or borrower becomes unable to meet its obligations on the lease or mortgage loan, the liquidation value of the property could be substantially less than the net book value or the amount owing on any related mortgage loan than would be the case if the property were readily adaptable to other uses.

Development and construction risks could affect the profitability and completion of properties.

Our business includes development and construction of seniors housing and health care properties. Construction and development projects involve risks such as the following:

● development of a project could be abandoned after expending significant resources resulting in the loss of deposits or failure to recover expenses already incurred;

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● development and construction costs of a project could exceed original estimates due to increased interest rates and higher materials, transportation, labor, leasing, or other costs, which could make completion less profitable;

● financing for a project could be unavailable on favorable terms or at all;

● project delays could result in increases in construction costs and debt service expenses as a result of a variety of factors that are beyond our control, including natural disasters, labor conditions, material shortages, and regulatory hurdles; and

● occupancy rates and rents at a newly completed property could fail to meet expected levels and could be insufficient to make the property profitable.

We may be unable to invest cash proceeds due to competition for health care properties.

From time to time, we will have cash available from the sale of equity and debt capital, sale of properties, and funds from operations. With these cash proceeds, we may seek to invest in health care properties as part of our business and growth strategy. We compete for health care property investments with developers, public and private REITs, and other investors, some of whom may have greater financial resources than us. The competition for health care properties could affect our ability to make timely investments on acceptable terms, which could adversely affect our ability to grow or acquire properties profitably or with attractive return.

Our operators face competition providing seniors housing and health care services.

The business of providing seniors housing and health care is highly competitive. Our operators compete with other companies providing similar care services or alternatives such as home health agencies, hospices, life care at home, community-based service programs, retirement communities, and convalescent centers. Additionally, our operators are sensitive to changes in the labor market and wages and benefits offered to their employees, which can impact their ability to remain competitive. There can be no assurance that our operators will not encounter increased competition in the future which could limit their ability to attract residents or expand their businesses and therefore affect their ability to make their lease or loan payments to us.

Risks Related to Our Status as a REIT

Our failure to qualify as a REIT would have serious adverse consequences to our stockholders.

We intend to operate so as to qualify as a REIT under the Internal Revenue Code of 1986, as amended, or the Code. We believe that we have been organized and have operated in a manner which would allow us to qualify as a REIT under the Code beginning with our taxable year ended December 31, 1992. However, it is possible that we have been organized or have operated in a manner which would not allow us to qualify as a REIT, or that our future operations could cause us to fail to qualify. Qualification as a REIT requires us to satisfy numerous requirements (some on an annual and quarterly basis) established under highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations, and involves the determination of various factual matters and circumstances not entirely within our control. For example, in order to qualify as a REIT, at least 95% of our gross income in any year must be derived from qualifying sources, and we must pay dividends to stockholders aggregating annually at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and by excluding capital gains). Legislation, new regulations, administrative interpretations or court decisions could significantly change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification.

If we fail to qualify as a REIT in any taxable year, we will be subject to federal and state income tax (including any applicable alternative minimum tax for taxable years ending prior to January 1, 2018) on our taxable income at regular corporate rates. We note that REITs are specifically excluded from the application of the corporate alternative minimum tax that was enacted as part of the Inflation Reduction Act of 2022 (H.R. 5376). Unless we are entitled to relief under statutory provisions, we would be disqualified from treatment as a REIT for the four taxable years following the year during which we lost qualification. If we lose our REIT status, our net earnings available for investment or

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distribution to stockholders would be significantly reduced for each of the years involved. In addition, we would no longer be required to make distributions to stockholders.

Legislation, new regulations, administrative interpretations and/or court decisions could occur at any time and significantly change the tax laws with respect to our qualification as a REIT or the federal income tax consequences of such qualification. We cannot predict if or when any new or amended law, regulation, administrative interpretation, or case will be adopted, promulgated, decided or become effective, and any such change may apply retroactively. The last significant legislation affecting REITs was The Tax Cuts and Jobs Act, effective for tax years beginning in 2018. We and our security holders may be adversely affected by any new or amended law, regulation, administrative interpretation, or case law.

Prospective investors are urged to consult with their tax advisors with respect to the impact of the Tax Cuts and Jobs Act and any other regulatory, administrative or judicial developments and proposals and their potential effect on an investment in our securities.

Risks Related to Our Capital Structure

Limited access to capital could affect our growth.

As a REIT, we are required to distribute at least 90% of our taxable income. Our growth therefore is generally through the investment of new capital in real estate assets. As of December 31, 2022, we had $10.4 million of cash on hand and $270.0 million available under our unsecured revolving line of credit. We also have the ability to access the capital markets through the issuance of $130.6 million of common stock under our equity distribution agreements and an indeterminate amount through the issuance of debt and/or equity securities under an automatic shelf registration statement. We currently believe our liquidity and various sources of available capital are sufficient to fund operations and development commitments, meet debt service obligations, make dividend distributions, and finance potential investments. In the future, however, our ability to access the equity and/or debt markets could be limited. During such times, most of our available capital would be required to meet existing commitments. Limited access to the equity and/or debt markets could negatively impact our growth if we are unable to obtain additional capital, dispose of assets on favorable terms, or acquire health care properties on a competitive basis.

We could incur more debt.

We operate with a policy of incurring debt when it is advisable in the opinion of our Board of Directors. As of December 31, 2022, our indebtedness represented approximately 37.4% of our gross assets. We could incur additional debt by borrowing under our unsecured revolving line of credit, mortgaging properties we own, and/or issuing debt securities in public offerings or private transactions. The degree of indebtedness could affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, or other corporate purposes and make us more vulnerable to a downturn in business or the economy generally.

Covenants related to our indebtedness could limit our operations.

The terms of our current indebtedness as well as debt instruments that we enter into in the future are subject to customary financial and operational covenants. These include requiring us to maintain debt service coverage, leverage ratios, and minimum net worth requirements. We may be unable to maintain compliance with these covenants and, if we fail to do so, we may be unable to obtain waivers and/or amend the covenants. If some or all of our debt is accelerated and becomes immediately due and payable, we may be unable repay or refinance the debt. Our continued ability to incur debt and operate our business is subject to compliance with these covenants, which could limit operational flexibility.

An increase in market interest rates could increase our debt cost and impact our stock price.

We have entered into debt obligations, such as our unsecured revolving line of credit and term loans, with interest and related payments that vary with the movement of certain indices. In the future, we could incur additional indebtedness in connection with the entry into new credit facilities or the financing of acquisitions or development activity. If market interest rates increase, so could our interest costs. This could make the financing of any acquisition

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more costly. Rising interest rates could limit our ability to refinance existing debt when it matures or cause us to pay higher interest rates upon refinancing. Further, the dividend yield on our common stock will influence its price. An increase in market interest rates could lead prospective purchasers of our common stock to expect a higher dividend yield, which could adversely affect the market price of our common stock.

Ownership through partnerships and joint ventures could limit property performance.

We have in the past and may in the future develop and/or acquire properties in partnerships and similar joint ventures, including those in which we own a preferred interest, when we believe circumstances warrant this type of investment. Our organizational documents do not limit the amount of available funds that we can invest in partnerships or other joint venture structures. As of December 31, 2022, we had six active joint ventures with a total LTC equity investment of $141.0 million. Investments in partnerships and joint ventures, including limited liability companies, involve risks such as the following:

● our partners could become bankrupt, in which event we and any other remaining partners would generally remain liable for the liabilities of the venture;

● our partners could have economic or other business interests or goals which are inconsistent with our business objectives;

● our partners or co-members could be in a position to take action contrary to our instructions, requests or objectives, including our policy with respect to maintaining our qualification as a REIT; and

● governing agreements often contain restrictions on the transfer of an interest or “buy-sell” or other provisions which could result in a purchase or sale of the interest at a disadvantageous time or on disadvantageous terms.

We generally will seek to maintain sufficient control of a partnerships or joint venture to permit us to achieve our business objectives. However, in the event that it fails to meet expectations or becomes insolvent, we could lose our investment in the partnership or joint venture.

Risks Related to Our Stock

A failure to maintain or increase our dividend could reduce the market price of our common stock.

The decision to declare and pay dividends on our common stock, as well as the timing, amount, and composition of any future dividends, will be at the sole discretion of our Board of Directors. The ability to maintain or raise the dividend on our common stock is dependent, to a large part, on growth of funds available for distribution. This growth in turn depends upon increased revenues from additional investments and loans, rental increases, and mortgage rate increases. Any change in our dividend policy could have an adverse effect on the market price of our common stock.

Your ownership percentage in our common stock could be diluted.

From time to time, we could issue additional shares of our common stock in connection with sales under our equity distribution agreement or other capital market transactions. These issuances could cause your percentage ownership in our common stock to be diluted in the future and could have a dilutive effect on our earnings per share and reduce the value of our common stock. Additionally, our charter authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, powers, privileges, preferences, including preferences over our common stock respecting dividends and distributions, terms of redemption and relative participation, optional or other rights, if any, of the shares of each such series of preferred stock and any qualifications, limitations or restrictions thereof, as our Board of Directors determines. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock.

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Provisions in our charter limit ownership of shares of our stock.

No more than 50% in value of the outstanding shares of a REIT can be beneficially owned, directly or indirectly, by five or fewer individuals at any time during the last half of each taxable year. To ensure qualification under this test, our charter provide that, subject to exceptions, no person is permitted to beneficially own more than 9.8% of outstanding shares of any class or series of our stock, including our common stock. Our Board of Directors could decide to exempt a person from the 9.8% ownership limit unless doing so would result in the termination of our status as a REIT. Shares of our stock in excess of the 9.8% ownership limitation that lack an applicable exemption may lose rights to dividends and voting, and may be subject to redemption. Additionally, acquisition of any shares of our stock that would result in our disqualification as a REIT may be limited or void. The 9.8% ownership limitation also could have the effect of delaying, deferring, or preventing a change in control of us, including a merger or acquisition or tender offer that might provide a premium price for holders of our stock.

Maryland law could increase the difficulty of acquiring us. 

 Provisions of Maryland law, our charter, and our bylaws could have the effect of discouraging, delaying, or preventing transactions that involve an actual or threatened change in control. These provisions include the following:

● The Maryland Business Combination Act provides that unless exempted, a Maryland corporation may not engage in business combinations, including mergers, dispositions of 10% or more of its assets, certain issuances of shares of stock, and other specified transactions, with an “interested stockholder” or an affiliate of an interested stockholder for five years after the most recent date on which the interested stockholder became an interested stockholder, and thereafter unless specified criteria are met. An interested stockholder is generally a person owning or controlling, directly or indirectly, 10% or more of the voting power of the outstanding stock of a Maryland corporation. Our Board of Directors has not exempted us from this statute.

● The Maryland Control Share Acquisition Act provides that “control shares” of a corporation acquired in a control share acquisition shall have no voting rights except to the extent approved by the stockholders by a vote of two-thirds of the votes eligible to be cast on the matter under the Maryland Control Share Acquisition Act. “Control Shares” means shares of stock that, if aggregated with all other shares of stock previously acquired by the acquiror, would entitle the acquiror to exercise voting power in electing directors within certain ranges. If voting rights of control shares are not approved at a stockholder’s meeting, then subject to certain conditions and limitations, the issuer may redeem any or all of the control shares for fair value. Our bylaws contain a provision by which we have opted-out of the Maryland Control Share Acquisition Act. However, we could, by resolutions adopted by our Board of Directors and without stockholder approval, elect to become subject to the Maryland Control Share Acquisition Act. 

These and other provisions of Maryland law could increase the difficulty of acquiring us, even if the acquisition would be in the best interests of our stockholders.

General Risk Factors

We are dependent on key personnel. 

Our three executive officers and other senior officers have a significant role in our success. Our ability to retain our management group or to attract suitable replacements should any member of the management group leave is dependent on the competitive nature of the employment market. The loss of services from key members of the management group or a limitation in their availability could adversely affect our business and could be negatively perceived in the capital markets.

Our investments are concentrated in a single sector.

Our investments are concentrated in health care properties. A downturn in the health care property sector could have a greater adverse effect on our business and financial condition than if we had investments in multiple industries and sectors. A downturn in the health care property sector also could adversely impact the ability of our operators to

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meet their obligations to us and maintain residents and occupancy rates. Additionally, a downturn in the health care property sector could adversely affect the value of our properties and our ability to sell properties at prices or on terms acceptable to us.

Disruptions in the capital markets could affect the price of our common stock and our ability to obtain financing. 

The United States capital markets could experience significant price volatility, dislocations, and liquidity disruptions, due to global economic impact and infectious disease outbreaks. This has caused market prices of many securities, including our common stock, to fluctuate substantially. Uncertainty in the stock and credit markets could negatively impact our ability to access financing at reasonable terms, which could negatively impact our ability to acquire properties and otherwise pursue our investment strategy. A prolonged downturn in the stock or credit markets could cause other unknown negative impacts on us and the economy.

Catastrophic weather and natural disasters could affect our properties.

Some of our properties are located in areas susceptible to catastrophic weather and natural disasters, including fires, snow or ice storms, windstorms or hurricanes, earthquakes, flooding, or other severe conditions. Adverse weather and natural events could cause damage to our properties. If our operators suffer losses from catastrophic weather or natural disasters, we could lose our invested capital and anticipated future revenue from the property.

We could incur costs associated with hazardous substances and contamination.

Under various federal, state, and local environmental laws, owners or operators of real estate could be required to investigate and remediate the effects of contamination of currently or formerly owned real estate by hazardous substances, often regardless of knowledge of or responsibility for the contamination. Although our operators are primarily responsible for the condition of the property they occupy, we also could be held liable to a governmental authority or to third parties for property damage, personal injuries, and for investigation and clean-up costs incurred in connection with the contamination or we could be required to incur additional costs to change how the property is constructed or operated due to presence of such substances. The presence of hazardous substances or a failure to properly remediate any resulting contamination could adversely affect our ability to lease, mortgage, or sell an affected property.

Information technology failures or data breaches could harm our business.

We and our operators rely on information technology systems to process, transmit, and store financial transactions and records, operator and lease data, and other confidential information. We are not aware of any material losses to our business or results of operations due to information technology failures, data breaches, or cyber-attacks. However, information technology systems are vulnerable to failure, breaches, or attacks due to improper functioning and unauthorized access from physical or electronic break-ins, computer viruses, and similar disruptions, including by hackers, foreign governments, and cyber terrorists. This risk has increased since the outbreak of the COVID-19 pandemic as we and our operators have increased reliance on information technology. We and our operators also rely on numerous third-party providers for information technology services, and we and our operators face similar risks relating to these providers. We cannot be certain that their information security protocols are sufficient to withstand a data breach or cyber-attack. The inability to maintain proper function, security, and availability of our and our operators’ information systems and the data maintained in those systems could interrupt our operations, damage our reputation, harm our business relationships, or increase our security and insurance costs. Further, an information technology failure, data breach, or cyber-attack on an operator could impact their operations and ability to perform under the terms of their lease with us. While we maintain insurance coverage that may, subject to policy terms and conditions including deductibles, cover specific aspects of information security risks, such insurance coverage may be insufficient to cover all losses. As information security risks continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and to investigate and remediate any information security vulnerabilities.

Data privacy security failures or breaches could expose us to regulatory and other liability.

We and our operators are subject to various federal and state laws governing privacy and security of personally identifiable information. Despite safeguards by us and our operators, a data privacy security failure or breach could occur

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as a result of unintentional or deliberate acts to obtain unauthorized access to information, or to destroy, manipulate, or sabotage data. Information technology failures or data breaches also could result in the loss or release of personally identifiable information. A privacy or security failure or breach could cause a loss of business, regulatory enforcement, substantial legal liability, and reputational harm. Where the failure or breach affects an operator, this could jeopardize the operator’s ability to fulfill its obligations to us. Further, the adoption of new privacy and security laws at the federal and state level could require us and our operators to incur significant compliance costs.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

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Item 2. PROPERTIES

Here and throughout this Annual Report on Form 10-K wherever we provide details of our properties’ bed/unit count, the number of beds/units applies to skilled nursing, assisted living, independent living, memory care and behavioral health care properties only. This number is based upon unit/bed counts shown on operating licenses provided to us by lessees/borrowers or units/beds as stipulated by lease/mortgage documents. These numbers often differ, usually not materially by property, from units/beds in operation at any point in time. The differences are caused by such things as operators converting a patient/resident room for alternative uses, such as offices or storage, or converting a multi-patient room/unit into a single patient room/unit. We monitor our properties on a routine basis through site visits and reviews of current licenses. In an instance where such change would cause a de-licensing of beds or in our opinion impact the value of the property, we may take action against the lessee/borrower to preserve the value of the property/collateral.

Owned Properties. The following table sets forth certain information regarding our owned properties as of December 31, 2022 (dollars amounts in thousands):

								Remaining
	No. of	No. of	No. of		No. of			Lease	Gross
Location	ALFs	SNFs	Others		Beds/Units	Encumbrances		Term (1)	Investments
Alabama	—	1	—		174	$	—	40	$	9,734
Arizona	—	3	—		613		—	20		28,496
California	3	1	—		402		—	70		69,685
Colorado	13	—	—		705		—	58		104,795
Florida	6	4	—		762		—	36		67,816
Georgia	1	—	—		70		—	18		14,493
Illinois	5	—	—		418		—	101		88,347
Kansas	8	—	—		431		—	72		57,928
Kentucky	1	2	—		346		—	105		61,731
Michigan	2	—	—	(2)​	156		—	92		22,387
Mississippi	1	—	—		67		—	18		9,452
Missouri	1	2	—		253		—	90		52,952
Nebraska	3	—	—		117		—	7		7,633
Nevada	—	—	1		118		—	26		10,975
New Jersey	4	—	—		205		—	57		62,832
New Mexico	—	7	—		843		—	37		50,912
N. Carolina	5	—	—		210		—	12		14,318
Ohio	7	2	—		580		—	99		87,569
Oklahoma	6	—	—		219		—	12		13,080
Oregon	2	1	—		266		—	77		38,279
Pennsylvania	2	—	—		130		—	7		9,744
S. Carolina	5	2	—		515		—	32		49,735
Tennessee	—	2	—		141		—	12		5,275
Texas	17	20	—		3,268		—	36		327,490
Virginia	—	4	—		500		—	37		30,209
Wisconsin	7	1	—		690		—	86		114,838
TOTAL	99	52	1		12,199	$	—	59	$	1,410,705

(1) Weighted average remaining months in lease term as of December 31, 2022.

(2) Includes three parcels of land held-for-use.

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The following chart represents the 10 states with the highest percentage of gross investment for our owned properties as of December 31, 2022:

The following table sets forth certain information regarding our lease expirations for our owned properties as of December 31, 2022 (dollars amounts in thousands):

								Annualized		% of Annualized
	No. of	No. of		No. of	No. of		No. of	Rental		Rental Income
Year	SNFs	ALFs		Others	Beds/Units		Operators	Income (1)		Expiring
2023 (2)	4	43		—	2,234		6	$	19,143	16.4	%
2024	14	14		—	2,775		4		8,359	7.2	%
2025	6	1		1	981		2		9,120	7.8	%
2026	15	—		—	1,889		3		18,072	15.5	%
2027	—	9		—	611		3		11,341	9.8	%
2028	1	1		—	188		2		1,965	1.7	%
2029	2	4		—	656		4		7,311	6.3	%
2030	1	9		—	668		3		8,715	7.5	%
2031	—	17		—	1,146		3		15,316	13.2	%
2032	5	—		—	429		2		5,843	5.0	%
Thereafter	4	—		—	574		1		11,195	9.6	%
TOTAL	52	98	(3)​	1	12,151	(3)​		$	116,380	100.0	%

(1) Represents annualized contractual GAAP rent for leased properties, excluding variable rental income from lessee reimbursement of our real estate taxes for investments as of December 31, 2022.

(2) Subsequent to December 31, 2022, a master lease covering two SNFs that was scheduled to mature in 2023 was renewed at the contractual rate for another five years extending the maturity to November 2028. The centers have a total 216 beds and are located in Florida.

(3) Excludes a 48-unit closed ALF located in Colorado.

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Mortgage Loans. The following table sets forth certain information regarding our mortgage loans as of December 31, 2022 (dollars amounts in thousands):

						Average	Original				Current
	No. of	No. of	No. of	No. of	Interest	Months to	Face Amount		Gross		Annual Debt
Location	SNFs (1)	ALFs (1)	OTHs (1)	Beds/ Units	Rate	Maturity	of Mortgage Loans		Investments		Service (2)
Florida	—	1	—	68	7.75%	32	$	13,123	$	14,308	$	1,101
Louisiana	1	—	—	189	7.5%	21		27,347		29,347		2,232
Michigan	22	—	—	2,702	9.6%-10.6%	256		264,370		258,003		26,657
Missouri	—	—	—	—	7.5%	6		1,886		1,886		143
North Carolina (3)	—	16	—	695	7.25%	37		81,437		85,328		6,394
South Carolina (3)	—	1	—	45	7.25%	35		4,529		4,786		360
TOTAL	23	18	—	3,699		179	$	392,692	$	393,658	$	36,887

(1) Consists of ten mortgage loans in six states with five borrowers.

(2) Includes principal and interest payments.

(3) Represents a single mortgage loan secured by 13 ALFs. The mortgage loan was allocated by state for reporting purposes only.

Item 3. LEGAL PROCEEDINGS

We are and may become from time to time a party to various claims and lawsuits arising in the ordinary course of our business, which in our opinion are not singularly or in the aggregate anticipated to be material to our results of operations or financial condition. Claims and lawsuits may include matters involving general or professional liability asserted against the lessees or borrowers of our properties, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder. We believe that these matters are the responsibility of our lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable leases or mortgages. We intend to continue to vigorously defend such claims and lawsuits.

Item 4. MINE SAFETY DISCLOSURES

Not applicable

PART II

Item 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is listed on the NYSE under the symbol “LTC”.

Holders

As of February 9, 2023, we had approximately 402 holders of our common stock, as determined by counting our record holders and the number of participants reflected in a security position listing provided to us by the Depository Trust Company. Because such “DTC participants” are brokers and other institutions holding shares of our common stock on behalf of their customers, we do not know the actual number of unique stockholders represented by these record holders.

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Dividend

We declared and paid total cash distributions on common stock as set forth below:

	Declared				Paid
	2022		2021		2022		2021
First quarter	$	0.57	$	0.57	$	0.57	$	0.57
Second quarter	$	0.57	$	0.57	$	0.57	$	0.57
Third quarter	$	0.57	$	0.57	$	0.57	$	0.57
Fourth quarter	$	0.57	$	0.57	$	0.57	$	0.57
	$	2.28	$	2.28	$	2.28	$	2.28

We intend to distribute to our stockholders an amount at least sufficient to satisfy the distribution requirements of a REIT. Cash flows from operating activities available for distribution to stockholders will be derived primarily from interest and rental payments from our real estate investments. All distributions will be made subject to approval of our Board of Directors and will depend on our earnings, our financial condition and such other factors as our Board of Directors deem relevant. In order to qualify for the beneficial tax treatment accorded to REITs by Sections 856 through 860 of the Internal Revenue Code, we are required to make distributions to holders of our shares equal to at least 90% of our REIT taxable income.

Issuer Purchases of Equity Securities

None.

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Stock Performance Graph

The National Association of Real Estate Investment Trusts (“NAREIT”), an organization representing U.S. REITs and publicly traded real estate companies, classifies a company with 50% or more of assets directly or indirectly in the equity ownership of real estate as an equity REIT. Our equity ownership of real estate assets was approximately 70% during 2022.

This graph compares the cumulative total stockholder return on our common stock from December 31, 2017 to December 31, 2022 with the cumulative stockholder total return of (1) the Standard & Poor’s 500 Stock Index and (2) the NAREIT Equity REIT Index. The comparison assumes $100 was invested on December 31, 2017 in our common stock and in each of the foregoing indices and assumes the reinvestment of dividends.

		Period Ending
Index		12/31/17		12/31/18		12/31/19		12/31/20		12/31/21		12/31/22
LTC Properties, Inc.	$	100.00	$	101.12	$	114.06	$	105.44	$	98.30	$	108.65
NAREIT Equity	$	100.00	$	95.38	$	120.17	$	110.56	$	158.36	$	119.77
S&P 500	$	100.00	$	95.62	$	125.72	$	148.85	$	191.58	$	156.88

The stock performance depicted in the above graph is not necessarily indicative of future performance.

The stock performance graph shall not be deemed incorporated by reference into any filing by us under the Securities Act of 1933 or the Securities Exchange Act of 1934 except to the extent that we specifically incorporate such information by reference, and shall not otherwise be deemed filed under such Acts.

Item 6. Reserved

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Overview

Business and Investment Strategy

We are a real estate investment trust (“REIT”) that invests in seniors housing and health care properties through sale-leasebacks, financing leases, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. We seek to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. Our primary seniors housing and health care property classifications include skilled nursing facilities (“SNF”), assisted living facilities (“ALF”), independent living facilities (“ILF”), memory care communities (“MC”) and combinations thereof. We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals. To meet these objectives, we attempt to invest in properties that provide opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment.

We conduct and manage our business as one operating segment for internal reporting and internal decision-making purposes. For purposes of this Annual Report on Form 10-K and other presentations, we generally include ALF, ILF, and MC in the ALF property classification. We have been operating since August 1992.

The following graph summarizes our gross investments as of December 31, 2022:

Substantially all of our revenues and sources of cash flows from operations are derived from operating lease rentals, interest earned on outstanding loans receivable and income from investments in unconsolidated joint ventures. Our investments in owned properties, financing leases, mortgage loans, mezzanine loans and preferred equity investments represent our primary source of liquidity to fund distributions and are dependent upon the performance of the operators on their lease and loan obligations and the rates earned thereon. To the extent that the operators experience operating difficulties and are unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. To mitigate this risk, we monitor our investments through a variety of methods determined by property type and operator. Our monitoring process

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includes periodic review of financial statements for each facility, periodic review of operator credit, scheduled property inspections and review of covenant compliance.

In addition to our monitoring and research efforts, we also structure our investments to help mitigate payment risk. Some operating leases, financing leases and loans are credit enhanced by guaranties and/or letters of credit. In addition, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other loans, operating leases or agreements between us and the operator and its affiliates.

Depending upon the availability and cost of external capital, we anticipate making additional investments in health care related properties. New investments are generally funded from cash on hand, temporary borrowings under our unsecured revolving line of credit and internally generated cash flows. Our investments generate internal cash from rent and interest receipts and principal payments on mortgage loans receivable. Permanent financing for future investments, which replaces funds drawn under our unsecured revolving line of credit, is expected to be provided through a combination of public and private offerings of debt and equity securities and secured and unsecured debt financing. The timing, source and amount of cash flows provided by financing activities and used in investing activities are sensitive to the capital markets’ environment, especially to changes in interest rates. Changes in the capital markets’ environment may impact the availability of cost-effective capital.

We believe our business model has enabled and will continue to enable us to maintain the integrity of our property investments, including in response to financial difficulties that may be experienced by operators. Traditionally, we have taken a conservative approach to managing our business, choosing to maintain liquidity and exercise patience until favorable investment opportunities arise.

COVID-19

On March 11, 2020, the World Health Organization declared the outbreak of coronavirus (“COVID-19”) as a pandemic, and on March 13, 2020, the United States declared a national emergency with regard to COVID-19. The COVID-19 pandemic has had repercussions across regional and global economies and financial markets. The outbreak of COVID-19 in many countries, including the United States, has significantly and adversely impacted public health and economic activity, and has contributed to significant volatility, dislocations and liquidity disruptions in financial markets.

The operations and occupancy levels at our properties have been adversely affected by COVID-19 and could be further adversely affected by COVID-19 or another pandemic especially if there are infections on a large scale at our properties. The impact of COVID-19 has included, and another pandemic could include, early resident move-outs, our operators delaying accepting new residents due to quarantines or admission suspensions, potential occupants postponing moves to our operators’ facilities, and/or hospitals cancelling or significantly reducing elective surgeries thereby there were fewer people in need of skilled nursing care. Additionally, as our operators have responded to the pandemic, operating costs have begun to rise. A decrease in occupancy, ability to collect rents from residents and/or increase in operating costs could have a material adverse effect on the ability of our operators to meet their financial and other contractual obligations to us, including the payment of rent or interest. In recognition of the pandemic impact affecting our operators, we provided assistance in form of rent abatements and rent deferrals and may continue to provide assistance as needed.

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Portfolio Overview

The following tables summarize our real estate investment portfolio as of December 31, 2022 (dollar amounts in thousands):

								Twelve Months Ended
								December 31, 2022
		Number of				Percentage					Percentage
	Number of	SNF	ALF	Gross		of		Rental			of Total
Owned Properties	Properties (1)	Beds (2)	Units (2)	Investments		Investments		Revenue			Revenues
Assisted Living	99	—	5,497	$	797,813	40.7	%	$	53,923		34.1	%
Skilled Nursing	52	6,348	236		600,974	30.7	%		55,126		34.8	%
Other (3)	1	118	—		11,918	0.6	%		991		0.6	%
Total Owned Properties	152	6,466	5,733		1,410,705	72.0	%		110,040	(5)​	69.5	%
		Number of				Percentage		Interest Income			Percentage
	Number of	SNF	ALF		Gross	of		from Financing			of Total
Financing Receivable	Properties (1)	Beds	Units		Investments	Investments		Receivable			Revenues
Skilled Nursing	3	299	—		76,767	3.9	%		1,762		1.1	%
Total Financing Receivable	3	299	—		76,767	3.9	%		1,762		1.1	%
		Number of				Percentage		Interest Income			Percentage
	Number of	SNF	ALF		Gross	of		from Mortgage			of Total
Mortgage Loans	Properties (1)	Beds	Units		Investments	Investments		Loans			Revenues
Assisted Living	18	—	808		103,626	5.4	%		6,730		4.3	%
Skilled Nursing	23	2,891	—		287,349	14.6	%		33,692		21.3	%
Other (4)	—	—	—		2,683	0.1	%		178		0.1	%
Total Mortgage Loans	41	2,891	808		393,658	20.1	%		40,600		25.7	%
		Number of				Percentage		Interest			Percentage
	Number of	SNF	ALF		Gross	of		and other			of Total
Notes Receivable	Properties (1)	Beds	Units		Investments	Investments		Income			Revenues
Assisted Living	7	—	961		43,662	2.2	%		3,590		2.3	%
Skilled Nursing	—	—	—		15,311	0.8	%		720		0.4	%
Total Notes Receivable	7	—	961		58,973	3.0	%		4,310		2.7	%
		Number of				Percentage		Income from			Percentage
	Number of	SNF	ALF		Gross	of		Unconsolidated			of Total
Unconsolidated Joint Ventures	Properties (1)	Beds	Units		Investments	Investments		Joint Ventures			Revenues
Assisted Living	1	—	95		6,340	0.3	%		450		0.3	%
Under Development	—	—	—		13,000	0.7	%		1,054		0.7	%
Total Unconsolidated Joint Ventures	1	—	95		19,340	1.0	%		1,504		1.0	%
Total Portfolio	204	9,656	7,597	$	1,959,443	100.0	%	$	158,216		100.0	%

	Number	Number of				Percentage
	of	SNF	ALF	Gross		of
Summary of Properties by Type	Properties (1)	Beds (2)	Units (2)	Investments		Investments
Skilled Nursing	78	9,538	236	$	980,401	50.0	%
Assisted Living	125	—	7,361		951,441	48.6	%
Under Development	—	—	—		13,000	0.7	%
Other (3) (4)	1	118	—		14,601	0.7	%
Total Portfolio	204	9,656	7,597	$	1,959,443	100.0	%

(1) We have investments in owned properties, financing receivable, mortgage loans, notes receivable and unconsolidated joint ventures in 29 states to 32 different operators.

(2) See Item 2. Properties for discussion of bed/unit count.

(3) Includes three parcels of land held-for-use and one behavioral health care hospital.

(4) Includes one parcel of land in Missouri securing a first mortgage held for future development of a post-acute SNF and one parcel of land in North Carolina securing a first mortgage held for future development of a seniors housing community.

(5) Excludes $15,459 variable rental income from lessee reimbursement of our real estate taxes and $2,745 rental income from sold properties.

As of December 31, 2022, we had $1.6 billion in carrying value of net investments, consisting of $1.0 billion or 65.2% invested in owned and leased properties, $76.0 million or 4.9% invested in financing receivable, $0.4 billion or

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24.9% invested in mortgage loans secured by first mortgages, $58.4 million or 3.7% in notes receivable and $19.3 million or 1.3% in unconsolidated joint ventures.

Rental income, income from financing receivable and interest income from mortgage loans represented 73.2%, 1% and 23.2%, respectively, of Total revenues on the Consolidated Statements of Income for the year ended December 31, 2022. In most instances, our lease structure contains annual rental escalations. Our leases that contain fixed annual rental escalations and/or have annual rental escalations that are contingent upon changes in the Consumer Price Index or the Medicare Market Basket Rate, are generally recognized on a straight-line basis over the minimum lease period. Certain leases have annual rental escalations that are contingent upon changes in the gross operating revenues of the property. This revenue is not recognized until the appropriate contingencies have been resolved. For the year ended December 31, 2022, we recognized a $1.4 million straight-line rental adjustment reflecting higher cash rent received than recorded as rental income and $1.1 million in amortization and write-off of lease incentives. For the remaining leases in place at December 31, 2022, assuming no modification or replacement of existing leases and no new leased investments are added to our portfolio, except for the potential subsequent lease extensions and the leases reported below under Update on Certain Operators, we currently expect that the non-cash straight-line rent portion of rental income will decrease from negative $1.4 million in 2022 to negative $1.9 million for projected annual 2023 which represents higher cash rent received than recorded as rental income. Our cash rental income is projected to increase from $130.7 million in 2022 to $120.8 million for projected annual 2023. At December 31, 2022, the straight-line rent receivable balance on the consolidated balance sheet was $21.8 million.

Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent payable upon renewal being greater or less than that currently being paid. During the year ended December 31, 2022, we renewed one lease covering a 99-bed skilled nursing center in Oregon and a master lease covering 11 skilled nursing centers in Texas with a total of 1,444 beds. See Update on Certain Operators and Former Operators below for discussion regarding renewal of a master lease subsequent to December 31, 2022.

Some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. See Item 8. FINANCIAL STATEMENTS— Note 5. Real Estate Investments. Owned Properties for a table that includes information about purchase options included in our lease agreements.

Update on Certain Operators and Former Operators

Anthem Memory Care

Anthem Memory Care (“Anthem”) operates 11 memory care communities under a master lease and was placed in default in 2017 resulting from Anthem’s partial payment of its minimum rent. However, we did not enforce our rights and remedies pertaining to the event of default, under the stipulation that Anthem achieves sufficient performance and pays agreed upon rent. Anthem increased their rent payment every year between 2017 and 2021. During the second and third quarter of 2022, we agreed to a certain temporary rent reduction totaling $1.5 million. During the fourth quarter of 2022, we received payment of Anthem’s $1.5 million temporary rent reduction and a return to Anthem’s previously agreed upon rent of $0.9 million per month. Accordingly, Anthem paid us the agreed upon annual cash rent of $10.8 million in 2022. Anthem is current on agreed upon rent payments through January and February 2023. We receive regular financial performance updates from Anthem and continue to monitor their performance obligations under the master lease agreement.

Brookdale Senior Living Communities, Inc

The Brookdale master lease matures on December 31, 2023 and provides three renewal options consisting of a two-year renewal option, a five-year renewal option and a 10-year renewal option. The first renewal option expires on February 28, 2023. The master lease provides Brookdale a $4.0 million capital commitment, which matures on February 28, 2023, at a yield of 7% with a reduced rate for qualified ESG projects. During the fourth quarter of 2022, we funded $1.5 million under Brookdale’s capital commitment. Accordingly, we have a remaining commitment of $0.9 million. Brookdale is current on rent payments through January and February 2023.

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Other Operators

During the third quarter of 2022, we terminated a master lease with an operator and transitioned the communities to an existing LTC operator. In connection with the lease termination, we abated rent for June 2022 and have forgiven the former operator’s outstanding deferred rent balance of $7.1 million. Also, we paid the former operator a $0.5 million lease termination fee in exchange for cooperation and assistance in facilitating an orderly transition. The transitioned communities are operated pursuant to a new master lease with a two-year term, with zero rent for each of July, August, September, and October of 2022. Thereafter, cash rent is based on mutually agreed upon fair market rent. In conjunction with the new master lease, we paid the new operator a $0.4 million lease incentive payment which will be amortized as a yield adjustment to rental income over the two-year lease term. LTC is evaluating options for this portfolio.

A master lease covering two assisted living communities is scheduled to mature during 2023. One of the two communities is located in Kentucky. During the third quarter of 2022, we classified this community as held-for-sale and recorded an impairment loss of $1.3 million as a result of our decision to sell the community below our carrying value. We are negotiating a new lease for the other community which is located in Ohio.

Subsequent to December 31, 2022, a master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed at the contractual rate for another five years extending the maturity to November 2028. The centers have a total 216 beds and are located in Florida.

Senior Care Centers, LLC – Former Operator

Senior Care Centers, LLC and affiliates and subsidiaries (“Senior Care”) filed for Chapter 11 bankruptcy in December 2018. During 2019, while in bankruptcy, Senior Care assumed LTC’s master lease and, in March 2020, Senior Care emerged from bankruptcy. Concurrent with their emergence from bankruptcy, in accordance with the order confirming Senior Care’s plan of reorganization, Abri Health Services, LLC (“Abri Health”) was formed as the parent company of reorganized Senior Care and became co-tenant and co-obligor with reorganized Senior Care under our master lease. In March 2021, Senior Care and Abri Health (collectively, “Lessee”) failed to pay rent and additional obligations owed under the master lease. Accordingly, we sent the lessee a notice of default and applied proceeds from letters of credit to certain obligations owed under the master lease. Furthermore, we sent the Lessee a notice of termination of the master lease to be effective April 17, 2021. On April 16, 2021, the Lessee filed for Chapter 11 bankruptcy. In August 2021, the United States Bankruptcy Court approved a settlement agreement between Lessee and LTC. The settlement provided for, among other things, a one-time payment of $3.3 million from LTC to the affiliates of Lessee in exchange for cooperation and assistance in facilitating an orderly transition of the 11 skilled nursing centers from the Lessee and its affiliates to affiliates of HMG Healthcare, LLC (“HMG”) which occurred on October 1, 2021. As of October 1, 2021, Senior Care and Abri Health no longer operate any properties in our portfolio.

Senior Lifestyle Corporation

During 2020, an affiliate of Senior Lifestyle (“Senior Lifestyle”) failed to pay its contractual obligations under its master lease. As a result, we applied their letter of credit and deposits to past due rent and to their outstanding notes receivable. Senior Lifestyle did not pay rent or its other obligations under the master lease since 2021. During 2021, we transitioned 18 assisted living communities previously leased to Senior Lifestyle to six operators. These communities are located in Illinois, Ohio, Wisconsin, Colorado, Pennsylvania and Nebraska. Also, during 2021, we sold three Wisconsin communities and a closed community in Nebraska previously leased to Senior Lifestyle for a combined total of $35.9 million. We received total proceeds of $34.8 million and recorded a net gain on sale of $5.4 million. During 2022, an assisted living community located in Colorado, which transitioned from Senior Lifestyle to a new operator during the first quarter of 2021, was closed and the lease was terminated. Additionally, during 2022, we transitioned the remaining community located in New Jersey under the Senior Lifestyle master lease to an existing operator. Accordingly, as of December 31, 2022, Senior Lifestyle does not operate any properties in our portfolio.

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2022 Transactions Overview

The following tables summarizes our transactions in 2022 (dollar amounts in thousand):

Investment in Owned Properties

	Number	Type	Number	Initial					Total		Total
	of	of	of	Cash			Purchase		Transaction		Acquisition
State	Properties	Properties	Beds/Units	Yield			Price		Costs		Costs
Texas (1)	4	SNF	339	8.0	%	$	51,534	$	283	$	51,817

(1) The properties are leased to an affiliate of an existing operator under a 10-year lease with two 5-year renewal options. Additionally, the lease allows the operator to elect for either an earn-out payment or purchase option. If neither option is elected within the timeframe defined in the lease, both elections are terminated. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. The purchase option is available beginning in the sixth lease year through the end of the seventh lease year. The initial cash yield is 8% for the first lease year increasing to 8.25% for the second year, then increases annually by 2.0% to 4.0% based on the change in the Medicare Market Basket Rate. In connection with the transition, we provided the lessee a 10-year working capital loan for up to $2,000 at 8% for the first year, increasing to 8.25% for the second year, then increasing annually with the lease rate. At December 31, 2022, the working capital loan had an outstanding balance of $1,642.

Investment in Development and Improvement Projects

	Developments		Improvements
Assisted Living Communities	$	105	$	5,538
Skilled Nursing Centers		—		2,897
Other		—		559
Total	$	105	$	8,994

Sold Properties

	Type	Number	Number
	of	of	of		Sales		Carrying		Net
State	Properties	Properties	Beds/Units		Price		Value		Gain (Loss) (1)
California	ALF	2	232	$	43,715	$	17,832	$	25,867
California	SNF	1	121		13,250		1,846		10,846
Texas	SNF	1	—		485		697		(441)
Virginia	ALF	1	74		16,895		15,549		1,344	(2)​
n/a	n/a	—	—		—		—		214	(3)​
		5	427	$	74,345	$	35,924	$	37,830

(1) Calculation of net gain (loss) includes cost of sales and write-off of straight-line rent receivable and lease incentives, when applicable.

(2) In connection with this sale, the former operator paid us a lease termination fee of $1,181 which is not included in the gain on sale.

(3) We recognized additional gain due to the reassessment adjustment of the holdbacks related to properties sold during 2020 and 2019, under the expected value model per ASC Topic 606, Contracts with Customers.

Financing Receivable

Financing Receivable. During 2022, we entered into a joint venture and contributed $61.7 million into the JV that purchased three skilled nursing centers located in Florida for $75.8 million. Our JV partner contributed the remaining $14.3 million of equity. The JV leased the centers back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year. Accordingly, the transaction has been accounted for as a Financing receivable on our Consolidated Balance Sheets. During 2022, we recognized $1.8 million of Interest income from financing receivable on our Consolidated Statements of Income. Additionally, we recorded $0.8 million provision for expected loan losses during 2022.

Subsequent to December 31, 2022, we entered into a $121.3 million JV with an affiliate of an existing operator

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and contributed $117.9 million into the JV that purchased 11 assisted living and memory care communities from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit Internal Rate of Return (“IRR”) of 9.0%. In accordance with GAAP, the communities acquired by the JV are required to be presented as a Financing receivable on our Consolidated Balance Sheets.

Investment in Mortgage Loans

Originations and funding under mortgage loans receivable	$	40,732	(1) (2)​
Application of interest reserve		6,192
Scheduled principal payments received		(1,175)
Mortgage loan premium amortization		(6)
Provision for loan loss reserve		(457)
Net increase in mortgage loans receivable	$	45,286

(1) Subsequent to December 31, 2022, we originated a $10,750 mortgage loan secured by a MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%.

(2) We originated two senior mortgage loans, secured by four ALFs operated by an existing operator, as well as a land parcel in North Carolina. The communities have a combined total of 217 units, with an average age of less than four years. The land parcel is approximately 7.6 acers adjacent to one of the ALFs and is being held for the future development of a seniors housing community. The mortgage loans have a four-year term, an interest rate of 7.25% and an IRR of 8%. We also funded an additional $2,000 under an existing mortgage loan.

Investment in Notes Receivable

Advances under notes receivable	$	37,192	(1)​
Principal payments received under notes receivable (2)		(6,843)
Provision for credit losses		(303)
Net increase in notes receivable	$	30,046

(1) Includes origination of a $25,000 mezzanine loan for the recapitalization of five ALFs located in Oregon and Montana. Additionally includes origination of a working capital loan for a commitment of up to $2,000, of which $1,867 has been funded and $9,761 of funding under a working capital loan to HMG.

(2) Subsequent to December 31, 2022, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190, from a mezzanine loan early payoff. The mezzanine loan was on a 136-unit ILF in Oregon.

Key Performance Indicators, Trends and Uncertainties

We utilize several key performance indicators to evaluate the various aspects of our business. These indicators are discussed below and relate to concentration risk and credit strength. Management uses these key performance indicators to facilitate internal and external comparisons to our historical operating results in making operating decisions and for budget planning purposes.

Concentration Risk. We evaluate by gross real estate investment our concentration risk in terms of asset mix, real estate investment mix, operator mix and geographic mix. Concentration risk is valuable to understand what portion of our real estate investments could be at risk if certain sectors were to experience downturns. Asset mix measures the portion of our real estate investments that are real property or mortgage loans. Investment mix measures the portion of our investments that relate to our various property types. Operator mix measures the portion of our real estate investments that relate to our top five operators. Geographic mix measures the portion of our real estate investment that relate to our top five states.

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The following table reflects our recent historical trends of concentration risk (gross investment, in thousands):

	12/31/22		9/30/22		6/30/22		3/31/22		12/31/21
Asset mix:
Real property	$	1,410,705	$	1,408,402	$	1,409,937	$	1,409,625	$	1,408,557
Financing receivable		76,767		76,267		—		—		—
Loans receivable		393,658		386,868		383,647		350,037		347,915
Notes receivable		58,973		59,014		58,794		62,127		28,623
Unconsolidated joint ventures		19,340		19,340		19,340		19,340		19,340
Real estate investment mix:
Assisted living communities	$	951,441	$	945,552	$	942,581	$	956,642	$	929,113
Skilled nursing centers		980,401		976,753		901,911		858,150		849,182
Under development		13,000		13,000		13,000		13,000		13,000
Other (1)		14,601		14,586		14,226		13,337		13,140
Operator mix:
Prestige Healthcare (1)	$	271,476	$	271,851	$	271,853	$	272,326	$	272,453
ALG Senior		192,699		189,533		110,075		76,715		74,888
HMG Healthcare		175,835		174,107		175,532		180,662		171,920
Anthem Memory Care		139,176		139,176		139,176		139,176		139,176
Brookdale Senior Living		106,010		104,461		103,831		103,136		102,921
Remaining operators		1,074,247		1,070,763		1,071,251		1,069,114		1,043,077
Geographic mix:
Texas	$	327,490	$	325,380	$	326,983	$	274,803	$	274,626
Michigan		280,389		280,932		280,934		281,407		281,512
Florida		158,892		158,175		81,525		80,815		80,540
Wisconsin		114,838		114,838		114,729		114,729		114,538
Colorado		104,795		104,760		104,651		104,514		104,514
Remaining states		973,039		965,806		962,896		984,861		948,705

(1) As of December 31, 2022, we have three parcels of land. These parcels are located adjacent to properties securing the Prestige Healthcare mortgage loan and are managed by Prestige.

Credit Strength. We measure our credit strength both in terms of leverage ratios and coverage ratios. Our leverage ratios include debt to gross asset value and debt to market capitalization. The leverage ratios indicate how much of our Consolidated Balance Sheet capitalization is related to long-term obligations. Our coverage ratios include interest coverage ratio and fixed charge coverage ratio. The coverage ratios indicate our ability to service interest and fixed charges (interest). The coverage ratios are based on earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) as defined by National Association of Real Estate Investment Trusts (“NAREIT”). EBITDAre is calculated as net income available to common stockholders (computed in accordance with GAAP) excluding (i) interest expense, (ii) income tax expense, (iii) real estate depreciation and amortization, (iv) impairment write-downs of depreciable real estate, (v) gains or losses on the sale of depreciable real estate, and (vi) adjustments for unconsolidated partnerships and joint ventures. Adjusted EBITDAre is calculated as EBITDAre adjusted for non-recurring items. Leverage ratios and coverage ratios are widely used by investors, analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. The following table reflects the recent historical trends for our credit strength measures:

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Balance Sheet Metrics

	Year Ended		Quarter Ended
	12/31/22		12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
Debt to gross asset value	37.4	%	37.4	%	(1)​	38.9	%	(3)​	37.6	%	(1)​	39.6	%	(3)​	38.4	%
Debt to market capitalization ratio	34.4	%	34.4	%		34.4	%	(4)​	32.2	%	(5)​	33.4	%	(6)​	35.0	%
Interest coverage ratio (7)	4.3	x	4.4	x	(2)​	4.2	x		4.3	x		4.4	x		4.3	x
Fixed charge coverage ratio (7)	4.3	x	4.4	x	(2)​	4.2	x		4.3	x		4.4	x		4.3	x

(1) Decreased due to decrease in outstanding debt and increase in gross asset value.

(2) Increased due to increase in interest expense partially offset by increase in rental income and interest income from financing receivable.

(3) Increased due to increase in outstanding debt partially offset by increase in gross asset value.

(4) Increased due to decrease in market capitalization and increase in outstanding debt primarily related to investments.

(5) Decreased due to decrease in outstanding debt and increase in market capitalization.

(6) Decreased due to increase in market capitalization partially offset by increase in outstanding debt.

(7) In calculating our interest coverage and fixed charge coverage ratios above, we use EBITDAre, which is a financial measure not derived in accordance with GAAP (non-GAAP financial measure). EBITDAre and Adjusted EBITDAre are not alternatives to net income, operating income or cash flows from operating activities as calculated and presented in accordance with GAAP. You should not rely on EBITDAre and Adjusted EBITDAre as a substitute for any such GAAP financial measures or consider it in isolation, for the purpose of analyzing our financial performance, financial position or cash flows. Net income is the most directly comparable GAAP measure to EBITDAre and Adjusted EBITDAre.

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	Year to Date			Quarter Ended
	12/31/22			12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
Net income	$	100,584		$	18,198		$	13,389		$	54,490		$	14,507		$	12,930
Less/Add: (Gain)/loss on sale		(37,830)			(21)			387			(38,094)			(102)			(70)
Add: Impairment loss		3,422			2,136			1,286			—			—			—
Add: Interest expense		31,437			8,830			7,941			7,523			7,143			6,933
Add: Depreciation and amortization		37,496			9,294			9,385			9,379			9,438			9,449
EBITDAre	$	135,109		$	38,437		$	32,388		$	33,298		$	30,986		$	29,242
Add (less): Non-recurring one-time items		824	(1) (2) (3)​		—			1,260	(1)​		(859)	(2)​		423	(3)​		869	(4)​
Adjusted EBITDAre	$	135,933		$	38,437		$	33,648		$	32,439		$	31,409		$	30,111
Interest expense	$	31,437		$	8,830		$	7,941		$	7,523		$	7,143		$	6,933
Interest incurred	$	31,437		$	8,830		$	7,941		$	7,523		$	7,143		$	6,933
Interest coverage ratio		4.3	x		4.4	x		4.2	x		4.3	x		4.4	x		4.3	x
Interest incurred	$	31,437		$	8,830		$	7,941		$	7,523		$	7,143		$	6,933
Total fixed charges	$	31,437		$	8,830		$	7,941		$	7,523		$	7,143		$	6,933
Fixed charge coverage ratio		4.3	x		4.4	x		4.2	x		4.3	x		4.4	x		4.3	x

(1) Represents $500 lease termination fee paid to a former operator in exchange for cooperation in facilitating an orderly transition and $760 provision for credit losses related to the origination of financing receivable during the third quarter of 2022.

(2) Represents the $1,181 lease termination fee income received in connection with the sale of a 74-unit ALF partially offset by $322 provision for credit losses related to the origination of two mortgage loans during the second quarter of 2022.

(3) Represents the provision for credit losses related to the origination of a $25,000 mezzanine loan ($250) and a lease incentive balance write-off ($173) related to a closed property and subsequent lease termination.

(4) Represents the provision for credit losses related to the origination of $86,900 of mortgage loans.

We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results. Our expected results may not be achieved and actual results may differ materially from our expectations. This may be a result of various factors, including, but not limited to:

● The status of the economy;

● The status of capital markets, including prevailing interest rates;

● Compliance with and changes to regulations and payment policies within the health care industry;

● Changes in financing terms;

● Competition within the health care and seniors housing industries;

● Changes in federal, state and local legislation;

● The duration, spread and severity of the COVID-19 outbreak.

Management regularly monitors the economic and other factors listed above. We develop strategic and tactical plans designed to improve performance and maximize our competitive position. Our ability to achieve our financial objectives is dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic and company-specific trends.

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Operating Results

Year ended December 31, 2022 compared to year ended December 31, 2021 (in thousands):

	Years ended December 31,
	2022			2021			Difference
Revenues:
Rental income	$	128,244		$	121,125		$	7,119	(1)​
Interest income from financing receivable		1,762			—			1,762	(2)​
Interest income from mortgage loans		40,600			32,811			7,789	(3)​
Interest and other income		4,547			1,386			3,161	(4)​
Total revenues		175,153			155,322			19,831
Expenses:
Interest expense		31,437			27,375			(4,062)	(5)​
Depreciation and amortization		37,496			38,296			800	(6)​
Impairment loss		3,422			—			(3,422)	(7)​
Provision for credit losses		1,528			1,021			(507)	(8)​
Transaction costs		828			4,433			3,605	(9)​
Property tax expense		15,486			15,392			(94)
General and administrative expenses		23,706			21,460			(2,246)	(10)​
Total expenses		113,903			107,977			(5,926)
Other operating income:
Gain on sale of real estate, net		37,830	(11)​		7,462	(12)​		30,368
Operating income		99,080			54,807			44,273
Income from unconsolidated joint ventures		1,504			1,417			87
Net income		100,584			56,224			44,360
Income allocated to non-controlling interests		(560)			(363)			(197)
Net income attributable to LTC Properties, Inc.		100,024			55,861			44,163
Income allocated to participating securities		(580)			(458)			(122)
Net income available to common stockholders	$	99,444		$	55,403		$	44,041

(1) Increased primarily due to rent received from transitioned portfolios, lease termination fee income of $1,181 received in connection with the sale of a 74-unit ALF, rental income from acquisitions, completed development projects and annual rent escalations partially offset by property sales.

(2) Represents revenue from the acquisition of three SNFs located in Florida for $75,825. In accordance with ASC 842, this transaction is presented as Financing Receivable on our Consolidated Statements of Balance Sheet. See Note 5. Real Estate Investments within our consolidated financial statements for more information.

(3) Increased primarily due to mortgage loan originations during 2022 and 2021 fourth quarter.

(4) Increased primarily due to a mezzanine loan origination during the first quarter of 2022 and third quarter of 2021 and additional funding under working capital loans partially offset by loan payoffs.

(5) Increased primarily due to the origination of two $50,000 term loans in the fourth quarter of 2021, issuance of $75,000 senior unsecured notes during the second quarter of 2022 and higher interest rates on our line of credit in 2022.

(6) Decreased due to property sales.

(7) Represents impairment loss related to a 60-unit ALF in Kentucky, a 70-unit ALF in Florida and a closed MC located in Florida. See Note 5. Real Estate Investments within our consolidated financial statements for more information.

(8) Increased primarily due to the financing receivable origination, as discussed in (2) above, mortgage and mezzanine loan originations and capital improvement funding offset by scheduled principal paydowns.

(9) Decreased primarily due to the Senior Care and Abri Health settlement and related fees paid during 2021.

(10) Increased due to conference sponsorships and travel, property maintenance expense for closed properties, higher incentive compensation charges and increase in overall costs due to inflationary pressures.

(11) Represents the net gain on sale of $38,057 related to a SNF located in California and three ALFs located in Virginia and California and $214 quarterly reassessment of prior years’ sale holdbacks partially offset by the net loss on sale of $441 related to a closed SNF in Texas.

(12) Represents the net gain on sale of $8,157 related to a SNF in Washington and three ALFs in Wisconsin and $363 quarterly reassessment of prior years’ sale holdbacks partially offset by the net loss of sale of $1,058 related to a closed ALF in Nebraska and a closed ALF in Florida.

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Year ended December 31, 2021 compared to year ended December 31, 2020 (in thousands):

	Years ended December 31,
	2021			2020			Difference
Revenues:
Rental income	$	121,125		$	126,094		$	(4,969)	(1)​
Interest income from mortgage loans		32,811			31,396			1,415	(2)​
Interest and other income		1,386			1,847			(461)	(3)​
Total revenues		155,322			159,337			(4,015)
Expenses:
Interest expense		27,375			29,705			2,330	(4)​
Depreciation and amortization		38,296			39,071			775
Impairment loss		—			3,977			3,977	(5)​
Provision (recovery) for credit losses		1,021			(3)			(1,024)	(6)​
Transaction costs		4,433			299			(4,134)	(7)​
Property tax expense		15,392			15,065			(327)
General and administrative expenses		21,460			19,710			(1,750)	(8)​
Total expenses		107,977			107,824			(153)
Other operating income:
Gain on sale of real estate, net		7,462	(9)​		44,117	(10)​		(36,655)
Operating income		54,807			95,630			(40,823)
Gain from property insurance proceeds		—			373	(11)​		(373)
Loss on unconsolidated joint ventures		—	(11)​		(758)	(12)​		758
Impairment loss from investments in unconsolidated joint ventures		—			—			—
Income from unconsolidated joint ventures		1,417			432			985	(13)​
Net income		56,224			95,677			(39,453)
Income allocated to non-controlling interests		(363)			(384)			21
Net income attributable to LTC Properties, Inc.		55,861			95,293			(39,432)
Income allocated to participating securities		(458)			(422)			(36)
Net income available to common stockholders	$	55,403		$	94,871		$	(39,468)

(1) Decreased primarily due to defaults of lease obligations from Senior lifestyle and Senior Care and Abri Health, abated and deferred rent, net of repayment, a $758 straight-line rent receivable write-off during 2021, a decrease in property tax revenue, reduced rent from sold properties and 50% reduction of 2021 rent escalations partially offset by a $23,214 write-off of straight-line rent receivable and lease incentive balances related to three operators during 2020, increased rent from re-leasing 18 properties previously leased to Senior lifestyle, completed development projects and contractual rent increases.

(2) Increased due to mortgage loan originations and capital improvement funding offset by scheduled principal paydowns and 50% reduction of 2021 interest escalations.

(3) Decreased primarily due to the payoff of a mezzanine loan offset by additional notes receivable funding.

(4) Decreased due to scheduled principal payments on our senior unsecured notes and lower interest rates under our unsecured revolving line of credit partially offset by higher interest rates on $100,000 of new term loans in fourth quarter of 2021 and higher outstanding balances under our unsecured revolving line of credit.

(5) Represents impairment losses related to a 48-unit ALF in Colorado and a 61-unit ALF in Florida.

(6) Increased primarily due to mortgage originations and capital improvement funding offset by scheduled principal paydowns.

(7) Increased due to Senior Care and Abri Health settlement and related fees.

(8) Increased primarily due to higher incentive compensation expense, an increase in non-cash restricted stock and performance-based stock vesting expense and additional employees.

(9) Represents the net gain on sale of $2,562 related to a SNF in Washington, $5,595 related to three ALFs in Wisconsin and $363 of quarterly reassessment of the prior years’ sale holdbacks partially offset by the net loss on sale of $200 related to a closed ALF in Nebraska and the net loss on sale of $858 related to a closed property in Florida.

(10) Represents net gain on sale of 21 SNFs and additional gain due to quarterly reassessment of prior years’ sale holdbacks.

(11) Represents gain on insurance proceeds related to a 114-bed SNF in Texas sold during the first quarter of 2020.

(12) Relates to the sale of properties comprising a joint venture in which we had a preferred equity investment with Senior lifestyle.

(13) Increased due to preferred equity investments in two unconsolidated joint ventures.

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Funds From Operations

Funds from Operations (“FFO”) attributable to common stockholders, basic FFO attributable to common stockholders per share and diluted FFO attributable to common stockholders per share are supplemental measures of a REIT’s financial performance that are not defined by GAAP. Real estate values historically rise and fall with market conditions, but cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. We believe that by excluding the effect of historical cost depreciation, which may be of limited relevance in evaluating current performance, FFO facilitates comparisons of operating performance between periods.

We use FFO as a supplemental performance measurement of our cash flow generated by operations. FFO does not represent cash generated from operating activities in accordance with GAAP, and is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income available to common stockholders.

We calculate and report FFO in accordance with the definition and interpretive guidelines issued by NAREIT. FFO, as defined by NAREIT, means net income available to common stockholders (computed in accordance with GAAP) excluding gains or losses on the sale of real estate and impairment write-downs of depreciable real estate plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our calculation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that have a different interpretation of the current NAREIT definition from us; therefore, caution should be exercised when comparing our FFO to that of other REITs.

The following table reconciles net income available to common stockholders to FFO attributable to common stockholders (unaudited, amounts in thousands, except per share amounts):

	For the Year Ended December 31,
	2022			2021		2020
GAAP net income available to common stockholders	$	99,444		$	55,403	$	94,871
Add: Depreciation and amortization		37,496			38,296		39,071
Add: Impairment loss		3,422			—		3,977
Add: Loss on unconsolidated joint ventures		—			—		758
Less: Gain on sale of real estate, net		(37,830)			(7,462)		(44,117)
NAREIT FFO attributable to common stockholders	$	102,532		$	86,237	$	94,560
NAREIT FFO attributable to common stockholders per share:
Basic	$	2.57		$	2.20	$	2.41
Diluted	$	2.56	(1)​	$	2.20	$	2.41
Weighted average shares used to calculate NAREIT FFO per share:
Basic		39,894			39,156		39,179
Diluted		40,296	(2)​		39,156		39,264	(3)​

(1) Includes the effect of participating securities.

(2) Diluted weighted average shares used to calculate FFO per share includes the effect of performance-based stock units and participating securities.

(3) Diluted weighted average shares used to calculate FFO per share includes the effect of performance-based stock units.

Critical Accounting Policies and Estimates

Our accounting policies are more fully described under Item 8. FINANCIAL STATEMENTS—Footnote 2. Summary of Significant Accounting Policies. As discussed in Footnote 2, the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Listed below are those policies and estimates that we believe are critical and require the use of significant judgement in their application.

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Impairment of Long-Lived Assets

Assets that are classified as held-for-use are periodically evaluated for impairment when events or changes in circumstances indicate that the asset may be impaired or the carrying amount of the asset may not be recoverable through future undiscounted cash flows. Where indicators of impairment exist, the estimation required in the undiscounted future cash flow assumption includes management’s probability-weighting of various scenarios such as modifying the lease with the existing operator, identifying a replacement operator or sale of the real property investment. In addition, the undiscounted future cashflows include management’s assumptions of rental revenues, net operating income, capitalization rates and expected hold periods. In determining fair value, we use current appraisals or other third-party opinions of value and other estimates of fair value such as estimated discounted future cash flows.

Collectability of operator obligations

We assess the collectability of substantially all our lease payments through maturity. If collectability is not probable, all or a portion of our straight-line rent receivables and other lease receivables may be written-off. In order to assess our lease payments for collectability, we make assumptions that include evaluating lessee’s payment history, the financial strength of the lessee, future market conditions and contractual rents, and timing of expected payments. Our ability to accurately predict collectability of substantially all of our lease payments impacts the timing of straight-line rent and other lease receivable write-offs, if any. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our consolidated financial statements.

Liquidity and Capital Resources

Sources and Uses of Cash

As of December 31, 2022, we had a total of $10.4 million of cash and cash equivalents, $270.0 million available under our unsecured revolving line of credit and the potential ability to access the capital markets through the issuance of $130.6 million of common stock under our Equity Distribution Agreements. Furthermore, we have the ability to access the capital markets through the issuance of debt and/or equity securities under an automatic shelf registration statement.

We believe that our current cash balance, cash flow from operations available for distribution or reinvestment, our borrowing capacity and our potential ability to access the capital markets are sufficient to provide for payment of our current operating costs, meet debt obligations and pay common dividends at least sufficient to maintain our REIT status and repay borrowings at, or prior to, their maturity. The timing, source and amount of cash flows used by financing and investing activities are sensitive to the capital markets’ environment, especially to changes in interest rates. In addition, COVID-19 has adversely affected and is expected to continue to adversely affect our operators’ business, results of operations, cash flows and financial condition which could, in turn, adversely affect our financial position.

The operating results of the properties will be impacted by various factors over which the operators/owners may have no control. Those factors include, without limitation, the health of the economy, inflation pressures, employee availability and cost, changes in supply of or demand for competing seniors housing and health care facilities, ability to hire and maintain qualified staff, ability to control rising operating costs, the potential for significant reforms in the health care industry, and the ongoing impact of COVID-19. In addition, our future growth in net income and cash flow may be adversely impacted by various proposals for changes in the governmental regulations and financing of the health care industry, and the continuing impact of COVID-19 or the impact of any other infectious disease outbreaks. We cannot presently predict what impact these potential events may have, if any. We believe that adequate provision has been made for the possibility of loans proving uncollectable but we will continually evaluate the financial status of the operations of the seniors housing and health care properties. In addition, we will monitor our borrowers and the underlying collateral for mortgage loans and will make future revisions to the provision, if considered necessary.

Depending on our borrowing capacity, compliance with financial covenants, ability to access the capital markets, and the payment of dividends may be negatively impacted. We continuously evaluate the availability of cost-effective capital and believe we have sufficient liquidity for our current dividend, corporate expenses and additional capital investments in 2023.

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Our investments, principally our investments in owned properties, financing leases and mortgage loans, are subject to the possibility of loss of their carrying values as a result of changes in market prices, interest rates and inflationary expectations. The effects on interest rates may affect our costs of financing our operations and the fair market value of our financial assets. Generally, our leases have agreed upon annual increases and our loans have predetermined increases in interest rates. Inasmuch as we may initially fund some of our investments with variable interest rate debt, we would be at risk of net interest margin deterioration if medium and long-term rates were to increase.

Our primary sources of cash include rent and interest receipts, borrowings under our unsecured credit facility, public and private issuance of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures and construction advances), loan advances and general and administrative expenses. These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows as summarized below (in thousands):

	Year Ended December 31,					Change
Cash provided by (used in):	2022		2021			$
Operating activities	$	105,586	$	91,184	$	14,402
Investing activities		(119,949)		(69,786)		(50,163)
Financing activities		19,581		(24,009)		43,590
Increase (decrease) in cash and cash equivalents		5,218		(2,611)		7,829
Cash and cash equivalents, beginning of period		5,161		7,772		(2,611)
Cash and cash equivalents, end of period	$	10,379	$	5,161	$	5,218

Debt Obligations

Unsecured Credit Facility. We had an unsecured credit agreement (the “Original Credit Agreement”) that provided for a revolving aggregate commitment of the lenders of up to $600.0 million with the opportunity to increase the commitment size of the credit agreement up to a total of $1.0 billion. The Original Credit Agreement’s maturity was on June 27, 2022 and provided for a one-year extension option at our discretion, subject to customary conditions.

In advance of expiration of the Original Credit Agreement, during the fourth quarter of 2021, we entered into the Third Amended and Restated Credit Agreement (the “Credit Agreement”) to replace the Original Credit Agreement. The Credit Agreement decreased the aggregate commitment of the lenders under the Original Credit Agreement to $500.0 million comprised of a $400.0 million revolving credit facility (the “Revolving Line of Credit”) and two $50.0 million term loans (the “Term Loans”). The Credit Agreement permits us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1.0 billion, extends the maturity of the Revolving Line of Credit to November 19, 2025 and provides for a one-year extension option at our discretion, subject to customary conditions. The Term Loans mature on November 19, 2025 and November 19, 2026. During the fourth quarter of 2022, we entered into the First Amendment to the Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”) to replace London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”), plus a credit spread adjustment of 10 basis points, (“Adjusted SOFR”) as the reference rate for purpose of calculating interest under the Amended Credit Agreement. Other material terms of the Credit Agreement remain unchanged. Based on our leverage at December 31, 2022, the Revolving Line of Credit provides for interest annually at Adjusted SOFR plus 115 points and a facility fee of 20 basis point and the Term Loans provide for interest annually at Adjusted SOFR plus 135 points.

Interest Rate Swap Agreement. In connection with entering into the Term Loans as discussed above, we entered into two receive variable/pay fixed interest rate swap agreements (“Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that will effectively lock-in the forecasted interest payments on the Term Loan borrowings over the four and five year terms of the loans. The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value, with changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. In connection with entering into the Amended Credit Agreement discussed above, we entered into amendments to our Interest Rate Swaps to account for SOFR as the updated reference rate in the Amended Credit Agreement. During 2022 and 2021, we recorded a $8.9 million increase and $0.2 million decrease, respectively, in fair value of Interest Rate Swaps.

Senior Unsecured Notes. We have senior unsecured notes held by institutional investors with interest rates

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ranging from 3.66% to 5.03%. The senior unsecured notes mature between 2024 and 2033. During 2022, we sold $75.0 million aggregate principal amount of 3.66% senior unsecured notes. The notes have an average 10-year life, scheduled principal payments and mature in May 2033.

The debt obligations by component as of December 31, 2022 are as follows (dollar amounts in thousands):

	Applicable			Available
	Interest	Outstanding		for
Debt Obligations	Rate (1)	Balance		Borrowing
Revolving line of credit (2)	5.38%	$	130,000	$	270,000
Term loans, net of debt issue costs	2.69%		99,511		—
Senior unsecured notes, net of debt issue costs (3)	4.25%		538,343		—
Total	4.24%	$	767,854	$	270,000

(1) Represents weighted average of interest rate as of December 31, 2022.

(2) Subsequent to December 31, 2022, we borrowed $162,700 under our Revolving Line of Credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our Revolving Line of Credit.

(3) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes. Accordingly, we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

Our debt borrowings and repayments during the year ended December 31, 2022, are as follows (in thousands):

Debt Obligations		Borrowings		Repayments
Revolving line of credit (1)	$	194,000	$	(174,900)
Senior unsecured notes (2)		75,000		(48,160)
Total	$	269,000	$	(223,060)

(1) Subsequent to December 31, 2022, we borrowed $162,700 under our Revolving Line of Credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our Revolving Line of Credit.

(2) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes. Accordingly, we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

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Equity

Non-controlling Interests. We have entered into partnerships to develop and/or own real estate. Given that our limited members do not have substantive kick-out rights, liquidation rights, or participation rights, we have concluded that the partnerships are VIEs. Since we exercise power over and receive benefits from the VIEs, we are considered the primary beneficiary. Accordingly, we consolidate the VIEs and record the non-controlling interests at cost. As of December 31, 2022, we have the following consolidated VIEs (in thousands):

						Gross
Investment			Property			Consolidated		Non-Controlling
Year (1)	Purpose		Type	State		Assets		Interests
2022	Owned real estate	(2)​	SNF	FL	$	76,767	$	14,325
2018	Owned real estate		ILF	OR		14,650		2,906
2018	Owned real estate and development		ALF/MC	OR		18,452		1,164
2017	Owned real estate and development		ILF/ALF/MC	WI		22,007		2,305
2017	Owned real estate		ALF/MC	SC		11,680		1,241
Total					$	143,556	$	21,941

(1) Subsequent to December 31, 2022, we entered into a $121,321 JV with an affiliate of an existing operator and contributed $117,900 into the JV that purchased 11 ALF and MC from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit IRR of 9.0%. In accordance with GAAP, the communities acquired by the JV are required to be presented as a Financing receivable on our Consolidated Balance Sheets. See Note 2. Summary of Significant Accounting Policies and Note 5. Real Estate Investments for more information.

(2) During 2022, we entered into a joint venture and contributed $61,661 into the JV that purchased three SNFs located in Florida for $75,825. Our JV partner contributed the remaining $14,325 of equity. The JV leased the centers back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year. In accordance with GAAP, the centers acquired by the JV are required to be presented as a Financing receivable on our Consolidated Balance Sheets. See Note 2. Summary of Significant Accounting Policies and Note 5. Real Estate Investments for more information.

At December 31, 2022, we had 41,262,191 shares of common stock outstanding, equity on our balance sheet totaled $850.3 million and our equity securities had a market value of $1.5 billion. During the year ended December 31, 2022, we declared and paid $91.5 million of cash dividends.

Common Stock. We have separate equity distribution agreements (collectively, “Equity Distribution Agreements”) to offer and sell, from time to time, up to $200.0 million in aggregate offering price of our common shares. The Equity Distribution Agreements provide for sales of common shares to be made by means of ordinary brokers’ transactions, which may include block trades, or transactions that are deemed to be “at the market” offerings. During the year ended December 31, 2022, we sold 1,792,400 shares of common stock for $68.2 million in net proceeds under our Equity Distribution Agreements. In conjunction with the sale of common stock, we incurred $0.5 million costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received. At December 31, 2022, we had $130.6 million available under our equity distribution agreement.

During 2022, we acquired 39,463 shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations. Subsequent to December 31, 2022, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of January, February and March 2023, payable on January 31, February 28 and March 31, 2023, respectively, to stockholders of record on January 23, February 17, and March 23, 2023, respectively.

Stock Based Compensation Plans. During 2021, we adopted, and our shareholders approved the 2021 Equity Participation Plan (the “2021 Plan”) which replaces the 2015 Equity Participation Plan (the “2015 Plan”). Under the 2021 Plan, 1,900,000 shares of common stock have been authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 Plan after December 31, 2020 and prior to adoption. In addition, any shares that are not issued under outstanding awards under the 2015 Plan because the shares were forfeited

49

or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan. Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2021 Plan and the 2015 Plan are set by our compensation committee at its discretion.

Restricted Stock and Performance-based Stock Units. During 2022, we granted 221,542 shares of restricted common stock and performance-based stock units under the 2021 Plan as follows:

No. of	Price per
Shares	Share		Award Type	Vesting Period
122,865	$	33.94	Restricted stock	ratably over 3 years
86,332	$	33.94	Performance-based stock units	TSR targets (1)
12,345	$	38.48	Restricted stock	May 25,2023
221,542

(1) Vesting is based on achieving certain total shareholder return (“TSR”) targets in 4 years with acceleration opportunity in 3 years.

At December 31, 2022, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (dollar amounts in thousands):

	Remaining
	Compensation
Vesting Date	Expense
2023	$	5,603
2024		2,853
2025		309
Total	$	8,765

Stock Options. We did not issue any stock options during the year ended December 31, 2022. At December 31, 2022, we have 10,000 stock options outstanding and exercisable.

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Material Cash Requirements

We monitor our contractual obligations and commitments detailed above to ensure funds are available to meet obligations when due. The following table represents our long-term contractual obligations (scheduled principal payments and amounts due at maturity) as of December 31, 2022, excluding the effects of interest and debt issue costs (in thousands):

	Total			2023			2024		2025			2026		2027		Thereafter
Revolving line of credit	$	130,000	(1)​	$	—		$	—	$	130,000	(1)​	$		$	—	$	—
Term loans		100,000			—			—		50,000			50,000		—		—
Senior unsecured notes		539,820	(2)​		49,160	(2)​		49,160		49,500			51,500		54,500		286,000
	$	769,820		$	49,160		$	49,160	$	229,500		$	101,500	$	54,500	$	286,000

(1) Subsequent to December 31, 2022, we had a net borrowing of $162,700 under our unsecured revolving line of credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our unsecured revolving line of credit.

(2) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes, accordingly we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

The following table represents our projected interest expense, excluding capitalized interest, amortization of debt issue costs and bank fees, as of December 31, 2022 (in thousands):

	Total		2023		2024		2025		2026		2027		Thereafter
Revolving line of credit	$	22,475	$	7,898	$	7,919	$	6,658	$	—	$	—	$	—
Term loans		9,265		2,727		2,734		2,570		1,234		—		—
Senior unsecured notes		114,749		21,748		19,492		17,281		15,218		13,154		27,856
	$	146,489	$	32,373	$	30,145	$	26,509	$	16,452	$	13,154	$	27,856

Also, see Item 8. FINANCIAL STATEMENTS— Note 11. Commitments and Contingencies for additional information regarding our contractual commitments.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks associated with changes in interest rates as they relate to our mortgage loans receivable and debt. Interest rate risk is sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control.

We do not utilize forward or option contracts, or foreign currencies or commodities, or other types of derivative financial instruments, with exception of interest rate swaps, nor do we engage in “off-balance sheet” transactions. The purpose of the following disclosure is to provide a framework to understand our sensitivity to hypothetical changes in interest rates as of December 31, 2022.

Our future earnings, cash flows and estimated fair values relating to financial instruments are dependent upon prevalent market rates of interest, such as SOFR or term rates of U.S. Treasury Notes. Changes in interest rates generally impact the fair value, but not future earnings or cash flows, of mortgage loans receivable and fixed rate debt. Our mortgage loans receivable and debt, such as our senior unsecured notes, are primarily fixed-rate instruments. Also, we have two interest rate swap agreements to effectively lock-in the forecasted interest payments on our term loans which are based on SOFR. For variable rate debt, such as our revolving line of credit, changes in interest rates generally do not impact the fair value, but do affect future earnings and cash flows.

At December 31, 2022, the fair value of our financing receivable using a 7.6% discount rate was approximately $76.0 million. A 1% increase in such rate would decrease their estimated fair value by $1.9 million while a 1% decrease in such rate would increase their value by $2.0 million. At December 31, 2022, the fair value of our mortgage loans receivable using a 9.3% discount rate was approximately $461.3 million. A 1% increase in such rate would decrease the estimated fair value of our mortgage loans by approximately $30.8 million while a 1% decrease in such rate would

51

increase their estimated fair value by approximately $35.1 million. At December 31, 2022, the fair value of our notes receivable using a 7.1% discount rate approximately $61.9 million. A 1% increase in such rate would decrease the estimated fair value of our notes receivable by approximately $1.7 million. while a 1% decrease in such rate would increase their estimated fair value by approximately $1.8 million. At December 31, 2022, the fair value of our senior unsecured notes using a 6.5% discount rate for those maturing before year 2030 and 7.0% discount rate for those maturing at or beyond year 2030 was approximately $477.7 million. A 1% increase in such rate would decrease the estimated fair value of our senior unsecured notes by approximately $19.7 million while a 1% decrease in such rate would increase their estimated fair value by approximately $21.0 million. These discount rates were measured based upon management’s estimates of rates currently prevailing for comparable loans available to us and instruments of comparable maturities.

The estimated impact of changes in interest rates discussed above are determined by considering the impact of the hypothetical interest rates on our borrowing costs, lending rates and current U.S. Treasury rates from which our financial instruments may be priced. We do not believe that future market rate risks related to our financial instruments will be material to our financial position or results of operations. These analyses do not consider the effects of industry specific events, changes in the real estate markets, or other overall economic activities that could increase or decrease the fair value of our financial instruments. If such events or changes were to occur, we would consider taking actions to mitigate and/or reduce any negative exposure to such changes. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our capital structure.

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ITEM 8. FINANCIAL STATEMENTS

LTC Properties, Inc.

Index to Consolidated Financial Statements

and Financial Statements Schedules

	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)	54
Consolidated Balance Sheets as of December 31, 2022 and 2021	56
Consolidated Statements of Income for the years ended December 31, 2022, 2021 and 2020	57
Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020	58
Consolidated Statements of Equity for the years ended December 31, 2022, 2021 and 2020	59
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020	60
Notes to Consolidated Financial Statements	61
Consolidated Financial Statement Schedules
Schedule II—Valuation and Qualifying Accounts	89
Schedule III—Real Estate and Accumulated Depreciation	90
Schedule IV—Mortgage Loans on Real Estate	95

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of LTC Properties, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of LTC Properties, Inc. (the Company) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 16, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment of Real Property Investments

Description of the Matter

At December 31, 2022, the carrying value of the Company’s real property investments was $1.0 billion. As discussed in Note 2 of the consolidated financial statements, the real property investments are periodically evaluated for events or changes in circumstances that indicate the assets may be impaired or the carrying amount of the assets may not be recoverable. When impairment indicators are identified, management calculates the future undiscounted cash flows for the real property investment. Auditing the Company’s evaluation of whether its real estate investments are recoverable was complex and involved a high degree of subjectivity in evaluating management’s assumptions in estimating future cash flows as they are based on assumptions about future market and economic conditions. The estimation required in

54

the undiscounted future cash flow assumptions includes management’s probability-weighting of various scenarios such as modifying the lease with the existing operator, identifying a replacement operator, or sale of the real property investment.  In addition, the undiscounted future cash flows include management’s assumptions of rental revenues, net operating income, capitalization rates and expected hold periods.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over the Company’s real property investments impairment assessment process.  For example, we tested controls over management’s process for estimating and evaluating the assumptions used in the calculations of the future undiscounted cash flows for real property investments where impairment indicators existed. For real property investments with identified indicators of impairment, we performed audit procedures over the Company’s estimation of the real property investments’ undiscounted future cash flows. For example, we compared significant assumptions used to estimate future cash flows to the Company’s historical accounting records or to available market data. We also tested the mathematical accuracy of management’s forecasted cash flows.  Additionally, for certain assumptions, we performed sensitivity analyses to evaluate the changes in the undiscounted cash flows of the real property investments that would result from changes in the assumptions.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1992.

Los Angeles, California

February 16, 2023

55

LTC PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

	December 31,
	2022		2021
ASSETS
Investments:
Land	$	124,665	$	123,239
Buildings and improvements		1,273,025		1,285,318
Accumulated depreciation and amortization		(389,182)		(374,606)
Operating real estate property, net		1,008,508		1,033,951
Properties held-for-sale, net of accumulated depreciation: 2022—$2,305; 2021—$0		10,710		—
Real property investments, net		1,019,218		1,033,951
Financing receivable, net of credit loss reserve: 2022—$768; 2021—$0		75,999		—
Mortgage loans receivable, net of credit loss reserve: 2022—$3,930; 2021—$3,473		389,728		344,442
Real estate investments, net		1,484,945		1,378,393
Notes receivable, net of credit loss reserve: 2022—$589; 2021—$286		58,383		28,337
Investments in unconsolidated joint ventures		19,340		19,340
Investments, net		1,562,668		1,426,070
Other assets:
Cash and cash equivalents		10,379		5,161
Debt issue costs related to revolving line of credit		2,321		3,057
Interest receivable		46,000		39,522
Straight-line rent receivable		21,847		24,146
Lease incentives		1,789		2,678
Prepaid expenses and other assets		11,099		4,191
Total assets	$	1,656,103	$	1,504,825
LIABILITIES
Revolving line of credit	$	130,000	$	110,900
Term loans, net of debt issue costs: 2022—$489; 2021—$637		99,511		99,363
Senior unsecured notes, net of debt issue costs: 2022—$1,477; 2021—$524		538,343		512,456
Accrued interest		5,234		3,745
Accrued expenses and other liabilities		32,708		33,234
Total liabilities		805,796		759,698
EQUITY
Stockholders’ equity:
Common stock: $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2022—41,262; 2021—39,374		412		394
Capital in excess of par value		931,124		856,895
Cumulative net income		1,544,660		1,444,636
Accumulated other comprehensive income (loss)		8,719		(172)
Cumulative distributions		(1,656,548)		(1,565,039)
Total LTC Properties, Inc. stockholders’ equity		828,367		736,714
Non-controlling interests		21,940		8,413
Total equity		850,307		745,127
Total liabilities and equity	$	1,656,103	$	1,504,825

See accompanying notes.

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LTC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

	Year Ended December 31,
	2022		2021		2020
Revenues:
Rental income	$	128,244	$	121,125	$	126,094
Interest income from financing receivable		1,762		—		—
Interest income from mortgage loans		40,600		32,811		31,396
Interest and other income		4,547		1,386		1,847
Total revenues		175,153		155,322		159,337
Expenses:
Interest expense		31,437		27,375		29,705
Depreciation and amortization		37,496		38,296		39,071
Impairment loss		3,422		—		3,977
Provision (recovery) for credit losses		1,528		1,021		(3)
Transaction costs		828		4,433		299
Property tax expense		15,486		15,392		15,065
General and administrative expenses		23,706		21,460		19,710
Total expenses		113,903		107,977		107,824
Other operating income:
Gain on sale of real estate, net		37,830		7,462		44,117
Operating income		99,080		54,807		95,630
Gain from property insurance proceeds		—		—		373
Loss on unconsolidated joint ventures		—		—		(758)
Income from unconsolidated joint ventures		1,504		1,417		432
Net income		100,584		56,224		95,677
Income allocated to non-controlling interests		(560)		(363)		(384)
Net income attributable to LTC Properties, Inc.		100,024		55,861		95,293
Income allocated to participating securities		(580)		(458)		(422)
Net income available to common stockholders	$	99,444	$	55,403	$	94,871
Earnings per common share:
Basic	$	2.49	$	1.41	$	2.42
Diluted	$	2.48	$	1.41	$	2.42
Weighted average shares used to calculate earnings per common share:
Basic		39,894		39,156		39,179
Diluted		40,067		39,156		39,264

See accompanying notes.

57

LTC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

	Year Ended December 31,
	2022		2021		2020
Net income	$	100,584	$	56,224	$	95,677
Unrealized gain (loss) on cash flow hedges before reclassification		9,181		(172)		—
(Gains) reclassified from accumulated other comprehensive income to interest expense		(290)		—		—
Comprehensive income		109,475		56,052		95,677
Less: Comprehensive income allocated to non-controlling interests		(560)		(363)		(384)
Comprehensive income attributable to LTC Properties, Inc.	$	108,915	$	55,689	$	95,293

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LTC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except per share amounts)

					Capital in		Cumulative						Total		Non-
	Common Stock				Excess of		Net		Accumulated		Cumulative		Stockholders’		controlling		Total
		shares	Amount		Par Value		Income		OCI		Distributions		Equity		Interests		Equity
Balance—December 31, 2019		39,752	$	398	$	867,346	$	1,293,482	$	—	$	(1,384,283)	$	776,943	$	8,483	$	785,426
Repurchase of common stock		(616)		(6)		(18,006)		—		—		—		(18,012)		—		(18,012)
Issuance of restricted stock		101		1		(1)		—		—		—		—		—		—
Net income		—		—		—		95,293		—		—		95,293		384		95,677
Stock-based compensation expense		—		—		7,012		—		—		—		7,012		—		7,012
Vesting of performance-based stock units, including the payment of distributions		82		—		—		—				(586)		(586)		—		(586)
Non-controlling interest distributions		—		—		—		—		—		—		—		(463)		(463)
Common stock cash distributions ($2.28 per share)		—		—		—		—		—		(89,676)		(89,676)		—		(89,676)
Cash paid for taxes in lieu of common shares		(77)		(1)		(3,565)		—		—		—		(3,566)		—		(3,566)
Other		—		—		(6)		—		—		—		(6)		—		(6)
Balance—December 31, 2020		39,242		392		852,780		1,388,775		—		(1,474,545)		767,402		8,404		775,806
Issuance of restricted stock		110		1		(1)		—		—		—		—		—		—
Net income		—		—		—		55,861		—		—		55,861		363		56,224
Stock-based compensation expense		—		—		7,760		—		—		—		7,760		—		7,760
Vesting of performance-based stock units, including the payment of distributions		109		1		(1)		—				(764)		(764)		—		(764)
Non-controlling interest contributions		—		—		—		—		—		—		—		9		9
Non-controlling interest distributions		—		—		—		—		—		—		—		(363)		(363)
Common stock cash distributions ($2.28 per share)		—		—		—		—		—		(89,730)		(89,730)		—		(89,730)
Cash paid for taxes in lieu of common shares		(87)		—		(3,573)		—		—		—		(3,573)		—		(3,573)
Fair market valuation adjustment for interest rate swap		—		—		—		—		(172)		—		(172)		—		(172)
Other		—		—		(70)		—		—		—		(70)		—		(70)
Balance—December 31, 2021		39,374		394		856,895		1,444,636		(172)		(1,565,039)		736,714		8,413		745,127
Issuance of common stock		1,792		18		67,625		—		—		—		67,643		—		67,643
Issuance of restricted stock		135		1		(1)		—		—		—		—		—		—
Net income		—		—		—		100,024		—		—		100,024		560		100,584
Stock-based compensation expense		—		—		7,964		—		—		—		7,964		—		7,964
Non-controlling interest contributions		—		—		—		—		—		—		—		14,375		14,375
Non-controlling interest distributions		—		—		—		—		—		—		—		(1,406)		(1,406)
Common stock cash distributions ($2.28 per share)		—		—		—		—		—		(91,509)		(91,509)		—		(91,509)
Cash paid for taxes in lieu of common shares		(39)		(1)		(1,354)		—		—		—		(1,355)		—		(1,355)
Fair market valuation adjustment for interest rate swap		—		—		—		—		8,891		—		8,891		—		8,891
Other		—		—		(5)		—		—		—		(5)		(2)		(7)
Balance—December 31, 2022		41,262	$	412	$	931,124	$	1,544,660	$	8,719	$	(1,656,548)	$	828,367	$	21,940	$	850,307

See accompanying notes.

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LTC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Year Ended December 31,
	2022		2021		2020
OPERATING ACTIVITIES:
Net income	$	100,584	$	56,224	$	95,677
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		37,496		38,296		39,071
Stock-based compensation expense		7,964		7,760		7,012
Impairment loss		3,422		—		3,977
Gain on sale of real estate, net		(37,830)		(7,462)		(44,117)
Loss on unconsolidated joint ventures		—		—		758
Income from unconsolidated joint ventures		(1,504)		(1,417)		(432)
Income distributions from unconsolidated joint ventures		351		—		432
Straight-line rental adjustment (income)		1,369		(467)		(1,778)
Adjustment for collectability of lease incentives and rental income		256		758		23,214
Amortization of lease incentives		877		608		426
Provision (recovery) for credit losses		1,528		1,021		(3)
Application of interest reserve		(6,192)		(150)		—
Amortization of debt issue costs		1,139		1,122		1,029
Other non-cash items, net		113		—		4
Change in operating assets and liabilities
Lease incentives funded		(418)		(824)		(220)
Increase in interest receivable		(7,173)		(6,776)		(6,161)
Increase (decrease) in accrued interest payable		1,489		(471)		(767)
Net change in other assets and liabilities		2,115		2,962		(2,021)
Net cash provided by operating activities		105,586		91,184		116,101
INVESTING ACTIVITIES:
Investment in real estate properties		(51,817)		—		(13,581)
Investment in real estate developments		(105)		—		(16,699)
Investment in real estate capital improvements		(8,994)		(6,298)		(6,913)
Capitalized interest		—		—		(354)
Proceeds from sale of real estate, net		72,620		43,627		72,141
Investment in financing receivable		(61,747)		—		—
Investment in real estate mortgage loans receivable		(40,732)		(88,955)		(4,253)
Principal payments received on mortgage loans receivable		1,175		1,175		1,065
Investments in unconsolidated joint ventures		—		(5,676)		(8,520)
Proceeds from liquidation of investments in unconsolidated joint ventures		—		—		17,848
Advances and originations under notes receivable		(37,192)		(16,353)		(2,078)
Principal payments received on notes receivable		6,843		2,694		5,275
Net cash (used in) provided by investing activities		(119,949)		(69,786)		43,931
FINANCING ACTIVITIES:
Borrowings from revolving line of credit		194,000		204,400		24,000
Borrowings from term loans		—		100,000		—
Repayment of revolving line of credit		(174,900)		(183,400)		(28,000)
Proceeds from issuance of senior unsecured notes		75,000		—		—
Principal payments on senior unsecured notes		(48,160)		(47,160)		(40,160)
Stock repurchase plan		—		—		(18,012)
Proceeds from common stock issued		68,156		—		—
Distributions paid to stockholders		(91,509)		(90,494)		(90,262)
Contribution from non-controlling interests		50		9		—
Distributions paid to non-controlling interests		(487)		(363)		(463)
Financing costs paid		(1,208)		(3,358)		(35)
Cash paid for taxes in lieu of shares upon vesting of restricted stock and performance-based stock units		(1,355)		(3,573)		(3,566)
Other		(6)		(70)		(6)
Net cash provided by (used in) financing activities		19,581		(24,009)		(156,504)
Increase (decrease) in cash and cash equivalents		5,218		(2,611)		3,528
Cash and cash equivalents, beginning of period		5,161		7,772		4,244
Cash and cash equivalents, end of period	$	10,379	$	5,161	$	7,772
Supplemental disclosure of cash flow information:
Interest paid	$	28,809	$	26,724	$	29,443

See accompanying notes.

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1. The Company

LTC Properties, Inc. (“LTC”), a Maryland corporation, commenced operations on August 25, 1992. LTC is a real estate investment trust (“REIT”) that invests primarily in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. We conduct and manage our business as one operating segment, rather than multiple operating segments, for internal reporting and internal decision-making purposes. Our primary objectives are to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), assisted living communities (“ALF”), independent living communities (“ILF”), memory care communities (“MC”) and combinations thereof. We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals. ILF, ALF, MC and combinations thereof are included in the ALF classification.

2. Summary of Significant Accounting Policies

Basis of Presentation. The accompanying consolidated financial statements include the accounts of LTC, our wholly-owned subsidiaries, and our consolidated companies. All intercompany investments, accounts and transactions have been eliminated.

Any reference to the number of properties or facilities, number of units, number of beds, number of operators, and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board.

Consolidation. At inception, and on an ongoing basis, as circumstances indicate the need for reconsideration, we evaluate each legal entity that is not wholly-owned by us for consolidation, first under the variable interest entity (“VIE”), then under the voting model. Our evaluation considers all of our variable interests, including common or preferred equity ownership, loans, and other participating instruments. The variable interest model applies to entities that meet both of the following criteria:

● A legal structure has been established to conduct business activities and to hold assets.

● LTC has a variable interest in the entity - i.e., it has equity ownership or other financial interests that change with changes in the fair value of the entity's net assets.

If an entity does meet the above criteria and does not qualify for a scope exception from the VIE model, we will determine whether the entity is a VIE.

A legal entity is determined to be a VIE if it has any of the following three characteristics:

1. The entity does not have sufficient equity to finance its activities without additional subordinated financial support;

2. The equity holders, as a group, lack the characteristics of a controlling financial interest, as evidenced by all of the following characteristics:

● The power, through voting rights or similar rights, to direct the activities of the entity that most significantly impact the entity's economic performance;

● The obligation to absorb the entity's expected losses;

● The right to receive the entity's expected residual returns; or

3. The entity is established with non-substantive voting rights (i.e., the entity is structured such that majority economic interest holder(s) have disproportionately few voting rights).

If any of the three characteristics of a VIE are met, we conclude that the entity is a VIE and evaluate it for consolidation under the variable interest model.

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If an entity is determined to be a VIE, we evaluate whether we are the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and benefits. We consolidate a VIE if we have both power and benefits - that is (i) we have the power to direct the activities of a VIE that most significantly impact the VIE's economic performance (power), and (ii) we have the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). If we have a variable interest in a VIE but we are not the primary beneficiary, we account for our investment using the equity method of accounting.

If a legal entity fails to meet any of the three of the characteristics of a VIE, we evaluate such entity under the voting interest model. Under the voting interest model, we consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting shares or if we are the general partner or managing member of the entity and the limited partners or non-managing members do not have substantive participating, liquidation, or kick-out rights.

The FASB requires the classification of non-controlling interests as a component of consolidated equity in the consolidated balance sheet subject to the provisions of the rules governing classification and measurement of redeemable securities. The guidance requires consolidated net income to be reported at the amounts attributable to both the controlling and non-controlling interests. The calculation of earnings per share will be based on income amounts attributable to the controlling interest.

Use of Estimates. Preparation of the consolidated financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Our most significant assumptions and estimates are related to the valuation of real estate, purchase price allocation of acquired assets, revenue recognition including the collectability of tenant receivables and asset impairment.

Cash Equivalents. Cash equivalents consist of highly liquid investments with a maturity of three months or less when purchased and are stated at cost which approximates market.

Owned Properties. We make estimates as part of our allocation of the purchase price of acquisitions to the various components of the acquisition based upon the fair value of each component. In determining fair value, we use current appraisals or other third-party opinions of value. The most significant components of our allocations are typically the allocation of fair value to land and buildings and, for certain of our acquisitions, in-place leases and other intangible assets. In the case of the fair value of buildings and the allocation of value to land and other intangibles, the estimates of the values of these components will affect the amount of depreciation and amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the value of in-place leases, we make best estimates based on the evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. These assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases. We evaluate each purchase transaction to determine whether the acquired assets meet the definition of an asset acquisition or a business combination. Transaction costs related to acquisitions that are not deemed to be business combinations are included in the cost basis of the acquired assets, while transaction costs related to acquisitions that are deemed to be business combinations are expensed as incurred.

We capitalize direct construction and development costs, including predevelopment costs, interest, property taxes, insurance and other costs directly related and essential to the acquisition, development or construction of a real estate asset. We capitalize construction and development costs while substantive activities are ongoing to prepare an asset for its intended use. We consider a construction project as substantially complete and held available for occupancy upon the issuance of the certificate of occupancy. Costs incurred after a project is substantially complete and ready for its intended use, or after development activities have ceased, are expensed as incurred. For redevelopment, renovation and expansion of existing operating properties, we capitalize the cost for the construction and improvement incurred in connection with the redevelopment, renovation and expansion. Costs previously capitalized related to abandoned acquisitions or developments are charged to earnings. Expenditures for repairs and maintenance are expensed as incurred.

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Depreciation is computed principally by the straight-line method for financial reporting purposes over the estimated useful lives of the assets, which range from 3 to 5 years for computers, 5 to 15 years for furniture and equipment, 35 to 50 years for buildings, 10 to 20 years for site improvements, 10 to 50 years for building improvements and the respective lease term for acquired lease intangibles.

Financing Receivable. As part of our acquisitions, we may from time to time, invest in sale and leaseback transactions. In accordance with ASC Topic 842, Leases (“ACS 842”), we are required to determine whether the sale and leaseback transaction qualifies as a sale. ASC 842 clarifies that an option for the seller-lessee to repurchase a real estate asset would generally preclude accounting for the transfer of the asset as a sale. Therefore, a sale and leaseback transaction of real estate that includes a seller-lessee repurchase option is accounted for as a failed sale and leaseback transaction. As a result, the purchased assets of a failed sale and leaseback transaction would be presented as a Financing receivable on our Consolidated Balance Sheets and the rental revenue from these properties is recorded as Interest income from financing receivable on our Consolidated Statements of Income. Furthermore, upon expiration of the purchase option if the purchase option remains unexercised by the seller-lessee, the purchased assets will be reclassified from Financing receivable to Real property investments on our Consolidated Balance Sheets.

Mortgage Loans Receivable, Net of Loan Loss Reserve. Mortgage loans receivable we originate are recorded on an amortized cost basis.

Working Capital Loans. Our investment in working capital loans consists of loan arrangements with interest ranging between 4% and 8% and maturities between 2023 and 2032.

Mezzanine Loans. Mezzanine financing sits between senior debt and common equity in the capital structure, and typically is used to finance development projects or value-add opportunities on existing operational properties. We seek market-based, risk-adjusted rates of return typically between 7-12% with the loan term typically four to five years. Security for mezzanine loans can include all or a portion of the following credit enhancements; secured second mortgage, pledge of equity interests and personal/corporate guarantees. Mezzanine loans are recorded for GAAP purposes as either a loan, under notes receivable, or joint venture (“JV”), under investment in unconsolidated JVs, depending upon specifics of the loan terms and related credit enhancements.

Investments in unconsolidated joint ventures. From time to time, we provide funding to third-party operators for the acquisition, development and construction (“ADC”) of a property. Under an ADC arrangement, we may participate in the residual profits of the project through the sale or refinancing of the property. These ADC arrangements can have characteristics similar to a loan or similar to a JV or partnership such as participating in the risks and rewards of the project as an owner or an investment partner. If the ADC arrangement characteristics are more similar to a jointly-owned investment or partnership, we account for the ADC arrangement as an investment in an unconsolidated JV under the equity method of accounting or a direct investment (consolidated basis of accounting) instead of applying loan accounting.

We evaluate our ADC arrangements first pursuant to Accounting Standard Codification (“ASC”) 810, Consolidation, to determine whether the ADC arrangement meets the definition of a VIE, as explained above, and whether we are the primary beneficiary. If the ADC arrangement is deemed to be a VIE but we are not the primary beneficiary, or if it is deemed to be a voting interest entity but we do not have a controlling financial interest, we account for our investment in the ADC arrangement using the equity method. Under the equity method, we initially record our investment at cost and subsequently recognize our share of net earnings or losses and other comprehensive income or loss, cash contributions made and distributions received, and other adjustments, as appropriate. Allocations of net income or loss may be subject to preferred returns or allocation formulas defined in operating agreements and may not be according to percentage ownership interests. In certain circumstances where we have a substantive profit-sharing arrangement which provides a priority return on our investment, a portion of our equity in earnings may consist of a change in our claim on the net assets of the underlying JV. Distributions of operating profit from the JVs are reported as part of operating cash flows, while distributions related to a capital transaction, such as a refinancing transaction or sale, are reported as investing activities. Currently we do not have any ADC arrangements.

We periodically perform evaluation of our investment in unconsolidated JVs to determine whether the fair

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value of each investment is less than the carrying value, and, if such decrease in value is deemed to be other-than-temporary, we write the investment down to its estimated fair value as of the measurement date.

Loan Loss Reserve. ASC 326, Financial Instruments- Credit Losses requires a forward looking “expected loss” model to be used for receivables, held-to-maturity debt, loans, and other instruments. When shared risk characteristics exist, ASC 326 requires a collective basis measurement of expected credit losses of the financial assets.

We adopted ASC 326 on January 1, 2020 and determined our Mortgage loans receivable and Notes receivable are within the scope of this ASU. We utilize the probability of default and discounted cash flow methods to estimate expected credit losses. Additionally, we stress-test the results to reflect the impact of unknown adverse future events including recessions. Upon adoption, we concluded that the adoption of ASC 326 did not have a material impact on our financial statements.

We elected not to measure an allowance for expected credit losses on accrued interest receivable under the expected credit loss standard as we have a policy in place to reserve or write off accrued interest receivable in a timely manner through our quarterly review of the loan and property performance. Therefore, we elected the policy to write off accrued interest receivable by reversing interest income and/or recognizing credit loss expense. As of December 31, 2022, the total balance of accrued interest receivable of $46,000,000 was not included in the measurement of expected credit loss. For the years ended December 31, 2022, 2021 and 2020, Company did not recognize any write-off related to accrued interest receivable.

Accrued incentives. As part of our acquisitions and/or amendments, we may commit to provide contingent payments to our sellers or lessees, upon the properties achieving certain rent coverage ratios. Typically, when the contingent incentive payments are funded, cash rent will increase by the amount funded multiplied by a rate stipulated in the agreement. If it is deemed probable, the contingent payment is recorded as a liability at the estimate fair value calculated using a discounted cash flow analysis and accreted to the settlement amount of the estimated payment date. If the contingent payment is provided to the lessee, the payment is recorded as a lease incentive included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets and is amortized as a yield adjustment over the life of the lease. The fair value of these contingent liabilities is evaluated on a quarterly basis based on changes in estimates of future operating results and changes in market discount rates. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement.

Impairments. Assets that are classified as held-for-use are periodically evaluated for impairment when events or changes in circumstances indicate that the asset may be impaired or the carrying amount of the asset may not be recoverable through future undiscounted cash flows. Where indicators of impairment exist, the estimation required in the undiscounted future cash flow assumption includes management’s probability-weighting of various scenarios

including whether the management modifies the lease with the existing operator versus identifying a replacement operator and the assumed market lease rate underlying projected future rental cash flows. In determining fair value, we use current appraisals or other third-party opinions of value and other estimates of fair value such as estimated discounted future cash flows. Based on our assessment, during the years ended December 31, 2022, 2021 and 2020, we recognized impairment losses of $3,422,000, $0 and $3,977,000, respectively, related to our real property investments.

Properties held-for-sale. Properties classified as held-for-sale on the Consolidated Balance Sheets include only those properties available for immediate sale in their present condition and for which management believes that it is probable that a sale of the property will be completed within one year. Properties held-for-sale are carried at the lower of cost or fair value less estimated selling costs. No depreciation expense is recognized on properties held-for-sale once they have been classified as such. Only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. We have not reclassified results of operations for properties disposed as discontinued operations as these disposals do not represent strategic shifts in our operations.

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Fair Value of Financial Instruments. The FASB requires the disclosure of fair value information about financial instruments for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. Accordingly, the aggregate fair market value amounts presented in the notes to these consolidated financial statements do not represent our underlying carrying value in financial instruments.

The FASB provides guidance for using fair value to measure assets and liabilities, the information used to measure fair value, and the effect of fair value measurements on earnings. The FASB emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the FASB establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices).

The fair value guidance issued by the FASB excludes accounting pronouncements that address fair value measurements for purposes of lease classification or measurement. However, this scope exception does not apply to assets acquired and liabilities assumed in a business combination that are required to be measured at fair value, regardless of whether those assets and liabilities are related to leases.

In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses on items for which the fair value option has been elected reported in earnings. We have not elected the fair value option for any of our financial assets or liabilities.

The FASB requires disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. See Note 15. Fair Value Measurements for the disclosure about fair value of our financial instruments.

Derivative Instruments. As of December 31, 2022, we had two interest rate swaps that were designated as cash flow hedges of interest rate risk with a total notional amount of $100,000,000. See Note 9. Debt Obligations within our consolidated financial statements for further detail on our interest rate swaps. We record cash flow hedges either as an asset or a liability measured at fair value. If hedge accounting is applied to a derivative instrument, the entire change in the fair value of the derivative designated and qualified as cash flow hedge is recorded in Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. We estimate the fair value of our interest rate swaps using the assistance of a third-party using inputs that are observable in the market which include forward yield curves and other relevant information. Additionally, we are exposed to credit risk of the counterparty to our interest rate swap agreements in the event of non-performance under the terms of the agreements. We have determined that the majority of the inputs used to value our derivative instruments fall within level 2 of the fair value hierarchy.

In March 2020, the FASB issued Accounting Standards Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"), which contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts as the market transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The practical expedients are optional and may be elected over time as reference rate reform activities occur. ASU 2020-04 is effective upon issuance and can be applied through December 31, 2022. In December

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2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, which defers the sunset date from December 31, 2022 to December 31, 2024.

In December 2022, we amended our unsecured credit agreement to update the benchmark provisions to replace LIBOR with the Secured Overnight Financing Rate (“SOFR”), plus a credit spread of 10 basis points, as the reference rate for the purpose of calculating interest under the agreement. In connection with amending the unsecured credit agreement, we also amended our fixed interest rate swap agreements to update reference rate to SOFR. As a result, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients maintains the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the ASU and may apply other elections, as applicable, as additional changes in the market occur. Our election to apply the hedge accounting expedients did not have a material impact on our consolidated financial statements. See Note 9. Debt Obligations within our consolidated financial statements for further detail on our unsecured credit agreement.

Revenue Recognition- Rental Income. Rental income from operating leases is generally recognized on a straight-line basis over the terms of the leases. Substantially all of our leases contain provisions for specified annual increases over the rents of the prior year and are generally computed in one of four methods depending on specific provisions of each lease as follows:

(i) a specified annual increase over the prior year’s rent, generally between 2.0% and 3.0%;

(ii) a calculation based on the Consumer Price Index or the Medicare Market Basket Rate;

(iii) as a percentage of facility revenues in excess of base amounts or

(iv) specific dollar increases.

The FASB does not permit recognition of contingent revenue until the contingencies have been resolved. Historically, we have not included contingent rents as income until received and we will continue our historical policy. During the years ended December 31, 2022, 2021 and 2020, we received $57,000, $0 and $111,000, respectively, of contingent rental income.

In accordance with ASC 842, Leases, we report real estate taxes that are reimbursed by our operators as Rental income with a corresponding Property tax expense in the Consolidated Statements of Income. Furthermore, we assess the collectability of substantially all of our lease payments through maturity and if collectability is not probable, all or a portion of our straight-line rent receivable and other lease receivables may be written off and the rental income during the period would be limited to the lesser of the income that would have been recognized if collection were probable, and the lease payments received. Our assessment of collectability of leases includes evaluating the data and assumptions used in determining whether substantially all of the future lease payments were probable based on the lessee’s payment history, the financial strength of the lessees, future contractual rents, and the timing of expected payments.

In April 2020, the FASB staff released guidance regarding accounting for lease concessions in response to the novel coronavirus (“COVID-19”) pandemic. The FASB staff guidance indicates that lessors could elect an accounting policy to not evaluate whether rent concessions provided in response to the COVID-19 pandemic are lease modifications. When only the timing of payments is impacted by the rent deferrals, but the amount of the consideration is substantially the same as required by the original lease agreement, the FASB listed two methods for lessors to account for the rent deferrals. We elected to account for the rent deferrals as if there were no changes made to the lease agreement. Accordingly, we increased the lease receivable and continued to recognize income. We recognized the rent abatements given to the operators where we accrue rent on a straight-line basis, over the remaining life of those respective leases. Payments made to or on behalf of our lessees represent incentives that are deferred and amortized over the term of the lease on a straight-line basis.

Revenue Recognition- Interest Income. Interest income on mortgage loans receivable and notes receivable is recognized using the effective interest method. Exit fee income and commitment fee income are also amortized over the life of the related loan under the effective interest method. Effective interest method, as required by GAAP, is a technique for calculating the actual interest rate for the term of a mortgage loan based on the initial origination value. When the actual interest rate is higher than the stated interest rate in the early years of the mortgage loan, an effective

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interest receivable asset is created and included in the Interest receivable line item in our Consolidated Balance Sheets and begins reducing down to zero when, at some point during the mortgage loan, the stated interest rate is higher than the actual interest rate. We consider a loan to be non-performing after 60 days of non-payment of amounts due and do not recognize unpaid interest income from that loan until the past due amounts have been received.

As previously discussed under Financing Receivable above, rental income from properties acquired through a sale leaseback, subject to a seller-lessee repurchase option, is recorded as Interest income from financing receivable on our Consolidated Statements of Income. Interest income on financing receivable is recognized using the effective interest method. The recognition of interest income will stop when Financing receivable is reclassified to Real estate investments when the purchase option remains unexercised upon expiration of the purchase option.

Gains on sale of Real Estate, Net. Recognition of gains or losses from sales of investments in real estate requires that we:

a) meet certain revenue recognition criteria in accordance with ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets; and

b) transfer control of the real estate to the buyer.

The gain or loss recorded is measured as the difference between the sales price, less costs to sell, and the carrying value of the real estate when we sell it.

Federal Income Taxes. LTC qualifies as a REIT under the Internal Revenue Code of 1986, as amended, and as such, no provision for Federal income taxes has been made. A REIT is required to distribute at least 90% of its taxable income to its stockholders and a REIT may deduct dividends in computing taxable income. If a REIT distributes 100% of its taxable income and complies with other Internal Revenue Code requirements, it will generally not be subject to Federal income taxation.

For Federal tax purposes, depreciation is generally calculated using the straight-line method over a period 27.5 years. Earnings profits, which determine the taxability of distributions to stockholders, use the straight-line method over 30 years. The determination of Federal taxable income differ from net income for financial statement purposes principally due to the treatment of certain investments in joint ventures, timing of interest income, rental income, other expense items, recognition of impairment charges, and depreciable lives and bases of assets. At December 31, 2022, the net book basis of our depreciable assets exceeded our net tax basis by approximately $41,202,000 (unaudited), due to the difference previously mentioned.

The FASB clarified the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. The guidance utilizes a two-step approach for evaluating tax positions. Recognition (step one) occurs when a company concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. Measurement (step two) is only addressed if step one has been satisfied (i.e., the position is more likely than not to be sustained). Under step two, the tax benefit is measured as the largest amount of benefit (determined on a cumulative probability basis) that is more likely than not to be realized upon ultimate settlement. We currently do not have any uncertain tax positions that would not be sustained on its technical merits on a more-likely than not basis.

We may from time to time be assessed interest or penalties by certain tax jurisdictions. In the event we have received an assessment for interest and/or penalties, it has been classified in our Consolidated Statements of Income as General and administrative expenses.

Concentrations of Credit Risk. Financial instruments which potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, operating leases on owned properties, financing receivable and mortgage loans receivable. Our financial instruments, operating leases, financing receivable and mortgage loans receivable are subject to the possibility of loss of carrying value as a result of the failure of other parties to perform according to their contractual obligations or changes in market prices which may make the instrument less valuable. We obtain various collateral and other protective rights, and continually monitor these rights, in order to reduce such

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possibilities of loss. In addition, we provide reserves for potential losses based upon management’s periodic review of our portfolio. See Note 3. Major Operators for further discussion of concentrations of credit risk from our tenants.

Net Income Per Share. Basic earnings per share is calculated using the weighted-average shares of common stock outstanding during the period excluding common stock equivalents. Diluted earnings per share includes the effect of all dilutive common stock equivalents.

In accordance with the accounting guidance regarding the determination of whether instruments granted in share-based payments transactions are participating securities, we have applied the two-class method of computing basic earnings per share. This guidance clarifies that outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends participate in undistributed earnings with common stockholders and are considered participating securities.

Stock-Based Compensation. The FASB requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. We use the Black-Scholes-Merton formula to estimate the value of stock options granted to employees. Also, we use the Monte Carlo model to estimate the value of performance-based stock units granted to employees. These models require management to make certain estimates including stock volatility, expected dividend yield and the expected term. If management incorrectly estimates these variables, the results of operations could be affected. The FASB also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow. Because we qualify as a REIT under the Internal Revenue Code of 1986, as amended, we are generally not subject to Federal income taxation. Therefore, this reporting requirement does not have an impact on the Consolidated Statements of Cash Flows.

Segment Disclosures. The FASB accounting guidance regarding disclosures about segments of an enterprise and related information establishes standards for the manner in which public business enterprises report information about operating segments. Our investment decisions in seniors housing and health care properties, including property lease transactions, financing receivable, mortgage loans, and other investments, are made and resulting investments are managed as a single operating segment for internal reporting and for internal decision-making purposes. Therefore, we have concluded that we operate as a single segment.

3. Major Operators

We have one operator from which we derive approximately 10% or more of our total revenues. The following table sets forth information regarding our major operator as of December 31, 2022:

	Number of		Number of		Percentage of
			SNF	ALF	Total		Total
Operator	SNF	ALF	Beds	Units	Revenues (1)		Assets (2)
Prestige Healthcare (3)	24	—	2,820	93	18.6	%	16.0	%

(1) Includes total revenues for the twelve months ended December 31, 2022.

(2) Represents the net carrying value of the mortgage loans and properties we own divided by the Total assets on the Consolidated Balance Sheets.

(3) The majority of the revenue derived from this operator relates to interest income from mortgage loans.

Our financial position and ability to make distributions may be adversely affected if Prestige Healthcare, or any of our lessees and borrowers face financial difficulties, including any bankruptcies, inability to emerge from bankruptcy, insolvency, or general downturn in business of any such operator, impact upon services or occupancy levels due to infectious disease outbreaks, or in the event any such operator does not renew and/or extend its relationship with us.

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4. Supplemental Cash Flow Information

	Year Ended December 31,
	2022		2021		2020
	(in thousands)
Non-cash investing and financing transactions:
Contribution of financing receivable from non-controlling interests (See Note 5. Real Estate Investments)	$	14,325	$	—	$	—
Mortgage loans receivable reserve withheld at origination (See Note 5. Real Estate Investments)		107		298		—
Accretion of interest reserve recorded as mortgage loan receivable (See Note 5. Real Estate Investments)		(6,192)		—		—
Preferred return reserve related to investment in unconsolidated joint ventures (See Note 6. Investment in Unconsolidated Joint Ventures)		351		2,324		2,878
Notes receivable reserve withheld at origination (See Note 7. Notes Receivable)		—		353		—
Reclassification of notes receivable to lease incentives (Note 8. Lease Incentives)		—		—		300
Change in fair value of interest rate swap agreements (Note 9. Debt Obligations )		(8,891)		172		—

5. Real Estate Investments

Owned Properties. As of December 31, 2022, we owned 152 health care real estate properties consisting of 99 ALFs, 52 SNFs and one behavioral health care hospital located in 26 states. These properties are operated by 24 operators.

Independent living communities, assisted living communities, memory care communities and combinations thereof are included in the assisted living property classification (collectively “ALF”). Any reference to the number of properties, number of units, number of beds, and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board.

Depreciation expense on buildings and improvements, including properties classified as held-for-sale, was $37,394,000, $38,192,000, and $38,945,000 for the years ended December 31, 2022, 2021 and 2020, respectively.

Future minimum base rents receivable under the remaining non-cancelable terms of operating leases excluding the effects of straight-line rent, amortization of lease incentives and renewal options are as follows (in thousands):

	Cash
	Rent (1)
2023	$	120,817
2024		113,003
2025		103,690
2026		71,044
2027		67,087
Thereafter		200,663

(1) Represents contractual cash rent, except for certain master leases which are based on estimated cash. Includes rent from subsequent acquisitions and excludes rent from subsequent dispositions. See Note 16. Subsequent Events for more information.

Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent receivable upon renewal being greater of less than that currently being paid. Subsequent to December 31, 2022, a master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed at the contractual rate for another five years extending the maturity to November 2028. The centers have a total 216 beds and are located in Florida.

We monitor the collectability of our receivable balances, including deferred rent receivable balances, on an ongoing basis. We write-off uncollectable operator receivable balances, including straight-line rent receivable and lease incentives balances, as a reduction to rental income in the period such balances are no longer probable of being collected. Therefore, recognition of rental income is limited to the lesser of the amount of cash collected or rental income reflected on a straight-line basis for those customer receivable balances deemed uncollectable. We wrote-off straight-line rent receivable and lease incentives balances of $256,000, $758,000 and $23,214,000 for the years ended December 31, 2022, 2021 and 2020, respectively.

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We continue to take into account the current financial condition of our operators, including consideration of the impact of COVID-19, in our estimation of uncollectable accounts and deferred rents receivable at December 31, 2022. We are closely monitoring the collectability of such rents and will adjust future estimations as appropriate as further information becomes known.

The following table summarizes components of our rental income for the years ended December 31, 2022, 2021 and 2020 (in thousands):

	December 31,
Rental Income		2022			2021			2020
Base cash rental income	$	115,230	(1)	$	107,692	(2)	$	132,789
Variable cash rental income		15,516	(3)		14,332	(3)		15,167	(3)
Straight-line rent		(1,369)	(4)		467	(5)		1,778
Adjustment for collectability of lease incentives and rental income		(256)	(6)		(758)	(6)		(23,214)	(6)
Amortization of lease incentives		(877)			(608)			(426)
Total	$	128,244		$	121,125		$	126,094

(1) Increased primarily due to rent received from transitioned portfolios, rental income from acquisitions, completed development projects, annual rent escalations, and lease termination fee income of $1,181 received in connection with the sale of a 74-unit ALF partially offset by decreased rent from the sold properties.

(2) Decreased primarily due to defaults of payments for lease obligations from Senior Lifestyle and Senior Care, abated and deferred rent and reduced rent from a sold property. This decrease was partially offset by increased rent from re-leasing 18 properties previously leased to Senior Lifestyle, completion of development projects and contractual rent increases.

(3) The variable cash rental income for the years ended December 31, 2022, 2021 and 2020 primarily includes reimbursement of real estate taxes by our lessees.

(4) Decreased primarily due to a deferred rent repayment, normal amortization and the impact of the 50% reduction of 2021 rent escalations for those leases accounted for on a straight-line basis.

(5) Decreased due to more leases accounted for on a cash basis, normal amortization and the impact of the 50% reduction of 2021 rent escalations for those leases accounted for on a straight-line basis.

(6) Represents straight-line rent receivable and lease incentives write-offs.

Some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. The following table summarizes information about purchase options included in our lease agreements (dollar amount in thousands):

	Type	Number
	of	of		Gross		Carrying	Option
State	Property	Properties		Investments		Value	Window
California	ALF/MC	2	$	38,895	$	33,719	2023-2029
Florida	MC	1		15,201		12,500	2029
Florida	SNF	3		76,767		75,999	2025-2027	(1)
Nebraska	ALF	3		7,633		2,948	TBD	(2)
South Carolina	ALF/MC	1		11,680		9,052	2029
Texas	SNF	4		51,837		50,848	2027-2029	(3)
Total			$	202,013	$	185,066

(1) During 2022, we entered into a joint venture to purchase three SNFs. For more information regarding this transaction, see Financing Receivable below.

(2) Subject to the properties achieving certain coverage ratios.

(3) During 2022, we purchased four SNFs and leased these properties under a 10-year lease with an existing operator. The lease allows the operator to elect either an earn-out payment or purchase option. If neither is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the earn-out see Note 11 Commitments and Contingencies.

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic. At December 31, 2022, in conjunction with the continued levels of uncertainty related to the adverse effects of COVID-19,

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we assessed the probability of collecting substantially all of our lease payments through maturity and concluded that we did not have sufficient information available to evaluate the impact of COVID-19 on the collectability of our lease payments. The extent to which COVID-19 could impact our operators and the collectability of our future lease payments will depend on the future developments including the financial impact significance, government support and subsidies and the duration of the pandemic.

In recognition of the pandemic impact affecting our operators, we have agreed to provide assistance in form of rent abatements and rent deferrals and we may continue to provide assistance as needed.

Impairment Loss. During 2022, we made the decision to sell an assisted living community located in Kentucky which decreased the period over which we could recover the carrying value of the community. As a result of our decision to sell, we determined that the community’s carrying value would not be fully recoverable and recorded an impairment loss of $1,286,000. This community was classified as held-for sale at December 31, 2022. See Properties Held-for-Sale below for more information regarding this community. Additionally, during 2022, we concluded that the carrying value of a 70-unit assisted living community in Florida and a closed memory care community in Colorado may not be recoverable through future undiscounted cash flows, Accordingly, we recorded a combined impairment loss of $2,136,000 which represents the amount by which the carrying value of these properties exceeds their estimated fair value.

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Properties Held-for-Sale. The following summarizes our held for sale as of December 31, 2022 (dollar amounts in thousands):

	Type	Number	Number
	of	of	of		Gross		Accumulated
State (1)	Property	Properties	Beds/units		Investment		Depreciation
KY	ALF	1	60	$	13,015	$	2,305

(1) During 2022, we recorded an impairment loss of $1,286 to write-down the carrying value of the community to its anticipated selling price.

Acquisitions. The following table summarizes our acquisitions for the years ended December 31, 2022 through 2020 (dollar amounts in thousands):

						Total		Number	Number
		Purchase		Transaction		Acquisition		of	of
Year	Type of Property	Price		Costs		Costs		Properties	Beds/Units
2022 (1)	SNF	$	51,534	$	283	$	51,817	4	339
2021	n/a	$	—	$	—	$	—	—	—

(1) The properties are located in Texas and are leased to an affiliate of an existing operator under a 10-year lease with two 5-year renewal options. Additionally, the lease allows the operator to elect either an earn-out payment or purchase option. If neither option is elected within the timeframe defined in the lease, both elections are terminated. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the seventh lease year. The initial cash yield is 8% for the first year, increasing to 8.25% for the second year, then increases annually by 2.0% to 4.0% based on the change in the Medicare Market Basket Rate. In connection with transaction, we provided the lessee a 10-year working capital loan for up to $2,000 at 8% for first year, increasing to 8.25% for the second year, then increasing annually with the lease rate. At December 31, 2022, the working capital loan had an outstanding balance of $1,642.

Developments and Improvements. During the years ended December 31, 2022, 2021 and 2020, we invested the following in development and improvement projects (in thousands):

Type of Property		2022				2021			2020
	Developments		Improvements		Developments		Improvements		Developments		Improvements
Assisted Living Communities	$	105	$	5,538	$	—	$	5,846	$	4,491	$	6,842
Skilled Nursing Centers		—		2,897		—		452		12,208		71
Other		—		559		—		—		—		—
Total	$	105	$	8,994	$	—	$	6,298	$	16,699	$	6,913

Completed Projects. During the years ended December 31, 2022 and 2021, we had no completed development projects. The following table summarizes our completed development projects during the years ended December 31, 2020 (dollar amounts in thousands):

	Number	Type	Number
	of	of	of			Total
Year	Properties	Property	Beds/Units	State	Investment
2020	1	ALF/MC	78	Oregon	$	18,447
	1	SNF	90	Missouri		16,587
Total 2020	2		168		$	35,034

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Property Sales. The following table summarizes property sales during the years ended December 31, 2022 through 2020 (dollar amounts in thousands):

		Type	Number	Number
		of	of	of		Sales		Carrying		Net
Year	State	Properties	Properties	Beds/Units		Price		Value		Gain (loss) (1)
2022	California	ALF	2	232	$	43,715	$	17,832	$	25,867
	California	SNF	1	121		13,250		1,846		10,846
	Texas	SNF	1	—		485		697		(441)
	Virginia	ALF	1	74		16,895		15,549		1,344	(2)
	n/a	n/a	—	—		—		—		214	(3)
Total 2022			5	427	$	74,345	$	35,924	$	37,830
2021	Florida	ALF	1	—	$	2,000	$	2,626	$	(858)
	Nebraska	ALF	1	40		900		1,079		(200)
	Washington	SNF	1	123		7,700		4,513		2,562
	Wisconsin	ALF	3	263		35,000		28,295		5,595
	n/a	n/a	—	—		—		—		363	(3)
Total 2021			6	426	$	45,600	$	36,513	$	7,462
2020	Arizona	SNF	1	194	$	12,550	$	2,229	$	10,293
	Colorado	SNF	3	275		15,000		4,271		10,364
	Iowa	SNF	7	544		14,500		4,886		9,051
	Kansas	SNF	3	250		9,750		7,438		1,993
	Texas	SNF	7	1,148		23,000		10,260		12,287
	n/a	n/a	—	—		—		—		129	(3)
Total 2020			21	2,411	$	74,800	$	29,084	$	44,117

(1) Calculation of net gain (loss) includes cost of sales and write-off of straight-line rent receivable and lease incentives, when applicable.

(2) In connection with this sale, the former operator paid us a lease termination fee of $1,181 which is not included in the gain on sale.

(3) We recognized additional gain due to the reassessment adjustment of the holdbacks related to properties sold during 2020 and 2019, under the expected value model per ASC Topic 606, Contracts with Customers.

During 2020, we sold a 114-bed skilled nursing center in Texas and recorded $373,000 from insurance proceeds related to the property’s roof damage as Gain from property insurance proceeds on the Consolidated Statements of Income.

Financing Receivable. During 2022, we entered into a joint venture and contributed $61,661,000 into the JV that purchased three skilled nursing centers located in Florida for $75,825,000. Our JV partner contributed the remaining $14,325,000 of equity. The JV leased the centers back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year. Accordingly, the transaction has been accounted for as a Financing receivable on our Consolidated Balance Sheets. During 2022, we recognized $1,762,000 of Interest income from financing receivable on our Consolidated Statements of Income. Additionally, we recorded $768,000 Provisions for expected loan losses during 2022.

Subsequent to December 31, 2022, we entered into a $121,321,000 JV with an affiliate of an existing operator and contributed $117,900,000 into the JV that purchased 11 assisted living and memory care communities from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit Internal Rate of Return (“IRR”) of 9.0%. In accordance with GAAP, the communities acquired by the JV are required to be presented as a Financing receivable on our Consolidated Balance Sheets.

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Mortgage Loans. The following table summarizes our investments in mortgage loans secured by first mortgages at December 31, 2022 (dollar amounts in thousands):

					Type	Percentage		Number of					Investment
			Gross		of	of					SNF	ALF	per
Interest Rate	Maturity	State	Investment (1)		Property	Investment		Loans (2)	Properties (3)		Beds	Units	Bed/Unit
7.5%	2023	MO	$	1,886	OTH	0.5	%	1	—	(4)	—	—	$	n/a
7.5%	2024	LA		29,347	SNF	7.5	%	1	1		189	—	$	155.28
7.8%	2025	FL		14,308	ALF	3.6	%	1	1		—	68	$	210.41
7.3% (5)	2025	NC/SC		56,317	ALF	14.3	%	1	13		—	523	$	107.68
7.3%	2026	NC		33,001	ALF	8.4	%	1	4		—	217	$	152.08
7.3%	2026	NC		797	OTH	0.2	%	1	—	(6)	—	—	$	—
10.6% (7)	2043	MI		184,351	SNF	46.8	%	1	15		1,875	—	$	98.32
9.6% (7)	2045	MI		39,026	SNF	9.9	%	1	4		480	—	$	81.30
9.8% (7)	2045	MI		19,750	SNF	5.0	%	1	2		201	—	$	98.26
10.1% (7)	2045	MI		14,875	SNF	3.8	%	1	1		146	—	$	101.88
Total			$	393,658		100.0	%	10	41		2,891	808	$	106.42

(1) Subsequent to December 31, 2022, we originated a $10,750 mortgage loan secured by a MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%.

(2) Some loans contain certain guarantees and/or provide for certain facility fees.

(3) Our mortgage loans are secured by properties located in six states with five borrowers.

(4) Represents a mortgage loan secured by a parcel of land for the future development of a 91-bed post-acute SNF.

(5) Represents the initial rate. This loan has an IRR of 8%.

(6) Represents a mortgage loan secured by a parcel of land in North Carolina held for future development of a seniors housing community.

(7) Mortgage loans provide for 2.25% annual increases in the interest rate after a certain time period.

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The following table summarizes our mortgage loan activity for the years ended December 31, 2022, 2021 and 2020 (in thousands):

	Year Ended December 31,
	2022			2021			2020
Originations and funding under mortgage loans receivable	$	40,732	(1) (2)	$	88,955	(3)	$	4,253	(4)
Application of interest reserve		6,192			298			—
Scheduled principal payments received		(1,175)			(1,175)			(1,065)
Mortgage loan premium amortization		(6)			(6)			(4)
Provision for loan loss reserve		(457)			(881)			(32)
Net increase in mortgage loans receivable	$	45,286		$	87,191		$	3,152

(1) Subsequent to December 31, 2022, we originated a $10,750 mortgage loan secured by a MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%.

(2) We originated two senior mortgage loans, secured by four ALFs operated by an existing operator, as well as a land parcel in North Carolina. The communities have a combined total of 217 units, with an average age of less than four years. The land parcel is approximately 7.6 acres adjacent to one of the ALFs and is being held for the future development of a seniors housing community. The mortgage loans have a four-year term, an interest rate of 7.25% and an IRR of 8%. We also funded an additional $2,000 under an existing mortgage loan.

(3) We funded the following:

a. $1,638 mortgage loan secured by a parcel of land for the future development of a 91-bed post-acute SNF in Missouri and withheld an interest reserve of $142. The mortgage loan term is one year at a yield of 7.5%;

b. $27,047 mortgage loan secured by a 189-bed SNF in Louisiana with a regional operator new to us. The mortgage loan has a three-year term with one 12-month extension option and a yield of 7.5%;

c. $11,724 mortgage loan secured by a 68-unit ALF and MC in Florida operated by a regional operator new to us. At origination, we withheld an interest reserve of $806 and applied $156 of the reserve during 2021. The mortgage loan term is approximately 4 years at a 7.75% yield and includes an additional $4,177 loan commitment for the construction of a memory care addition to the property to be funded at a later date subject to satisfaction of various conditions;

d. $48,006 mortgage loan for the purchase of a 13-property seniors housing portfolio located in North (12) and South Carolina (1). The communities are operated by an existing LTC operator. At origination, we withheld an interest reserve of $4,496. The loan term is 4 years at a 7.25% yield and includes a commitment of $6,097 for capital improvements and $650 for working capital; and

e. $540 additional capital funding under our existing mortgage loans.

(4) We funded an additional $2,000 under an existing mortgage loan.

At December 31, 2022 and 2021 the carrying values of the mortgage loans were $389,728,000 and $344,442,000, respectively. Scheduled principal payments on mortgage loan receivables are as follows (in thousands):

	Scheduled
	Principal
2023	$	3,061
2024		30,522
2025		71,801
2026		34,972
2027		1,175
Thereafter		252,127
Total	$	393,658

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6. Investments in Unconsolidated Joint Ventures

During 2020, we provided preferred capital contribution commitments to two joint ventures. We determined that each of these JVs meets the accounting criteria to be considered a VIE. We are not the primary beneficiary of the VIEs as we do not have both: 1) the power to direct the activities that most significantly affect the VIE’s economic performance, and 2) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. However, we do have significant influence over the JVs. Therefore, we account for the joint venture investments using the equity method of accounting. 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) Represents a 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) Represents a 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. Subsequent to December 31, 2022, we received a notice of intent to redeem our $13,000 preferred equity investment in the joint venture.

The following table summarizes our capital contributions, income recognized, and cash interest received related to our investments in unconsolidated joint ventures during the years ended December 31, 2022, 2021 and 2020 (in thousands):

	Type
	of			Capital		Income		Cash Interest		Application of
Year	Properties			Contribution		Recognized		Earned		Interest Reserve
2022	ALF/MC		$	—	$	450	$	—	$	450
	UDP			—		1,054		351		703
Total			$	—	$	1,504	$	351	$	1,153
2021	ALF/MC		$	—	$	450	$	—	$	412
	UDP			8,000		967		—		880
Total			$	8,000	$	1,417	$	—	$	1,292
2020	ILF/ALF/MC	(1)	$	58	$	231	$	231	$	—
	UDP			6,340		169		169		—
	UDP			5,000		32		32		—
Total			$	11,398	$	432	$	432	$	—

(1) We had a preferred equity investment in an unconsolidated joint venture that owned four ALFs located in Arizona, providing independent living, assisted living and memory care services. During the year ended December 31, 2020, upon sale of the four properties comprising the JV, we received liquidation proceeds totaling $17,848 and incurred an additional $758 of loss.

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7. Notes Receivable

Notes receivable consists of mezzanine loans and working capital loans. The following table summarizes our investments in notes receivable at December 31, 2022 (dollar amounts in thousands):

Interest			Type of	Gross				Type of
Rate	IRR	Maturity	Loan	Investment			# of loans	Property
5.0%	—	2023	Working capital	$	380		1	ALF
7.0%	—	2023	Working capital		500		1	ALF
8.0%	12.0%	2023	Mezzanine		7,460		1	ALF
5.0%	—	2024	Working capital		184		1	ALF
8.0%	10.5%	2024	Mezzanine		4,355	(1)	1	ILF
4.0%	—	2024	Working capital		13,531		1	SNF
5.0%	—	2025	Working capital		932		1	ALF
7.5%	—	2027	Working capital		550		1	ALF
8.0%	11.0%	2027	Mezzanine		25,000		1	ALF
6.5%	—	2030	Working capital		138		1	SNF
7.1%	—	2030	Working capital		1,607		2	ALF
7.0%	—	2031	Working capital		2,693		1	ALF
8.0%	—	2032	Working capital		1,642		1	SNF
				$	58,972		14

(1) Subsequent to December 31, 2022, we received $4,545 which includes a prepayment fee and the exit IRR totaling $190, from a mezzanine loan early payoff. The mezzanine loan was on a 136-unit in Oregon.

The following table is a summary of our notes receivable components at December 31, 2022 and 2021 (in thousands):

	At December 31,
	2022		2021
Mezzanine loans (1) (2)	$	36,815	$	11,815
Other loans		22,157		16,808
Notes receivable credit loss reserve		(589)		(286)
Total	$	58,383	$	28,337

(1) Subsequent to December 31, 2022, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190 from a mezzanine loan early payoff. The mezzanine loan was on a 136-unit ILF in Oregon.

(2) During 2022, we originated a $25,000 mezzanine loan for the recapitalization of a five-property seniors housing portfolio. The mezzanine loan has a term of approximately five years, with two one-year extension options and bears interest at 8% with an IRR of 11%. The five communities are located in Oregon and Montana, have a total of 621 units, and include ILF, ALF and MC.

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The following table summarizes our notes receivable activity for the years ended December 31, 2022 through 2020 (in thousands):

	Year Ended December 31,
		2022			2021			2020
Advances under notes receivable	$	37,192	(1)	$	16,353	(2)	$	2,078
Interest reserve withheld		—			353			—
Principal payments received under notes receivable (3)		(6,843)			(2,694)			(5,275)
Reclassified to lease incentives		—			—			(300)	(4)
Provision (recovery) for credit losses		(303)			(140)			35
Net increase (decrease) in notes receivable	$	30,046		$	13,872		$	(3,462)

(1) Includes origination of a $25,000 mezzanine loan for the recapitalization of five ALFs located in Oregon and Montana. Additionally includes origination of a working capital loan for a commitment of up to $2,000, of which $1,867 has been funded and $9,761 of funding under a working capital loan to HMG Healthcare, LLC.

(2) Funding under working capital notes and mezzanine loans with interest ranging between 4.0% and 8.0%. During 2021, we originated a $4,355 mezzanine loan and withheld 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 10.5% IRR. Additionally, we provided an operator a $25,000 secured working capital loan to facilitate the transition of the 11 properties from Senior Care and Abri Health and funded $9,900 under this working capital loan.

(3) Subsequent to December 31, 2022, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190, from a mezzanine loan early payoff. The mezzanine loan was on a 136-unit ILF in Oregon.

(4) Represents an interim working capital loan related to a development project which matured upon completion of the development project and commencement of the lease.

8. Lease Incentives

The following table summarizes lease incentives as of December 31, 2022 and 2021 (in thousands):

	December 31,
		2022		2021
Non-contingent lease incentives	$	1,789	$	2,678

The following table summarizes our non-contingent lease incentive activity for the years ended December 31, 2022, 2021 and 2020 (in thousands):

	Year Ended December 31,
		2022			2021		2020
Lease incentives funded	$	418		$	824	$	220
Amortization of lease incentives		(877)			(608)		(426)
Adjustment for collectability of lease incentives		(256)	(1)		—		—
Other adjustments		(174)	(2)		—		115	(3)
Net (decrease) increase in non-contingent lease incentives	$	(889)		$	216	$	(91)

(1) Represents the lease incentive balance write-off related to a closed property and subsequent lease termination and lease incentive balance write-off related to 12 ALFs transitioned to an existing operator.

(2) Primarily relates to the sale of two ALFs in California during the second quarter of 2022.

(3) We reclassified a $300 interim working capital loan as lease incentive. See Note 7. Notes Receivable for further discussion. Additionally, we wrote-off $185 of lease incentive related to a master lease for which we determined it was not probable we will collect substantially all of the contractual lease obligations through maturity. See Note 5. Real Estate Investments for further discussion.

Non-contingent lease incentives represent payments made to our lessees for various reasons including entering into a new lease or lease amendments and extensions. Contingent lease incentives represent potential contingent earn-out payments that may be made to our lessees in the future, as part of our lease agreements. From time to time, we may commit to provide contingent payments to our lessees, upon our properties achieving certain rent coverage ratios. Once

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the contingent payment becomes probable and estimable, the contingent payment is recorded as a lease incentive. Lease incentives are amortized as a yield adjustment to rental income over the remaining life of the lease.

9. Debt Obligations

Unsecured Credit Facility. We have an unsecured credit agreement (the “Credit Agreement”) that provides for an aggregate commitment of the lenders of up to $500,000,000 comprising of a $400,000,000 revolving credit facility (the “Revolving Line of Credit”) and two $50,000,000 term loans (the “Term Loans”). The Credit Agreement permits us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1,000,000,000. The Revolving Line of Credit matures on November 19, 2025 and provides for a one-year extension option at our discretion, subject to customary conditions. The Term Loans mature on November 19, 2025 and November 19, 2026. During the fourth quarter of 2022, we entered into the First Amendment (the “Amended Credit Agreement”) to replace LIBOR with SOFR, plus a credit spread adjustment of 10 basis points (“Adjusted SOFR”), as the reference rate for purpose of calculating interest under the Amended Credit Agreement. Other material terms of the Credit Agreement remain unchanged.

Based on our leverage at December 31, 2022, the Revolving Line of Credit provides for interest annually at Adjusted SOFR plus 115 points and a facility fee of 20 basis point and the Term Loans provide for interest annually at Adjusted SOFR plus 135 points.

Interest Rate Swap Agreements. In connection with entering into the Term Loans as discussed above, we entered into two receive variable/pay fixed interest rate swap agreements (“Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that will effectively lock-in the forecasted interest payments on the Term Loans’ borrowings over the four and five year terms of the loans. The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value, with changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. In connection with entering into the Amended Credit Agreement discussed above, we entered into amendments to our Interest Rate Swaps to account for SOFR as the updated reference rate in the Amended Credit Agreement. During the year ended December 31, 2022 and 2021, we recorded $8,891,000 increase and $172 decrease, respectively, in fair value of Interest Rate Swaps.

As of December 31, 2022, the terms of our Interest Rate Swaps were as follows (dollar amounts in thousands):

						Notional	Fair Value at
Date Entered	Maturity Date	Swap Rate		Rate Index		Amount		December 31, 2022
November 2021	November 19, 2025	2.62	%	1-month SOFR	$	50,000	$	4,003
November 2021	November 19, 2026	2.76	%	1-month SOFR		50,000		4,716
					$	100,000	$	8,719

Senior Unsecured Notes. We have senior unsecured notes held by institutional investors with interest rates ranging from 3.66% to 5.03%. The senior unsecured notes mature between 2024 and 2033. During the twelve months ended December 31, 2022, we sold $75,000,000 aggregate principal amount of 3.66% senior unsecured notes. The notes have an average 10-year life, scheduled principal payments and mature in May 2033.

The senior unsecured notes and Credit Agreement, including the Revolving Line of Credit and the Term Loans, contain financial covenants, which are measured quarterly, require us to maintain, among other things:

(i) a ratio of total indebtedness to total asset value not greater than 0.5 to 1.0;

(ii) a ratio of secured debt to total asset value not greater than 0.35 to 1.0;

(iii) a ratio of unsecured debt to the value of the unencumbered asset value not greater than 0.6 to 1.0; and

(iv) a ratio of EBITDA, as calculated in the Unsecured Credit Agreement, to fixed charges not less than 1.50 to 1.0.

At December 31, 2022, we were in compliance with all applicable financial covenants. These debt obligations also contain additional customary covenants and events of default that are subject to a number of important and

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significant limitations, qualifications and exceptions.

The following table sets forth information regarding debt obligations by component as of December 31, 2022 and 2021 (dollar amounts in thousands):

		At December 31, 2022				At December 31, 2021
	Applicable			Available				Available
	Interest	Outstanding		for		Outstanding		for
Debt Obligations	Rate (1)	Balance		Borrowing		Balance		Borrowing
Revolving line of credit (2)	5.38%	$	130,000	$	270,000	$	110,900	$	289,100
Term loans, net of debt issue costs	2.69%		99,511		—		99,363		—
Senior unsecured notes, net of debt issue costs (3)	4.25%		538,343		—		512,456		—
Total	4.24%	$	767,854	$	270,000	$	722,719	$	289,100

(1) Represents weighted average of interest rate as of December 31, 2022.

(2) Subsequent to December 31, 2022, we had a net borrowing of $162,700 under our unsecured revolving line of credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our unsecured revolving line of credit.

(3) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes, accordingly we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

Our borrowings and repayments for the years ended December 31, 2022, 2021 and 2020 are as follows (in thousands):

	Year Ended December 31,
	2022				2021				2020
Debt Obligations		Borrowings		Repayments	Borrowings		Repayments		Borrowings		Repayments
Revolving line of credit (1)	$	194,000	$	(174,900)	$	204,400	$	(183,400)	$	24,000	$	(28,000)
Term loans		—		—		100,000		—		—		—
Senior unsecured notes (2)		75,000		(48,160)		—		(47,160)		—		(40,160)
Total	$	269,000	$	(223,060)	$	304,400	$	(230,560)	$	24,000	$	(68,160)

(1) Subsequent to December 31, 2022, we had a net borrowing of $162,700 under our unsecured revolving line of credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our unsecured revolving line of credit.

(2) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes, accordingly we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

Scheduled Principal Payments. The following table represents our long-term contractual obligations (scheduled principal payments and amounts due at maturity) as of December 31, 2022, and excludes the effects of interest and debt issue costs (in thousands):

	Total			2023			2024		2025			2026		2027		Thereafter
Revolving line of credit	$	130,000	(1)	$	—		$	—	$	130,000	(1)	$	—	$	—	$	—
Term loans		100,000			—			—		50,000			50,000		—		—
Senior unsecured notes		539,820	(2)		49,160	(2)		49,160		49,500			51,500		54,500		286,000
	$	769,820		$	49,160		$	49,160	$	229,500		$	101,500	$	54,500	$	286,000

(1) Subsequent to December 31, 2022, we borrowed $162,700 under our unsecured revolving line of credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our unsecured revolving line of credit.

(2) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes, accordingly we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

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10. Equity

Non-controlling Interests. We have entered into partnerships to develop and/or own real estate. Given that our limited members do not have the substantive kick-out rights, liquidation rights, or participation rights, we have concluded that the partnerships are VIEs. As we exercise power over and receive benefits from the VIEs, we are considered the primary beneficiary. Accordingly, we consolidate the VIEs and record the non-controlling interests on the consolidated financial statements. As of December 31, 2022, we have the following consolidated VIEs (in thousands):

						Gross
Investment			Property			Consolidated		Non-Controlling
Year (1)	Purpose		Type	State		Assets		Interests
2022	Owned real estate	(2)	SNF	FL	$	76,767	$	14,325
2018	Owned real estate		ILF	OR		14,650		2,906
2018	Owned real estate and development		ALF/MC	OR		18,452		1,164
2017	Owned real estate and development		ILF/ALF/MC	WI		22,007		2,305
2017	Owned real estate		ALF/MC	SC		11,680		1,240
Total					$	143,556	$	21,940

(1) Subsequent to December 31, 2022, we entered into a $121,321 JV with an affiliate of an existing operator and contributed $117,900 into the JV that purchased 11 ALF and MC from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit IRR of 9.0%. In accordance with GAAP, the communities acquired by the JV are required to be presented as a Financing receivable on our Consolidated Balance Sheets. See Note 2. Summary of Significant Accounting Policies and Note 5. Real Estate Investments for more information.

(2) During 2022, we entered into a joint venture and contributed $61,661 into the JV that purchased three SNFs located in Florida for $75,825. Our JV partner contributed the remaining $14,325 of equity. The JV leased the centers back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year. In accordance with GAAP, the centers acquired by the JV are required to be presented as a Financing receivable on our Consolidated Balance Sheets. See Note 2. Summary of Significant Accounting Policies and Note 5. Real Estate Investments for more information.

Common Stock. We have separate equity distribution agreements (collectively, “Equity Distribution Agreements”) to offer and sell, from time to time, up to $200,000,000 in aggregate offering price of shares of our common shares. The Equity Distribution Agreements provide for sales of common shares to be made by means of ordinary brokers’ transactions, which may include block trades, or transactions that are deemed to be “at the market” offerings. During the years ended December 31, 2021 and 2020, no shares were issued under the Equity Distribution Agreements. During the year ended December 31, 2022, we sold 1,792,400 shares of common stock for $68,156,000 in net proceeds under our Equity Distribution Agreements. In conjunction with the sale of common stock, we incurred $513,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received. At December 31, 2022, we had $130,631,000 available under the Equity Distribution Agreements.

During the years 2022, 2021 and 2020, we acquired 39,463 shares, 87,249 shares and 76,574 shares, respectively, of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

Stock Repurchase Plan. In March 2020, our Board of Directors authorized the repurchase of up to 5,000,000 outstanding shares of common stock. Due to the rising level of uncertainty in financial markets and the adverse effects of COVID-19 on the public health and our operators, our Board of Directors terminated the stock repurchase plan on March 25, 2020. During the year ended December 31, 2020, we purchased 615,827 shares at an average price of $29.25 per share, including commissions, for a total purchase price of $18,012,000.

Shelf Registration Statement. We have an automatic shelf registration statement on file with the SEC, and currently have the ability to file additional automatic shelf registration statements, to provide us with capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units. We may from time to time publicly raise capital under our automatic shelf registration statement in amounts, at prices, and on

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terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering. Our shelf registration statement expires on February 17, 2025.

Distributions. We declared and paid the following cash dividends (in thousands):

	Year Ended December 31,
	2022				2021						2020
	Declared		Paid		Declared			Paid			Declared			Paid
Common Stock (1)	$	91,509	$	91,509	$	90,494	(2)	$	90,494	(2)	$	90,262	(2)	$	90,262	(2)

(1) Represents $0.19 per share per month for the years ended December 31, 2022, 2021 and 2020.

(2) During the years ended December 31, 2021 and 2020, we paid $764 and $586, respectively as a result of vesting of the performance-based stock units.

In January 2023, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of January, February and March 2023 payable on January 31, February 28, and March 31, 2023, respectively, to stockholders of record on January 23, February 17, and March 23, 2023, respectively.

Stock Based Compensation Plans. During 2021, we adopted, and our stockholders approved the 2021 Equity Participation Plan (the “2021 Plan”) which replaces the 2015 Equity Participation Plan (the “2015 Plan”). Under the 2021 Plan, 1,900,000 shares of common stock have been authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 plan after December 31, 2020 and prior to adoption. In addition, any shares that are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan. Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2021 Plan and the 2015 Plan are set by our compensation committee at its discretion. As of December 31, 2022, we have 1,545,722 shares of common stock reserved for awards under the 2021 Plan.

Restricted Stock and Performance-Based Stock Units. Restricted stock activity for the years ended December 31, 2022, 2021 and 2020 was as follows:

	Year Ended December 31,
	2022		2021		2020
Outstanding, January 1		197,422		180,440		163,569
Granted		135,210		110,348		101,348
Vested		(103,396)		(93,366)		(84,477)
Outstanding, December 31		229,236		197,422		180,440

During the years ended December 31, 2022, 2021 and 2020, we granted 86,332, 71,892 and 66,027, respectively, of performance-based stock units. Additionally, no performance-based stock units vested during the twelve months ended December 31, 2022. During the years ended December 31, 2021 and 2020, the number of vested performance-based stock units were 108,720 and 81,574, respectively. Total compensation expense related to restricted stock and performance-based stock units for the years ended December 31, 2022, 2021 and 2020 were $7,964,000, $7,760,000 and $7,012,000.

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During 2022, 2021 and 2020, we granted 221,542, 182,240 and 167,375 shares of restricted common stock and performance-based stock units, respectively, under the 2021 Plan and 2015 Plan as follows:

	No. of	Price per
Year	Shares/Units	Share		Reward Type	Vesting Period
2022	122,865	$	33.94	Restricted stock	ratably over 3 years
	86,332	$	33.94	Performance-based stock units	TSR targets (1)
	12,345	$	38.48	Restricted stock	May 25,2023
	221,542
2021	95,293	$	42.27	Restricted stock	ratably over 3 years
	71,892	$	42.27	Performance-based stock units	TSR targets (1)
	12,055	$	39.40	Restricted stock	May 26, 2022
	3,000	$	43.14	Restricted stock	April 1, 2022
	182,240
2020	76,464	$	48.95	Restricted stock	ratably over 3 years
	66,027	$	49.98	Performance-based stock units	TSR targets (1)
	9,884	$	38.45	Restricted stock	May 27, 2021
	15,000	$	38.45	Restricted stock	ratably over 3 years
	167,375

(1) Vesting is based on achieving certain total shareholder return (“TSR”) targets in 4 years with acceleration opportunity in 3 years.

At December 31, 2022, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (dollar amount in thousands):

	Remaining
	Compensation
Vesting Date	Expense
2023	$	5,603
2024		2,853
2025		309
Total	$	8,765

Stock Options. During 2022, 2021 and 2020, we did not issue any stock options. Nonqualified stock option activity for the years ended December 31, 2022, 2021 and 2020, was as follows:

				Weighted Average
	Shares			Price
	2022	2021	2020	2022			2021	2020
Outstanding, January 1	15,000	15,000	15,000	$	38.43	$	38.43	$	38.43
Granted	—	—	—		n/a		n/a		n/a
Exercised	—	—	—		n/a		n/a		n/a
Canceled	(5,000)	—	—	$	38.43		n/a		n/a
Outstanding, December 31	10,000	15,000	15,000	$	38.43	$	38.43	$	38.43
Exercisable, December 31(1)	10,000	15,000	15,000	$	38.43	$	38.43	$	38.43

(1) The aggregate intrinsic value of exercisable options at December 31, 2022, based upon the closing price of our common shares at December 30, 2022, the last trading day of 2022, was approximately $0. Options exercisable at December 31, 2022, 2021 and 2020 have a weighted average remaining contractual life of approximately 0.7 years, 1.2 years, and 2.2 years, respectively.

We use the Black-Scholes-Merton formula to estimate the value of stock options granted to employees. This model requires management to make certain estimates including stock volatility, expected dividend yield and the expected term. Compensation expense related to the vesting of stock options for the years ended December 31, 2022, 2021 and 2020 was $0.

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11. Commitments and Contingencies

At December 31, 2022, we had commitments as follows (in thousands):

						Total
	Investment			2022		Commitment		Remaining
	Commitment			Funding		Funded		Commitment
Real estate properties (Note 5. Real Estate Investments)	$	22,102	(1)	$	7,263	$	8,315	$	13,787
Accrued incentives and earn-out liabilities (Note 8. Lease Incentives)		19,000	(2)		—		—		19,000
Mortgage loans (Note 5. Real Estate Investments)		32,507	(3)		5,873		9,613		22,894
Notes receivable (Note 7. Notes Receivable)		27,541			12,192		15,962		11,579
Total	$	101,150		$	25,328	$	33,890	$	67,260

(1) Represents commitments to purchase land and improvements, if applicable, and to develop, re-develop, renovate or expand seniors housing and health care properties.

(2) Includes an earn-out payment of up to $3,000 to an operator under a master lease on four SNFs in Texas which were acquired during 2022. The master lease allows either an earn-out payment up to $3,000 or a purchase option. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. If neither option is elected within the timeframe defined in the lease, both elections are terminated.

(3) Represents $14,507 of commitments to expand and renovate the seniors housing and health care properties securing the mortgage loans and $18,000 represents contingent funding upon the borrower achieving certain coverage ratios.

Also, some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. See Note 5. Real Estate Investments for a table summarizing information about our purchase options.

We are a party from time to time to various general and professional liability claims and lawsuits asserted against the lessees or borrowers of our properties, which in our opinion are not singularly or in the aggregate material to our results of operations or financial condition. These types of claims and lawsuits may include matters involving general or professional liability, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder. We believe that these matters are the responsibility of our lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable leases or mortgages. We intend to continue to vigorously defend such claims.

12. Distributions

We must distribute at least 90% of our taxable income in order to continue to qualify as a REIT. This distribution requirement can be satisfied by current year distributions or, to a certain extent, by distributions in the following year.

For federal tax purposes, distributions to stockholders are treated as ordinary income, capital gains, return of capital or a combination thereof. Distributions for 2022, 2021 and 2020 were cash distributions. The federal income tax classification of the per share common stock distributions are as follows (unaudited):

	Year Ended December 31,
	2022		2021		2020
Ordinary taxable distribution	$	1.095	$	1.220	$	0.936
Return of capital		—		0.750		—
Unrecaptured Section 1250 gain		0.502		0.252		0.894
Long-term capital gain		0.683		0.058		0.450
Total	$	2.280	$	2.280	$	2.280

84

13. Net Income Per Common Share

Basic and diluted net income per share was as follows (in thousands except per share amounts):

	For the year ended December 31,
	2022		2021			2020
Net income	$	100,584	$	56,224		$	95,677
Less income allocated to non-controlling interests		(560)		(363)			(384)
Less income allocated to participating securities:
Non-forfeitable dividends on participating securities		(531)		(458)			(397)
Income allocated to participating securities		(49)		—			(25)
Total net income allocated to participating securities		(580)		(458)			(422)
Net income available to common stockholders		99,444		55,403			94,871
Effect of dilutive securities:
Participating securities (1)		—		—			—
Net income for diluted net income per share	$	99,444	$	55,403		$	94,871
Shares for basic net income per share		39,894		39,156			39,179
Effect of dilutive securities:
Stock options (2)		—		—			—
Performance-based stock units		173		—	(3)		85
Participating securities (1)		—		—			—
Total effect of dilutive securities		173		—			85
Shares for diluted net income per share		40,067		39,156			39,264
Basic net income per share	$	2.49	$	1.41		$	2.42
Diluted net income per share	$	2.48	$	1.41		$	2.42

(1) For the years ended December 31, 2022, 2021 and 2020, the participating securities were excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

(2) For the years ended December 31, 2022, 2021and 2020, the stock options were excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

(3) For the year ended December 31, 2021, no performance-based stock units would be earned based on TSR targets.

85

14. Quarterly Financial Information

	For the quarter ended
	March 31,		June 30,		September 30,		December 31,
	(unaudited, in thousands except per share amounts)
2022
Revenues	$	40,787	$	43,024	$	43,503	$	47,839
Net income available to common stockholders	$	14,275	$	54,065	$	13,159	$	17,809
Net income per common share available to common stockholders:
Basic	$	0.36	$	1.37	$	0.33	$	0.44
Diluted	$	0.36	$	1.36	$	0.32	$	0.44
Dividends per share declared	$	0.57	$	0.57	$	0.57	$	0.57
Dividends per share paid	$	0.57	$	0.57	$	0.57	$	0.57
2021
Revenues	$	40,280	$	38,129	$	37,472	$	39,441
Net income available to common stockholders	$	13,642	$	18,126	$	10,909	$	12,726
Net income per common share available to common stockholders:
Basic	$	0.35	$	0.46	$	0.28	$	0.32
Diluted	$	0.35	$	0.46	$	0.28	$	0.32
Dividends per share declared	$	0.57	$	0.57	$	0.57	$	0.57
Dividends per share paid	$	0.57	$	0.57	$	0.57	$	0.57

NOTE: Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of per share amounts for the quarters may not agree with the per share amounts for the year.

86

15. Fair Value Measurements

In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses reported in earnings. We did not adopt the elective fair market value option for our financial assets and financial liabilities.

The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments. We do not invest our cash in auction rate securities. The carrying value and fair value of our financial instruments as of December 31, 2022 and 2021 assuming election of fair value for our financial assets and financial liabilities were as follows (in thousands):

	At December 31, 2022					At December 31, 2021
	Carrying		Fair			Carrying		Fair
	Value		Value			Value		Value
Financing receivable, net of credit loss reserve	$	75,999	$	76,033	(1)	$	—	$	—
Mortgage loans receivable, net of credit loss reserve		389,728		461,276	(2)		344,442		405,162	(2)
Notes receivable, net of credit loss reserve		58,383		61,858	(3)		28,337		28,653	(3)
Revolving line of credit		130,000		130,000	(4)		110,900		110,900	(4)
Term loans, net of debt issue costs		99,511		100,000	(4)		99,363		100,000	(4)
Senior unsecured notes, net of debt issue costs		538,343		477,653	(5)		512,456		540,045	(5)

(1) Our investment in financing receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate used to value our future cash inflows of the financing receivable at December 31, 2022 was 7.6%.

(2) Our investment in mortgage loans receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash inflows of the mortgage loans receivable at December 31, 2022 and 2021 was 9.3% and 9.5%, respectively.

(3) Our investments in notes receivable are classified as Level 3. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash flows of the notes receivable at December 31, 2022 and 2021, were 7.1% and 5.6%, respectively.

(4) Our revolving line of credit and term loans bear interest at a variable interest rate. The estimated fair value of our revolving line of credit and term loans approximated their carrying values at December 31, 2022 and 2021 based upon prevailing market interest rates for similar debt arrangements.

(5) Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is measured based upon management’s estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities. At December 31, 2022, the discount rate used to value our future cash outflow of our senior unsecured notes was 6.50% for those maturing before year 2030 and 7.00% for those maturing at or beyond year 2030. At December 31, 2021, the discount rate used to value our future cash outflow of our senior unsecured notes was 3.0% for those maturing before year 2030 and 3.25% for those maturing beyond year 2030.

16. Subsequent Events

The following events occurred subsequent to the balance sheet date:

Lease Renewals. A master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed at the contractual rate for another five years extending the maturity to November 2028. The centers have a total 216 beds and are located in Florida.

Financing Receivable. We entered into a $121,321,000 JV with an affiliate of an existing operator and contributed $117,900,000 into the JV that purchased 11 assisted living and memory care communities from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee

87

with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit IRR of 9.0%. In accordance with GAAP, the communities acquired by the JV are required to be presented as a Financing receivable on our Consolidated Balance Sheets. See Note 2. Summary of Significant Accounting Policies and Note 5. Real Estate Investments for more information.

Mortgage Loans. We originated a $10,750,000 mortgage loan secured by a memory care community located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%.

Notes Receivable. We received $4,545,000, which includes a prepayment fee and the exit IRR totaling $190,000, from a mezzanine loan repayment. The mezzanine loan was on a 136-unit independent living community in Oregon.

Unconsolidated Joint Ventures. We received a note of intent to redeem our $13,000,000 preferred equity investment in a joint venture to develop a 267-unit independent and assisted living community in Washington. We anticipate receiving $1,675,000 of additional income associated with the redemption representing the 14% IRR.

Revolving Line of Credit. We borrowed $162,700,000 under our unsecured revolving line of credit. Accordingly, we have $292,700,000 outstanding and $107,300,000 available for borrowing under our unsecured revolving line of credit.

Senior Unsecured Notes. We repaid $7,000,000 in regular scheduled principal payments under our senior unsecured notes. Accordingly, we have $531,343,000 outstanding, net of debt issue costs, under our senior unsecured notes.

Equity. We declared a monthly cash dividend of $0.19 per share on our common stock for the months of January, February, and March 2023, payable on January 31, February 28, and March 31, 2023, respectively, to stockholders of record on January 23, February 17, and March 23, 2023, respectively.

88

LTC PROPERTIES, INC.

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

			Additions
			(Recovered)
	Balance at		charged to		Charged to
	beginning of		costs and		other				Balance at end
Account Description	period		expenses		accounts (1)		Deductions (2)		of period
Year ended December 31, 2020
Loan loss reserves	$	2,560	$	32	$	—	$	—	$	2,592
Other notes receivable allowance		181		(35)		—		—		146
Straight-line rent receivable allowance		—		—		—		—		—
	$	2,741	$	(3)	$	—	$	—	$	2,738
Year ended December 31, 2021
Loan loss reserves	$	2,592	$	881	$	—	$	—	$	3,473
Other notes receivable allowance		146		140		—		—		286
Straight-line rent receivable allowance		—		—		—		—		—
	$	2,738	$	1,021	$	—	$	—	$	3,759
Year ended December 31, 2022
Loan loss reserves	$	3,473	$	457	$	—	$	—	$	3,930
Financing receivable loss reserve		—		768		—		—		768
Other notes receivable allowance		286		303		—		—		589
	$	3,759	$	1,528	$	—	$	—	$	5,287

(1) There were no charges to other accounts.

(2) Deductions represent uncollectable accounts written off.

89

LTC PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

(in thousands)

							Costs
							capitalized		Gross amount at which carried at
			Initial cost to company				subsequent		December 31, 2022
					Building and		to				Building and				Accum		Construction/	Acquisition
	Encumbrances		Land		improvements		acquisition		Land		improvements		Total (1)		deprec.		renovation date	date
Skilled Nursing Properties:
134 Alamogordo, NM	$	—	$	210	$	2,593	$	641	$	210	$	3,234	$	3,444	$	1,742	1985	2001
218 Albuquerque, NM		—		1,696		3,891		530		1,696		4,421		6,117		2,293	2008	2005
219 Albuquerque, NM		—		1,950		8,910		207		1,950		9,117		11,067		4,513	1982	2005
220 Albuquerque, NM		—		2,463		7,647		9		2,463		7,656		10,119		3,751	1970	2005
252 Amarillo, TX		—		844		—		7,925		844		7,925		8,769		2,488	2013	2011
247 Arlington, TX		—		1,016		13,649		132		1,016		13,781		14,797		4,988	2007	2011
325 Austin, TX		—		896		9,562		—		896		9,562		10,458		202	2017	2022
319, Blue Springs, MO		—		2,644		13,942		73		2,644		14,015		16,659		1,508	2020	2019
007 Bradenton, FL		—		330		2,720		160		330		2,880		3,210		2,418	2012	1993
256 Brownwood, TX		—		164		6,336		29		164		6,365		6,529		2,188	2011	2012
177 Chesapeake, VA		—		388		3,469		2,777		388		6,246		6,634		4,110	2017	1995
257 Cincinnati, OH		—		1,890		25,110		224		1,890		25,334		27,224		5,945	2009	2012
125 Clovis, NM		—		561		5,539		307		561		5,846		6,407		3,155	2006	2001
129 Clovis, NM		—		598		5,902		59		598		5,961		6,559		3,236	1995	2001
267 Cold Spring, KY		—		2,050		21,496		196		2,050		21,692		23,742		6,014	2014	2012
253 Colton, CA		—		2,474		15,158		—		2,474		15,158		17,632		4,803	1990	2011
246 Crowley, TX		—		2,247		14,276		187		2,247		14,463		16,710		5,266	2007	2011
235 Daleville, VA		—		279		8,382		—		279		8,382		8,661		3,180	2005	2010
258 Dayton, OH		—		373		26,627		—		373		26,627		27,000		6,344	2010	2012
196 Dresden, TN		—		31		1,529		1,073		31		2,602		2,633		1,400	2014	2000
298 Forth Worth, TX		—		2,785		7,546		413		2,785		7,959		10,744		3,086	1998	2015
326 Forth Worth, TX		—		922		12,268		—		922		12,268		13,190		267	2017	2022
026 Gardendale, AL		—		100		7,550		2,084		100		9,634		9,734		7,078	2011	1996
248 Granbury, TX		—		836		6,693		363		836		7,056		7,892		3,132	2008	2011
250 Hewitt, TX		—		1,780		8,220		391		1,780		8,611		10,391		2,787	2008	2011
318 Kansas City, MO		—		1,229		18,369		69		1,229		18,438		19,667		1,755	2018	2019
008 Lecanto, FL		—		351		2,665		2,737		351		5,402		5,753		4,287	2012	1993
322 Longview, TX		—		1,405		12,176		—		1,405		12,176		13,581		1,274	2014	2020
300 Mansfield, TX		—		2,890		13,110		—		2,890		13,110		16,000		3,377	2015	2016
053 Mesa, AZ		—		305		6,909		1,876		305		8,785		9,090		6,610	1996	1996
242 Mission, TX		—		1,111		16,602		82		1,111		16,684		17,795		5,727	2004	2010
233 Nacogdoches, TX		—		394		7,456		268		394		7,724		8,118		2,848	1991	2010
249 Nacogdoches, TX		—		1,015		11,109		358		1,015		11,467		12,482		4,575	2007	2011
245 Newberry, SC		—		439		4,639		879		439		5,518		5,957		2,374	1995	2011
244 Newberry, SC		—		919		5,454		200		919		5,654		6,573		2,277	2001	2011
251 Pasadena, TX		—		1,155		14,345		522		1,155		14,867		16,022		4,685	2005	2011
193 Phoenix, AZ		—		300		9,703		92		300		9,795		10,095		6,608	1985	2000
094 Portland, OR		—		100		1,925		3,152		100		5,077		5,177		4,147	2007	1997
254 Red Oak, TX		—		1,427		17,173		244		1,427		17,417		18,844		5,550	2002	2012
197 Ripley, TN		—		20		985		1,638		20		2,623		2,643		1,468	2014	2000

90

LTC PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

(in thousands)

							Costs
							capitalized		Gross amount at which carried at
			Initial cost to company				subsequent		December 31, 2022
					Building and		to				Building and				Accum		Construction/	Acquisition
	Encumbrances		Land		improvements		acquisition		Land		improvements		Total (1)		deprec.		renovation date	date
133 Roswell, NM	$	—	$	568	$	5,235	$	1,396	$	568	$	6,631	$	7,199	$	3,521	1975	2001
325 San Antonio, TX		—		1,676		15,470		20		1,676		15,490		17,166		320	2018	2022
281 Slinger, WI		—		464		13,482		—		464		13,482		13,946		3,916	2014	2015
234 St. Petersburg, FL		—		1,070		7,930		500		1,070		8,430		9,500		2,892	1988	2010
243 Stephenville, TX		—		670		10,117		616		670		10,733		11,403		3,811	2009	2010
178 Tappahannock, VA		—		375		1,327		397		375		1,724		2,099		1,569	1978	1995
270 Trinity, FL		—		1,653		12,748		—		1,653		12,748		14,401		3,781	2008	2013
192 Tucson, AZ		—		276		8,924		112		276		9,036		9,312		6,091	1992	2000
305 Union, KY		—		858		24,116		—		858		24,116		24,974		3,426	2019	2016
299 Weatherford, TX		—		836		11,902		280		836		12,182		13,018		3,962	1996	2015
323 Webster, TX		—		2,310		8,713		—		2,310		8,713		11,023		200	2018	2022
236 Wytheville, VA		—		647		12,167		—		647		12,167		12,814		5,363	1996	2010
Skilled Nursing Properties	$	—	$	53,990	$	513,766	$	33,218	$	53,990	$	546,984	$	600,974	$	182,308
Assisted Living Properties:
077 Ada, OK		—		100		1,650		180		100		1,830		1,930		1,106	1996	1996
105 Arvada, CO		—		100		2,810		7,072		100		9,882		9,982		4,027	2014	1997
304 Athens, GA		—		1,056		13,326		111		1,056		13,437		14,493		2,422	2016	2016
063 Athens, TX		—		96		1,510		113		96		1,623		1,719		1,125	1995	1996
320 Auburn Hills, MI		—		1,964		4,577		1,149		1,964		5,726		7,690		1,056	1995	2019
269 Aurora, CO		—		850		8,583		—		850		8,583		9,433		2,566	2014	2013
260 Aurora, CO		—		831		10,071		327		831		10,398		11,229		2,866	1999	2012
117 Beatrice, NE		—		100		2,173		243		100		2,416		2,516		1,517	1997	1997
277 Burr Ridge, IL		—		1,400		11,102		—		1,400		11,102		12,502		2,735	2016	2014
278 Castle Rock, CO		—		759		5,091		—		759		5,091		5,850		1,573	2012	2014
311 Cedarburg, WI		—		924		21,083		—		924		21,083		22,007		2,946	2019	2017
160 Central, SC		—		100		2,321		119		100		2,440		2,540		1,272	1998	1999
263 Chatham, NJ		—		5,365		36,399		587		5,365		36,986		42,351		10,105	2002	2012
307 Clovis, CA		—		2,542		19,126		—		2,542		19,126		21,668		3,022	2014	2017
308 Clovis, CA		—		3,054		14,172		—		3,054		14,172		17,226		2,154	2016	2017
279 Corpus Christi, TX		—		880		11,440		298		880		11,738		12,618		2,753	2016	2015
292 De Forest, WI		—		485		5,568		47		485		5,615		6,100		1,191	2006	2015
057 Dodge City, KS		—		84		1,666		30		84		1,696		1,780		1,156	1995	1995
083 Durant, OK		—		100		1,769		157		100		1,926		2,026		1,162	1997	1997
107 Edmond, OK		—		100		1,365		659		100		2,024		2,124		1,226	1996	1997
163 Ft. Collins, CO		—		100		2,961		3,674		100		6,635		6,735		3,147	2014	1999
170 Ft. Collins, CO		—		100		3,400		4,928		100		8,328		8,428		3,669	2014	1999
132 Ft. Meyers, FL		—		100		2,728		272		100		3,000		3,100		1,717	1998	1998
315 Ft. Worth, TX		—		1,534		11,099		34		1,534		11,133		12,667		1,424	2014	2018
100 Fremont ,OH		—		100		2,435		203		100		2,638		2,738		1,663	1997	1997
266 Frisco, TX		—		1,000		5,154		—		1,000		5,154		6,154		1,667	2014	2012
314 Frisco, TX		—		2,216		10,417		119		2,216		10,536		12,752		1,367	2015	2018
296 Glenview, IL		—		2,800		14,248		—		2,800		14,248		17,048		2,764	2017	2015
167 Goldsboro, NC		—		100		2,385		170		100		2,555		2,655		1,217	1998	1999
056 Great Bend, KS		—		80		1,570		68		80		1,638		1,718		1,234	1995	1995
102 Greeley, CO		—		100		2,310		612		100		2,922		3,022		1,686	1997	1997
284 Green Bay, WI		—		1,660		19,079		475		1,660		19,554		21,214		4,448	2004	2015
286 Greenfield, WI		—		818		8,014		232		818		8,246		9,064		1,755	2007	2015
164 Greenville, NC		—		100		2,478		198		100		2,676		2,776		1,418	1998	1999
062 Greenville, TX		—		42		1,565		105		42		1,670		1,712		1,134	1995	1996
161 Greenwood, SC		—		100		2,638		337		100		2,975		3,075		1,544	1998	1999
295 Jacksonville, FL		—		1,389		12,756		1,056		1,389		13,812		15,201		2,702	2015	2015
066 Jacksonville, TX		—		100		1,900		90		100		1,990		2,090		1,361	1996	1996
310 Kansas City, MO		—		1,072		15,552		—		1,072		15,552		16,624		2,071	2017	2017
285 Kenosha, WI		—		936		12,361		498		936		12,859		13,795		2,625	2008	2015
255 Littleton, CO		—		1,882		8,248		—		1,882		8,248		10,130		2,226	2013	2012
268 Littleton, CO		—		1,200		8,688		—		1,200		8,688		9,888		2,670	2014	2013
148 Longmont, CO		—		100		2,640		64		100		2,704		2,804		1,645	1998	1998
060 Longview, TX		—		38		1,568		134		38		1,702		1,740		1,180	1995	1995
261 Louisville, CO		—		911		11,703		390		911		12,093		13,004		3,283	2000	2012

91

LTC PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

(in thousands)

							Costs
							capitalized		Gross amount at which carried at
			Initial cost to company				subsequent		December 31, 2022
						Building and	to				Building and				Accum		Construction/	Acquisition
	Encumbrances		Land			improvements	acquisition		Land		improvements		Total (1)		deprec.		renovation date	date
301 Louisville, KY	$	—	$	1,021	$	11,871	$	123	$	1,021	$	11,994	$	13,015	$	2,305	2016	2016
114 Loveland, CO		—		100		2,865		324		100		3,189		3,289		1,995	1997	1997
068 Lufkin, TX		—		100		1,950		106		100		2,056		2,156		1,400	1996	1996
061 Marshall, TX		—		38		1,568		544		38		2,112		2,150		1,477	1995	1995
293 McHenry, IL		—		1,289		28,976		987		1,289		29,963		31,252		6,257	2005	2015
058 McPherson, KS		—		79		1,571		67		79		1,638		1,717		1,223	1994	1995
313 Medford, OR				636		17,816		—		636		17,816		18,452		1,788	2020	2018
316 Medford, OR		—		750		13,650		250		750		13,900		14,650		1,874	2005	2018
239 Merritt Island, FL		—		550		6,928		115		550		7,043		7,593		3,056	2004	2010
104 Millville, NJ		—		100		2,825		848		100		3,673		3,773		2,174	1997	1997
231 Monroeville, PA		—		526		5,334		439		526		5,773		6,299		2,317	1997	2009
280 Murrells Inlet, SC		—		2,490		14,185		129		2,490		14,314		16,804		3,278	2016	2015
294 Murrieta, CA		—		2,022		11,136		—		2,022		11,136		13,158		2,586	2016	2015
289 Neenah, WI		—		694		20,839		251		694		21,090		21,784		4,316	1991	2015
166 New Bern, NC		—		100		2,427		170		100		2,597		2,697		1,254	1998	1999
118 Newark, OH		—		100		2,435		383		100		2,818		2,918		1,703	1997	1997
143 Niceville, FL		—		100		2,680		108		100		2,788		2,888		1,676	1998	1998
095 Norfolk, NE		—		100		2,123		311		100		2,434		2,534		1,541	1997	1997
306 Oak Lawn, IL		—		1,591		13,772		—		1,591		13,772		15,363		2,325	2018	2016
302 Overland Park, KS		—		1,951		11,882		281		1,951		12,163		14,114		2,496	2013	2016
232 Pittsburgh, PA		—		470		2,615		360		470		2,975		3,445		1,264	1994	2009
165 Rocky Mount, NC		—		100		2,494		378		100		2,872		2,972		1,359	1998	1999
059 Salina, KS		—		79		1,571		303		79		1,874		1,953		1,250	1994	1995
084 San Antonio, TX		—		100		1,900		45		100		1,945		2,045		1,240	1997	1997
092 San Antonio, TX		—		100		2,055		577		100		2,632		2,732		1,411	1997	1997
288 Sheboygan, WI		—		1,168		5,382		379		1,168		5,761		6,929		1,384	2006	2015
149 Shelby, NC		—		100		2,805		312		100		3,117		3,217		1,782	1998	1998
312 Spartanburg, SC		—		254		9,906		1,520		254		11,426		11,680		2,627	1999	2017
150 Spring Hill, FL		—		100		2,650		104		100		2,754		2,854		1,662	1998	1998
103 Springfield, OH		—		100		2,035		363		100		2,398		2,498		1,490	1997	1997
321 Sterling Heights, MI		—		1,133		11,487		1,133		1,133		12,620		13,753		1,643	1997	2019
162 Sumter, SC		—		100		2,351		656		100		3,007		3,107		1,393	1998	1999
140 Tallahassee, FL		—		100		3,075		140		100		3,215		3,315		1,925	1998	1998
098 Tiffin, OH		—		100		2,435		366		100		2,801		2,901		1,678	1997	1997
282 Tinley Park, IL		—		702		11,481		—		702		11,481		12,183		2,608	2016	2015
088 Troy, OH		—		100		2,435		821		100		3,256		3,356		1,950	1997	1997
080 Tulsa, OK		—		200		1,650		148		200		1,798		1,998		1,091	1997	1997
093 Tulsa, OK		—		100		2,395		42		100		2,437		2,537		1,553	1997	1997
238 Tupelo, MS		—		1,170		8,230		52		1,170		8,282		9,452		3,133	2000	2010
075 Tyler, TX		—		100		1,800		144		100		1,944		2,044		1,207	1996	1996
091 Waco, TX		—		100		2,235		770		100		3,005		3,105		1,563	2021	1997
096 Wahoo, NE		—		100		2,318		166		100		2,484		2,584		1,628	1997	1997
108 Watauga, TX		—		100		1,668		38		100		1,706		1,806		1,076	1996	1997
109 Weatherford, OK		—		100		1,669		698		100		2,367		2,467		1,454	1996	1997
309 West Chester, OH		—		2,355		13,553		212		2,355		13,765		16,120		2,235	2017	2017
276 Westminster, CO		—		1,425		9,575		—		1,425		9,575		11,000		2,660	2015	2013
110 Wheelersburg, OH		—		29		2,435		349		29		2,784		2,813		1,720	1997	1997
303 Wichita, KS		—		1,422		9,957		285		1,422		10,242		11,664		2,162	2011	2016
259 Wichita, KS		—		730		—		9,682		730		9,682		10,412		2,911	2013	2012
283 Wichita, KS		—		624		13,946		—		624		13,946		14,570		2,373	2016	2015
076 Wichita Falls, TX		—		100		1,850		126		100		1,976		2,076		1,225	1996	1996
120 Wichita Falls, TX		—		100		2,750		143		100		2,893		2,993		1,841	1997	1997
264 Williamstown, NJ		—		711		6,637		—		711		6,637		7,348		1,982	2000	2012
265 Williamstown, NJ		—		711		8,649		—		711		8,649		9,360		2,411	2000	2012
Assisted Living Properties	$	—	$	68,788	$	678,526	$	50,499	$	68,788	$	729,025	$	797,813	$	207,529

92

LTC PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

(in thousands)

							Costs
							capitalized		Gross amount at which carried at
			Initial cost to company				subsequent		December 31, 2022
					Building and		to				Building and					Accum		Construction/	Acquisition
	Encumbrances		Land		improvements		acquisition		Land		improvements		Total (1)			deprec.		renovation date	date
Other:
Properties:
297 Las Vegas, NV		—		1,965		7,308		1,702		1,965		9,010		10,975			1,650	1990/1994	2015
Properties		—		1,965		7,308		1,702		1,965		9,010		10,975			1,650
Land:
271 Howell, MI		—		420		—		—		420		—		420			—	N/A	2013
272 Milford, MI		—		450		—		—		450		—		450			—	N/A	2014
275 Yale, MI		—		73		—		—		73		—		73			—	N/A	2013
Land		—		943		—		—		943		—		943			—
Other Properties		—		2,908		7,308		1,702		2,908		9,010		11,918			1,650
	$	—	$	125,686	$	1,199,600	$	85,419	$	125,686	$	1,285,019	$	1,410,705	(2)	$	391,487

(1) Depreciation is computed principally by the straight-line method for financial reporting purposes which generally range of a life from 5 to 15 years for furniture and equipment, 35 to 50 years for buildings, 10 to 20 years for site improvements, 10 to 50 years for building improvements and the respective lease term for acquired lease intangibles.

(2) As of December 31, 2022, our aggregate cost for Federal income tax purposes was $1,420,258 (unaudited).

93

LTC PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

(in thousands)

Activity for the years ended December 31, 2022, 2021 and 2020 is as follows:

	For the Year Ended December 31,
	2022		2021		2020
Reconciliation of real estate:
Carrying cost:
Balance at beginning of period	$	1,408,557	$	1,452,001	$	1,484,571
Acquisitions		51,817		—		13,581
Improvements		9,099		6,298		23,612
Capitalized interest		—		—		354
Cost of real estate sold		(55,346)		(49,742)		(66,140)
Impairment loss from real estate investments		(3,422)		—		(3,977)
Ending balance	$	1,410,705	$	1,408,557	$	1,452,001
Accumulated depreciation:
Balance at beginning of period	$	374,606	$	349,643	$	347,755
Depreciation expense		37,394		38,192		38,945
Cost of real estate sold		(20,513)		(13,229)		(37,057)
Ending balance	$	391,487	$	374,606	$	349,643

94

LTC PROPERTIES, INC.

SCHEDULE IV

MORTGAGE LOANS RECEIVABLE ON REAL ESTATE

(in thousands)

														Principal
														Amount of
												Carrying		Loans
								Current				Amount of		Subject to
	(Unaudited)							Monthly		Face		Mortgages		Delinquent
	Number of				Final	Balloon		Debt		Amount of		December 31,		Principal or
State	Properties		Units/Beds (1)	Interest Rate (2)	Maturity Date	Amount (3)		Service		Mortgages		2022		Interest
MI	15		1,875	10.60%	2043	$	163,214	$	1,623	$	190,214	$	182,514	$	—
MI	4		480	9.60%	2045		35,576		311		39,406		38,636		—
MI	1		146	10.10%	2045		14,325		125		15,000		14,726		—
MI	2		201	9.80%	2045		19,750		162		19,750		19,553		—
FL	1		68	7.80%	2025		14,308		92		14,308		14,165		—
LA	1		189	7.50%	2024		29,346		186		29,346		29,054		—
MO	—		—	7.50%	2023		1,887		12		1,887		1,867		—
NC	4		217	7.30%	2026		33,000		209		33,000		32,670		—
NC	—		—	7.30%	2026		796		5		796		788		—
NC	12	(4)	478	7.30%	2025		51,531		318		51,531		51,016		—
SC	1	(4)	45	7.30%	2025		4,787		30		4,787		4,739		—
	41	(5)	3,699			$	368,520	$	3,073	$	400,025	$	389,728	$	—

(1) This number is based upon unit/bed counts shown on operating licenses provided to us by lessee/borrowers or units/beds as stipulated by lease/mortgage documents. We have found during the years that these numbers often differ, usually not materially, from units/beds in operation at any point in time. The differences are caused by such things as operators converting a patient/resident room for alternative uses, such as offices or storage, or converting a multi-patient room/unit into a single patient room/unit. We monitor our properties on a routine basis through site visits and reviews of current licenses. In an instance where such change would cause a de-licensing of beds or in our opinion impact the value of the property, we would take action against the borrower to preserve the value of the property/collateral.

(2) Represents current stated interest rate. Generally, the loans have principal and interest payable at varying amounts over the life to maturity with annual interest adjustments through specified fixed rate increases effective either on the first anniversary or calendar year of the loan.

(3) Balloon payment is due upon maturity.

(4) Represents a single mortgage loan secured by 13 ALFs. The mortgage loan was allocated by state for reporting purposes only.

(5) Includes 10 first-lien mortgage loans as follows:

Number of Loans	Original loan amounts
2		$ 500 - $2,000
0		$2,001 - $3,000
0		$3,001 - $4,000
0		$4,001 - $5,000
0		$5,001 - $6,000
0		$6,001 - $7,000
8		$7,001 +

95

Mortgage loans receivable activity for the years ended December 31, 2022, 2021 and 2020 is as follows:

Balance— December 31, 2019	$	254,099
New mortgage loans		—
Other additions		4,253
Amortization of mortgage premium		(4)
Collections of principal		(1,065)
Foreclosures		—
Loan loss reserve		(32)
Other deductions		—
Balance— December 31, 2020		257,251
New mortgage loans		88,415
Other additions		540
Application of interest reserve		298
Amortization of mortgage premium		(6)
Collections of principal		(1,175)
Foreclosures		—
Loan loss reserve		(881)
Other deductions		—
Balance— December 31, 2021		344,442
New mortgage loans		31,965
Other additions		8,767
Application of interest reserve		6,192
Amortization of mortgage premium		(6)
Collections of principal		(1,175)
Foreclosures		—
Loan loss reserve		(457)
Other deductions		—
Balance— December 31, 2022	$	389,728

96

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on such evaluation our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report our disclosure controls and procedures were effective.

Internal Control Over Financial Reporting.

The Management Report on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm thereon are set forth on the following pages.

There has been no change in our internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

97

Management Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers and effected by the issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

● Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;

● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and

● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect material misstatements on a timely basis. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control— Integrated Framework (2013 Framework). Based on this assessment, our management concluded that, as of the end of the fiscal year ended December 31, 2022, our internal control over financial reporting was effective.

The effectiveness of our internal control over financial reporting as of December 31, 2022, has been audited by Ernst &Young LLP, independent registered public accounting firm. Ernst & Young LLP’s report on our internal control over financial reporting appears on the following page.

98

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of LTC Properties, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited LTC Properties, Inc.’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, LTC Properties, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the financial statement schedules listed in the Index at Item 15(a) and our report dated February 16, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Los Angeles, California

February 16, 2023

99

Item 9B. OTHER INFORMATION

None.

Item 9.C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION

Not applicable.

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference to our definitive proxy statement for the 2023 Annual Meeting of Stockholders (to be filed with the SEC within 120 days of our December 31, 2022 fiscal year end) under the headings “Proposal 1 Election of Directors,” “Corporate Governance Principles and Board Matters,” and “Executive Officers.”

Item 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference to our definitive proxy statement for the 2023 Annual Meeting of Stockholders (to be filed with the SEC within 120 days of our December 31, 2022 fiscal year end) under the headings “Executive Compensation Discussion and Analysis,” “Executive Compensation Tables,” “Director Compensation,” and “Compensation Committee Report.”

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated by reference to our definitive proxy statement for the 2023 Annual Meeting of Stockholders (to be filed with the SEC within 120 days of our December 31, 2022 fiscal year end) under the heading “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is incorporated by reference to our definitive proxy statement for the 2023 Annual Meeting of Stockholders (to be filed with the SEC within 120 days of our December 31, 2022 fiscal year end) under the heading “Certain Relationships and Related Transactions, and Director Independence.”

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated by reference to our definitive proxy statement for the 2023 Annual Meeting of Stockholders (to be filed with the SEC within 120 days of our December 31, 2022 fiscal year end) under the heading “Independent Registered Public Accounting Firm Fees and Services.”

100

PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

The following financial statements of LTC Properties, Inc. are included in Part II, Item 8 of this Annual Report on Form 10-K:

(a)(2) Financial Statement Schedules

The following financial statement schedules of LTC Properties, Inc. are included in Part II, Item 8 of this Annual Report on Form 10-K:

All other schedules are omitted because they are not applicable or not present in amounts sufficient to require submission of the schedule or the required information is shown in the Consolidated Financial Statements and the Notes thereto.

(a)(3) Exhibits

Exhibit Number	Description
3.1	LTC Properties, Inc. Articles of Restatement (incorporated by reference to Exhibit 3.1.2 to the registrant’s Current Report on Form 8-K filed June 6, 2016)
3.2	Bylaws of LTC Properties, Inc. (incorporated by reference to Exhibit 3.2.2 to the registrant’s Annual Report on Form 10-K filed February 18, 2021)
4.1	Description of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.1 to the registrant’s Annual Report on Form 10-K filed February 18, 2021)
10.1	Note Purchase Agreement dated February 16, 2017 (incorporated by reference to Exhibit 10.7 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2016)
10.2	Note Purchase Agreement dated May 17, 2022 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed May 19, 2022)
10.3	Note Purchase and Private Shelf Agreement between LTC Properties, Inc., and AIG Asset Management (U.S.) LLC dated August 4, 2015 (incorporated by reference to Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015)
10.4	Amended and Restated Note Purchase and Private Shelf Agreement between LTC Properties, Inc., and AIG Asset Management (U.S.) LLC dated June 2, 2016 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed June 6, 2016)
10.5	Equity Distribution Agreement, dated March 1, 2019, by and between LTC Properties, Inc. and JMP Securities LLC (incorporated by reference to Exhibit 1.1 to the registrant’s Current Report on Form 8-K filed March 1, 2019)
10.6	Equity Distribution Agreement, dated March 1, 2019, by and between LTC Properties, Inc., and KeyBanc Capital Markets Inc. (incorporated by reference to Exhibit 1.3 to the registrant’s Current Report on Form 8-K filed March 1, 2019)
10.7	Equity Distribution Agreement, dated November 19, 2021, by and between LTC Properties, Inc. and Huntington Securities USA Inc. (incorporated by reference to Exhibit 1.1 to the registrant’s Current Report on Form 8-K filed November 19, 2021)

101

Exhibit Number	Description
10.8	Third Amended and Restated Credit Agreement dated as of November 19, 2021 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed November 19, 2021)
10.9	First Amendment to the Third Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed December 19, 2022)
10.10	Employment Agreement of Wendy Simpson dated November 12, 2014 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed November 12, 2014)
10.11	Employment Agreement of Pamela Kessler, effective as of November 12, 2014 (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed November 12, 2014)
10.12+	Employment Agreement of Clint Malin, effective as of November 12, 2014 (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed November 12, 2014)
10.13+	Annual Cash Bonus Incentive Plan, effective as of October 27, 2014 (incorporated by reference to Exhibit 10.9 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2014)
10.14+	The 2015 Equity Participation Plan of LTC Properties, Inc. (incorporated by reference to Exhibit 4.3 to the registrant’s Registration Statement on Form S-8 (File No. 333-205115)
10.15+	The 2021 Equity Participation Plan of LTC Properties, Inc. (incorporated by reference to Exhibit 4.3 to the registrant’s Registration Statement on Form S-8 (File No. 333-256808)
10.16+	Form of Stock Option Agreement under the 2021 Equity Participation Plan (incorporated by reference to Exhibit 10.14 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2021)
10.17+	Form of Performance Based Market Stock Unit Agreement under the 2021 Equity Participation Plan (incorporated by reference to Exhibit 10.15 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2021)
10.18+	Form of Indemnification Agreement dated as of July 30, 2009 between LTC Properties, Inc. and its Directors and Officers (incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009)
21	List of Subsidiaries
23.1	Consent of Independent Registered Accounting Firm
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

+ Management contract or compensatory plan or arrangement in which an executive officer or director of the Company participates

Item 16. FORM 10-K SUMMARY

None.

102

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LTC PROPERTIES, INC. Registrant
Dated: February 16, 2023
	By:	/s/ CAROLINE CHIKHALE CAROLINE CHIKHALE Executive Vice President, Chief Accounting Officer and Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Wendy L. Simpson WENDY L. SIMPSON	Chairman and Chief Executive Officer (Principal Executive Officer)	February 16, 2023
/s/ Pamela J. Kessler PAMELA J. KESSLER	Co-President, Chief Financial Officer and Corporate Secretary (Principal Financial Officer)	February 16, 2023
/s/ Boyd Hendrickson BOYD HENDRICKSON	Director	February 16, 2023
/s/ Cornelia Cheng	Director	February 16, 2023
CORNELIA CHENG
/s/ Devra G. Shapiro DEVRA G. SHAPIRO	Director	February 16, 2023
/s/ James J. Pieczynski JAMES J. PIECZYNSKI	Director	February 16, 2023
/s/ Timothy J. Triche TIMOTHY J. TRICHE	Director	February 16, 2023

103

EX-21

EXHIBIT 21

LTC PROPERTIES, INC.

LIST OF SUBSIDIARIES

As of December 31, 2022

Company	State of Organization	Company	State of Organization
Albuquerque Real Estate Investments, Inc.	Delaware	L-Tex LP Corporation	Delaware
Badger RE Holdings, LLC	Wisconsin	Memorial Park Real Estate Investments, Inc.	Delaware
Bakersfield-LTC, Inc.	Delaware	Merritt Island Real Estate Investments, Inc.	Delaware
Beaumont Real Estate Investments, LP	Texas	Midwest RE Holdings, Inc.	Delaware
Broadway Real Estate Investments, Inc.	Delaware	Mission Real Estate Investments, Inc.	Delaware
BV Holding-LTC, Inc.	Delaware	MLREI Holdings, Inc.	Delaware
Blue Ridge RE Holdings, LLC	Delaware	Monroeville Real Estate Investments, Inc.	Delaware
Chatham Real Estate Investments, LLC	Delaware	Mountain States Real Estate Investments, Inc.	Delaware
Coronado Corporation	Delaware	MS-FL Real Estate Investments, Inc.	Delaware
CPP Investments, Inc.	Delaware	MW Real Estate Investments, LLC	Illinois
Docena Real Estate Investments, LLC	Delaware	New Mexico Real Estate Investments, Inc.	Delaware
Florida-LTC, Inc.	Nevada	Newberry Real Estate Investments, Inc.	Delaware
Fort Wayne Real Estate Investments, Inc.	Delaware	NMKS Holdings, Inc.	Delaware
Great Road RE Holdings, Inc.	Delaware	NMKS Real Estate Investments, Inc.	Delaware
Gulf Breeze Real Estate Investments, Inc.	Delaware	North Carolina Real Estate Investments, LLC	North Carolina
Hewitt Real Estate Investments, Inc.	Delaware	Northwest RE Holdings, Inc.	Delaware
JVC Holdings, Inc.	Delaware	Ohio Springs Real Estate Investments, Inc.	Delaware
JVCH Real Estate Investments, Inc.	Delaware	Park Villa Corporation	Delaware
JVCO Real Estate Investments, Inc.	Delaware	PENN-IND Real Estate Investments, Inc.	Delaware
JVWL Real Estate Investments, Inc.	Delaware	PSF Real Estate Investments, LLC	Delaware
Kansas-LTC Corporation	Delaware	RC Real Estate Investments, Inc.	Delaware
Lakes Real Estate Investments, Inc.	Delaware	Red Oak Real Estate Investments, Inc.	Delaware
LTC GP I, Inc.	Delaware	Rogue Valley RE Holdings, LLC	Delaware
LTC West, Inc.	Nevada	Sabal RE Holdings, LLC	Delaware
LTC-Dearfield, Inc.	Nevada	Skilled Healthcare Holdings, Inc.	Delaware
LTC-DS, Inc.	Delaware	South Hills Real Estate Investments, Inc.	Delaware
LTC-Finance, Inc.	Delaware	Southeast RE Holdings, Inc.	Delaware
LTC-Griffin, Inc.	Nevada	SP Real Estate Investments, LLC	Delaware
LTC-Jonesboro, Inc.	Nevada	Stephenville Real Estate Investments, Inc.	Delaware
LTC-K1 Inc.	Delaware	SWTX Real Estate Investments, Inc.	Delaware
LTC-K2 Limited Partnership	Delaware	Texas-LTC Limited Partnership	Texas
LTC-K2 LP, Inc.	Delaware	Texas-LTC Woodridge Limited Partnership	Delaware
LTC-K2, Inc.	Delaware	Tupelo Real Estate Investments, Inc.	Delaware
LTC-New Mexico, Inc.	Nevada	TXMS Real Estate Investments, Inc.	Delaware
LTC-Richmond, Inc.	Nevada	Vacaville-LTC, Inc.	Delaware
L-Tex GP, Inc.	Delaware	Virginia-LTC, Inc.	Nevada
		WISL Investments, Inc.	Wisconsin

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

(1) Registration Statement (Form S-8 No. 333-152295) pertaining to the 2008 Equity Participation Plan of LTC Properties, Inc.,

(2) Registration Statement (Form S-8 No. 333-205115) pertaining to the 2015 Equity Participation Plan of LTC Properties, Inc.,  

(3) Registration Statement (Form S-8 No. 333-256808) pertaining to the 2021 Equity Participation Plan of LTC Properties, Inc., and

(4) Registration Statement (Form S-3 No. 333-262837) and in the related prospectus of LTC Properties, Inc.,

of our reports dated February 16, 2023 with respect to the consolidated financial statements and schedules of LTC Properties, Inc. and the effectiveness of internal control over financial reporting of LTC Properties, Inc., included in this Annual Report (Form 10-K) of LTC Properties, Inc. for the year ended December 31, 2022.

/s/ Ernst & Young LLP

Los Angeles, California

February 16, 2023

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Wendy L. Simpson, certify that:

1.I have reviewed this annual report on Form 10-K of LTC Properties, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Wendy L. Simpson

Wendy L. Simpson

Chairman and Chief Executive Officer

(Principal Executive Officer)

February 16, 2023

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Pamela J. Kessler, certify that:

1.I have reviewed this annual report on Form 10-K of LTC Properties, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Pamela J. Kessler

Pamela J. Kessler

Co-President, Chief Financial Officer

and Corporate Secretary

(Principal Financial and Accounting Officer)

February 16, 2023

EX-32

Exhibit 32

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of LTC Properties, Inc. (or the Company) on Form 10-K for the period ending December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (or the Report), I, Wendy L. Simpson, Chairman and Chief Executive Officer of the Company, and I, Pamela J. Kessler, Co-President, Chief Financial Officer and Corporate Secretary of the Company, certify solely for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 16, 2023	/s/ Wendy L. Simpson
	Wendy L. Simpson Chairman and Chief Executive Officer
Date: February 16, 2023	/s/ Pamela J. Kessler
	Pamela J. Kessler Co-President, Chief Financial Officer and Corporate Secretary

This certification is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Act of 1934 (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2022	Feb. 09, 2023	Jun. 30, 2022
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2022
Entity File Number	1-11314
Entity Registrant Name	LTC PROPERTIES, INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	71-0720518
Entity Address, Address Line One	2829 Townsgate Road, Suite 350
Entity Address, City or Town	Westlake Village
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	91361
City Area Code	805
Local Phone Number	981-8655
Title of 12(b) Security	Common stock, $.01 Par Value
Trading Symbol	LTC
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 1,515,770,000
Entity Common Stock, Shares Outstanding		41,372,589
Auditor Name	Ernst & Young LLP
Auditor Firm ID	42
Auditor Location	Los Angeles, California
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Central Index Key	0000887905
Amendment Flag	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Investments:
Land	$ 124,665	$ 123,239
Buildings and improvements	1,273,025	1,285,318
Accumulated depreciation and amortization	(389,182)	(374,606)
Operating real estate property, net	1,008,508	1,033,951
Properties held-for-sale, net of accumulated depreciation: 2022-$2,305; 2021-$0	10,710
Real property investments, net	1,019,218	1,033,951
Financing receivable, net of credit loss reserve: 2022-$768; 2021-$0	75,999
Mortgage loans receivable, net of credit loss reserve: 2022-$3,930; 2021-$3,473	389,728	344,442
Real estate investments, net	1,484,945	1,378,393
Notes receivable, net of credit loss reserve: 2022-$589; 2021-$286	58,383	28,337
Investments in unconsolidated joint ventures	19,340	19,340
Investments, net	1,562,668	1,426,070
Other assets:
Cash and cash equivalents	10,379	5,161
Debt issue costs related to revolving line of credit	2,321	3,057
Interest receivable	46,000	39,522
Straight-line rent receivable	21,847	24,146
Lease incentives	1,789	2,678
Prepaid expenses and other assets	11,099	4,191
Total assets	1,656,103	1,504,825
LIABILITIES
Revolving line of credit	130,000	110,900
Term loans, net of debt issue costs: 2022-$489; 2021-$637	99,511	99,363
Senior unsecured notes, net of debt issue costs: 2022-$1,477; 2021-$524	538,343	512,456
Accrued interest	5,234	3,745
Accrued expenses and other liabilities	32,708	33,234
Total liabilities	805,796	759,698
Stockholders' equity:
Common stock: $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2022-41,262; 2021-39,374	412	394
Capital in excess of par value	931,124	856,895
Cumulative net income	1,544,660	1,444,636
Accumulated other comprehensive income (loss)	8,719	(172)
Cumulative distributions	(1,656,548)	(1,565,039)
Total LTC Properties, Inc. stockholders' equity	828,367	736,714
Non-controlling interests	21,940	8,413
Total equity	850,307	745,127
Total liabilities and equity	$ 1,656,103	$ 1,504,825

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Properties held-for-sale, accumulated depreciation	$ 2,305	$ 0
Financial Receivable credit loss reserve	768	0
Mortgage loans receivable, loan loss reserve	3,930	3,473
Notes receivable, loan loss reserve	$ 589	$ 286
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	60,000	60,000
Common stock, shares issued	41,262	39,374
Common stock, shares outstanding	41,262	39,374
Term loans
Debt issue costs, net	$ 489	$ 637
Senior Unsecured Notes
Debt issue costs, net	$ 1,477	$ 524

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenues:
Rental income	$ 128,244,000	$ 121,125,000	$ 126,094,000
Interest income from financing receivable	1,762,000
Interest income from mortgage loans	40,600,000	32,811,000	31,396,000
Interest and other income	4,547,000	1,386,000	1,847,000
Total revenues	175,153,000	155,322,000	159,337,000
Expenses:
Interest expense	31,437,000	27,375,000	29,705,000
Depreciation and amortization	37,496,000	38,296,000	39,071,000
Impairment loss	3,422,000	0	3,977,000
Provision (recovery) for credit losses	1,528,000	1,021,000	(3,000)
Transaction costs	828,000	4,433,000	299,000
Property tax expense	15,486,000	15,392,000	15,065,000
General and administrative expenses	23,706,000	21,460,000	19,710,000
Total expenses	113,903,000	107,977,000	107,824,000
Other operating income:
Gain on sale of real estate, net	37,830,000	7,462,000	44,117,000
Operating income	99,080,000	54,807,000	95,630,000
Gain from property insurance proceeds			373,000
Loss on unconsolidated joint ventures			(758,000)
Income from unconsolidated joint ventures	1,504,000	1,417,000	432,000
Net income	100,584,000	56,224,000	95,677,000
Income allocated to non-controlling interests	(560,000)	(363,000)	(384,000)
Net income attributable to LTC Properties, Inc.	100,024,000	55,861,000	95,293,000
Income allocated to participating securities	(580,000)	(458,000)	(422,000)
Net income available to common stockholders	$ 99,444,000	$ 55,403,000	$ 94,871,000
Earnings per common share:
Basic (in dollars per share)	$ 2.49	$ 1.41	$ 2.42
Diluted (in dollars per share)	$ 2.48	$ 1.41	$ 2.42
Weighted average shares used to calculate earnings per common share:
Basic (in shares)	39,894	39,156	39,179
Diluted (in shares)	40,067	39,156	39,264

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 100,584	$ 56,224	$ 95,677
Unrealized gain (loss) on cash flow hedges before reclassification	9,181	(172)
(Gains) reclassified from accumulated other comprehensive income to interest expense	(290)
Comprehensive income	109,475	56,052	95,677
Less: Comprehensive income allocated to non-controlling interests	(560)	(363)	(384)
Comprehensive income attributable to LTC Properties, Inc.	$ 108,915	$ 55,689	$ 95,293

XML

CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands	Parent	Common Stock	Capital in Excess of Par Value	Cumulative Net Income	Accumulated Other Comprehensive Income (Loss)	Cumulative Distributions	Non-controlling Interests	Total
Balance at beginning of period at Dec. 31, 2019	$ 776,943	$ 398	$ 867,346	$ 1,293,482		$ (1,384,283)	$ 8,483	$ 785,426
Balance (in shares) at Dec. 31, 2019		39,752
Equity activity
Repurchase of common stock	(18,012)	$ (6)	(18,006)					(18,012)
Repurchase of common stock (in shares)		(616)
Issuance of restricted stock		$ 1	(1)
Issuance of restricted stock (in shares)		101
Net income	95,293			95,293			384	95,677
Stock-based compensation expense	7,012		7,012					7,012
Vesting of performance-based stock units, including the payment of distributions	(586)					(586)		(586)
Vesting of performance-based stock units, including the payment of distributions (in shares)		82
Non-controlling interest distributions							(463)	(463)
Common stock cash distributions	(89,676)					(89,676)		(89,676)
Cash paid for taxes in lieu of common shares	(3,566)	$ (1)	(3,565)					(3,566)
Cash paid for taxes in lieu of common shares (in shares)		(77)
Other	(6)		(6)					(6)
Balance at end of period at Dec. 31, 2020	767,402	$ 392	852,780	1,388,775		(1,474,545)	8,404	775,806
Balance (in shares) at Dec. 31, 2020		39,242
Equity activity
Issuance of restricted stock		$ 1	(1)
Issuance of restricted stock (in shares)		110
Net income	55,861			55,861			363	56,224
Stock-based compensation expense	7,760		7,760					7,760
Vesting of performance-based stock units, including the payment of distributions	(764)	$ 1	(1)			(764)		(764)
Vesting of performance-based stock units, including the payment of distributions (in shares)		109
Non-controlling interests contributions							9	9
Non-controlling interest distributions							(363)	(363)
Common stock cash distributions	(89,730)					(89,730)		(89,730)
Cash paid for taxes in lieu of common shares	(3,573)		(3,573)					(3,573)
Cash paid for taxes in lieu of common shares (in shares)		(87)
Fair market valuation adjustment for interest rate swap	(172)				$ (172)			(172)
Other	(70)		(70)					(70)
Balance at end of period at Dec. 31, 2021	736,714	$ 394	856,895	1,444,636	(172)	(1,565,039)	8,413	745,127
Balance (in shares) at Dec. 31, 2021		39,374
Equity activity
Issuance of common stock	67,643	$ 18	67,625					67,643
Issuance of common stock (in shares)		1,792
Issuance of restricted stock		$ 1	(1)
Issuance of restricted stock (in shares)		135
Net income	100,024			100,024			560	100,584
Stock-based compensation expense	7,964		7,964					7,964
Non-controlling interests contributions							14,375	14,375
Non-controlling interest distributions							(1,406)	(1,406)
Common stock cash distributions	(91,509)					(91,509)		(91,509)
Cash paid for taxes in lieu of common shares	(1,355)	$ (1)	(1,354)					(1,355)
Cash paid for taxes in lieu of common shares (in shares)		(39)
Fair market valuation adjustment for interest rate swap	8,891				8,891			8,891
Other	(5)		(5)				(2)	(7)
Balance at end of period at Dec. 31, 2022	$ 828,367	$ 412	$ 931,124	$ 1,544,660	$ 8,719	$ (1,656,548)	$ 21,940	$ 850,307
Balance (in shares) at Dec. 31, 2022		41,262

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CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares	3 Months Ended								12 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
CONSOLIDATED STATEMENTS OF EQUITY
Common Stock cash distributions	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 2.280	$ 2.280	$ 2.280

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
OPERATING ACTIVITIES:
Net income	$ 100,584	$ 56,224	$ 95,677
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	37,496	38,296	39,071
Stock-based compensation expense	7,964	7,760	7,012
Impairment loss	3,422		3,977
Gain on sale of real estate, net	(37,830)	(7,462)	(44,117)
Loss on unconsolidated joint ventures			758
Income from unconsolidated joint ventures	(1,504)	(1,417)	(432)
Income distributions from unconsolidated joint ventures	351		432
Straight-line rental adjustment (income)	1,369	(467)	(1,778)
Adjustment for collectability of lease incentives and rental income	256	758	23,214
Amortization of lease incentives	877	608	426
Provision (recovery) for credit losses	1,528	1,021	(3)
Application of interest reserve	(6,192)	(150)
Amortization of debt issue costs	1,139	1,122	1,029
Other non-cash items, net	113		4
Change in operating assets and liabilities
Lease incentives funded	(418)	(824)	(220)
Increase in interest receivable	(7,173)	(6,776)	(6,161)
Increase (decrease) in accrued interest payable	1,489	(471)	(767)
Net change in other assets and liabilities	2,115	2,962	(2,021)
Net cash provided by operating activities	105,586	91,184	116,101
INVESTING ACTIVITIES:
Investment in real estate properties	(51,817)		(13,581)
Investment in real estate developments	(105)		(16,699)
Investment in real estate capital improvements	(8,994)	(6,298)	(6,913)
Capitalized interest			(354)
Proceeds from sale of real estate, net	72,620	43,627	72,141
Investment in financing receivable	(61,747)
Investment in real estate mortgage loans receivable	(40,732)	(88,955)	(4,253)
Principal payments received on mortgage loans receivable	1,175	1,175	1,065
Investments in unconsolidated joint ventures		(5,676)	(8,520)
Proceeds from liquidation of investments in unconsolidated joint ventures			17,848
Advances and originations under notes receivable	(37,192)	(16,353)	(2,078)
Principal payments received on notes receivable	6,843	2,694	5,275
Net cash (used in) provided by investing activities	(119,949)	(69,786)	43,931
FINANCING ACTIVITIES:
Borrowings from revolving line of credit	194,000	204,400	24,000
Borrowings from term loans		100,000
Repayment of revolving line of credit	(174,900)	(183,400)	(28,000)
Proceeds from issuance of senior unsecured notes	75,000
Principal payments on senior unsecured notes	(48,160)	(47,160)	(40,160)
Stock repurchase plan			(18,012)
Proceeds from common stock issued	68,156
Distributions paid to stockholders	(91,509)	(90,494)	(90,262)
Contribution from non-controlling interests	50	9
Distributions paid to non-controlling interests	(487)	(363)	(463)
Financing costs paid	(1,208)	(3,358)	(35)
Cash paid for taxes in lieu of shares upon vesting of restricted stock and performance-based stock units	(1,355)	(3,573)	(3,566)
Other	(6)	(70)	(6)
Net cash provided by (used in) financing activities	19,581	(24,009)	(156,504)
Increase (decrease) in cash and cash equivalents	5,218	(2,611)	3,528
Cash and cash equivalents, beginning of period	5,161	7,772	4,244
Cash and cash equivalents, end of period	10,379	5,161	7,772
Supplemental disclosure of cash flow information:
Interest paid	$ 28,809	$ 26,724	$ 29,443

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The Company

12 Months Ended

Dec. 31, 2022

General

The Company

1. The Company

LTC Properties, Inc. (“LTC”), a Maryland corporation, commenced operations on August 25, 1992. LTC is a real estate investment trust (“REIT”) that invests primarily in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. We conduct and manage our business as one operating segment, rather than multiple operating segments, for internal reporting and internal decision-making purposes. Our primary objectives are to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), assisted living communities (“ALF”), independent living communities (“ILF”), memory care communities (“MC”) and combinations thereof. We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals. ILF, ALF, MC and combinations thereof are included in the ALF classification.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation. The accompanying consolidated financial statements include the accounts of LTC, our wholly-owned subsidiaries, and our consolidated companies. All intercompany investments, accounts and transactions have been eliminated.

Any reference to the number of properties or facilities, number of units, number of beds, number of operators, and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board.

Consolidation. At inception, and on an ongoing basis, as circumstances indicate the need for reconsideration, we evaluate each legal entity that is not wholly-owned by us for consolidation, first under the variable interest entity (“VIE”), then under the voting model. Our evaluation considers all of our variable interests, including common or preferred equity ownership, loans, and other participating instruments. The variable interest model applies to entities that meet both of the following criteria:

● A legal structure has been established to conduct business activities and to hold assets.

● LTC has a variable interest in the entity - i.e., it has equity ownership or other financial interests that change with changes in the fair value of the entity's net assets.

If an entity does meet the above criteria and does not qualify for a scope exception from the VIE model, we will determine whether the entity is a VIE.

A legal entity is determined to be a VIE if it has any of the following three characteristics:

1. The entity does not have sufficient equity to finance its activities without additional subordinated financial support;

2. The equity holders, as a group, lack the characteristics of a controlling financial interest, as evidenced by all of the following characteristics:

● The power, through voting rights or similar rights, to direct the activities of the entity that most significantly impact the entity's economic performance;

● The obligation to absorb the entity's expected losses;

● The right to receive the entity's expected residual returns; or

3. The entity is established with non-substantive voting rights (i.e., the entity is structured such that majority economic interest holder(s) have disproportionately few voting rights).

If any of the three characteristics of a VIE are met, we conclude that the entity is a VIE and evaluate it for consolidation under the variable interest model.

If an entity is determined to be a VIE, we evaluate whether we are the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and benefits. We consolidate a VIE if we have both power and benefits - that is (i) we have the power to direct the activities of a VIE that most significantly impact the VIE's economic performance (power), and (ii) we have the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). If we have a variable interest in a VIE but we are not the primary beneficiary, we account for our investment using the equity method of accounting.

If a legal entity fails to meet any of the three of the characteristics of a VIE, we evaluate such entity under the voting interest model. Under the voting interest model, we consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting shares or if we are the general partner or managing member of the entity and the limited partners or non-managing members do not have substantive participating, liquidation, or kick-out rights.

The FASB requires the classification of non-controlling interests as a component of consolidated equity in the consolidated balance sheet subject to the provisions of the rules governing classification and measurement of redeemable securities. The guidance requires consolidated net income to be reported at the amounts attributable to both the controlling and non-controlling interests. The calculation of earnings per share will be based on income amounts attributable to the controlling interest.

Use of Estimates. Preparation of the consolidated financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Our most significant assumptions and estimates are related to the valuation of real estate, purchase price allocation of acquired assets, revenue recognition including the collectability of tenant receivables and asset impairment.

Cash Equivalents. Cash equivalents consist of highly liquid investments with a maturity of three months or less when purchased and are stated at cost which approximates market.

Owned Properties. We make estimates as part of our allocation of the purchase price of acquisitions to the various components of the acquisition based upon the fair value of each component. In determining fair value, we use current appraisals or other third-party opinions of value. The most significant components of our allocations are typically the allocation of fair value to land and buildings and, for certain of our acquisitions, in-place leases and other intangible assets. In the case of the fair value of buildings and the allocation of value to land and other intangibles, the estimates of the values of these components will affect the amount of depreciation and amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the value of in-place leases, we make best estimates based on the evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. These assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases. We evaluate each purchase transaction to determine whether the acquired assets meet the definition of an asset acquisition or a business combination. Transaction costs related to acquisitions that are not deemed to be business combinations are included in the cost basis of the acquired assets, while transaction costs related to acquisitions that are deemed to be business combinations are expensed as incurred.

We capitalize direct construction and development costs, including predevelopment costs, interest, property taxes, insurance and other costs directly related and essential to the acquisition, development or construction of a real estate asset. We capitalize construction and development costs while substantive activities are ongoing to prepare an asset for its intended use. We consider a construction project as substantially complete and held available for occupancy upon the issuance of the certificate of occupancy. Costs incurred after a project is substantially complete and ready for its intended use, or after development activities have ceased, are expensed as incurred. For redevelopment, renovation and expansion of existing operating properties, we capitalize the cost for the construction and improvement incurred in connection with the redevelopment, renovation and expansion. Costs previously capitalized related to abandoned acquisitions or developments are charged to earnings. Expenditures for repairs and maintenance are expensed as incurred.

Depreciation is computed principally by the straight-line method for financial reporting purposes over the estimated useful lives of the assets, which range from 3 to 5 years for computers, 5 to 15 years for furniture and equipment, 35 to 50 years for buildings, 10 to 20 years for site improvements, 10 to 50 years for building improvements and the respective lease term for acquired lease intangibles.

Financing Receivable. As part of our acquisitions, we may from time to time, invest in sale and leaseback transactions. In accordance with ASC Topic 842, Leases (“ACS 842”), we are required to determine whether the sale and leaseback transaction qualifies as a sale. ASC 842 clarifies that an option for the seller-lessee to repurchase a real estate asset would generally preclude accounting for the transfer of the asset as a sale. Therefore, a sale and leaseback transaction of real estate that includes a seller-lessee repurchase option is accounted for as a failed sale and leaseback transaction. As a result, the purchased assets of a failed sale and leaseback transaction would be presented as a Financing receivable on our Consolidated Balance Sheets and the rental revenue from these properties is recorded as Interest income from financing receivable on our Consolidated Statements of Income. Furthermore, upon expiration of the purchase option if the purchase option remains unexercised by the seller-lessee, the purchased assets will be reclassified from Financing receivable to Real property investments on our Consolidated Balance Sheets.

Mortgage Loans Receivable, Net of Loan Loss Reserve. Mortgage loans receivable we originate are recorded on an amortized cost basis.

Working Capital Loans. Our investment in working capital loans consists of loan arrangements with interest ranging between 4% and 8% and maturities between 2023 and 2032.

Mezzanine Loans. Mezzanine financing sits between senior debt and common equity in the capital structure, and typically is used to finance development projects or value-add opportunities on existing operational properties. We seek market-based, risk-adjusted rates of return typically between 7-12% with the loan term typically four to five years. Security for mezzanine loans can include all or a portion of the following credit enhancements; secured second mortgage, pledge of equity interests and personal/corporate guarantees. Mezzanine loans are recorded for GAAP purposes as either a loan, under notes receivable, or joint venture (“JV”), under investment in unconsolidated JVs, depending upon specifics of the loan terms and related credit enhancements.

Investments in unconsolidated joint ventures. From time to time, we provide funding to third-party operators for the acquisition, development and construction (“ADC”) of a property. Under an ADC arrangement, we may participate in the residual profits of the project through the sale or refinancing of the property. These ADC arrangements can have characteristics similar to a loan or similar to a JV or partnership such as participating in the risks and rewards of the project as an owner or an investment partner. If the ADC arrangement characteristics are more similar to a jointly-owned investment or partnership, we account for the ADC arrangement as an investment in an unconsolidated JV under the equity method of accounting or a direct investment (consolidated basis of accounting) instead of applying loan accounting.

We evaluate our ADC arrangements first pursuant to Accounting Standard Codification (“ASC”) 810, Consolidation, to determine whether the ADC arrangement meets the definition of a VIE, as explained above, and whether we are the primary beneficiary. If the ADC arrangement is deemed to be a VIE but we are not the primary beneficiary, or if it is deemed to be a voting interest entity but we do not have a controlling financial interest, we account for our investment in the ADC arrangement using the equity method. Under the equity method, we initially record our investment at cost and subsequently recognize our share of net earnings or losses and other comprehensive income or loss, cash contributions made and distributions received, and other adjustments, as appropriate. Allocations of net income or loss may be subject to preferred returns or allocation formulas defined in operating agreements and may not be according to percentage ownership interests. In certain circumstances where we have a substantive profit-sharing arrangement which provides a priority return on our investment, a portion of our equity in earnings may consist of a change in our claim on the net assets of the underlying JV. Distributions of operating profit from the JVs are reported as part of operating cash flows, while distributions related to a capital transaction, such as a refinancing transaction or sale, are reported as investing activities. Currently we do not have any ADC arrangements.

We periodically perform evaluation of our investment in unconsolidated JVs to determine whether the fair

value of each investment is less than the carrying value, and, if such decrease in value is deemed to be other-than-temporary, we write the investment down to its estimated fair value as of the measurement date.

Loan Loss Reserve. ASC 326, Financial Instruments- Credit Losses requires a forward looking “expected loss” model to be used for receivables, held-to-maturity debt, loans, and other instruments. When shared risk characteristics exist, ASC 326 requires a collective basis measurement of expected credit losses of the financial assets.

We adopted ASC 326 on January 1, 2020 and determined our Mortgage loans receivable and Notes receivable are within the scope of this ASU. We utilize the probability of default and discounted cash flow methods to estimate expected credit losses. Additionally, we stress-test the results to reflect the impact of unknown adverse future events including recessions. Upon adoption, we concluded that the adoption of ASC 326 did not have a material impact on our financial statements.

We elected not to measure an allowance for expected credit losses on accrued interest receivable under the expected credit loss standard as we have a policy in place to reserve or write off accrued interest receivable in a timely manner through our quarterly review of the loan and property performance. Therefore, we elected the policy to write off accrued interest receivable by reversing interest income and/or recognizing credit loss expense. As of December 31, 2022, the total balance of accrued interest receivable of $46,000,000 was not included in the measurement of expected credit loss. For the years ended December 31, 2022, 2021 and 2020, Company did not recognize any write-off related to accrued interest receivable.

Accrued incentives. As part of our acquisitions and/or amendments, we may commit to provide contingent payments to our sellers or lessees, upon the properties achieving certain rent coverage ratios. Typically, when the contingent incentive payments are funded, cash rent will increase by the amount funded multiplied by a rate stipulated in the agreement. If it is deemed probable, the contingent payment is recorded as a liability at the estimate fair value calculated using a discounted cash flow analysis and accreted to the settlement amount of the estimated payment date. If the contingent payment is provided to the lessee, the payment is recorded as a lease incentive included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets and is amortized as a yield adjustment over the life of the lease. The fair value of these contingent liabilities is evaluated on a quarterly basis based on changes in estimates of future operating results and changes in market discount rates. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement.

Impairments. Assets that are classified as held-for-use are periodically evaluated for impairment when events or changes in circumstances indicate that the asset may be impaired or the carrying amount of the asset may not be recoverable through future undiscounted cash flows. Where indicators of impairment exist, the estimation required in the undiscounted future cash flow assumption includes management’s probability-weighting of various scenarios

including whether the management modifies the lease with the existing operator versus identifying a replacement operator and the assumed market lease rate underlying projected future rental cash flows. In determining fair value, we use current appraisals or other third-party opinions of value and other estimates of fair value such as estimated discounted future cash flows. Based on our assessment, during the years ended December 31, 2022, 2021 and 2020, we recognized impairment losses of $3,422,000, $0 and $3,977,000, respectively, related to our real property investments.

Properties held-for-sale. Properties classified as held-for-sale on the Consolidated Balance Sheets include only those properties available for immediate sale in their present condition and for which management believes that it is probable that a sale of the property will be completed within one year. Properties held-for-sale are carried at the lower of cost or fair value less estimated selling costs. No depreciation expense is recognized on properties held-for-sale once they have been classified as such. Only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. We have not reclassified results of operations for properties disposed as discontinued operations as these disposals do not represent strategic shifts in our operations.

Fair Value of Financial Instruments. The FASB requires the disclosure of fair value information about financial instruments for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. Accordingly, the aggregate fair market value amounts presented in the notes to these consolidated financial statements do not represent our underlying carrying value in financial instruments.

The FASB provides guidance for using fair value to measure assets and liabilities, the information used to measure fair value, and the effect of fair value measurements on earnings. The FASB emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the FASB establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices).

The fair value guidance issued by the FASB excludes accounting pronouncements that address fair value measurements for purposes of lease classification or measurement. However, this scope exception does not apply to assets acquired and liabilities assumed in a business combination that are required to be measured at fair value, regardless of whether those assets and liabilities are related to leases.

In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses on items for which the fair value option has been elected reported in earnings. We have not elected the fair value option for any of our financial assets or liabilities.

The FASB requires disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. See Note 15. Fair Value Measurements for the disclosure about fair value of our financial instruments.

Derivative Instruments. As of December 31, 2022, we had two interest rate swaps that were designated as cash flow hedges of interest rate risk with a total notional amount of $100,000,000. See Note 9. Debt Obligations within our consolidated financial statements for further detail on our interest rate swaps. We record cash flow hedges either as an asset or a liability measured at fair value. If hedge accounting is applied to a derivative instrument, the entire change in the fair value of the derivative designated and qualified as cash flow hedge is recorded in Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. We estimate the fair value of our interest rate swaps using the assistance of a third-party using inputs that are observable in the market which include forward yield curves and other relevant information. Additionally, we are exposed to credit risk of the counterparty to our interest rate swap agreements in the event of non-performance under the terms of the agreements. We have determined that the majority of the inputs used to value our derivative instruments fall within level 2 of the fair value hierarchy.

In March 2020, the FASB issued Accounting Standards Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"), which contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts as the market transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The practical expedients are optional and may be elected over time as reference rate reform activities occur. ASU 2020-04 is effective upon issuance and can be applied through December 31, 2022. In December

2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, which defers the sunset date from December 31, 2022 to December 31, 2024.

In December 2022, we amended our unsecured credit agreement to update the benchmark provisions to replace LIBOR with the Secured Overnight Financing Rate (“SOFR”), plus a credit spread of 10 basis points, as the reference rate for the purpose of calculating interest under the agreement. In connection with amending the unsecured credit agreement, we also amended our fixed interest rate swap agreements to update reference rate to SOFR. As a result, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients maintains the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the ASU and may apply other elections, as applicable, as additional changes in the market occur. Our election to apply the hedge accounting expedients did not have a material impact on our consolidated financial statements. See Note 9. Debt Obligations within our consolidated financial statements for further detail on our unsecured credit agreement.

Revenue Recognition- Rental Income. Rental income from operating leases is generally recognized on a straight-line basis over the terms of the leases. Substantially all of our leases contain provisions for specified annual increases over the rents of the prior year and are generally computed in one of four methods depending on specific provisions of each lease as follows:

(i) a specified annual increase over the prior year’s rent, generally between 2.0% and 3.0%;

(ii) a calculation based on the Consumer Price Index or the Medicare Market Basket Rate;

(iii) as a percentage of facility revenues in excess of base amounts or

(iv) specific dollar increases.

The FASB does not permit recognition of contingent revenue until the contingencies have been resolved. Historically, we have not included contingent rents as income until received and we will continue our historical policy. During the years ended December 31, 2022, 2021 and 2020, we received $57,000, $0 and $111,000, respectively, of contingent rental income.

In accordance with ASC 842, Leases, we report real estate taxes that are reimbursed by our operators as Rental income with a corresponding Property tax expense in the Consolidated Statements of Income. Furthermore, we assess the collectability of substantially all of our lease payments through maturity and if collectability is not probable, all or a portion of our straight-line rent receivable and other lease receivables may be written off and the rental income during the period would be limited to the lesser of the income that would have been recognized if collection were probable, and the lease payments received. Our assessment of collectability of leases includes evaluating the data and assumptions used in determining whether substantially all of the future lease payments were probable based on the lessee’s payment history, the financial strength of the lessees, future contractual rents, and the timing of expected payments.

In April 2020, the FASB staff released guidance regarding accounting for lease concessions in response to the novel coronavirus (“COVID-19”) pandemic. The FASB staff guidance indicates that lessors could elect an accounting policy to not evaluate whether rent concessions provided in response to the COVID-19 pandemic are lease modifications. When only the timing of payments is impacted by the rent deferrals, but the amount of the consideration is substantially the same as required by the original lease agreement, the FASB listed two methods for lessors to account for the rent deferrals. We elected to account for the rent deferrals as if there were no changes made to the lease agreement. Accordingly, we increased the lease receivable and continued to recognize income. We recognized the rent abatements given to the operators where we accrue rent on a straight-line basis, over the remaining life of those respective leases. Payments made to or on behalf of our lessees represent incentives that are deferred and amortized over the term of the lease on a straight-line basis.

Revenue Recognition- Interest Income. Interest income on mortgage loans receivable and notes receivable is recognized using the effective interest method. Exit fee income and commitment fee income are also amortized over the life of the related loan under the effective interest method. Effective interest method, as required by GAAP, is a technique for calculating the actual interest rate for the term of a mortgage loan based on the initial origination value. When the actual interest rate is higher than the stated interest rate in the early years of the mortgage loan, an effective

interest receivable asset is created and included in the Interest receivable line item in our Consolidated Balance Sheets and begins reducing down to zero when, at some point during the mortgage loan, the stated interest rate is higher than the actual interest rate. We consider a loan to be non-performing after 60 days of non-payment of amounts due and do not recognize unpaid interest income from that loan until the past due amounts have been received.

As previously discussed under Financing Receivable above, rental income from properties acquired through a sale leaseback, subject to a seller-lessee repurchase option, is recorded as Interest income from financing receivable on our Consolidated Statements of Income. Interest income on financing receivable is recognized using the effective interest method. The recognition of interest income will stop when Financing receivable is reclassified to Real estate investments when the purchase option remains unexercised upon expiration of the purchase option.

Gains on sale of Real Estate, Net. Recognition of gains or losses from sales of investments in real estate requires that we:

a) meet certain revenue recognition criteria in accordance with ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets; and

b) transfer control of the real estate to the buyer.

The gain or loss recorded is measured as the difference between the sales price, less costs to sell, and the carrying value of the real estate when we sell it.

Federal Income Taxes. LTC qualifies as a REIT under the Internal Revenue Code of 1986, as amended, and as such, no provision for Federal income taxes has been made. A REIT is required to distribute at least 90% of its taxable income to its stockholders and a REIT may deduct dividends in computing taxable income. If a REIT distributes 100% of its taxable income and complies with other Internal Revenue Code requirements, it will generally not be subject to Federal income taxation.

For Federal tax purposes, depreciation is generally calculated using the straight-line method over a period 27.5 years. Earnings profits, which determine the taxability of distributions to stockholders, use the straight-line method over 30 years. The determination of Federal taxable income differ from net income for financial statement purposes principally due to the treatment of certain investments in joint ventures, timing of interest income, rental income, other expense items, recognition of impairment charges, and depreciable lives and bases of assets. At December 31, 2022, the net book basis of our depreciable assets exceeded our net tax basis by approximately $41,202,000 (unaudited), due to the difference previously mentioned.

The FASB clarified the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. The guidance utilizes a two-step approach for evaluating tax positions. Recognition (step one) occurs when a company concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. Measurement (step two) is only addressed if step one has been satisfied (i.e., the position is more likely than not to be sustained). Under step two, the tax benefit is measured as the largest amount of benefit (determined on a cumulative probability basis) that is more likely than not to be realized upon ultimate settlement. We currently do not have any uncertain tax positions that would not be sustained on its technical merits on a more-likely than not basis.

We may from time to time be assessed interest or penalties by certain tax jurisdictions. In the event we have received an assessment for interest and/or penalties, it has been classified in our Consolidated Statements of Income as General and administrative expenses.

Concentrations of Credit Risk. Financial instruments which potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, operating leases on owned properties, financing receivable and mortgage loans receivable. Our financial instruments, operating leases, financing receivable and mortgage loans receivable are subject to the possibility of loss of carrying value as a result of the failure of other parties to perform according to their contractual obligations or changes in market prices which may make the instrument less valuable. We obtain various collateral and other protective rights, and continually monitor these rights, in order to reduce such

possibilities of loss. In addition, we provide reserves for potential losses based upon management’s periodic review of our portfolio. See Note 3. Major Operators for further discussion of concentrations of credit risk from our tenants.

Net Income Per Share. Basic earnings per share is calculated using the weighted-average shares of common stock outstanding during the period excluding common stock equivalents. Diluted earnings per share includes the effect of all dilutive common stock equivalents.

In accordance with the accounting guidance regarding the determination of whether instruments granted in share-based payments transactions are participating securities, we have applied the two-class method of computing basic earnings per share. This guidance clarifies that outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends participate in undistributed earnings with common stockholders and are considered participating securities.

Stock-Based Compensation. The FASB requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. We use the Black-Scholes-Merton formula to estimate the value of stock options granted to employees. Also, we use the Monte Carlo model to estimate the value of performance-based stock units granted to employees. These models require management to make certain estimates including stock volatility, expected dividend yield and the expected term. If management incorrectly estimates these variables, the results of operations could be affected. The FASB also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow. Because we qualify as a REIT under the Internal Revenue Code of 1986, as amended, we are generally not subject to Federal income taxation. Therefore, this reporting requirement does not have an impact on the Consolidated Statements of Cash Flows.

Segment Disclosures. The FASB accounting guidance regarding disclosures about segments of an enterprise and related information establishes standards for the manner in which public business enterprises report information about operating segments. Our investment decisions in seniors housing and health care properties, including property lease transactions, financing receivable, mortgage loans, and other investments, are made and resulting investments are managed as a single operating segment for internal reporting and for internal decision-making purposes. Therefore, we have concluded that we operate as a single segment.

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Major Operators

12 Months Ended

Dec. 31, 2022

Major Operators

Major Operators

3. Major Operators

We have one operator from which we derive approximately 10% or more of our total revenues. The following table sets forth information regarding our major operator as of December 31, 2022:

	Number of		Number of		Percentage of
			SNF	ALF	Total		Total
Operator	SNF	ALF	Beds	Units	Revenues (1)		Assets (2)
Prestige Healthcare (3)	24	—	2,820	93	18.6	%	16.0	%

(1) Includes total revenues for the twelve months ended December 31, 2022.

(2) Represents the net carrying value of the mortgage loans and properties we own divided by the Total assets on the Consolidated Balance Sheets.

(3) The majority of the revenue derived from this operator relates to interest income from mortgage loans.

Our financial position and ability to make distributions may be adversely affected if Prestige Healthcare, or any of our lessees and borrowers face financial difficulties, including any bankruptcies, inability to emerge from bankruptcy, insolvency, or general downturn in business of any such operator, impact upon services or occupancy levels due to infectious disease outbreaks, or in the event any such operator does not renew and/or extend its relationship with us.

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Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2022

Supplemental Cash Flow Information

Supplemental Cash Flow Information

4. Supplemental Cash Flow Information

	Year Ended December 31,
	2022		2021		2020
	(in thousands)
Non-cash investing and financing transactions:
Contribution of financing receivable from non-controlling interests (See Note 5. Real Estate Investments)	$	14,325	$	—	$	—
Mortgage loans receivable reserve withheld at origination (See Note 5. Real Estate Investments)		107		298		—
Accretion of interest reserve recorded as mortgage loan receivable (See Note 5. Real Estate Investments)		(6,192)		—		—
Preferred return reserve related to investment in unconsolidated joint ventures (See Note 6. Investment in Unconsolidated Joint Ventures)		351		2,324		2,878
Notes receivable reserve withheld at origination (See Note 7. Notes Receivable)		—		353		—
Reclassification of notes receivable to lease incentives (Note 8. Lease Incentives)		—		—		300
Change in fair value of interest rate swap agreements (Note 9. Debt Obligations )		(8,891)		172		—

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Real Estate Investments

12 Months Ended

Dec. 31, 2022

Real Estate Investments

Real Estate Investments

5. Real Estate Investments

Owned Properties. As of December 31, 2022, we owned 152 health care real estate properties consisting of 99 ALFs, 52 SNFs and one behavioral health care hospital located in 26 states. These properties are operated by 24 operators.

Independent living communities, assisted living communities, memory care communities and combinations thereof are included in the assisted living property classification (collectively “ALF”). Any reference to the number of properties, number of units, number of beds, and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board.

Depreciation expense on buildings and improvements, including properties classified as held-for-sale, was $37,394,000, $38,192,000, and $38,945,000 for the years ended December 31, 2022, 2021 and 2020, respectively.

Future minimum base rents receivable under the remaining non-cancelable terms of operating leases excluding the effects of straight-line rent, amortization of lease incentives and renewal options are as follows (in thousands):

	Cash
	Rent (1)
2023	$	120,817
2024		113,003
2025		103,690
2026		71,044
2027		67,087
Thereafter		200,663

(1) Represents contractual cash rent, except for certain master leases which are based on estimated cash. Includes rent from subsequent acquisitions and excludes rent from subsequent dispositions. See Note 16. Subsequent Events for more information.

Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent receivable upon renewal being greater of less than that currently being paid. Subsequent to December 31, 2022, a master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed at the contractual rate for another five years extending the maturity to November 2028. The centers have a total 216 beds and are located in Florida.

We monitor the collectability of our receivable balances, including deferred rent receivable balances, on an ongoing basis. We write-off uncollectable operator receivable balances, including straight-line rent receivable and lease incentives balances, as a reduction to rental income in the period such balances are no longer probable of being collected. Therefore, recognition of rental income is limited to the lesser of the amount of cash collected or rental income reflected on a straight-line basis for those customer receivable balances deemed uncollectable. We wrote-off straight-line rent receivable and lease incentives balances of $256,000, $758,000 and $23,214,000 for the years ended December 31, 2022, 2021 and 2020, respectively.

We continue to take into account the current financial condition of our operators, including consideration of the impact of COVID-19, in our estimation of uncollectable accounts and deferred rents receivable at December 31, 2022. We are closely monitoring the collectability of such rents and will adjust future estimations as appropriate as further information becomes known.

The following table summarizes components of our rental income for the years ended December 31, 2022, 2021 and 2020 (in thousands):

	December 31,
Rental Income		2022			2021			2020
Base cash rental income	$	115,230	(1)	$	107,692	(2)	$	132,789
Variable cash rental income		15,516	(3)		14,332	(3)		15,167	(3)
Straight-line rent		(1,369)	(4)		467	(5)		1,778
Adjustment for collectability of lease incentives and rental income		(256)	(6)		(758)	(6)		(23,214)	(6)
Amortization of lease incentives		(877)			(608)			(426)
Total	$	128,244		$	121,125		$	126,094

(1) Increased primarily due to rent received from transitioned portfolios, rental income from acquisitions, completed development projects, annual rent escalations, and lease termination fee income of $1,181 received in connection with the sale of a 74-unit ALF partially offset by decreased rent from the sold properties.

(2) Decreased primarily due to defaults of payments for lease obligations from Senior Lifestyle and Senior Care, abated and deferred rent and reduced rent from a sold property. This decrease was partially offset by increased rent from re-leasing 18 properties previously leased to Senior Lifestyle, completion of development projects and contractual rent increases.

(3) The variable cash rental income for the years ended December 31, 2022, 2021 and 2020 primarily includes reimbursement of real estate taxes by our lessees.

(4) Decreased primarily due to a deferred rent repayment, normal amortization and the impact of the 50% reduction of 2021 rent escalations for those leases accounted for on a straight-line basis.

(5) Decreased due to more leases accounted for on a cash basis, normal amortization and the impact of the 50% reduction of 2021 rent escalations for those leases accounted for on a straight-line basis.

(6) Represents straight-line rent receivable and lease incentives write-offs.

Some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. The following table summarizes information about purchase options included in our lease agreements (dollar amount in thousands):

	Type	Number
	of	of		Gross		Carrying	Option
State	Property	Properties		Investments		Value	Window
California	ALF/MC	2	$	38,895	$	33,719	2023-2029
Florida	MC	1		15,201		12,500	2029
Florida	SNF	3		76,767		75,999	2025-2027	(1)
Nebraska	ALF	3		7,633		2,948	TBD	(2)
South Carolina	ALF/MC	1		11,680		9,052	2029
Texas	SNF	4		51,837		50,848	2027-2029	(3)
Total			$	202,013	$	185,066

(1) During 2022, we entered into a joint venture to purchase three SNFs. For more information regarding this transaction, see Financing Receivable below.

(2) Subject to the properties achieving certain coverage ratios.

(3) During 2022, we purchased four SNFs and leased these properties under a 10-year lease with an existing operator. The lease allows the operator to elect either an earn-out payment or purchase option. If neither is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the earn-out see Note 11 Commitments and Contingencies.

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic. At December 31, 2022, in conjunction with the continued levels of uncertainty related to the adverse effects of COVID-19,

we assessed the probability of collecting substantially all of our lease payments through maturity and concluded that we did not have sufficient information available to evaluate the impact of COVID-19 on the collectability of our lease payments. The extent to which COVID-19 could impact our operators and the collectability of our future lease payments will depend on the future developments including the financial impact significance, government support and subsidies and the duration of the pandemic.

In recognition of the pandemic impact affecting our operators, we have agreed to provide assistance in form of rent abatements and rent deferrals and we may continue to provide assistance as needed.

Impairment Loss. During 2022, we made the decision to sell an assisted living community located in Kentucky which decreased the period over which we could recover the carrying value of the community. As a result of our decision to sell, we determined that the community’s carrying value would not be fully recoverable and recorded an impairment loss of $1,286,000. This community was classified as held-for sale at December 31, 2022. See Properties Held-for-Sale below for more information regarding this community. Additionally, during 2022, we concluded that the carrying value of a 70-unit assisted living community in Florida and a closed memory care community in Colorado may not be recoverable through future undiscounted cash flows, Accordingly, we recorded a combined impairment loss of $2,136,000 which represents the amount by which the carrying value of these properties exceeds their estimated fair value.

Properties Held-for-Sale. The following summarizes our held for sale as of December 31, 2022 (dollar amounts in thousands):

	Type	Number	Number
	of	of	of		Gross		Accumulated
State (1)	Property	Properties	Beds/units		Investment		Depreciation
KY	ALF	1	60	$	13,015	$	2,305

(1) During 2022, we recorded an impairment loss of $1,286 to write-down the carrying value of the community to its anticipated selling price.

Acquisitions. The following table summarizes our acquisitions for the years ended December 31, 2022 through 2020 (dollar amounts in thousands):

						Total		Number	Number
		Purchase		Transaction		Acquisition		of	of
Year	Type of Property	Price		Costs		Costs		Properties	Beds/Units
2022 (1)	SNF	$	51,534	$	283	$	51,817	4	339
2021	n/a	$	—	$	—	$	—	—	—

(1) The properties are located in Texas and are leased to an affiliate of an existing operator under a 10-year lease with two 5-year renewal options. Additionally, the lease allows the operator to elect either an earn-out payment or purchase option. If neither option is elected within the timeframe defined in the lease, both elections are terminated. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the seventh lease year. The initial cash yield is 8% for the first year, increasing to 8.25% for the second year, then increases annually by 2.0% to 4.0% based on the change in the Medicare Market Basket Rate. In connection with transaction, we provided the lessee a 10-year working capital loan for up to $2,000 at 8% for first year, increasing to 8.25% for the second year, then increasing annually with the lease rate. At December 31, 2022, the working capital loan had an outstanding balance of $1,642.

Developments and Improvements. During the years ended December 31, 2022, 2021 and 2020, we invested the following in development and improvement projects (in thousands):

Type of Property		2022				2021			2020
	Developments		Improvements		Developments		Improvements		Developments		Improvements
Assisted Living Communities	$	105	$	5,538	$	—	$	5,846	$	4,491	$	6,842
Skilled Nursing Centers		—		2,897		—		452		12,208		71
Other		—		559		—		—		—		—
Total	$	105	$	8,994	$	—	$	6,298	$	16,699	$	6,913

Completed Projects. During the years ended December 31, 2022 and 2021, we had no completed development projects. The following table summarizes our completed development projects during the years ended December 31, 2020 (dollar amounts in thousands):

	Number	Type	Number
	of	of	of			Total
Year	Properties	Property	Beds/Units	State	Investment
2020	1	ALF/MC	78	Oregon	$	18,447
	1	SNF	90	Missouri		16,587
Total 2020	2		168		$	35,034

Property Sales. The following table summarizes property sales during the years ended December 31, 2022 through 2020 (dollar amounts in thousands):

		Type	Number	Number
		of	of	of		Sales		Carrying		Net
Year	State	Properties	Properties	Beds/Units		Price		Value		Gain (loss) (1)
2022	California	ALF	2	232	$	43,715	$	17,832	$	25,867
	California	SNF	1	121		13,250		1,846		10,846
	Texas	SNF	1	—		485		697		(441)
	Virginia	ALF	1	74		16,895		15,549		1,344	(2)
	n/a	n/a	—	—		—		—		214	(3)
Total 2022			5	427	$	74,345	$	35,924	$	37,830
2021	Florida	ALF	1	—	$	2,000	$	2,626	$	(858)
	Nebraska	ALF	1	40		900		1,079		(200)
	Washington	SNF	1	123		7,700		4,513		2,562
	Wisconsin	ALF	3	263		35,000		28,295		5,595
	n/a	n/a	—	—		—		—		363	(3)
Total 2021			6	426	$	45,600	$	36,513	$	7,462
2020	Arizona	SNF	1	194	$	12,550	$	2,229	$	10,293
	Colorado	SNF	3	275		15,000		4,271		10,364
	Iowa	SNF	7	544		14,500		4,886		9,051
	Kansas	SNF	3	250		9,750		7,438		1,993
	Texas	SNF	7	1,148		23,000		10,260		12,287
	n/a	n/a	—	—		—		—		129	(3)
Total 2020			21	2,411	$	74,800	$	29,084	$	44,117

(1) Calculation of net gain (loss) includes cost of sales and write-off of straight-line rent receivable and lease incentives, when applicable.

(2) In connection with this sale, the former operator paid us a lease termination fee of $1,181 which is not included in the gain on sale.

(3) We recognized additional gain due to the reassessment adjustment of the holdbacks related to properties sold during 2020 and 2019, under the expected value model per ASC Topic 606, Contracts with Customers.

During 2020, we sold a 114-bed skilled nursing center in Texas and recorded $373,000 from insurance proceeds related to the property’s roof damage as Gain from property insurance proceeds on the Consolidated Statements of Income.

Financing Receivable. During 2022, we entered into a joint venture and contributed $61,661,000 into the JV that purchased three skilled nursing centers located in Florida for $75,825,000. Our JV partner contributed the remaining $14,325,000 of equity. The JV leased the centers back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year. Accordingly, the transaction has been accounted for as a Financing receivable on our Consolidated Balance Sheets. During 2022, we recognized $1,762,000 of Interest income from financing receivable on our Consolidated Statements of Income. Additionally, we recorded $768,000 Provisions for expected loan losses during 2022.

Subsequent to December 31, 2022, we entered into a $121,321,000 JV with an affiliate of an existing operator and contributed $117,900,000 into the JV that purchased 11 assisted living and memory care communities from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit Internal Rate of Return (“IRR”) of 9.0%. In accordance with GAAP, the communities acquired by the JV are required to be presented as a Financing receivable on our Consolidated Balance Sheets.

Mortgage Loans. The following table summarizes our investments in mortgage loans secured by first mortgages at December 31, 2022 (dollar amounts in thousands):

					Type	Percentage		Number of					Investment
			Gross		of	of					SNF	ALF	per
Interest Rate	Maturity	State	Investment (1)		Property	Investment		Loans (2)	Properties (3)		Beds	Units	Bed/Unit
7.5%	2023	MO	$	1,886	OTH	0.5	%	1	—	(4)	—	—	$	n/a
7.5%	2024	LA		29,347	SNF	7.5	%	1	1		189	—	$	155.28
7.8%	2025	FL		14,308	ALF	3.6	%	1	1		—	68	$	210.41
7.3% (5)	2025	NC/SC		56,317	ALF	14.3	%	1	13		—	523	$	107.68
7.3%	2026	NC		33,001	ALF	8.4	%	1	4		—	217	$	152.08
7.3%	2026	NC		797	OTH	0.2	%	1	—	(6)	—	—	$	—
10.6% (7)	2043	MI		184,351	SNF	46.8	%	1	15		1,875	—	$	98.32
9.6% (7)	2045	MI		39,026	SNF	9.9	%	1	4		480	—	$	81.30
9.8% (7)	2045	MI		19,750	SNF	5.0	%	1	2		201	—	$	98.26
10.1% (7)	2045	MI		14,875	SNF	3.8	%	1	1		146	—	$	101.88
Total			$	393,658		100.0	%	10	41		2,891	808	$	106.42

(1) Subsequent to December 31, 2022, we originated a $10,750 mortgage loan secured by a MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%.

(2) Some loans contain certain guarantees and/or provide for certain facility fees.

(3) Our mortgage loans are secured by properties located in six states with five borrowers.

(4) Represents a mortgage loan secured by a parcel of land for the future development of a 91-bed post-acute SNF.

(5) Represents the initial rate. This loan has an IRR of 8%.

(6) Represents a mortgage loan secured by a parcel of land in North Carolina held for future development of a seniors housing community.

(7) Mortgage loans provide for 2.25% annual increases in the interest rate after a certain time period.

The following table summarizes our mortgage loan activity for the years ended December 31, 2022, 2021 and 2020 (in thousands):

	Year Ended December 31,
	2022			2021			2020
Originations and funding under mortgage loans receivable	$	40,732	(1) (2)	$	88,955	(3)	$	4,253	(4)
Application of interest reserve		6,192			298			—
Scheduled principal payments received		(1,175)			(1,175)			(1,065)
Mortgage loan premium amortization		(6)			(6)			(4)
Provision for loan loss reserve		(457)			(881)			(32)
Net increase in mortgage loans receivable	$	45,286		$	87,191		$	3,152

(1) Subsequent to December 31, 2022, we originated a $10,750 mortgage loan secured by a MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%.

(2) We originated two senior mortgage loans, secured by four ALFs operated by an existing operator, as well as a land parcel in North Carolina. The communities have a combined total of 217 units, with an average age of less than four years. The land parcel is approximately 7.6 acres adjacent to one of the ALFs and is being held for the future development of a seniors housing community. The mortgage loans have a four-year term, an interest rate of 7.25% and an IRR of 8%. We also funded an additional $2,000 under an existing mortgage loan.

(3) We funded the following:

a. $1,638 mortgage loan secured by a parcel of land for the future development of a 91-bed post-acute SNF in Missouri and withheld an interest reserve of $142. The mortgage loan term is one year at a yield of 7.5%;

b. $27,047 mortgage loan secured by a 189-bed SNF in Louisiana with a regional operator new to us. The mortgage loan has a three-year term with one 12-month extension option and a yield of 7.5%;

c. $11,724 mortgage loan secured by a 68-unit ALF and MC in Florida operated by a regional operator new to us. At origination, we withheld an interest reserve of $806 and applied $156 of the reserve during 2021. The mortgage loan term is approximately 4 years at a 7.75% yield and includes an additional $4,177 loan commitment for the construction of a memory care addition to the property to be funded at a later date subject to satisfaction of various conditions;

d. $48,006 mortgage loan for the purchase of a 13-property seniors housing portfolio located in North (12) and South Carolina (1). The communities are operated by an existing LTC operator. At origination, we withheld an interest reserve of $4,496. The loan term is 4 years at a 7.25% yield and includes a commitment of $6,097 for capital improvements and $650 for working capital; and

e. $540 additional capital funding under our existing mortgage loans.

(4) We funded an additional $2,000 under an existing mortgage loan.

At December 31, 2022 and 2021 the carrying values of the mortgage loans were $389,728,000 and $344,442,000, respectively. Scheduled principal payments on mortgage loan receivables are as follows (in thousands):

	Scheduled
	Principal
2023	$	3,061
2024		30,522
2025		71,801
2026		34,972
2027		1,175
Thereafter		252,127
Total	$	393,658

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Investment in Unconsolidated Joint Ventures

12 Months Ended

Dec. 31, 2022

Investment in Unconsolidated Joint Ventures

Investment in Unconsolidated Joint Ventures

6. Investments in Unconsolidated Joint Ventures

During 2020, we provided preferred capital contribution commitments to two joint ventures. We determined that each of these JVs meets the accounting criteria to be considered a VIE. We are not the primary beneficiary of the VIEs as we do not have both: 1) the power to direct the activities that most significantly affect the VIE’s economic performance, and 2) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. However, we do have significant influence over the JVs. Therefore, we account for the joint venture investments using the equity method of accounting. 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) Represents a 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) Represents a 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. Subsequent to December 31, 2022, we received a notice of intent to redeem our $13,000 preferred equity investment in the joint venture.

The following table summarizes our capital contributions, income recognized, and cash interest received related to our investments in unconsolidated joint ventures during the years ended December 31, 2022, 2021 and 2020 (in thousands):

	Type
	of			Capital		Income		Cash Interest		Application of
Year	Properties			Contribution		Recognized		Earned		Interest Reserve
2022	ALF/MC		$	—	$	450	$	—	$	450
	UDP			—		1,054		351		703
Total			$	—	$	1,504	$	351	$	1,153
2021	ALF/MC		$	—	$	450	$	—	$	412
	UDP			8,000		967		—		880
Total			$	8,000	$	1,417	$	—	$	1,292
2020	ILF/ALF/MC	(1)	$	58	$	231	$	231	$	—
	UDP			6,340		169		169		—
	UDP			5,000		32		32		—
Total			$	11,398	$	432	$	432	$	—

(1) We had a preferred equity investment in an unconsolidated joint venture that owned four ALFs located in Arizona, providing independent living, assisted living and memory care services. During the year ended December 31, 2020, upon sale of the four properties comprising the JV, we received liquidation proceeds totaling $17,848 and incurred an additional $758 of loss.

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Notes Receivable

12 Months Ended

Dec. 31, 2022

Notes Receivable.

Notes Receivable

7. Notes Receivable

Notes receivable consists of mezzanine loans and working capital loans. The following table summarizes our investments in notes receivable at December 31, 2022 (dollar amounts in thousands):

Interest			Type of	Gross				Type of
Rate	IRR	Maturity	Loan	Investment			# of loans	Property
5.0%	—	2023	Working capital	$	380		1	ALF
7.0%	—	2023	Working capital		500		1	ALF
8.0%	12.0%	2023	Mezzanine		7,460		1	ALF
5.0%	—	2024	Working capital		184		1	ALF
8.0%	10.5%	2024	Mezzanine		4,355	(1)	1	ILF
4.0%	—	2024	Working capital		13,531		1	SNF
5.0%	—	2025	Working capital		932		1	ALF
7.5%	—	2027	Working capital		550		1	ALF
8.0%	11.0%	2027	Mezzanine		25,000		1	ALF
6.5%	—	2030	Working capital		138		1	SNF
7.1%	—	2030	Working capital		1,607		2	ALF
7.0%	—	2031	Working capital		2,693		1	ALF
8.0%	—	2032	Working capital		1,642		1	SNF
				$	58,972		14

(1) Subsequent to December 31, 2022, we received $4,545 which includes a prepayment fee and the exit IRR totaling $190, from a mezzanine loan early payoff. The mezzanine loan was on a 136-unit in Oregon.

The following table is a summary of our notes receivable components at December 31, 2022 and 2021 (in thousands):

	At December 31,
	2022		2021
Mezzanine loans (1) (2)	$	36,815	$	11,815
Other loans		22,157		16,808
Notes receivable credit loss reserve		(589)		(286)
Total	$	58,383	$	28,337

(1) Subsequent to December 31, 2022, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190 from a mezzanine loan early payoff. The mezzanine loan was on a 136-unit ILF in Oregon.

(2) During 2022, we originated a $25,000 mezzanine loan for the recapitalization of a five-property seniors housing portfolio. The mezzanine loan has a term of approximately five years, with two one-year extension options and bears interest at 8% with an IRR of 11%. The five communities are located in Oregon and Montana, have a total of 621 units, and include ILF, ALF and MC.

The following table summarizes our notes receivable activity for the years ended December 31, 2022 through 2020 (in thousands):

	Year Ended December 31,
		2022			2021			2020
Advances under notes receivable	$	37,192	(1)	$	16,353	(2)	$	2,078
Interest reserve withheld		—			353			—
Principal payments received under notes receivable (3)		(6,843)			(2,694)			(5,275)
Reclassified to lease incentives		—			—			(300)	(4)
Provision (recovery) for credit losses		(303)			(140)			35
Net increase (decrease) in notes receivable	$	30,046		$	13,872		$	(3,462)

(1) Includes origination of a $25,000 mezzanine loan for the recapitalization of five ALFs located in Oregon and Montana. Additionally includes origination of a working capital loan for a commitment of up to $2,000, of which $1,867 has been funded and $9,761 of funding under a working capital loan to HMG Healthcare, LLC.

(2) Funding under working capital notes and mezzanine loans with interest ranging between 4.0% and 8.0%. During 2021, we originated a $4,355 mezzanine loan and withheld 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 10.5% IRR. Additionally, we provided an operator a $25,000 secured working capital loan to facilitate the transition of the 11 properties from Senior Care and Abri Health and funded $9,900 under this working capital loan.

(3) Subsequent to December 31, 2022, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190, from a mezzanine loan early payoff. The mezzanine loan was on a 136-unit ILF in Oregon.

(4) Represents an interim working capital loan related to a development project which matured upon completion of the development project and commencement of the lease.

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Lease Incentives

12 Months Ended

Dec. 31, 2022

Lease Incentives

Lease Incentives

8. Lease Incentives

The following table summarizes lease incentives as of December 31, 2022 and 2021 (in thousands):

	December 31,
		2022		2021
Non-contingent lease incentives	$	1,789	$	2,678

The following table summarizes our non-contingent lease incentive activity for the years ended December 31, 2022, 2021 and 2020 (in thousands):

	Year Ended December 31,
		2022			2021		2020
Lease incentives funded	$	418		$	824	$	220
Amortization of lease incentives		(877)			(608)		(426)
Adjustment for collectability of lease incentives		(256)	(1)		—		—
Other adjustments		(174)	(2)		—		115	(3)
Net (decrease) increase in non-contingent lease incentives	$	(889)		$	216	$	(91)

(1) Represents the lease incentive balance write-off related to a closed property and subsequent lease termination and lease incentive balance write-off related to 12 ALFs transitioned to an existing operator.

(2) Primarily relates to the sale of two ALFs in California during the second quarter of 2022.

(3) We reclassified a $300 interim working capital loan as lease incentive. See Note 7. Notes Receivable for further discussion. Additionally, we wrote-off $185 of lease incentive related to a master lease for which we determined it was not probable we will collect substantially all of the contractual lease obligations through maturity. See Note 5. Real Estate Investments for further discussion.

Non-contingent lease incentives represent payments made to our lessees for various reasons including entering into a new lease or lease amendments and extensions. Contingent lease incentives represent potential contingent earn-out payments that may be made to our lessees in the future, as part of our lease agreements. From time to time, we may commit to provide contingent payments to our lessees, upon our properties achieving certain rent coverage ratios. Once

the contingent payment becomes probable and estimable, the contingent payment is recorded as a lease incentive. Lease incentives are amortized as a yield adjustment to rental income over the remaining life of the lease.

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Debt Obligations

12 Months Ended

Dec. 31, 2022

Debt Obligations

Debt Obligations

9. Debt Obligations

Unsecured Credit Facility. We have an unsecured credit agreement (the “Credit Agreement”) that provides for an aggregate commitment of the lenders of up to $500,000,000 comprising of a $400,000,000 revolving credit facility (the “Revolving Line of Credit”) and two $50,000,000 term loans (the “Term Loans”). The Credit Agreement permits us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1,000,000,000. The Revolving Line of Credit matures on November 19, 2025 and provides for a one-year extension option at our discretion, subject to customary conditions. The Term Loans mature on November 19, 2025 and November 19, 2026. During the fourth quarter of 2022, we entered into the First Amendment (the “Amended Credit Agreement”) to replace LIBOR with SOFR, plus a credit spread adjustment of 10 basis points (“Adjusted SOFR”), as the reference rate for purpose of calculating interest under the Amended Credit Agreement. Other material terms of the Credit Agreement remain unchanged.

Based on our leverage at December 31, 2022, the Revolving Line of Credit provides for interest annually at Adjusted SOFR plus 115 points and a facility fee of 20 basis point and the Term Loans provide for interest annually at Adjusted SOFR plus 135 points.

Interest Rate Swap Agreements. In connection with entering into the Term Loans as discussed above, we entered into two receive variable/pay fixed interest rate swap agreements (“Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that will effectively lock-in the forecasted interest payments on the Term Loans’ borrowings over the four and five year terms of the loans. The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value, with changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. In connection with entering into the Amended Credit Agreement discussed above, we entered into amendments to our Interest Rate Swaps to account for SOFR as the updated reference rate in the Amended Credit Agreement. During the year ended December 31, 2022 and 2021, we recorded $8,891,000 increase and $172 decrease, respectively, in fair value of Interest Rate Swaps.

As of December 31, 2022, the terms of our Interest Rate Swaps were as follows (dollar amounts in thousands):

						Notional	Fair Value at
Date Entered	Maturity Date	Swap Rate		Rate Index		Amount		December 31, 2022
November 2021	November 19, 2025	2.62	%	1-month SOFR	$	50,000	$	4,003
November 2021	November 19, 2026	2.76	%	1-month SOFR		50,000		4,716
					$	100,000	$	8,719

Senior Unsecured Notes. We have senior unsecured notes held by institutional investors with interest rates ranging from 3.66% to 5.03%. The senior unsecured notes mature between 2024 and 2033. During the twelve months ended December 31, 2022, we sold $75,000,000 aggregate principal amount of 3.66% senior unsecured notes. The notes have an average 10-year life, scheduled principal payments and mature in May 2033.

The senior unsecured notes and Credit Agreement, including the Revolving Line of Credit and the Term Loans, contain financial covenants, which are measured quarterly, require us to maintain, among other things:

(i) a ratio of total indebtedness to total asset value not greater than 0.5 to 1.0;

(ii) a ratio of secured debt to total asset value not greater than 0.35 to 1.0;

(iii) a ratio of unsecured debt to the value of the unencumbered asset value not greater than 0.6 to 1.0; and

(iv) a ratio of EBITDA, as calculated in the Unsecured Credit Agreement, to fixed charges not less than 1.50 to 1.0.

At December 31, 2022, we were in compliance with all applicable financial covenants. These debt obligations also contain additional customary covenants and events of default that are subject to a number of important and

significant limitations, qualifications and exceptions.

The following table sets forth information regarding debt obligations by component as of December 31, 2022 and 2021 (dollar amounts in thousands):

		At December 31, 2022				At December 31, 2021
	Applicable			Available				Available
	Interest	Outstanding		for		Outstanding		for
Debt Obligations	Rate (1)	Balance		Borrowing		Balance		Borrowing
Revolving line of credit (2)	5.38%	$	130,000	$	270,000	$	110,900	$	289,100
Term loans, net of debt issue costs	2.69%		99,511		—		99,363		—
Senior unsecured notes, net of debt issue costs (3)	4.25%		538,343		—		512,456		—
Total	4.24%	$	767,854	$	270,000	$	722,719	$	289,100

(1) Represents weighted average of interest rate as of December 31, 2022.

(2) Subsequent to December 31, 2022, we had a net borrowing of $162,700 under our unsecured revolving line of credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our unsecured revolving line of credit.

(3) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes, accordingly we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

Our borrowings and repayments for the years ended December 31, 2022, 2021 and 2020 are as follows (in thousands):

	Year Ended December 31,
	2022				2021				2020
Debt Obligations		Borrowings		Repayments	Borrowings		Repayments		Borrowings		Repayments
Revolving line of credit (1)	$	194,000	$	(174,900)	$	204,400	$	(183,400)	$	24,000	$	(28,000)
Term loans		—		—		100,000		—		—		—
Senior unsecured notes (2)		75,000		(48,160)		—		(47,160)		—		(40,160)
Total	$	269,000	$	(223,060)	$	304,400	$	(230,560)	$	24,000	$	(68,160)

(1) Subsequent to December 31, 2022, we had a net borrowing of $162,700 under our unsecured revolving line of credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our unsecured revolving line of credit.

(2) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes, accordingly we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

Scheduled Principal Payments. The following table represents our long-term contractual obligations (scheduled principal payments and amounts due at maturity) as of December 31, 2022, and excludes the effects of interest and debt issue costs (in thousands):

	Total			2023			2024		2025			2026		2027		Thereafter
Revolving line of credit	$	130,000	(1)	$	—		$	—	$	130,000	(1)	$	—	$	—	$	—
Term loans		100,000			—			—		50,000			50,000		—		—
Senior unsecured notes		539,820	(2)		49,160	(2)		49,160		49,500			51,500		54,500		286,000
	$	769,820		$	49,160		$	49,160	$	229,500		$	101,500	$	54,500	$	286,000

(1) Subsequent to December 31, 2022, we borrowed $162,700 under our unsecured revolving line of credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our unsecured revolving line of credit.

(2) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes, accordingly we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

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Equity

12 Months Ended

Dec. 31, 2022

Equity

Equity

10. Equity

Non-controlling Interests. We have entered into partnerships to develop and/or own real estate. Given that our limited members do not have the substantive kick-out rights, liquidation rights, or participation rights, we have concluded that the partnerships are VIEs. As we exercise power over and receive benefits from the VIEs, we are considered the primary beneficiary. Accordingly, we consolidate the VIEs and record the non-controlling interests on the consolidated financial statements. As of December 31, 2022, we have the following consolidated VIEs (in thousands):

						Gross
Investment			Property			Consolidated		Non-Controlling
Year (1)	Purpose		Type	State		Assets		Interests
2022	Owned real estate	(2)	SNF	FL	$	76,767	$	14,325
2018	Owned real estate		ILF	OR		14,650		2,906
2018	Owned real estate and development		ALF/MC	OR		18,452		1,164
2017	Owned real estate and development		ILF/ALF/MC	WI		22,007		2,305
2017	Owned real estate		ALF/MC	SC		11,680		1,240
Total					$	143,556	$	21,940

(1) Subsequent to December 31, 2022, we entered into a $121,321 JV with an affiliate of an existing operator and contributed $117,900 into the JV that purchased 11 ALF and MC from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit IRR of 9.0%. In accordance with GAAP, the communities acquired by the JV are required to be presented as a Financing receivable on our Consolidated Balance Sheets. See Note 2. Summary of Significant Accounting Policies and Note 5. Real Estate Investments for more information.

(2) During 2022, we entered into a joint venture and contributed $61,661 into the JV that purchased three SNFs located in Florida for $75,825. Our JV partner contributed the remaining $14,325 of equity. The JV leased the centers back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year. In accordance with GAAP, the centers acquired by the JV are required to be presented as a Financing receivable on our Consolidated Balance Sheets. See Note 2. Summary of Significant Accounting Policies and Note 5. Real Estate Investments for more information.

Common Stock. We have separate equity distribution agreements (collectively, “Equity Distribution Agreements”) to offer and sell, from time to time, up to $200,000,000 in aggregate offering price of shares of our common shares. The Equity Distribution Agreements provide for sales of common shares to be made by means of ordinary brokers’ transactions, which may include block trades, or transactions that are deemed to be “at the market” offerings. During the years ended December 31, 2021 and 2020, no shares were issued under the Equity Distribution Agreements. During the year ended December 31, 2022, we sold 1,792,400 shares of common stock for $68,156,000 in net proceeds under our Equity Distribution Agreements. In conjunction with the sale of common stock, we incurred $513,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received. At December 31, 2022, we had $130,631,000 available under the Equity Distribution Agreements.

During the years 2022, 2021 and 2020, we acquired 39,463 shares, 87,249 shares and 76,574 shares, respectively, of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

Stock Repurchase Plan. In March 2020, our Board of Directors authorized the repurchase of up to 5,000,000 outstanding shares of common stock. Due to the rising level of uncertainty in financial markets and the adverse effects of COVID-19 on the public health and our operators, our Board of Directors terminated the stock repurchase plan on March 25, 2020. During the year ended December 31, 2020, we purchased 615,827 shares at an average price of $29.25 per share, including commissions, for a total purchase price of $18,012,000.

Shelf Registration Statement. We have an automatic shelf registration statement on file with the SEC, and currently have the ability to file additional automatic shelf registration statements, to provide us with capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units. We may from time to time publicly raise capital under our automatic shelf registration statement in amounts, at prices, and on

terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering. Our shelf registration statement expires on February 17, 2025.

Distributions. We declared and paid the following cash dividends (in thousands):

	Year Ended December 31,
	2022				2021						2020
	Declared		Paid		Declared			Paid			Declared			Paid
Common Stock (1)	$	91,509	$	91,509	$	90,494	(2)	$	90,494	(2)	$	90,262	(2)	$	90,262	(2)

(1) Represents $0.19 per share per month for the years ended December 31, 2022, 2021 and 2020.

(2) During the years ended December 31, 2021 and 2020, we paid $764 and $586, respectively as a result of vesting of the performance-based stock units.

In January 2023, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of January, February and March 2023 payable on January 31, February 28, and March 31, 2023, respectively, to stockholders of record on January 23, February 17, and March 23, 2023, respectively.

Stock Based Compensation Plans. During 2021, we adopted, and our stockholders approved the 2021 Equity Participation Plan (the “2021 Plan”) which replaces the 2015 Equity Participation Plan (the “2015 Plan”). Under the 2021 Plan, 1,900,000 shares of common stock have been authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 plan after December 31, 2020 and prior to adoption. In addition, any shares that are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan. Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2021 Plan and the 2015 Plan are set by our compensation committee at its discretion. As of December 31, 2022, we have 1,545,722 shares of common stock reserved for awards under the 2021 Plan.

Restricted Stock and Performance-Based Stock Units. Restricted stock activity for the years ended December 31, 2022, 2021 and 2020 was as follows:

	Year Ended December 31,
	2022		2021		2020
Outstanding, January 1		197,422		180,440		163,569
Granted		135,210		110,348		101,348
Vested		(103,396)		(93,366)		(84,477)
Outstanding, December 31		229,236		197,422		180,440

During the years ended December 31, 2022, 2021 and 2020, we granted 86,332, 71,892 and 66,027, respectively, of performance-based stock units. Additionally, no performance-based stock units vested during the twelve months ended December 31, 2022. During the years ended December 31, 2021 and 2020, the number of vested performance-based stock units were 108,720 and 81,574, respectively. Total compensation expense related to restricted stock and performance-based stock units for the years ended December 31, 2022, 2021 and 2020 were $7,964,000, $7,760,000 and $7,012,000.

During 2022, 2021 and 2020, we granted 221,542, 182,240 and 167,375 shares of restricted common stock and performance-based stock units, respectively, under the 2021 Plan and 2015 Plan as follows:

	No. of	Price per
Year	Shares/Units	Share		Reward Type	Vesting Period
2022	122,865	$	33.94	Restricted stock	ratably over 3 years
	86,332	$	33.94	Performance-based stock units	TSR targets (1)
	12,345	$	38.48	Restricted stock	May 25,2023
	221,542
2021	95,293	$	42.27	Restricted stock	ratably over 3 years
	71,892	$	42.27	Performance-based stock units	TSR targets (1)
	12,055	$	39.40	Restricted stock	May 26, 2022
	3,000	$	43.14	Restricted stock	April 1, 2022
	182,240
2020	76,464	$	48.95	Restricted stock	ratably over 3 years
	66,027	$	49.98	Performance-based stock units	TSR targets (1)
	9,884	$	38.45	Restricted stock	May 27, 2021
	15,000	$	38.45	Restricted stock	ratably over 3 years
	167,375

(1) Vesting is based on achieving certain total shareholder return (“TSR”) targets in 4 years with acceleration opportunity in 3 years.

At December 31, 2022, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (dollar amount in thousands):

	Remaining
	Compensation
Vesting Date	Expense
2023	$	5,603
2024		2,853
2025		309
Total	$	8,765

Stock Options. During 2022, 2021 and 2020, we did not issue any stock options. Nonqualified stock option activity for the years ended December 31, 2022, 2021 and 2020, was as follows:

				Weighted Average
	Shares			Price
	2022	2021	2020	2022			2021	2020
Outstanding, January 1	15,000	15,000	15,000	$	38.43	$	38.43	$	38.43
Granted	—	—	—		n/a		n/a		n/a
Exercised	—	—	—		n/a		n/a		n/a
Canceled	(5,000)	—	—	$	38.43		n/a		n/a
Outstanding, December 31	10,000	15,000	15,000	$	38.43	$	38.43	$	38.43
Exercisable, December 31(1)	10,000	15,000	15,000	$	38.43	$	38.43	$	38.43

(1) The aggregate intrinsic value of exercisable options at December 31, 2022, based upon the closing price of our common shares at December 30, 2022, the last trading day of 2022, was approximately $0. Options exercisable at December 31, 2022, 2021 and 2020 have a weighted average remaining contractual life of approximately 0.7 years, 1.2 years, and 2.2 years, respectively.

We use the Black-Scholes-Merton formula to estimate the value of stock options granted to employees. This model requires management to make certain estimates including stock volatility, expected dividend yield and the expected term. Compensation expense related to the vesting of stock options for the years ended December 31, 2022, 2021 and 2020 was $0.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies

Commitments and Contingencies

11. Commitments and Contingencies

At December 31, 2022, we had commitments as follows (in thousands):

						Total
	Investment			2022		Commitment		Remaining
	Commitment			Funding		Funded		Commitment
Real estate properties (Note 5. Real Estate Investments)	$	22,102	(1)	$	7,263	$	8,315	$	13,787
Accrued incentives and earn-out liabilities (Note 8. Lease Incentives)		19,000	(2)		—		—		19,000
Mortgage loans (Note 5. Real Estate Investments)		32,507	(3)		5,873		9,613		22,894
Notes receivable (Note 7. Notes Receivable)		27,541			12,192		15,962		11,579
Total	$	101,150		$	25,328	$	33,890	$	67,260

(1) Represents commitments to purchase land and improvements, if applicable, and to develop, re-develop, renovate or expand seniors housing and health care properties.

(2) Includes an earn-out payment of up to $3,000 to an operator under a master lease on four SNFs in Texas which were acquired during 2022. The master lease allows either an earn-out payment up to $3,000 or a purchase option. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. If neither option is elected within the timeframe defined in the lease, both elections are terminated.

(3) Represents $14,507 of commitments to expand and renovate the seniors housing and health care properties securing the mortgage loans and $18,000 represents contingent funding upon the borrower achieving certain coverage ratios.

Also, some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. See Note 5. Real Estate Investments for a table summarizing information about our purchase options.

We are a party from time to time to various general and professional liability claims and lawsuits asserted against the lessees or borrowers of our properties, which in our opinion are not singularly or in the aggregate material to our results of operations or financial condition. These types of claims and lawsuits may include matters involving general or professional liability, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder. We believe that these matters are the responsibility of our lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable leases or mortgages. We intend to continue to vigorously defend such claims.

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Distributions

12 Months Ended

Dec. 31, 2022

Distributions

Distributions

12. Distributions

We must distribute at least 90% of our taxable income in order to continue to qualify as a REIT. This distribution requirement can be satisfied by current year distributions or, to a certain extent, by distributions in the following year.

For federal tax purposes, distributions to stockholders are treated as ordinary income, capital gains, return of capital or a combination thereof. Distributions for 2022, 2021 and 2020 were cash distributions. The federal income tax classification of the per share common stock distributions are as follows (unaudited):

	Year Ended December 31,
	2022		2021		2020
Ordinary taxable distribution	$	1.095	$	1.220	$	0.936
Return of capital		—		0.750		—
Unrecaptured Section 1250 gain		0.502		0.252		0.894
Long-term capital gain		0.683		0.058		0.450
Total	$	2.280	$	2.280	$	2.280

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Net Income Per Common Share

12 Months Ended

Dec. 31, 2022

Net Income Per Common Share

Net Income Per Common Share

13. Net Income Per Common Share

Basic and diluted net income per share was as follows (in thousands except per share amounts):

	For the year ended December 31,
	2022		2021			2020
Net income	$	100,584	$	56,224		$	95,677
Less income allocated to non-controlling interests		(560)		(363)			(384)
Less income allocated to participating securities:
Non-forfeitable dividends on participating securities		(531)		(458)			(397)
Income allocated to participating securities		(49)		—			(25)
Total net income allocated to participating securities		(580)		(458)			(422)
Net income available to common stockholders		99,444		55,403			94,871
Effect of dilutive securities:
Participating securities (1)		—		—			—
Net income for diluted net income per share	$	99,444	$	55,403		$	94,871
Shares for basic net income per share		39,894		39,156			39,179
Effect of dilutive securities:
Stock options (2)		—		—			—
Performance-based stock units		173		—	(3)		85
Participating securities (1)		—		—			—
Total effect of dilutive securities		173		—			85
Shares for diluted net income per share		40,067		39,156			39,264
Basic net income per share	$	2.49	$	1.41		$	2.42
Diluted net income per share	$	2.48	$	1.41		$	2.42

(1) For the years ended December 31, 2022, 2021 and 2020, the participating securities were excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

(2) For the years ended December 31, 2022, 2021and 2020, the stock options were excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

(3) For the year ended December 31, 2021, no performance-based stock units would be earned based on TSR targets.

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Quarterly Financial Information

12 Months Ended

Dec. 31, 2022

Quarterly Financial Information

Quarterly Financial Information

14. Quarterly Financial Information

	For the quarter ended
	March 31,		June 30,		September 30,		December 31,
	(unaudited, in thousands except per share amounts)
2022
Revenues	$	40,787	$	43,024	$	43,503	$	47,839
Net income available to common stockholders	$	14,275	$	54,065	$	13,159	$	17,809
Net income per common share available to common stockholders:
Basic	$	0.36	$	1.37	$	0.33	$	0.44
Diluted	$	0.36	$	1.36	$	0.32	$	0.44
Dividends per share declared	$	0.57	$	0.57	$	0.57	$	0.57
Dividends per share paid	$	0.57	$	0.57	$	0.57	$	0.57
2021
Revenues	$	40,280	$	38,129	$	37,472	$	39,441
Net income available to common stockholders	$	13,642	$	18,126	$	10,909	$	12,726
Net income per common share available to common stockholders:
Basic	$	0.35	$	0.46	$	0.28	$	0.32
Diluted	$	0.35	$	0.46	$	0.28	$	0.32
Dividends per share declared	$	0.57	$	0.57	$	0.57	$	0.57
Dividends per share paid	$	0.57	$	0.57	$	0.57	$	0.57

NOTE: Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of per share amounts for the quarters may not agree with the per share amounts for the year.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2022

Fair Value Measurements

Fair Value Measurements

15. Fair Value Measurements

In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses reported in earnings. We did not adopt the elective fair market value option for our financial assets and financial liabilities.

The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments. We do not invest our cash in auction rate securities. The carrying value and fair value of our financial instruments as of December 31, 2022 and 2021 assuming election of fair value for our financial assets and financial liabilities were as follows (in thousands):

	At December 31, 2022					At December 31, 2021
	Carrying		Fair			Carrying		Fair
	Value		Value			Value		Value
Financing receivable, net of credit loss reserve	$	75,999	$	76,033	(1)	$	—	$	—
Mortgage loans receivable, net of credit loss reserve		389,728		461,276	(2)		344,442		405,162	(2)
Notes receivable, net of credit loss reserve		58,383		61,858	(3)		28,337		28,653	(3)
Revolving line of credit		130,000		130,000	(4)		110,900		110,900	(4)
Term loans, net of debt issue costs		99,511		100,000	(4)		99,363		100,000	(4)
Senior unsecured notes, net of debt issue costs		538,343		477,653	(5)		512,456		540,045	(5)

(1) Our investment in financing receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate used to value our future cash inflows of the financing receivable at December 31, 2022 was 7.6%.

(2) Our investment in mortgage loans receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash inflows of the mortgage loans receivable at December 31, 2022 and 2021 was 9.3% and 9.5%, respectively.

(3) Our investments in notes receivable are classified as Level 3. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash flows of the notes receivable at December 31, 2022 and 2021, were 7.1% and 5.6%, respectively.

(4) Our revolving line of credit and term loans bear interest at a variable interest rate. The estimated fair value of our revolving line of credit and term loans approximated their carrying values at December 31, 2022 and 2021 based upon prevailing market interest rates for similar debt arrangements.

(5) Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is measured based upon management’s estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities. At December 31, 2022, the discount rate used to value our future cash outflow of our senior unsecured notes was 6.50% for those maturing before year 2030 and 7.00% for those maturing at or beyond year 2030. At December 31, 2021, the discount rate used to value our future cash outflow of our senior unsecured notes was 3.0% for those maturing before year 2030 and 3.25% for those maturing beyond year 2030.

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Subsequent Events

12 Months Ended

Dec. 31, 2022

Subsequent Events

Subsequent Events

16. Subsequent Events

The following events occurred subsequent to the balance sheet date:

Lease Renewals. A master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed at the contractual rate for another five years extending the maturity to November 2028. The centers have a total 216 beds and are located in Florida.

Financing Receivable. We entered into a $121,321,000 JV with an affiliate of an existing operator and contributed $117,900,000 into the JV that purchased 11 assisted living and memory care communities from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee

with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit IRR of 9.0%. In accordance with GAAP, the communities acquired by the JV are required to be presented as a Financing receivable on our Consolidated Balance Sheets. See Note 2. Summary of Significant Accounting Policies and Note 5. Real Estate Investments for more information.

Mortgage Loans. We originated a $10,750,000 mortgage loan secured by a memory care community located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%.

Notes Receivable. We received $4,545,000, which includes a prepayment fee and the exit IRR totaling $190,000, from a mezzanine loan repayment. The mezzanine loan was on a 136-unit independent living community in Oregon.

Unconsolidated Joint Ventures. We received a note of intent to redeem our $13,000,000 preferred equity investment in a joint venture to develop a 267-unit independent and assisted living community in Washington. We anticipate receiving $1,675,000 of additional income associated with the redemption representing the 14% IRR.

Revolving Line of Credit. We borrowed $162,700,000 under our unsecured revolving line of credit. Accordingly, we have $292,700,000 outstanding and $107,300,000 available for borrowing under our unsecured revolving line of credit.

Senior Unsecured Notes. We repaid $7,000,000 in regular scheduled principal payments under our senior unsecured notes. Accordingly, we have $531,343,000 outstanding, net of debt issue costs, under our senior unsecured notes.

Equity. We declared a monthly cash dividend of $0.19 per share on our common stock for the months of January, February, and March 2023, payable on January 31, February 28, and March 31, 2023, respectively, to stockholders of record on January 23, February 17, and March 23, 2023, respectively.

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SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 31, 2022

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS

LTC PROPERTIES, INC.

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

			Additions
			(Recovered)
	Balance at		charged to		Charged to
	beginning of		costs and		other				Balance at end
Account Description	period		expenses		accounts (1)		Deductions (2)		of period
Year ended December 31, 2020
Loan loss reserves	$	2,560	$	32	$	—	$	—	$	2,592
Other notes receivable allowance		181		(35)		—		—		146
Straight-line rent receivable allowance		—		—		—		—		—
	$	2,741	$	(3)	$	—	$	—	$	2,738
Year ended December 31, 2021
Loan loss reserves	$	2,592	$	881	$	—	$	—	$	3,473
Other notes receivable allowance		146		140		—		—		286
Straight-line rent receivable allowance		—		—		—		—		—
	$	2,738	$	1,021	$	—	$	—	$	3,759
Year ended December 31, 2022
Loan loss reserves	$	3,473	$	457	$	—	$	—	$	3,930
Financing receivable loss reserve		—		768		—		—		768
Other notes receivable allowance		286		303		—		—		589
	$	3,759	$	1,528	$	—	$	—	$	5,287

(1) There were no charges to other accounts.

(2) Deductions represent uncollectable accounts written off.

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SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION

12 Months Ended

Dec. 31, 2022

SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION

SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION

LTC PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

(in thousands)

							Costs
							capitalized		Gross amount at which carried at
			Initial cost to company				subsequent		December 31, 2022
					Building and		to				Building and				Accum		Construction/	Acquisition
	Encumbrances		Land		improvements		acquisition		Land		improvements		Total (1)		deprec.		renovation date	date
Skilled Nursing Properties:
134 Alamogordo, NM	$	—	$	210	$	2,593	$	641	$	210	$	3,234	$	3,444	$	1,742	1985	2001
218 Albuquerque, NM		—		1,696		3,891		530		1,696		4,421		6,117		2,293	2008	2005
219 Albuquerque, NM		—		1,950		8,910		207		1,950		9,117		11,067		4,513	1982	2005
220 Albuquerque, NM		—		2,463		7,647		9		2,463		7,656		10,119		3,751	1970	2005
252 Amarillo, TX		—		844		—		7,925		844		7,925		8,769		2,488	2013	2011
247 Arlington, TX		—		1,016		13,649		132		1,016		13,781		14,797		4,988	2007	2011
325 Austin, TX		—		896		9,562		—		896		9,562		10,458		202	2017	2022
319, Blue Springs, MO		—		2,644		13,942		73		2,644		14,015		16,659		1,508	2020	2019
007 Bradenton, FL		—		330		2,720		160		330		2,880		3,210		2,418	2012	1993
256 Brownwood, TX		—		164		6,336		29		164		6,365		6,529		2,188	2011	2012
177 Chesapeake, VA		—		388		3,469		2,777		388		6,246		6,634		4,110	2017	1995
257 Cincinnati, OH		—		1,890		25,110		224		1,890		25,334		27,224		5,945	2009	2012
125 Clovis, NM		—		561		5,539		307		561		5,846		6,407		3,155	2006	2001
129 Clovis, NM		—		598		5,902		59		598		5,961		6,559		3,236	1995	2001
267 Cold Spring, KY		—		2,050		21,496		196		2,050		21,692		23,742		6,014	2014	2012
253 Colton, CA		—		2,474		15,158		—		2,474		15,158		17,632		4,803	1990	2011
246 Crowley, TX		—		2,247		14,276		187		2,247		14,463		16,710		5,266	2007	2011
235 Daleville, VA		—		279		8,382		—		279		8,382		8,661		3,180	2005	2010
258 Dayton, OH		—		373		26,627		—		373		26,627		27,000		6,344	2010	2012
196 Dresden, TN		—		31		1,529		1,073		31		2,602		2,633		1,400	2014	2000
298 Forth Worth, TX		—		2,785		7,546		413		2,785		7,959		10,744		3,086	1998	2015
326 Forth Worth, TX		—		922		12,268		—		922		12,268		13,190		267	2017	2022
026 Gardendale, AL		—		100		7,550		2,084		100		9,634		9,734		7,078	2011	1996
248 Granbury, TX		—		836		6,693		363		836		7,056		7,892		3,132	2008	2011
250 Hewitt, TX		—		1,780		8,220		391		1,780		8,611		10,391		2,787	2008	2011
318 Kansas City, MO		—		1,229		18,369		69		1,229		18,438		19,667		1,755	2018	2019
008 Lecanto, FL		—		351		2,665		2,737		351		5,402		5,753		4,287	2012	1993
322 Longview, TX		—		1,405		12,176		—		1,405		12,176		13,581		1,274	2014	2020
300 Mansfield, TX		—		2,890		13,110		—		2,890		13,110		16,000		3,377	2015	2016
053 Mesa, AZ		—		305		6,909		1,876		305		8,785		9,090		6,610	1996	1996
242 Mission, TX		—		1,111		16,602		82		1,111		16,684		17,795		5,727	2004	2010
233 Nacogdoches, TX		—		394		7,456		268		394		7,724		8,118		2,848	1991	2010
249 Nacogdoches, TX		—		1,015		11,109		358		1,015		11,467		12,482		4,575	2007	2011
245 Newberry, SC		—		439		4,639		879		439		5,518		5,957		2,374	1995	2011
244 Newberry, SC		—		919		5,454		200		919		5,654		6,573		2,277	2001	2011
251 Pasadena, TX		—		1,155		14,345		522		1,155		14,867		16,022		4,685	2005	2011
193 Phoenix, AZ		—		300		9,703		92		300		9,795		10,095		6,608	1985	2000
094 Portland, OR		—		100		1,925		3,152		100		5,077		5,177		4,147	2007	1997
254 Red Oak, TX		—		1,427		17,173		244		1,427		17,417		18,844		5,550	2002	2012
197 Ripley, TN		—		20		985		1,638		20		2,623		2,643		1,468	2014	2000

LTC PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

(in thousands)

							Costs
							capitalized		Gross amount at which carried at
			Initial cost to company				subsequent		December 31, 2022
					Building and		to				Building and				Accum		Construction/	Acquisition
	Encumbrances		Land		improvements		acquisition		Land		improvements		Total (1)		deprec.		renovation date	date
133 Roswell, NM	$	—	$	568	$	5,235	$	1,396	$	568	$	6,631	$	7,199	$	3,521	1975	2001
325 San Antonio, TX		—		1,676		15,470		20		1,676		15,490		17,166		320	2018	2022
281 Slinger, WI		—		464		13,482		—		464		13,482		13,946		3,916	2014	2015
234 St. Petersburg, FL		—		1,070		7,930		500		1,070		8,430		9,500		2,892	1988	2010
243 Stephenville, TX		—		670		10,117		616		670		10,733		11,403		3,811	2009	2010
178 Tappahannock, VA		—		375		1,327		397		375		1,724		2,099		1,569	1978	1995
270 Trinity, FL		—		1,653		12,748		—		1,653		12,748		14,401		3,781	2008	2013
192 Tucson, AZ		—		276		8,924		112		276		9,036		9,312		6,091	1992	2000
305 Union, KY		—		858		24,116		—		858		24,116		24,974		3,426	2019	2016
299 Weatherford, TX		—		836		11,902		280		836		12,182		13,018		3,962	1996	2015
323 Webster, TX		—		2,310		8,713		—		2,310		8,713		11,023		200	2018	2022
236 Wytheville, VA		—		647		12,167		—		647		12,167		12,814		5,363	1996	2010
Skilled Nursing Properties	$	—	$	53,990	$	513,766	$	33,218	$	53,990	$	546,984	$	600,974	$	182,308
Assisted Living Properties:
077 Ada, OK		—		100		1,650		180		100		1,830		1,930		1,106	1996	1996
105 Arvada, CO		—		100		2,810		7,072		100		9,882		9,982		4,027	2014	1997
304 Athens, GA		—		1,056		13,326		111		1,056		13,437		14,493		2,422	2016	2016
063 Athens, TX		—		96		1,510		113		96		1,623		1,719		1,125	1995	1996
320 Auburn Hills, MI		—		1,964		4,577		1,149		1,964		5,726		7,690		1,056	1995	2019
269 Aurora, CO		—		850		8,583		—		850		8,583		9,433		2,566	2014	2013
260 Aurora, CO		—		831		10,071		327		831		10,398		11,229		2,866	1999	2012
117 Beatrice, NE		—		100		2,173		243		100		2,416		2,516		1,517	1997	1997
277 Burr Ridge, IL		—		1,400		11,102		—		1,400		11,102		12,502		2,735	2016	2014
278 Castle Rock, CO		—		759		5,091		—		759		5,091		5,850		1,573	2012	2014
311 Cedarburg, WI		—		924		21,083		—		924		21,083		22,007		2,946	2019	2017
160 Central, SC		—		100		2,321		119		100		2,440		2,540		1,272	1998	1999
263 Chatham, NJ		—		5,365		36,399		587		5,365		36,986		42,351		10,105	2002	2012
307 Clovis, CA		—		2,542		19,126		—		2,542		19,126		21,668		3,022	2014	2017
308 Clovis, CA		—		3,054		14,172		—		3,054		14,172		17,226		2,154	2016	2017
279 Corpus Christi, TX		—		880		11,440		298		880		11,738		12,618		2,753	2016	2015
292 De Forest, WI		—		485		5,568		47		485		5,615		6,100		1,191	2006	2015
057 Dodge City, KS		—		84		1,666		30		84		1,696		1,780		1,156	1995	1995
083 Durant, OK		—		100		1,769		157		100		1,926		2,026		1,162	1997	1997
107 Edmond, OK		—		100		1,365		659		100		2,024		2,124		1,226	1996	1997
163 Ft. Collins, CO		—		100		2,961		3,674		100		6,635		6,735		3,147	2014	1999
170 Ft. Collins, CO		—		100		3,400		4,928		100		8,328		8,428		3,669	2014	1999
132 Ft. Meyers, FL		—		100		2,728		272		100		3,000		3,100		1,717	1998	1998
315 Ft. Worth, TX		—		1,534		11,099		34		1,534		11,133		12,667		1,424	2014	2018
100 Fremont ,OH		—		100		2,435		203		100		2,638		2,738		1,663	1997	1997
266 Frisco, TX		—		1,000		5,154		—		1,000		5,154		6,154		1,667	2014	2012
314 Frisco, TX		—		2,216		10,417		119		2,216		10,536		12,752		1,367	2015	2018
296 Glenview, IL		—		2,800		14,248		—		2,800		14,248		17,048		2,764	2017	2015
167 Goldsboro, NC		—		100		2,385		170		100		2,555		2,655		1,217	1998	1999
056 Great Bend, KS		—		80		1,570		68		80		1,638		1,718		1,234	1995	1995
102 Greeley, CO		—		100		2,310		612		100		2,922		3,022		1,686	1997	1997
284 Green Bay, WI		—		1,660		19,079		475		1,660		19,554		21,214		4,448	2004	2015
286 Greenfield, WI		—		818		8,014		232		818		8,246		9,064		1,755	2007	2015
164 Greenville, NC		—		100		2,478		198		100		2,676		2,776		1,418	1998	1999
062 Greenville, TX		—		42		1,565		105		42		1,670		1,712		1,134	1995	1996
161 Greenwood, SC		—		100		2,638		337		100		2,975		3,075		1,544	1998	1999
295 Jacksonville, FL		—		1,389		12,756		1,056		1,389		13,812		15,201		2,702	2015	2015
066 Jacksonville, TX		—		100		1,900		90		100		1,990		2,090		1,361	1996	1996
310 Kansas City, MO		—		1,072		15,552		—		1,072		15,552		16,624		2,071	2017	2017
285 Kenosha, WI		—		936		12,361		498		936		12,859		13,795		2,625	2008	2015
255 Littleton, CO		—		1,882		8,248		—		1,882		8,248		10,130		2,226	2013	2012
268 Littleton, CO		—		1,200		8,688		—		1,200		8,688		9,888		2,670	2014	2013
148 Longmont, CO		—		100		2,640		64		100		2,704		2,804		1,645	1998	1998
060 Longview, TX		—		38		1,568		134		38		1,702		1,740		1,180	1995	1995
261 Louisville, CO		—		911		11,703		390		911		12,093		13,004		3,283	2000	2012

LTC PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

(in thousands)

							Costs
							capitalized		Gross amount at which carried at
			Initial cost to company				subsequent		December 31, 2022
						Building and	to				Building and				Accum		Construction/	Acquisition
	Encumbrances		Land			improvements	acquisition		Land		improvements		Total (1)		deprec.		renovation date	date
301 Louisville, KY	$	—	$	1,021	$	11,871	$	123	$	1,021	$	11,994	$	13,015	$	2,305	2016	2016
114 Loveland, CO		—		100		2,865		324		100		3,189		3,289		1,995	1997	1997
068 Lufkin, TX		—		100		1,950		106		100		2,056		2,156		1,400	1996	1996
061 Marshall, TX		—		38		1,568		544		38		2,112		2,150		1,477	1995	1995
293 McHenry, IL		—		1,289		28,976		987		1,289		29,963		31,252		6,257	2005	2015
058 McPherson, KS		—		79		1,571		67		79		1,638		1,717		1,223	1994	1995
313 Medford, OR				636		17,816		—		636		17,816		18,452		1,788	2020	2018
316 Medford, OR		—		750		13,650		250		750		13,900		14,650		1,874	2005	2018
239 Merritt Island, FL		—		550		6,928		115		550		7,043		7,593		3,056	2004	2010
104 Millville, NJ		—		100		2,825		848		100		3,673		3,773		2,174	1997	1997
231 Monroeville, PA		—		526		5,334		439		526		5,773		6,299		2,317	1997	2009
280 Murrells Inlet, SC		—		2,490		14,185		129		2,490		14,314		16,804		3,278	2016	2015
294 Murrieta, CA		—		2,022		11,136		—		2,022		11,136		13,158		2,586	2016	2015
289 Neenah, WI		—		694		20,839		251		694		21,090		21,784		4,316	1991	2015
166 New Bern, NC		—		100		2,427		170		100		2,597		2,697		1,254	1998	1999
118 Newark, OH		—		100		2,435		383		100		2,818		2,918		1,703	1997	1997
143 Niceville, FL		—		100		2,680		108		100		2,788		2,888		1,676	1998	1998
095 Norfolk, NE		—		100		2,123		311		100		2,434		2,534		1,541	1997	1997
306 Oak Lawn, IL		—		1,591		13,772		—		1,591		13,772		15,363		2,325	2018	2016
302 Overland Park, KS		—		1,951		11,882		281		1,951		12,163		14,114		2,496	2013	2016
232 Pittsburgh, PA		—		470		2,615		360		470		2,975		3,445		1,264	1994	2009
165 Rocky Mount, NC		—		100		2,494		378		100		2,872		2,972		1,359	1998	1999
059 Salina, KS		—		79		1,571		303		79		1,874		1,953		1,250	1994	1995
084 San Antonio, TX		—		100		1,900		45		100		1,945		2,045		1,240	1997	1997
092 San Antonio, TX		—		100		2,055		577		100		2,632		2,732		1,411	1997	1997
288 Sheboygan, WI		—		1,168		5,382		379		1,168		5,761		6,929		1,384	2006	2015
149 Shelby, NC		—		100		2,805		312		100		3,117		3,217		1,782	1998	1998
312 Spartanburg, SC		—		254		9,906		1,520		254		11,426		11,680		2,627	1999	2017
150 Spring Hill, FL		—		100		2,650		104		100		2,754		2,854		1,662	1998	1998
103 Springfield, OH		—		100		2,035		363		100		2,398		2,498		1,490	1997	1997
321 Sterling Heights, MI		—		1,133		11,487		1,133		1,133		12,620		13,753		1,643	1997	2019
162 Sumter, SC		—		100		2,351		656		100		3,007		3,107		1,393	1998	1999
140 Tallahassee, FL		—		100		3,075		140		100		3,215		3,315		1,925	1998	1998
098 Tiffin, OH		—		100		2,435		366		100		2,801		2,901		1,678	1997	1997
282 Tinley Park, IL		—		702		11,481		—		702		11,481		12,183		2,608	2016	2015
088 Troy, OH		—		100		2,435		821		100		3,256		3,356		1,950	1997	1997
080 Tulsa, OK		—		200		1,650		148		200		1,798		1,998		1,091	1997	1997
093 Tulsa, OK		—		100		2,395		42		100		2,437		2,537		1,553	1997	1997
238 Tupelo, MS		—		1,170		8,230		52		1,170		8,282		9,452		3,133	2000	2010
075 Tyler, TX		—		100		1,800		144		100		1,944		2,044		1,207	1996	1996
091 Waco, TX		—		100		2,235		770		100		3,005		3,105		1,563	2021	1997
096 Wahoo, NE		—		100		2,318		166		100		2,484		2,584		1,628	1997	1997
108 Watauga, TX		—		100		1,668		38		100		1,706		1,806		1,076	1996	1997
109 Weatherford, OK		—		100		1,669		698		100		2,367		2,467		1,454	1996	1997
309 West Chester, OH		—		2,355		13,553		212		2,355		13,765		16,120		2,235	2017	2017
276 Westminster, CO		—		1,425		9,575		—		1,425		9,575		11,000		2,660	2015	2013
110 Wheelersburg, OH		—		29		2,435		349		29		2,784		2,813		1,720	1997	1997
303 Wichita, KS		—		1,422		9,957		285		1,422		10,242		11,664		2,162	2011	2016
259 Wichita, KS		—		730		—		9,682		730		9,682		10,412		2,911	2013	2012
283 Wichita, KS		—		624		13,946		—		624		13,946		14,570		2,373	2016	2015
076 Wichita Falls, TX		—		100		1,850		126		100		1,976		2,076		1,225	1996	1996
120 Wichita Falls, TX		—		100		2,750		143		100		2,893		2,993		1,841	1997	1997
264 Williamstown, NJ		—		711		6,637		—		711		6,637		7,348		1,982	2000	2012
265 Williamstown, NJ		—		711		8,649		—		711		8,649		9,360		2,411	2000	2012
Assisted Living Properties	$	—	$	68,788	$	678,526	$	50,499	$	68,788	$	729,025	$	797,813	$	207,529

LTC PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

(in thousands)

							Costs
							capitalized		Gross amount at which carried at
			Initial cost to company				subsequent		December 31, 2022
					Building and		to				Building and					Accum		Construction/	Acquisition
	Encumbrances		Land		improvements		acquisition		Land		improvements		Total (1)			deprec.		renovation date	date
Other:
Properties:
297 Las Vegas, NV		—		1,965		7,308		1,702		1,965		9,010		10,975			1,650	1990/1994	2015
Properties		—		1,965		7,308		1,702		1,965		9,010		10,975			1,650
Land:
271 Howell, MI		—		420		—		—		420		—		420			—	N/A	2013
272 Milford, MI		—		450		—		—		450		—		450			—	N/A	2014
275 Yale, MI		—		73		—		—		73		—		73			—	N/A	2013
Land		—		943		—		—		943		—		943			—
Other Properties		—		2,908		7,308		1,702		2,908		9,010		11,918			1,650
	$	—	$	125,686	$	1,199,600	$	85,419	$	125,686	$	1,285,019	$	1,410,705	(2)	$	391,487

(1) Depreciation is computed principally by the straight-line method for financial reporting purposes which generally range of a life from 5 to 15 years for furniture and equipment, 35 to 50 years for buildings, 10 to 20 years for site improvements, 10 to 50 years for building improvements and the respective lease term for acquired lease intangibles.

(2) As of December 31, 2022, our aggregate cost for Federal income tax purposes was $1,420,258 (unaudited).

LTC PROPERTIES, INC.

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

(in thousands)

Activity for the years ended December 31, 2022, 2021 and 2020 is as follows:

	For the Year Ended December 31,
	2022		2021		2020
Reconciliation of real estate:
Carrying cost:
Balance at beginning of period	$	1,408,557	$	1,452,001	$	1,484,571
Acquisitions		51,817		—		13,581
Improvements		9,099		6,298		23,612
Capitalized interest		—		—		354
Cost of real estate sold		(55,346)		(49,742)		(66,140)
Impairment loss from real estate investments		(3,422)		—		(3,977)
Ending balance	$	1,410,705	$	1,408,557	$	1,452,001
Accumulated depreciation:
Balance at beginning of period	$	374,606	$	349,643	$	347,755
Depreciation expense		37,394		38,192		38,945
Cost of real estate sold		(20,513)		(13,229)		(37,057)
Ending balance	$	391,487	$	374,606	$	349,643

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SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE

12 Months Ended

Dec. 31, 2022

SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE

SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE

LTC PROPERTIES, INC.

SCHEDULE IV

MORTGAGE LOANS RECEIVABLE ON REAL ESTATE

(in thousands)

														Principal
														Amount of
												Carrying		Loans
								Current				Amount of		Subject to
	(Unaudited)							Monthly		Face		Mortgages		Delinquent
	Number of				Final	Balloon		Debt		Amount of		December 31,		Principal or
State	Properties		Units/Beds (1)	Interest Rate (2)	Maturity Date	Amount (3)		Service		Mortgages		2022		Interest
MI	15		1,875	10.60%	2043	$	163,214	$	1,623	$	190,214	$	182,514	$	—
MI	4		480	9.60%	2045		35,576		311		39,406		38,636		—
MI	1		146	10.10%	2045		14,325		125		15,000		14,726		—
MI	2		201	9.80%	2045		19,750		162		19,750		19,553		—
FL	1		68	7.80%	2025		14,308		92		14,308		14,165		—
LA	1		189	7.50%	2024		29,346		186		29,346		29,054		—
MO	—		—	7.50%	2023		1,887		12		1,887		1,867		—
NC	4		217	7.30%	2026		33,000		209		33,000		32,670		—
NC	—		—	7.30%	2026		796		5		796		788		—
NC	12	(4)	478	7.30%	2025		51,531		318		51,531		51,016		—
SC	1	(4)	45	7.30%	2025		4,787		30		4,787		4,739		—
	41	(5)	3,699			$	368,520	$	3,073	$	400,025	$	389,728	$	—

(1) This number is based upon unit/bed counts shown on operating licenses provided to us by lessee/borrowers or units/beds as stipulated by lease/mortgage documents. We have found during the years that these numbers often differ, usually not materially, from units/beds in operation at any point in time. The differences are caused by such things as operators converting a patient/resident room for alternative uses, such as offices or storage, or converting a multi-patient room/unit into a single patient room/unit. We monitor our properties on a routine basis through site visits and reviews of current licenses. In an instance where such change would cause a de-licensing of beds or in our opinion impact the value of the property, we would take action against the borrower to preserve the value of the property/collateral.

(2) Represents current stated interest rate. Generally, the loans have principal and interest payable at varying amounts over the life to maturity with annual interest adjustments through specified fixed rate increases effective either on the first anniversary or calendar year of the loan.

(3) Balloon payment is due upon maturity.

(4) Represents a single mortgage loan secured by 13 ALFs. The mortgage loan was allocated by state for reporting purposes only.

(5) Includes 10 first-lien mortgage loans as follows:

Number of Loans	Original loan amounts
2		$ 500 - $2,000
0		$2,001 - $3,000
0		$3,001 - $4,000
0		$4,001 - $5,000
0		$5,001 - $6,000
0		$6,001 - $7,000
8		$7,001 +

Mortgage loans receivable activity for the years ended December 31, 2022, 2021 and 2020 is as follows:

Balance— December 31, 2019	$	254,099
New mortgage loans		—
Other additions		4,253
Amortization of mortgage premium		(4)
Collections of principal		(1,065)
Foreclosures		—
Loan loss reserve		(32)
Other deductions		—
Balance— December 31, 2020		257,251
New mortgage loans		88,415
Other additions		540
Application of interest reserve		298
Amortization of mortgage premium		(6)
Collections of principal		(1,175)
Foreclosures		—
Loan loss reserve		(881)
Other deductions		—
Balance— December 31, 2021		344,442
New mortgage loans		31,965
Other additions		8,767
Application of interest reserve		6,192
Amortization of mortgage premium		(6)
Collections of principal		(1,175)
Foreclosures		—
Loan loss reserve		(457)
Other deductions		—
Balance— December 31, 2022	$	389,728

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation. The accompanying consolidated financial statements include the accounts of LTC, our wholly-owned subsidiaries, and our consolidated companies. All intercompany investments, accounts and transactions have been eliminated.

Any reference to the number of properties or facilities, number of units, number of beds, number of operators, and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board.

Consolidation

Consolidation. At inception, and on an ongoing basis, as circumstances indicate the need for reconsideration, we evaluate each legal entity that is not wholly-owned by us for consolidation, first under the variable interest entity (“VIE”), then under the voting model. Our evaluation considers all of our variable interests, including common or preferred equity ownership, loans, and other participating instruments. The variable interest model applies to entities that meet both of the following criteria:

● A legal structure has been established to conduct business activities and to hold assets.

● LTC has a variable interest in the entity - i.e., it has equity ownership or other financial interests that change with changes in the fair value of the entity's net assets.

If an entity does meet the above criteria and does not qualify for a scope exception from the VIE model, we will determine whether the entity is a VIE.

A legal entity is determined to be a VIE if it has any of the following three characteristics:

1. The entity does not have sufficient equity to finance its activities without additional subordinated financial support;

2. The equity holders, as a group, lack the characteristics of a controlling financial interest, as evidenced by all of the following characteristics:

● The power, through voting rights or similar rights, to direct the activities of the entity that most significantly impact the entity's economic performance;

● The obligation to absorb the entity's expected losses;

● The right to receive the entity's expected residual returns; or

3. The entity is established with non-substantive voting rights (i.e., the entity is structured such that majority economic interest holder(s) have disproportionately few voting rights).

If any of the three characteristics of a VIE are met, we conclude that the entity is a VIE and evaluate it for consolidation under the variable interest model.

If an entity is determined to be a VIE, we evaluate whether we are the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and benefits. We consolidate a VIE if we have both power and benefits - that is (i) we have the power to direct the activities of a VIE that most significantly impact the VIE's economic performance (power), and (ii) we have the obligation to absorb losses of the VIE that could potentially be significant to the VIE, or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). If we have a variable interest in a VIE but we are not the primary beneficiary, we account for our investment using the equity method of accounting.

If a legal entity fails to meet any of the three of the characteristics of a VIE, we evaluate such entity under the voting interest model. Under the voting interest model, we consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting shares or if we are the general partner or managing member of the entity and the limited partners or non-managing members do not have substantive participating, liquidation, or kick-out rights.

The FASB requires the classification of non-controlling interests as a component of consolidated equity in the consolidated balance sheet subject to the provisions of the rules governing classification and measurement of redeemable securities. The guidance requires consolidated net income to be reported at the amounts attributable to both the controlling and non-controlling interests. The calculation of earnings per share will be based on income amounts attributable to the controlling interest.

Use of Estimates

Use of Estimates. Preparation of the consolidated financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Our most significant assumptions and estimates are related to the valuation of real estate, purchase price allocation of acquired assets, revenue recognition including the collectability of tenant receivables and asset impairment.

Cash Equivalents

Cash Equivalents. Cash equivalents consist of highly liquid investments with a maturity of three months or less when purchased and are stated at cost which approximates market.

Owned Properties

Owned Properties. We make estimates as part of our allocation of the purchase price of acquisitions to the various components of the acquisition based upon the fair value of each component. In determining fair value, we use current appraisals or other third-party opinions of value. The most significant components of our allocations are typically the allocation of fair value to land and buildings and, for certain of our acquisitions, in-place leases and other intangible assets. In the case of the fair value of buildings and the allocation of value to land and other intangibles, the estimates of the values of these components will affect the amount of depreciation and amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the value of in-place leases, we make best estimates based on the evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. These assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases. We evaluate each purchase transaction to determine whether the acquired assets meet the definition of an asset acquisition or a business combination. Transaction costs related to acquisitions that are not deemed to be business combinations are included in the cost basis of the acquired assets, while transaction costs related to acquisitions that are deemed to be business combinations are expensed as incurred.

We capitalize direct construction and development costs, including predevelopment costs, interest, property taxes, insurance and other costs directly related and essential to the acquisition, development or construction of a real estate asset. We capitalize construction and development costs while substantive activities are ongoing to prepare an asset for its intended use. We consider a construction project as substantially complete and held available for occupancy upon the issuance of the certificate of occupancy. Costs incurred after a project is substantially complete and ready for its intended use, or after development activities have ceased, are expensed as incurred. For redevelopment, renovation and expansion of existing operating properties, we capitalize the cost for the construction and improvement incurred in connection with the redevelopment, renovation and expansion. Costs previously capitalized related to abandoned acquisitions or developments are charged to earnings. Expenditures for repairs and maintenance are expensed as incurred.

Depreciation is computed principally by the straight-line method for financial reporting purposes over the estimated useful lives of the assets, which range from 3 to 5 years for computers, 5 to 15 years for furniture and equipment, 35 to 50 years for buildings, 10 to 20 years for site improvements, 10 to 50 years for building improvements and the respective lease term for acquired lease intangibles.

Financing Receivable

Financing Receivable. As part of our acquisitions, we may from time to time, invest in sale and leaseback transactions. In accordance with ASC Topic 842, Leases (“ACS 842”), we are required to determine whether the sale and leaseback transaction qualifies as a sale. ASC 842 clarifies that an option for the seller-lessee to repurchase a real estate asset would generally preclude accounting for the transfer of the asset as a sale. Therefore, a sale and leaseback transaction of real estate that includes a seller-lessee repurchase option is accounted for as a failed sale and leaseback transaction. As a result, the purchased assets of a failed sale and leaseback transaction would be presented as a Financing receivable on our Consolidated Balance Sheets and the rental revenue from these properties is recorded as Interest income from financing receivable on our Consolidated Statements of Income. Furthermore, upon expiration of the purchase option if the purchase option remains unexercised by the seller-lessee, the purchased assets will be reclassified from Financing receivable to Real property investments on our Consolidated Balance Sheets.

Mortgage Loans Receivable, Net of Loan Loss Reserve

Mortgage Loans Receivable, Net of Loan Loss Reserve. Mortgage loans receivable we originate are recorded on an amortized cost basis.

Working capital loans

Working Capital Loans. Our investment in working capital loans consists of loan arrangements with interest ranging between 4% and 8% and maturities between 2023 and 2032.

Mezzanine Loans

Mezzanine Loans. Mezzanine financing sits between senior debt and common equity in the capital structure, and typically is used to finance development projects or value-add opportunities on existing operational properties. We seek market-based, risk-adjusted rates of return typically between 7-12% with the loan term typically four to five years. Security for mezzanine loans can include all or a portion of the following credit enhancements; secured second mortgage, pledge of equity interests and personal/corporate guarantees. Mezzanine loans are recorded for GAAP purposes as either a loan, under notes receivable, or joint venture (“JV”), under investment in unconsolidated JVs, depending upon specifics of the loan terms and related credit enhancements.

Investments in unconsolidated joint ventures

Investments in unconsolidated joint ventures. From time to time, we provide funding to third-party operators for the acquisition, development and construction (“ADC”) of a property. Under an ADC arrangement, we may participate in the residual profits of the project through the sale or refinancing of the property. These ADC arrangements can have characteristics similar to a loan or similar to a JV or partnership such as participating in the risks and rewards of the project as an owner or an investment partner. If the ADC arrangement characteristics are more similar to a jointly-owned investment or partnership, we account for the ADC arrangement as an investment in an unconsolidated JV under the equity method of accounting or a direct investment (consolidated basis of accounting) instead of applying loan accounting.

We evaluate our ADC arrangements first pursuant to Accounting Standard Codification (“ASC”) 810, Consolidation, to determine whether the ADC arrangement meets the definition of a VIE, as explained above, and whether we are the primary beneficiary. If the ADC arrangement is deemed to be a VIE but we are not the primary beneficiary, or if it is deemed to be a voting interest entity but we do not have a controlling financial interest, we account for our investment in the ADC arrangement using the equity method. Under the equity method, we initially record our investment at cost and subsequently recognize our share of net earnings or losses and other comprehensive income or loss, cash contributions made and distributions received, and other adjustments, as appropriate. Allocations of net income or loss may be subject to preferred returns or allocation formulas defined in operating agreements and may not be according to percentage ownership interests. In certain circumstances where we have a substantive profit-sharing arrangement which provides a priority return on our investment, a portion of our equity in earnings may consist of a change in our claim on the net assets of the underlying JV. Distributions of operating profit from the JVs are reported as part of operating cash flows, while distributions related to a capital transaction, such as a refinancing transaction or sale, are reported as investing activities. Currently we do not have any ADC arrangements.

We periodically perform evaluation of our investment in unconsolidated JVs to determine whether the fair

value of each investment is less than the carrying value, and, if such decrease in value is deemed to be other-than-temporary, we write the investment down to its estimated fair value as of the measurement date.

Loan Loss Reserve

Loan Loss Reserve. ASC 326, Financial Instruments- Credit Losses requires a forward looking “expected loss” model to be used for receivables, held-to-maturity debt, loans, and other instruments. When shared risk characteristics exist, ASC 326 requires a collective basis measurement of expected credit losses of the financial assets.

We adopted ASC 326 on January 1, 2020 and determined our Mortgage loans receivable and Notes receivable are within the scope of this ASU. We utilize the probability of default and discounted cash flow methods to estimate expected credit losses. Additionally, we stress-test the results to reflect the impact of unknown adverse future events including recessions. Upon adoption, we concluded that the adoption of ASC 326 did not have a material impact on our financial statements.

We elected not to measure an allowance for expected credit losses on accrued interest receivable under the expected credit loss standard as we have a policy in place to reserve or write off accrued interest receivable in a timely manner through our quarterly review of the loan and property performance. Therefore, we elected the policy to write off accrued interest receivable by reversing interest income and/or recognizing credit loss expense. As of December 31, 2022, the total balance of accrued interest receivable of $46,000,000 was not included in the measurement of expected credit loss. For the years ended December 31, 2022, 2021 and 2020, Company did not recognize any write-off related to accrued interest receivable.

Accrued incentives

Accrued incentives. As part of our acquisitions and/or amendments, we may commit to provide contingent payments to our sellers or lessees, upon the properties achieving certain rent coverage ratios. Typically, when the contingent incentive payments are funded, cash rent will increase by the amount funded multiplied by a rate stipulated in the agreement. If it is deemed probable, the contingent payment is recorded as a liability at the estimate fair value calculated using a discounted cash flow analysis and accreted to the settlement amount of the estimated payment date. If the contingent payment is provided to the lessee, the payment is recorded as a lease incentive included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets and is amortized as a yield adjustment over the life of the lease. The fair value of these contingent liabilities is evaluated on a quarterly basis based on changes in estimates of future operating results and changes in market discount rates. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement.

Impairments

Impairments. Assets that are classified as held-for-use are periodically evaluated for impairment when events or changes in circumstances indicate that the asset may be impaired or the carrying amount of the asset may not be recoverable through future undiscounted cash flows. Where indicators of impairment exist, the estimation required in the undiscounted future cash flow assumption includes management’s probability-weighting of various scenarios

including whether the management modifies the lease with the existing operator versus identifying a replacement operator and the assumed market lease rate underlying projected future rental cash flows. In determining fair value, we use current appraisals or other third-party opinions of value and other estimates of fair value such as estimated discounted future cash flows. Based on our assessment, during the years ended December 31, 2022, 2021 and 2020, we recognized impairment losses of $3,422,000, $0 and $3,977,000, respectively, related to our real property investments.

Fair Value of Financial Instruments

Fair Value of Financial Instruments. The FASB requires the disclosure of fair value information about financial instruments for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. Accordingly, the aggregate fair market value amounts presented in the notes to these consolidated financial statements do not represent our underlying carrying value in financial instruments.

The FASB provides guidance for using fair value to measure assets and liabilities, the information used to measure fair value, and the effect of fair value measurements on earnings. The FASB emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the FASB establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices).

The fair value guidance issued by the FASB excludes accounting pronouncements that address fair value measurements for purposes of lease classification or measurement. However, this scope exception does not apply to assets acquired and liabilities assumed in a business combination that are required to be measured at fair value, regardless of whether those assets and liabilities are related to leases.

In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses on items for which the fair value option has been elected reported in earnings. We have not elected the fair value option for any of our financial assets or liabilities.

The FASB requires disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. See Note 15. Fair Value Measurements for the disclosure about fair value of our financial instruments.

Derivatives Instruments

Derivative Instruments. As of December 31, 2022, we had two interest rate swaps that were designated as cash flow hedges of interest rate risk with a total notional amount of $100,000,000. See Note 9. Debt Obligations within our consolidated financial statements for further detail on our interest rate swaps. We record cash flow hedges either as an asset or a liability measured at fair value. If hedge accounting is applied to a derivative instrument, the entire change in the fair value of the derivative designated and qualified as cash flow hedge is recorded in Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. We estimate the fair value of our interest rate swaps using the assistance of a third-party using inputs that are observable in the market which include forward yield curves and other relevant information. Additionally, we are exposed to credit risk of the counterparty to our interest rate swap agreements in the event of non-performance under the terms of the agreements. We have determined that the majority of the inputs used to value our derivative instruments fall within level 2 of the fair value hierarchy.

In March 2020, the FASB issued Accounting Standards Update ("ASU") No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"), which contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts as the market transitions from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The practical expedients are optional and may be elected over time as reference rate reform activities occur. ASU 2020-04 is effective upon issuance and can be applied through December 31, 2022. In December

2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848, which defers the sunset date from December 31, 2022 to December 31, 2024.

In December 2022, we amended our unsecured credit agreement to update the benchmark provisions to replace LIBOR with the Secured Overnight Financing Rate (“SOFR”), plus a credit spread of 10 basis points, as the reference rate for the purpose of calculating interest under the agreement. In connection with amending the unsecured credit agreement, we also amended our fixed interest rate swap agreements to update reference rate to SOFR. As a result, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients maintains the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the ASU and may apply other elections, as applicable, as additional changes in the market occur. Our election to apply the hedge accounting expedients did not have a material impact on our consolidated financial statements. See Note 9. Debt Obligations within our consolidated financial statements for further detail on our unsecured credit agreement.

Revenue Recognition

Revenue Recognition- Rental Income. Rental income from operating leases is generally recognized on a straight-line basis over the terms of the leases. Substantially all of our leases contain provisions for specified annual increases over the rents of the prior year and are generally computed in one of four methods depending on specific provisions of each lease as follows:

(i) a specified annual increase over the prior year’s rent, generally between 2.0% and 3.0%;

(ii) a calculation based on the Consumer Price Index or the Medicare Market Basket Rate;

(iii) as a percentage of facility revenues in excess of base amounts or

(iv) specific dollar increases.

The FASB does not permit recognition of contingent revenue until the contingencies have been resolved. Historically, we have not included contingent rents as income until received and we will continue our historical policy. During the years ended December 31, 2022, 2021 and 2020, we received $57,000, $0 and $111,000, respectively, of contingent rental income.

In accordance with ASC 842, Leases, we report real estate taxes that are reimbursed by our operators as Rental income with a corresponding Property tax expense in the Consolidated Statements of Income. Furthermore, we assess the collectability of substantially all of our lease payments through maturity and if collectability is not probable, all or a portion of our straight-line rent receivable and other lease receivables may be written off and the rental income during the period would be limited to the lesser of the income that would have been recognized if collection were probable, and the lease payments received. Our assessment of collectability of leases includes evaluating the data and assumptions used in determining whether substantially all of the future lease payments were probable based on the lessee’s payment history, the financial strength of the lessees, future contractual rents, and the timing of expected payments.

In April 2020, the FASB staff released guidance regarding accounting for lease concessions in response to the novel coronavirus (“COVID-19”) pandemic. The FASB staff guidance indicates that lessors could elect an accounting policy to not evaluate whether rent concessions provided in response to the COVID-19 pandemic are lease modifications. When only the timing of payments is impacted by the rent deferrals, but the amount of the consideration is substantially the same as required by the original lease agreement, the FASB listed two methods for lessors to account for the rent deferrals. We elected to account for the rent deferrals as if there were no changes made to the lease agreement. Accordingly, we increased the lease receivable and continued to recognize income. We recognized the rent abatements given to the operators where we accrue rent on a straight-line basis, over the remaining life of those respective leases. Payments made to or on behalf of our lessees represent incentives that are deferred and amortized over the term of the lease on a straight-line basis.

Revenue Recognition- Interest Income. Interest income on mortgage loans receivable and notes receivable is recognized using the effective interest method. Exit fee income and commitment fee income are also amortized over the life of the related loan under the effective interest method. Effective interest method, as required by GAAP, is a technique for calculating the actual interest rate for the term of a mortgage loan based on the initial origination value. When the actual interest rate is higher than the stated interest rate in the early years of the mortgage loan, an effective

interest receivable asset is created and included in the Interest receivable line item in our Consolidated Balance Sheets and begins reducing down to zero when, at some point during the mortgage loan, the stated interest rate is higher than the actual interest rate. We consider a loan to be non-performing after 60 days of non-payment of amounts due and do not recognize unpaid interest income from that loan until the past due amounts have been received.

As previously discussed under Financing Receivable above, rental income from properties acquired through a sale leaseback, subject to a seller-lessee repurchase option, is recorded as Interest income from financing receivable on our Consolidated Statements of Income. Interest income on financing receivable is recognized using the effective interest method. The recognition of interest income will stop when Financing receivable is reclassified to Real estate investments when the purchase option remains unexercised upon expiration of the purchase option.

Gains on sale of Real Estate, Net

Gains on sale of Real Estate, Net. Recognition of gains or losses from sales of investments in real estate requires that we:

a) meet certain revenue recognition criteria in accordance with ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets; and

b) transfer control of the real estate to the buyer.

The gain or loss recorded is measured as the difference between the sales price, less costs to sell, and the carrying value of the real estate when we sell it.

Federal Income Taxes

Federal Income Taxes. LTC qualifies as a REIT under the Internal Revenue Code of 1986, as amended, and as such, no provision for Federal income taxes has been made. A REIT is required to distribute at least 90% of its taxable income to its stockholders and a REIT may deduct dividends in computing taxable income. If a REIT distributes 100% of its taxable income and complies with other Internal Revenue Code requirements, it will generally not be subject to Federal income taxation.

For Federal tax purposes, depreciation is generally calculated using the straight-line method over a period 27.5 years. Earnings profits, which determine the taxability of distributions to stockholders, use the straight-line method over 30 years. The determination of Federal taxable income differ from net income for financial statement purposes principally due to the treatment of certain investments in joint ventures, timing of interest income, rental income, other expense items, recognition of impairment charges, and depreciable lives and bases of assets. At December 31, 2022, the net book basis of our depreciable assets exceeded our net tax basis by approximately $41,202,000 (unaudited), due to the difference previously mentioned.

The FASB clarified the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. The guidance utilizes a two-step approach for evaluating tax positions. Recognition (step one) occurs when a company concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination. Measurement (step two) is only addressed if step one has been satisfied (i.e., the position is more likely than not to be sustained). Under step two, the tax benefit is measured as the largest amount of benefit (determined on a cumulative probability basis) that is more likely than not to be realized upon ultimate settlement. We currently do not have any uncertain tax positions that would not be sustained on its technical merits on a more-likely than not basis.

We may from time to time be assessed interest or penalties by certain tax jurisdictions. In the event we have received an assessment for interest and/or penalties, it has been classified in our Consolidated Statements of Income as General and administrative expenses.

Concentrations of Credit Risks

Concentrations of Credit Risk. Financial instruments which potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, operating leases on owned properties, financing receivable and mortgage loans receivable. Our financial instruments, operating leases, financing receivable and mortgage loans receivable are subject to the possibility of loss of carrying value as a result of the failure of other parties to perform according to their contractual obligations or changes in market prices which may make the instrument less valuable. We obtain various collateral and other protective rights, and continually monitor these rights, in order to reduce such

possibilities of loss. In addition, we provide reserves for potential losses based upon management’s periodic review of our portfolio. See Note 3. Major Operators for further discussion of concentrations of credit risk from our tenants.

Properties held-for-sale

Properties held-for-sale. Properties classified as held-for-sale on the Consolidated Balance Sheets include only those properties available for immediate sale in their present condition and for which management believes that it is probable that a sale of the property will be completed within one year. Properties held-for-sale are carried at the lower of cost or fair value less estimated selling costs. No depreciation expense is recognized on properties held-for-sale once they have been classified as such. Only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. We have not reclassified results of operations for properties disposed as discontinued operations as these disposals do not represent strategic shifts in our operations.

Net Income Per Share

Net Income Per Share. Basic earnings per share is calculated using the weighted-average shares of common stock outstanding during the period excluding common stock equivalents. Diluted earnings per share includes the effect of all dilutive common stock equivalents.

In accordance with the accounting guidance regarding the determination of whether instruments granted in share-based payments transactions are participating securities, we have applied the two-class method of computing basic earnings per share. This guidance clarifies that outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends participate in undistributed earnings with common stockholders and are considered participating securities.

Stock-Based Compensation

Stock-Based Compensation. The FASB requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. We use the Black-Scholes-Merton formula to estimate the value of stock options granted to employees. Also, we use the Monte Carlo model to estimate the value of performance-based stock units granted to employees. These models require management to make certain estimates including stock volatility, expected dividend yield and the expected term. If management incorrectly estimates these variables, the results of operations could be affected. The FASB also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow. Because we qualify as a REIT under the Internal Revenue Code of 1986, as amended, we are generally not subject to Federal income taxation. Therefore, this reporting requirement does not have an impact on the Consolidated Statements of Cash Flows.

Segment Disclosures

Segment Disclosures. The FASB accounting guidance regarding disclosures about segments of an enterprise and related information establishes standards for the manner in which public business enterprises report information about operating segments. Our investment decisions in seniors housing and health care properties, including property lease transactions, financing receivable, mortgage loans, and other investments, are made and resulting investments are managed as a single operating segment for internal reporting and for internal decision-making purposes. Therefore, we have concluded that we operate as a single segment.

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Major Operators (Tables)

12 Months Ended

Dec. 31, 2022

Major Operators

Schedule of concentration of risk by major operators

	Number of		Number of		Percentage of
			SNF	ALF	Total		Total
Operator	SNF	ALF	Beds	Units	Revenues (1)		Assets (2)
Prestige Healthcare (3)	24	—	2,820	93	18.6	%	16.0	%

(1) Includes total revenues for the twelve months ended December 31, 2022.

(2) Represents the net carrying value of the mortgage loans and properties we own divided by the Total assets on the Consolidated Balance Sheets.

(3) The majority of the revenue derived from this operator relates to interest income from mortgage loans.

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Supplemental Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2022

Supplemental Cash Flow Information

Supplemental Cash Flow Information

	Year Ended December 31,
	2022		2021		2020
	(in thousands)
Non-cash investing and financing transactions:
Contribution of financing receivable from non-controlling interests (See Note 5. Real Estate Investments)	$	14,325	$	—	$	—
Mortgage loans receivable reserve withheld at origination (See Note 5. Real Estate Investments)		107		298		—
Accretion of interest reserve recorded as mortgage loan receivable (See Note 5. Real Estate Investments)		(6,192)		—		—
Preferred return reserve related to investment in unconsolidated joint ventures (See Note 6. Investment in Unconsolidated Joint Ventures)		351		2,324		2,878
Notes receivable reserve withheld at origination (See Note 7. Notes Receivable)		—		353		—
Reclassification of notes receivable to lease incentives (Note 8. Lease Incentives)		—		—		300
Change in fair value of interest rate swap agreements (Note 9. Debt Obligations )		(8,891)		172		—

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Real Estate Investments (Tables)

12 Months Ended

Dec. 31, 2022

Real Estate Investments

Schedule of future minimum base rents receivable

Future minimum base rents receivable under the remaining non-cancelable terms of operating leases excluding the effects of straight-line rent, amortization of lease incentives and renewal options are as follows (in thousands):

	Cash
	Rent (1)
2023	$	120,817
2024		113,003
2025		103,690
2026		71,044
2027		67,087
Thereafter		200,663

(1) Represents contractual cash rent, except for certain master leases which are based on estimated cash. Includes rent from subsequent acquisitions and excludes rent from subsequent dispositions. See Note 16. Subsequent Events for more information.

Summary of components of our rental income

The following table summarizes components of our rental income for the years ended December 31, 2022, 2021 and 2020 (in thousands):

	December 31,
Rental Income		2022			2021			2020
Base cash rental income	$	115,230	(1)	$	107,692	(2)	$	132,789
Variable cash rental income		15,516	(3)		14,332	(3)		15,167	(3)
Straight-line rent		(1,369)	(4)		467	(5)		1,778
Adjustment for collectability of lease incentives and rental income		(256)	(6)		(758)	(6)		(23,214)	(6)
Amortization of lease incentives		(877)			(608)			(426)
Total	$	128,244		$	121,125		$	126,094

(1) Increased primarily due to rent received from transitioned portfolios, rental income from acquisitions, completed development projects, annual rent escalations, and lease termination fee income of $1,181 received in connection with the sale of a 74-unit ALF partially offset by decreased rent from the sold properties.

(2) Decreased primarily due to defaults of payments for lease obligations from Senior Lifestyle and Senior Care, abated and deferred rent and reduced rent from a sold property. This decrease was partially offset by increased rent from re-leasing 18 properties previously leased to Senior Lifestyle, completion of development projects and contractual rent increases.

(3) The variable cash rental income for the years ended December 31, 2022, 2021 and 2020 primarily includes reimbursement of real estate taxes by our lessees.

(4) Decreased primarily due to a deferred rent repayment, normal amortization and the impact of the 50% reduction of 2021 rent escalations for those leases accounted for on a straight-line basis.

(5) Decreased due to more leases accounted for on a cash basis, normal amortization and the impact of the 50% reduction of 2021 rent escalations for those leases accounted for on a straight-line basis.

(6) Represents straight-line rent receivable and lease incentives write-offs.

Summary of information about purchase options included in our lease agreements

Some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. The following table summarizes information about purchase options included in our lease agreements (dollar amount in thousands):

	Type	Number
	of	of		Gross		Carrying	Option
State	Property	Properties		Investments		Value	Window
California	ALF/MC	2	$	38,895	$	33,719	2023-2029
Florida	MC	1		15,201		12,500	2029
Florida	SNF	3		76,767		75,999	2025-2027	(1)
Nebraska	ALF	3		7,633		2,948	TBD	(2)
South Carolina	ALF/MC	1		11,680		9,052	2029
Texas	SNF	4		51,837		50,848	2027-2029	(3)
Total			$	202,013	$	185,066

(1) During 2022, we entered into a joint venture to purchase three SNFs. For more information regarding this transaction, see Financing Receivable below.

(2) Subject to the properties achieving certain coverage ratios.

(3) During 2022, we purchased four SNFs and leased these properties under a 10-year lease with an existing operator. The lease allows the operator to elect either an earn-out payment or purchase option. If neither is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the earn-out see Note 11 Commitments and Contingencies.

Schedule of properties held-for-sale

	Type	Number	Number
	of	of	of		Gross		Accumulated
State (1)	Property	Properties	Beds/units		Investment		Depreciation
KY	ALF	1	60	$	13,015	$	2,305

(1) During 2022, we recorded an impairment loss of $1,286 to write-down the carrying value of the community to its anticipated selling price.

Summary of acquisitions

Acquisitions. The following table summarizes our acquisitions for the years ended December 31, 2022 through 2020 (dollar amounts in thousands):

						Total		Number	Number
		Purchase		Transaction		Acquisition		of	of
Year	Type of Property	Price		Costs		Costs		Properties	Beds/Units
2022 (1)	SNF	$	51,534	$	283	$	51,817	4	339
2021	n/a	$	—	$	—	$	—	—	—

(1) The properties are located in Texas and are leased to an affiliate of an existing operator under a 10-year lease with two 5-year renewal options. Additionally, the lease allows the operator to elect either an earn-out payment or purchase option. If neither option is elected within the timeframe defined in the lease, both elections are terminated. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the seventh lease year. The initial cash yield is 8% for the first year, increasing to 8.25% for the second year, then increases annually by 2.0% to 4.0% based on the change in the Medicare Market Basket Rate. In connection with transaction, we provided the lessee a 10-year working capital loan for up to $2,000 at 8% for first year, increasing to 8.25% for the second year, then increasing annually with the lease rate. At December 31, 2022, the working capital loan had an outstanding balance of $1,642.

Schedule of development and improvement projects

Type of Property		2022				2021			2020
	Developments		Improvements		Developments		Improvements		Developments		Improvements
Assisted Living Communities	$	105	$	5,538	$	—	$	5,846	$	4,491	$	6,842
Skilled Nursing Centers		—		2,897		—		452		12,208		71
Other		—		559		—		—		—		—
Total	$	105	$	8,994	$	—	$	6,298	$	16,699	$	6,913

Schedule of completed developments

	Number	Type	Number
	of	of	of			Total
Year	Properties	Property	Beds/Units	State	Investment
2020	1	ALF/MC	78	Oregon	$	18,447
	1	SNF	90	Missouri		16,587
Total 2020	2		168		$	35,034

Schedule of property sold

		Type	Number	Number
		of	of	of		Sales		Carrying		Net
Year	State	Properties	Properties	Beds/Units		Price		Value		Gain (loss) (1)
2022	California	ALF	2	232	$	43,715	$	17,832	$	25,867
	California	SNF	1	121		13,250		1,846		10,846
	Texas	SNF	1	—		485		697		(441)
	Virginia	ALF	1	74		16,895		15,549		1,344	(2)
	n/a	n/a	—	—		—		—		214	(3)
Total 2022			5	427	$	74,345	$	35,924	$	37,830
2021	Florida	ALF	1	—	$	2,000	$	2,626	$	(858)
	Nebraska	ALF	1	40		900		1,079		(200)
	Washington	SNF	1	123		7,700		4,513		2,562
	Wisconsin	ALF	3	263		35,000		28,295		5,595
	n/a	n/a	—	—		—		—		363	(3)
Total 2021			6	426	$	45,600	$	36,513	$	7,462
2020	Arizona	SNF	1	194	$	12,550	$	2,229	$	10,293
	Colorado	SNF	3	275		15,000		4,271		10,364
	Iowa	SNF	7	544		14,500		4,886		9,051
	Kansas	SNF	3	250		9,750		7,438		1,993
	Texas	SNF	7	1,148		23,000		10,260		12,287
	n/a	n/a	—	—		—		—		129	(3)
Total 2020			21	2,411	$	74,800	$	29,084	$	44,117

(1) Calculation of net gain (loss) includes cost of sales and write-off of straight-line rent receivable and lease incentives, when applicable.

(2) In connection with this sale, the former operator paid us a lease termination fee of $1,181 which is not included in the gain on sale.

(3) We recognized additional gain due to the reassessment adjustment of the holdbacks related to properties sold during 2020 and 2019, under the expected value model per ASC Topic 606, Contracts with Customers.

Summary of investments in mortgage loans secured by first mortgages

					Type	Percentage		Number of					Investment
			Gross		of	of					SNF	ALF	per
Interest Rate	Maturity	State	Investment (1)		Property	Investment		Loans (2)	Properties (3)		Beds	Units	Bed/Unit
7.5%	2023	MO	$	1,886	OTH	0.5	%	1	—	(4)	—	—	$	n/a
7.5%	2024	LA		29,347	SNF	7.5	%	1	1		189	—	$	155.28
7.8%	2025	FL		14,308	ALF	3.6	%	1	1		—	68	$	210.41
7.3% (5)	2025	NC/SC		56,317	ALF	14.3	%	1	13		—	523	$	107.68
7.3%	2026	NC		33,001	ALF	8.4	%	1	4		—	217	$	152.08
7.3%	2026	NC		797	OTH	0.2	%	1	—	(6)	—	—	$	—
10.6% (7)	2043	MI		184,351	SNF	46.8	%	1	15		1,875	—	$	98.32
9.6% (7)	2045	MI		39,026	SNF	9.9	%	1	4		480	—	$	81.30
9.8% (7)	2045	MI		19,750	SNF	5.0	%	1	2		201	—	$	98.26
10.1% (7)	2045	MI		14,875	SNF	3.8	%	1	1		146	—	$	101.88
Total			$	393,658		100.0	%	10	41		2,891	808	$	106.42

(1) Subsequent to December 31, 2022, we originated a $10,750 mortgage loan secured by a MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%.

(2) Some loans contain certain guarantees and/or provide for certain facility fees.

(3) Our mortgage loans are secured by properties located in six states with five borrowers.

(4) Represents a mortgage loan secured by a parcel of land for the future development of a 91-bed post-acute SNF.

(5) Represents the initial rate. This loan has an IRR of 8%.

(6) Represents a mortgage loan secured by a parcel of land in North Carolina held for future development of a seniors housing community.

(7) Mortgage loans provide for 2.25% annual increases in the interest rate after a certain time period.

Schedule of mortgage loan activity

The following table summarizes our mortgage loan activity for the years ended December 31, 2022, 2021 and 2020 (in thousands):

	Year Ended December 31,
	2022			2021			2020
Originations and funding under mortgage loans receivable	$	40,732	(1) (2)	$	88,955	(3)	$	4,253	(4)
Application of interest reserve		6,192			298			—
Scheduled principal payments received		(1,175)			(1,175)			(1,065)
Mortgage loan premium amortization		(6)			(6)			(4)
Provision for loan loss reserve		(457)			(881)			(32)
Net increase in mortgage loans receivable	$	45,286		$	87,191		$	3,152

(1) Subsequent to December 31, 2022, we originated a $10,750 mortgage loan secured by a MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%.

(2) We originated two senior mortgage loans, secured by four ALFs operated by an existing operator, as well as a land parcel in North Carolina. The communities have a combined total of 217 units, with an average age of less than four years. The land parcel is approximately 7.6 acres adjacent to one of the ALFs and is being held for the future development of a seniors housing community. The mortgage loans have a four-year term, an interest rate of 7.25% and an IRR of 8%. We also funded an additional $2,000 under an existing mortgage loan.

(3) We funded the following:

a. $1,638 mortgage loan secured by a parcel of land for the future development of a 91-bed post-acute SNF in Missouri and withheld an interest reserve of $142. The mortgage loan term is one year at a yield of 7.5%;

b. $27,047 mortgage loan secured by a 189-bed SNF in Louisiana with a regional operator new to us. The mortgage loan has a three-year term with one 12-month extension option and a yield of 7.5%;

c. $11,724 mortgage loan secured by a 68-unit ALF and MC in Florida operated by a regional operator new to us. At origination, we withheld an interest reserve of $806 and applied $156 of the reserve during 2021. The mortgage loan term is approximately 4 years at a 7.75% yield and includes an additional $4,177 loan commitment for the construction of a memory care addition to the property to be funded at a later date subject to satisfaction of various conditions;

d. $48,006 mortgage loan for the purchase of a 13-property seniors housing portfolio located in North (12) and South Carolina (1). The communities are operated by an existing LTC operator. At origination, we withheld an interest reserve of $4,496. The loan term is 4 years at a 7.25% yield and includes a commitment of $6,097 for capital improvements and $650 for working capital; and

e. $540 additional capital funding under our existing mortgage loans.

(4) We funded an additional $2,000 under an existing mortgage loan.

Scheduled principal payments on mortgage loan receivables

Scheduled principal payments on mortgage loan receivables are as follows (in thousands):

	Scheduled
	Principal
2023	$	3,061
2024		30,522
2025		71,801
2026		34,972
2027		1,175
Thereafter		252,127
Total	$	393,658

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Investment in Unconsolidated Joint Ventures (Tables)

12 Months Ended

Dec. 31, 2022

Investment in Unconsolidated Joint Ventures

Summary of the preferred equity investments

	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) Represents a 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) Represents a 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. Subsequent to December 31, 2022, we received a notice of intent to redeem our $13,000 preferred equity investment in the joint venture.

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

	Type
	of			Capital		Income		Cash Interest		Application of
Year	Properties			Contribution		Recognized		Earned		Interest Reserve
2022	ALF/MC		$	—	$	450	$	—	$	450
	UDP			—		1,054		351		703
Total			$	—	$	1,504	$	351	$	1,153
2021	ALF/MC		$	—	$	450	$	—	$	412
	UDP			8,000		967		—		880
Total			$	8,000	$	1,417	$	—	$	1,292
2020	ILF/ALF/MC	(1)	$	58	$	231	$	231	$	—
	UDP			6,340		169		169		—
	UDP			5,000		32		32		—
Total			$	11,398	$	432	$	432	$	—

(1) We had a preferred equity investment in an unconsolidated joint venture that owned four ALFs located in Arizona, providing independent living, assisted living and memory care services. During the year ended December 31, 2020, upon sale of the four properties comprising the JV, we received liquidation proceeds totaling $17,848 and incurred an additional $758 of loss.

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Notes Receivable (Tables)

12 Months Ended

Dec. 31, 2022

Notes Receivable.

Summary of investments in notes receivable

Notes receivable consists of mezzanine loans and working capital loans. The following table summarizes our investments in notes receivable at December 31, 2022 (dollar amounts in thousands):

Interest			Type of	Gross				Type of
Rate	IRR	Maturity	Loan	Investment			# of loans	Property
5.0%	—	2023	Working capital	$	380		1	ALF
7.0%	—	2023	Working capital		500		1	ALF
8.0%	12.0%	2023	Mezzanine		7,460		1	ALF
5.0%	—	2024	Working capital		184		1	ALF
8.0%	10.5%	2024	Mezzanine		4,355	(1)	1	ILF
4.0%	—	2024	Working capital		13,531		1	SNF
5.0%	—	2025	Working capital		932		1	ALF
7.5%	—	2027	Working capital		550		1	ALF
8.0%	11.0%	2027	Mezzanine		25,000		1	ALF
6.5%	—	2030	Working capital		138		1	SNF
7.1%	—	2030	Working capital		1,607		2	ALF
7.0%	—	2031	Working capital		2,693		1	ALF
8.0%	—	2032	Working capital		1,642		1	SNF
				$	58,972		14

(1) Subsequent to December 31, 2022, we received $4,545 which includes a prepayment fee and the exit IRR totaling $190, from a mezzanine loan early payoff. The mezzanine loan was on a 136-unit in Oregon.

Summary of mezzanine loans and other loan arrangements

The following table is a summary of our notes receivable components at December 31, 2022 and 2021 (in thousands):

	At December 31,
	2022		2021
Mezzanine loans (1) (2)	$	36,815	$	11,815
Other loans		22,157		16,808
Notes receivable credit loss reserve		(589)		(286)
Total	$	58,383	$	28,337

(1) Subsequent to December 31, 2022, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190 from a mezzanine loan early payoff. The mezzanine loan was on a 136-unit ILF in Oregon.

(2) During 2022, we originated a $25,000 mezzanine loan for the recapitalization of a five-property seniors housing portfolio. The mezzanine loan has a term of approximately five years, with two one-year extension options and bears interest at 8% with an IRR of 11%. The five communities are located in Oregon and Montana, have a total of 621 units, and include ILF, ALF and MC.

Summary of notes receivable activity

The following table summarizes our notes receivable activity for the years ended December 31, 2022 through 2020 (in thousands):

	Year Ended December 31,
		2022			2021			2020
Advances under notes receivable	$	37,192	(1)	$	16,353	(2)	$	2,078
Interest reserve withheld		—			353			—
Principal payments received under notes receivable (3)		(6,843)			(2,694)			(5,275)
Reclassified to lease incentives		—			—			(300)	(4)
Provision (recovery) for credit losses		(303)			(140)			35
Net increase (decrease) in notes receivable	$	30,046		$	13,872		$	(3,462)

(1) Includes origination of a $25,000 mezzanine loan for the recapitalization of five ALFs located in Oregon and Montana. Additionally includes origination of a working capital loan for a commitment of up to $2,000, of which $1,867 has been funded and $9,761 of funding under a working capital loan to HMG Healthcare, LLC.

(2) Funding under working capital notes and mezzanine loans with interest ranging between 4.0% and 8.0%. During 2021, we originated a $4,355 mezzanine loan and withheld 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 10.5% IRR. Additionally, we provided an operator a $25,000 secured working capital loan to facilitate the transition of the 11 properties from Senior Care and Abri Health and funded $9,900 under this working capital loan.

(3) Subsequent to December 31, 2022, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190, from a mezzanine loan early payoff. The mezzanine loan was on a 136-unit ILF in Oregon.

(4) Represents an interim working capital loan related to a development project which matured upon completion of the development project and commencement of the lease.

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Lease Incentives (Tables)

12 Months Ended

Dec. 31, 2022

Lease Incentives

Summary of lease incentive activity

The following table summarizes lease incentives as of December 31, 2022 and 2021 (in thousands):

	December 31,
		2022		2021
Non-contingent lease incentives	$	1,789	$	2,678

Summary of non-contingent lease incentive activity

The following table summarizes our non-contingent lease incentive activity for the years ended December 31, 2022, 2021 and 2020 (in thousands):

	Year Ended December 31,
		2022			2021		2020
Lease incentives funded	$	418		$	824	$	220
Amortization of lease incentives		(877)			(608)		(426)
Adjustment for collectability of lease incentives		(256)	(1)		—		—
Other adjustments		(174)	(2)		—		115	(3)
Net (decrease) increase in non-contingent lease incentives	$	(889)		$	216	$	(91)

(1) Represents the lease incentive balance write-off related to a closed property and subsequent lease termination and lease incentive balance write-off related to 12 ALFs transitioned to an existing operator.

(2) Primarily relates to the sale of two ALFs in California during the second quarter of 2022.

(3) We reclassified a $300 interim working capital loan as lease incentive. See Note 7. Notes Receivable for further discussion. Additionally, we wrote-off $185 of lease incentive related to a master lease for which we determined it was not probable we will collect substantially all of the contractual lease obligations through maturity. See Note 5. Real Estate Investments for further discussion.

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Debt Obligations (Tables)

12 Months Ended

Dec. 31, 2022

Debt Obligations

Schedule of interest rate swaps

						Notional	Fair Value at
Date Entered	Maturity Date	Swap Rate		Rate Index		Amount		December 31, 2022
November 2021	November 19, 2025	2.62	%	1-month SOFR	$	50,000	$	4,003
November 2021	November 19, 2026	2.76	%	1-month SOFR		50,000		4,716
					$	100,000	$	8,719

Schedule of Debt Obligations

The following table sets forth information regarding debt obligations by component as of December 31, 2022 and 2021 (dollar amounts in thousands):

		At December 31, 2022				At December 31, 2021
	Applicable			Available				Available
	Interest	Outstanding		for		Outstanding		for
Debt Obligations	Rate (1)	Balance		Borrowing		Balance		Borrowing
Revolving line of credit (2)	5.38%	$	130,000	$	270,000	$	110,900	$	289,100
Term loans, net of debt issue costs	2.69%		99,511		—		99,363		—
Senior unsecured notes, net of debt issue costs (3)	4.25%		538,343		—		512,456		—
Total	4.24%	$	767,854	$	270,000	$	722,719	$	289,100

(1) Represents weighted average of interest rate as of December 31, 2022.

(2) Subsequent to December 31, 2022, we had a net borrowing of $162,700 under our unsecured revolving line of credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our unsecured revolving line of credit.

(3) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes, accordingly we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

Schedule of borrowings and repayments

Our borrowings and repayments for the years ended December 31, 2022, 2021 and 2020 are as follows (in thousands):

	Year Ended December 31,
	2022				2021				2020
Debt Obligations		Borrowings		Repayments	Borrowings		Repayments		Borrowings		Repayments
Revolving line of credit (1)	$	194,000	$	(174,900)	$	204,400	$	(183,400)	$	24,000	$	(28,000)
Term loans		—		—		100,000		—		—		—
Senior unsecured notes (2)		75,000		(48,160)		—		(47,160)		—		(40,160)
Total	$	269,000	$	(223,060)	$	304,400	$	(230,560)	$	24,000	$	(68,160)

(1) Subsequent to December 31, 2022, we had a net borrowing of $162,700 under our unsecured revolving line of credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our unsecured revolving line of credit.

(2) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes, accordingly we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

Schedule of principal payments and amounts due at maturity

	Total			2023			2024		2025			2026		2027		Thereafter
Revolving line of credit	$	130,000	(1)	$	—		$	—	$	130,000	(1)	$	—	$	—	$	—
Term loans		100,000			—			—		50,000			50,000		—		—
Senior unsecured notes		539,820	(2)		49,160	(2)		49,160		49,500			51,500		54,500		286,000
	$	769,820		$	49,160		$	49,160	$	229,500		$	101,500	$	54,500	$	286,000

(1) Subsequent to December 31, 2022, we borrowed $162,700 under our unsecured revolving line of credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our unsecured revolving line of credit.

(2) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes, accordingly we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

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Equity (Tables)

12 Months Ended

Dec. 31, 2022

Equity

Schedule of consolidated VIEs

As of December 31, 2022, we have the following consolidated VIEs (in thousands):

						Gross
Investment			Property			Consolidated		Non-Controlling
Year (1)	Purpose		Type	State		Assets		Interests
2022	Owned real estate	(2)	SNF	FL	$	76,767	$	14,325
2018	Owned real estate		ILF	OR		14,650		2,906
2018	Owned real estate and development		ALF/MC	OR		18,452		1,164
2017	Owned real estate and development		ILF/ALF/MC	WI		22,007		2,305
2017	Owned real estate		ALF/MC	SC		11,680		1,240
Total					$	143,556	$	21,940

Schedule of cash dividends declared and paid

	Year Ended December 31,
	2022				2021						2020
	Declared		Paid		Declared			Paid			Declared			Paid
Common Stock (1)	$	91,509	$	91,509	$	90,494	(2)	$	90,494	(2)	$	90,262	(2)	$	90,262	(2)

(1) Represents $0.19 per share per month for the years ended December 31, 2022, 2021 and 2020.

(2) During the years ended December 31, 2021 and 2020, we paid $764 and $586, respectively as a result of vesting of the performance-based stock units.

Schedule of restricted stock activity

Restricted Stock and Performance-Based Stock Units. Restricted stock activity for the years ended December 31, 2022, 2021 and 2020 was as follows:

	Year Ended December 31,
	2022		2021		2020
Outstanding, January 1		197,422		180,440		163,569
Granted		135,210		110,348		101,348
Vested		(103,396)		(93,366)		(84,477)
Outstanding, December 31		229,236		197,422		180,440

Schedule of restricted stock granted

During 2022, 2021 and 2020, we granted 221,542, 182,240 and 167,375 shares of restricted common stock and performance-based stock units, respectively, under the 2021 Plan and 2015 Plan as follows:

	No. of	Price per
Year	Shares/Units	Share		Reward Type	Vesting Period
2022	122,865	$	33.94	Restricted stock	ratably over 3 years
	86,332	$	33.94	Performance-based stock units	TSR targets (1)
	12,345	$	38.48	Restricted stock	May 25,2023
	221,542
2021	95,293	$	42.27	Restricted stock	ratably over 3 years
	71,892	$	42.27	Performance-based stock units	TSR targets (1)
	12,055	$	39.40	Restricted stock	May 26, 2022
	3,000	$	43.14	Restricted stock	April 1, 2022
	182,240
2020	76,464	$	48.95	Restricted stock	ratably over 3 years
	66,027	$	49.98	Performance-based stock units	TSR targets (1)
	9,884	$	38.45	Restricted stock	May 27, 2021
	15,000	$	38.45	Restricted stock	ratably over 3 years
	167,375

(1) Vesting is based on achieving certain total shareholder return (“TSR”) targets in 4 years with acceleration opportunity in 3 years.

Schedule of restricted common stock and performance-based stock unit scheduled to vest and remaining compensation expense

At December 31, 2022, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (dollar amount in thousands):

	Remaining
	Compensation
Vesting Date	Expense
2023	$	5,603
2024		2,853
2025		309
Total	$	8,765

Schedule of nonqualified stock option activity

				Weighted Average
	Shares			Price
	2022	2021	2020	2022			2021	2020
Outstanding, January 1	15,000	15,000	15,000	$	38.43	$	38.43	$	38.43
Granted	—	—	—		n/a		n/a		n/a
Exercised	—	—	—		n/a		n/a		n/a
Canceled	(5,000)	—	—	$	38.43		n/a		n/a
Outstanding, December 31	10,000	15,000	15,000	$	38.43	$	38.43	$	38.43
Exercisable, December 31(1)	10,000	15,000	15,000	$	38.43	$	38.43	$	38.43

(1) The aggregate intrinsic value of exercisable options at December 31, 2022, based upon the closing price of our common shares at December 30, 2022, the last trading day of 2022, was approximately $0. Options exercisable at December 31, 2022, 2021 and 2020 have a weighted average remaining contractual life of approximately 0.7 years, 1.2 years, and 2.2 years, respectively.

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies

Schedule of commitments

At December 31, 2022, we had commitments as follows (in thousands):

						Total
	Investment			2022		Commitment		Remaining
	Commitment			Funding		Funded		Commitment
Real estate properties (Note 5. Real Estate Investments)	$	22,102	(1)	$	7,263	$	8,315	$	13,787
Accrued incentives and earn-out liabilities (Note 8. Lease Incentives)		19,000	(2)		—		—		19,000
Mortgage loans (Note 5. Real Estate Investments)		32,507	(3)		5,873		9,613		22,894
Notes receivable (Note 7. Notes Receivable)		27,541			12,192		15,962		11,579
Total	$	101,150		$	25,328	$	33,890	$	67,260

(1) Represents commitments to purchase land and improvements, if applicable, and to develop, re-develop, renovate or expand seniors housing and health care properties.

(2) Includes an earn-out payment of up to $3,000 to an operator under a master lease on four SNFs in Texas which were acquired during 2022. The master lease allows either an earn-out payment up to $3,000 or a purchase option. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. If neither option is elected within the timeframe defined in the lease, both elections are terminated.

(3) Represents $14,507 of commitments to expand and renovate the seniors housing and health care properties securing the mortgage loans and $18,000 represents contingent funding upon the borrower achieving certain coverage ratios.

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Distributions (Tables)

12 Months Ended

Dec. 31, 2022

Distributions

Schedule of federal income tax classification of the per share common stock distributions

	Year Ended December 31,
	2022		2021		2020
Ordinary taxable distribution	$	1.095	$	1.220	$	0.936
Return of capital		—		0.750		—
Unrecaptured Section 1250 gain		0.502		0.252		0.894
Long-term capital gain		0.683		0.058		0.450
Total	$	2.280	$	2.280	$	2.280

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Net Income Per Common Share (Tables)

12 Months Ended

Dec. 31, 2022

Net Income Per Common Share

Schedule of basic and diluted net income per share

Basic and diluted net income per share was as follows (in thousands except per share amounts):

	For the year ended December 31,
	2022		2021			2020
Net income	$	100,584	$	56,224		$	95,677
Less income allocated to non-controlling interests		(560)		(363)			(384)
Less income allocated to participating securities:
Non-forfeitable dividends on participating securities		(531)		(458)			(397)
Income allocated to participating securities		(49)		—			(25)
Total net income allocated to participating securities		(580)		(458)			(422)
Net income available to common stockholders		99,444		55,403			94,871
Effect of dilutive securities:
Participating securities (1)		—		—			—
Net income for diluted net income per share	$	99,444	$	55,403		$	94,871
Shares for basic net income per share		39,894		39,156			39,179
Effect of dilutive securities:
Stock options (2)		—		—			—
Performance-based stock units		173		—	(3)		85
Participating securities (1)		—		—			—
Total effect of dilutive securities		173		—			85
Shares for diluted net income per share		40,067		39,156			39,264
Basic net income per share	$	2.49	$	1.41		$	2.42
Diluted net income per share	$	2.48	$	1.41		$	2.42

(1) For the years ended December 31, 2022, 2021 and 2020, the participating securities were excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

(2) For the years ended December 31, 2022, 2021and 2020, the stock options were excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

(3) For the year ended December 31, 2021, no performance-based stock units would be earned based on TSR targets.

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Quarterly Financial Information (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2022

Quarterly Financial Information

Schedule of quarterly financial information

	For the quarter ended
	March 31,		June 30,		September 30,		December 31,
	(unaudited, in thousands except per share amounts)
2022
Revenues	$	40,787	$	43,024	$	43,503	$	47,839
Net income available to common stockholders	$	14,275	$	54,065	$	13,159	$	17,809
Net income per common share available to common stockholders:
Basic	$	0.36	$	1.37	$	0.33	$	0.44
Diluted	$	0.36	$	1.36	$	0.32	$	0.44
Dividends per share declared	$	0.57	$	0.57	$	0.57	$	0.57
Dividends per share paid	$	0.57	$	0.57	$	0.57	$	0.57
2021
Revenues	$	40,280	$	38,129	$	37,472	$	39,441
Net income available to common stockholders	$	13,642	$	18,126	$	10,909	$	12,726
Net income per common share available to common stockholders:
Basic	$	0.35	$	0.46	$	0.28	$	0.32
Diluted	$	0.35	$	0.46	$	0.28	$	0.32
Dividends per share declared	$	0.57	$	0.57	$	0.57	$	0.57
Dividends per share paid	$	0.57	$	0.57	$	0.57	$	0.57

NOTE: Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of per share amounts for the quarters may not agree with the per share amounts for the year.

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2022

Fair Value Measurements

Schedule of carrying value and fair value of the entity's financial instruments

	At December 31, 2022					At December 31, 2021
	Carrying		Fair			Carrying		Fair
	Value		Value			Value		Value
Financing receivable, net of credit loss reserve	$	75,999	$	76,033	(1)	$	—	$	—
Mortgage loans receivable, net of credit loss reserve		389,728		461,276	(2)		344,442		405,162	(2)
Notes receivable, net of credit loss reserve		58,383		61,858	(3)		28,337		28,653	(3)
Revolving line of credit		130,000		130,000	(4)		110,900		110,900	(4)
Term loans, net of debt issue costs		99,511		100,000	(4)		99,363		100,000	(4)
Senior unsecured notes, net of debt issue costs		538,343		477,653	(5)		512,456		540,045	(5)

(1) Our investment in financing receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate used to value our future cash inflows of the financing receivable at December 31, 2022 was 7.6%.

(2) Our investment in mortgage loans receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash inflows of the mortgage loans receivable at December 31, 2022 and 2021 was 9.3% and 9.5%, respectively.

(3) Our investments in notes receivable are classified as Level 3. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash flows of the notes receivable at December 31, 2022 and 2021, were 7.1% and 5.6%, respectively.

(4) Our revolving line of credit and term loans bear interest at a variable interest rate. The estimated fair value of our revolving line of credit and term loans approximated their carrying values at December 31, 2022 and 2021 based upon prevailing market interest rates for similar debt arrangements.

(5) Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is measured based upon management’s estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities. At December 31, 2022, the discount rate used to value our future cash outflow of our senior unsecured notes was 6.50% for those maturing before year 2030 and 7.00% for those maturing at or beyond year 2030. At December 31, 2021, the discount rate used to value our future cash outflow of our senior unsecured notes was 3.0% for those maturing before year 2030 and 3.25% for those maturing beyond year 2030.

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The Company (Details)	12 Months Ended
	Dec. 31, 2022 segment
General
Number of operating segments	1

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Summary of Significant Accounting Policies - Owned Properties (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2020 USD ($) item
Owned Properties
Number of beds damaged | item		114
Gain from property insurance proceeds | $		$ 373,000
Computer Equipment | Minimum
Owned Properties
Useful life	3 years
Computer Equipment | Maximum
Owned Properties
Useful life	5 years
Furniture and Fixtures | Minimum
Owned Properties
Useful life	5 years
Furniture and Fixtures | Maximum
Owned Properties
Useful life	15 years
Building | Minimum
Owned Properties
Useful life	35 years
Building | Maximum
Owned Properties
Useful life	50 years
Site Improvements | Minimum
Owned Properties
Useful life	10 years
Site Improvements | Maximum
Owned Properties
Useful life	20 years
Building Improvements | Minimum
Owned Properties
Useful life	10 years
Building Improvements | Maximum
Owned Properties
Useful life	50 years

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Summary of Significant Accounting Policies - Working Capital Loan (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Mortgage loans on real estate
Interest rate (as a percent)	7.25%
Minimum
Mortgage loans on real estate
Interest rate (as a percent)		4.00%
Minimum | Working Capital Loans Receivables
Mortgage loans on real estate
Interest rate (as a percent)	4.00%
Maximum
Mortgage loans on real estate
Interest rate (as a percent)		8.00%
Maximum | Working Capital Loans Receivables
Mortgage loans on real estate
Interest rate (as a percent)	8.00%

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Summary of Significant Accounting Policies - Mezzanine Loans and Impairments (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Mortgage loans on real estate
Interest rate (as a percent)	7.25%
Loan Term	4 years
Allowance for Doubtful Accounts
Accrued interest receivable	$ 46,000,000
Write-off of accrued interest receivable	0	$ 0	$ 0
Impairments
Impairment of Real Estate	$ 3,422,000	$ 0	$ 3,977,000
Minimum
Mortgage loans on real estate
Interest rate (as a percent)		4.00%
Maximum
Mortgage loans on real estate
Interest rate (as a percent)		8.00%
Loan Term	4 years
Mezzanine Loans | Minimum
Mortgage loans on real estate
Interest rate (as a percent)	7.00%
Loan Term	4 years
Mezzanine Loans | Maximum
Mortgage loans on real estate
Interest rate (as a percent)	12.00%
Loan Term	5 years

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Summary of Significant Accounting Policies - Derivative Instruments (Details)	1 Months Ended	3 Months Ended
	Dec. 31, 2022 USD ($) item	Dec. 31, 2022 USD ($) item
Summary of Significant Accounting Policies
Number of interest rate swaps | item	2	2
Notional Amount | $	$ 100,000,000	$ 100,000,000
Credit spread basis points	10.00%	10.00%

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Summary of Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) item	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Revenue Recognition
Maximum period over which loan is to be considered as non-performing	60 days
Contingent rental income | $	$ 57	$ 0	$ 111
Minimum
Revenue Recognition
Methods used for calculation of annual increases over the rents of the prior year	1
Specified annual increase over the prior year's rent (as a percent)	2.00%
Maximum
Revenue Recognition
Methods used for calculation of annual increases over the rents of the prior year	4
Specified annual increase over the prior year's rent (as a percent)	3.00%

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Summary of Significant Accounting Policies - Taxes (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Federal Income Taxes
Provision for federal or state income taxes	$ 0	$ 0	$ 0
Minimum distribution of taxable income (as a percent)	90.00%
Distribution percentage	100
Period considered for calculation of depreciation for federal tax purpose	27 years 6 months
Period considered for determining the taxability of distributions to shareholders	30 years
(Excess) / Deficit of book basis of net depreciable assets over tax basis	$ 41,202,000

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Major Operators (Details)	12 Months Ended
	Dec. 31, 2022 item property
Major Operators
Number of major operators	1
Number of beds/units	217
ALF
Major Operators
Number of beds/units	74
Prestige Healthcare | SNF
Major Operators
Number of beds | property	24
Number of beds/units	2,820
Prestige Healthcare | ALF
Major Operators
Number of beds/units	93
Total Revenues | Operator Concentration Risk | Prestige Healthcare
Major Operators
Concentration risk (as a percent)	18.60%
Total Assets | Credit Concentration Risk | Prestige Healthcare
Major Operators
Concentration risk (as a percent)	16.00%

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Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Non-cash investing and financing transactions:
Contribution of financing receivable from non-controlling interests (See Note 5. Real Estate Investments)	$ 14,325
Mortgage loans receivable reserve withheld at origination (See Note 5. Real Estate Investments)	107	$ 298
Accretion of interest reserve recorded as mortgage loan receivable (See Note 5. Real Estate Investments)	(6,192)	(150)
Preferred return reserve related to investment in unconsolidated joint ventures (See Note 6. Investment in Unconsolidated Joint Ventures)	351	2,324	$ 2,878
Notes receivable reserve withheld at origination (See Note 7. Notes Receivable)		353
Reclassification of notes receivable to lease incentives (Note 8. Lease Incentives)			$ 300
Change in fair value of interest rate swap agreements (Note 9. Debt Obligations)	$ (8,891)	$ 172

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Real Estate Investments - Owned Properties (Details) - Real Estate Investment	Dec. 31, 2022 property
Real estate investments
Number of properties	152
Number of states	26
Number of operators	24
ALF
Real estate investments
Number of properties	99
SNF
Real estate investments
Number of properties	52
Hospital
Real estate investments
Number of properties	1

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Real Estate Investments - Base Rents (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Depreciation
Depreciation expense	$ 37,394	$ 38,192	$ 38,945
Future minimum base rents receivable
2023	120,817
2024	113,003
2025	103,690
2026	71,044
2027	67,087
Thereafter	$ 200,663

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Real Estate Investments - Lease (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2023 item lease Center	Dec. 31, 2022 USD ($) property Center lease item	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Real estate investments
Lease renewal term	5 years	5 years
Number of operating lease renewals | lease		2
Skilled nursing center purchased | Center		3
Write-off of straight-line rent and lease incentives balances		$ 256,000	$ 758,000	$ 23,214,000
Gross Investment		58,972,000
Carrying value		$ 1,019,218,000	1,033,951,000
Lease term		10 years
Income and Expenses, Lessor [Abstract]
Base cash rental income		$ 115,230,000	107,692,000	132,789,000
Variable cash rental income		15,516,000	14,332,000	15,167,000
Straight-line rent		(1,369,000)	467,000	1,778,000
Adjustment for collectability of lease incentives and rental income		(256,000)	(758,000)	(23,214,000)
Amortization of lease incentives		(877,000)	(608,000)	(426,000)
Total Rental Income		$ 128,244,000	$ 121,125,000	$ 126,094,000
Number of units | item		217
Number of Re leased properties | property		18
Percentage of reduction in rent and interest escalations		50.00%	50.00%
Subsequent Event
Real estate investments
Lease renewal term	5 years
Number of operating lease renewals | lease	2
Lease term	10 years
Florida | Brookdale Senior Living | Subsequent Event
Income and Expenses, Lessor [Abstract]
Number of units | item	216
Purchase Option in Lease Arrangements
Real estate investments
Gross Investment		$ 202,013,000
Carrying value		185,066,000
ALF
Income and Expenses, Lessor [Abstract]
Lease termination fee received		$ 1,181,000
Number of units | item		74
ALF | Purchase Option in Lease Arrangements | Nebraska
Real estate investments
Number of properties | property		3
Gross Investment		$ 7,633,000
Carrying value		$ 2,948,000
MC | Purchase Option in Lease Arrangements | Florida
Real estate investments
Number of properties | property		1
Gross Investment		$ 15,201,000
Carrying value		$ 12,500,000
ALF & MC | Purchase Option in Lease Arrangements | California
Real estate investments
Number of properties | property		2
Gross Investment		$ 38,895,000
Carrying value		$ 33,719,000
ALF & MC | Purchase Option in Lease Arrangements | South Carolina
Real estate investments
Number of properties | property		1
Gross Investment		$ 11,680,000
Carrying value		$ 9,052,000
SNF
Real estate investments
Lease renewal term		5 years
Number of operating lease renewals | lease		2
Skilled nursing center purchased | item		3
Number of properties acquired | property		4
Lease term		10 years
SNF | Brookdale Senior Living | Subsequent Event
Real estate investments
Skilled nursing center purchased | Center	2
Additional term of lessor's operating lease renewal	5 years
SNF | Florida | Brookdale Senior Living | Subsequent Event
Income and Expenses, Lessor [Abstract]
Number of units | item	216
SNF | Texas
Real estate investments
Lease term		10 years
SNF | Purchase Option in Lease Arrangements | Florida
Real estate investments
Number of properties | property		3
Gross Investment		$ 76,767,000
Carrying value		$ 75,999,000
Number of properties acquired | item		3
SNF | Purchase Option in Lease Arrangements | Texas
Real estate investments
Number of properties | property		4
Gross Investment		$ 51,837,000
Carrying value		$ 50,848,000
Number of properties acquired | item		4
Lease term		10 years

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Real Estate Investments - Impairment Loss (Details)	12 Months Ended
	Dec. 31, 2022 USD ($) item	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Real Estate Properties [Line Items]
Number of units | item	217
Impairment loss	$ 3,422,000	$ 0	$ 3,977,000
Kentucky
Real Estate Properties [Line Items]
Impairment loss from investments in unconsolidated joint ventures	$ 1,286,000
ALF
Real Estate Properties [Line Items]
Number of units | item	74
ALF | Kentucky
Real Estate Properties [Line Items]
Impairment loss from investments in unconsolidated joint ventures	$ 1,286,000
ALF | Florida and Colorado
Real Estate Properties [Line Items]
Number of units | item	70
Impairment loss	$ 2,136,000

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Real Estate Investments - Held-For-Sale Properties (Details)	12 Months Ended
	Dec. 31, 2022 USD ($) item property	Dec. 31, 2021 USD ($)
Real Estate Properties [Line Items]
Accumulated depreciation	$ 389,182,000	$ 374,606,000
Kentucky
Real Estate Properties [Line Items]
Impairment loss from investments in unconsolidated joint ventures	$ 1,286,000
ALF | Kentucky
Real Estate Properties [Line Items]
Number of Properties | property	1
Number of Beds/units | item	60
Gross Investment	$ 13,015,000
Accumulated depreciation	2,305,000
Impairment loss from investments in unconsolidated joint ventures	$ 1,286,000

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Real Estate Investments - Acquisitions (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) item property
Real estate investments
Lease term	10 years
SNF
Real estate investments
Purchase Price	$ 51,534
Transaction Costs	283
Acquisition Costs	$ 51,817
Number of properties acquired | property	4
Number of beds/units acquired | item	339
Lease term	10 years
SNF | Texas
Real estate investments
Lease term	10 years
Number of options available for renewal | item	2
Renewal term	5 years
Cash yield percentage, minimum	8.00%
Cash yield percentage year two	8.25%
Working capital loan outstanding	$ 1,642
SNF | Texas | Minimum
Real estate investments
Annual increase in cash yield percentage	2.00%
SNF | Texas | Maximum
Real estate investments
Annual increase in cash yield percentage	4.00%
Working capital loan funded	$ 2,000

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Real Estate Investments - Developments and Improvements (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Real estate investments
Invested in projects	$ 25,328
Development | Development and Improvement Commitments
Real estate investments
Invested in projects	105		$ 16,699
Improvements | Development and Improvement Commitments
Real estate investments
Invested in projects	8,994	$ 6,298	6,913
ALF | Development | Development and Improvement Commitments
Real estate investments
Invested in projects	105		4,491
ALF | Improvements | Development and Improvement Commitments
Real estate investments
Invested in projects	5,538	5,846	6,842
SNF | Development | Development and Improvement Commitments
Real estate investments
Invested in projects			12,208
SNF | Improvements | Development and Improvement Commitments
Real estate investments
Invested in projects	2,897	$ 452	$ 71
Other | Improvements | Development and Improvement Commitments
Real estate investments
Invested in projects	$ 559

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Real Estate Investments - Completed Projects (Details) - Real Estate Investment Completed Projects $ in Thousands	12 Months Ended
	Dec. 31, 2022 project	Dec. 31, 2021 project	Dec. 31, 2020 USD ($) property item
Completed development projects
Number of completed development projects | project	0	0
Real Estate Development Commitments
Completed development projects
Number of Properties | property			2
Number of Beds/Units | item			168
Total Investment | $			$ 35,034
ALF & MC | Real Estate Development Commitments | Oregon
Completed development projects
Number of Properties | property			1
Number of Beds/Units | item			78
Total Investment | $			$ 18,447
SNF | Real Estate Development Commitments | Missouri
Completed development projects
Number of Properties | property			1
Number of Beds/Units | item			90
Total Investment | $			$ 16,587

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Real Estate Investments - Properties Sales (Details)	12 Months Ended
	Dec. 31, 2022 USD ($) property item	Dec. 31, 2021 USD ($) item property	Dec. 31, 2020 USD ($) item property
Disposals and other
Carrying value	$ 1,019,218,000	$ 1,033,951,000
Net Gain (loss)	37,830,000	$ 7,462,000	$ 44,117,000
Gain from property insurance proceeds			$ 373,000
Number of beds damaged | item			114
Kentucky
Disposals and other
Impairment loss from investments in unconsolidated joint ventures	1,286,000
ALF | Virginia
Disposals and other
Lease termination fee payable	1,181,000
ALF | Kentucky
Disposals and other
Impairment loss from investments in unconsolidated joint ventures	$ 1,286,000
Properties sold
Disposals and other
Number of properties sold | property	5	6	21
Number of beds or units in property sold | item	427	426	2,411
Sales price	$ 74,345,000	$ 45,600,000	$ 74,800,000
Carrying value	35,924,000	36,513,000	29,084,000
Net Gain (loss)	37,830,000	7,462,000	44,117,000
Net Gain (loss)	$ 214,000	$ 363,000	$ 129,000
Properties sold | ALF | California
Disposals and other
Number of properties sold | property	2
Number of beds or units in property sold | item	232
Sales price	$ 43,715,000
Carrying value	17,832,000
Net Gain (loss)	$ 25,867,000
Properties sold | ALF | Florida
Disposals and other
Number of properties sold | property		1
Sales price		$ 2,000,000
Carrying value		2,626,000
Net Gain (loss)		$ (858,000)
Properties sold | ALF | Nebraska
Disposals and other
Number of properties sold | property		1
Number of beds or units in property sold | item		40
Sales price		$ 900,000
Carrying value		1,079,000
Net Gain (loss)		$ (200,000)
Properties sold | ALF | Wisconsin
Disposals and other
Number of properties sold | property		3
Number of beds or units in property sold | item		263
Sales price		$ 35,000,000
Carrying value		28,295,000
Net Gain (loss)		$ 5,595,000
Properties sold | ALF | Virginia
Disposals and other
Number of properties sold | property	1
Number of beds or units in property sold | item	74
Sales price	$ 16,895,000
Carrying value	15,549,000
Net Gain (loss)	$ 1,344,000
Properties sold | SNF | California
Disposals and other
Number of properties sold | property	1
Number of beds or units in property sold | item	121
Sales price	$ 13,250,000
Carrying value	1,846,000
Net Gain (loss)	$ 10,846,000
Properties sold | SNF | Washington
Disposals and other
Number of properties sold | property		1
Number of beds or units in property sold | item		123
Sales price		$ 7,700,000
Carrying value		4,513,000
Net Gain (loss)		$ 2,562,000
Properties sold | SNF | Arizona
Disposals and other
Number of properties sold | property			1
Number of beds or units in property sold | item			194
Sales price			$ 12,550,000
Carrying value			2,229,000
Net Gain (loss)			$ 10,293,000
Properties sold | SNF | Colorado
Disposals and other
Number of properties sold | property			3
Number of beds or units in property sold | item			275
Sales price			$ 15,000,000
Carrying value			4,271,000
Net Gain (loss)			$ 10,364,000
Properties sold | SNF | Iowa
Disposals and other
Number of properties sold | property			7
Number of beds or units in property sold | item			544
Sales price			$ 14,500,000
Carrying value			4,886,000
Net Gain (loss)			$ 9,051,000
Properties sold | SNF | Kansas
Disposals and other
Number of properties sold | property			3
Number of beds or units in property sold | item			250
Sales price			$ 9,750,000
Carrying value			7,438,000
Net Gain (loss)			$ 1,993,000
Properties sold | SNF | Texas
Disposals and other
Number of properties sold | property	1		7
Number of beds or units in property sold | item			1,148
Sales price	$ 485,000		$ 23,000,000
Carrying value	697,000		10,260,000
Net Gain (loss)	$ (441,000)		$ 12,287,000

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Real Estate Investments - Financing Receivable (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2023 USD ($) item lease	Dec. 31, 2022 USD ($) Center lease
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Contribution to JV		$ 61,661,000
Skilled nursing center purchased | Center		3
Real estate property acquired		$ 75,825,000
Lease term		10 years
Number of operating lease renewals | lease		2
Lease renewal term	5 years	5 years
Interest income from financing receivable		$ 1,762,000
Provision for expected loan losses		768,000
Subsequent Event
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amount of joint venture investment	$ 121,321,000
Contribution to JV	$ 117,900,000
Number of assisted living and memory care communities | item	11
Lease term	10 years
Number of operating lease renewals | lease	2
Lease renewal term	5 years
Percentage of contractual initial cash yield	7.25%
Percentage of contractual initial cash yield in year three	7.50%
Percentage of floor on initial cash yield	2.00%
Percentage of ceiling on initial cash yield	4.00%
Maximum percentage of purchase option to buy properties	50.00%
Percentage of cash return	9.00%
JV Partner
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Contribution to JV		$ 14,325,000

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Real Estate Investments - Mortgage Loan (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($) property loan item state $ / item	Dec. 31, 2021
Real Estate [Line Items]
Interest rate (as a percent)		7.25%
Gross Investment | $		$ 58,972,000
Number of Loans | property		14
Number of beds/units		217
Loan Term		4 years
Internal Rate of Return		8.00%
North Carolina | Subsequent Event
Real Estate [Line Items]
Interest rate (as a percent)	7.25%
Payments to Acquire Real Estate | $	$ 10,750,000
Loan Term	2 years
Internal Rate of Return	9.00%
ALF
Real Estate [Line Items]
Number of beds/units		74
ALF | North Carolina
Real Estate [Line Items]
Number of properties | property		4
Mezzanine loan
Real Estate [Line Items]
Interest rate (as a percent)		8.00%
Number of beds/units | property		621
Loan Term		5 years
Mezzanine loan | Subsequent Event
Real Estate [Line Items]
Number of beds/units	136
Mortgage loans with 7.3% Interest Maturing 2025 | ALF
Real Estate [Line Items]
Internal Rate of Return		8.00%
Mortgage loans with 7.3% Interest Maturing 2026 | OTH
Real Estate [Line Items]
Interest rate (as a percent)		7.30%
Mortgage Loans
Real Estate [Line Items]
Gross Investment | $		$ 393,658,000
Percentage of Investment		100.00%
Number of Loans | loan		10
Number of properties | property		41
Average Investment per Bed/Unit | $ / item		106.42
Number of borrowers		5
Number of states in which properties are located | state		6
Mortgage Loans | North Carolina
Real Estate [Line Items]
Interest rate (as a percent)		7.30%
Mortgage Loans | SNF Beds
Real Estate [Line Items]
Number of beds/units		2,891
Mortgage Loans | ALF Units
Real Estate [Line Items]
Number of beds/units		808
Mortgage Loans | SNF
Real Estate [Line Items]
Interest rate (as a percent)		2.25%
Mortgage Loans | Mortgage loans with 7.5% Interest Maturing 2023 | OTH
Real Estate [Line Items]
Interest rate (as a percent)		7.50%
Gross Investment | $		$ 1,886,000
Percentage of Investment		0.50%
Number of Loans | loan		1
Mortgage Loans | Mortgage loans with 7.5% Interest Maturing 2024 | SNF
Real Estate [Line Items]
Interest rate (as a percent)		7.50%
Gross Investment | $		$ 29,347,000
Percentage of Investment		7.50%
Number of Loans | loan		1
Number of properties | property		1
Average Investment per Bed/Unit | $ / item		155.28
Mortgage Loans | Mortgage loans with 7.5% Interest Maturing 2024 | SNF | SNF Beds
Real Estate [Line Items]
Number of beds/units		189
Mortgage Loans | Mortgage loans with 7.8% Interest Maturing 2025 | ALF
Real Estate [Line Items]
Interest rate (as a percent)		7.80%
Gross Investment | $		$ 14,308,000
Percentage of Investment		3.60%
Number of Loans | loan		1
Number of properties | property		1
Average Investment per Bed/Unit | $ / item		210.41
Mortgage Loans | Mortgage loans with 7.8% Interest Maturing 2025 | ALF | ALF Units
Real Estate [Line Items]
Number of beds/units		68
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2025 | ALF
Real Estate [Line Items]
Gross Investment | $		$ 56,317,000
Percentage of Investment		14.30%
Number of Loans | loan		1
Number of properties | property		13
Average Investment per Bed/Unit | $ / item		107.68
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2025 | ALF | ALF Units
Real Estate [Line Items]
Number of beds/units		523
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2026 | OTH
Real Estate [Line Items]
Gross Investment | $		$ 797,000
Percentage of Investment		0.20%
Number of Loans | loan		1
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2026 | ALF
Real Estate [Line Items]
Interest rate (as a percent)		7.30%
Gross Investment | $		$ 33,001,000
Percentage of Investment		8.40%
Number of Loans | loan		1
Number of properties | property		4
Average Investment per Bed/Unit | $ / item		152.08
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2026 | ALF | ALF Units
Real Estate [Line Items]
Number of beds/units		217
Mortgage Loans | Mortgage loans with 10.6% Interest Maturing 2043 | SNF
Real Estate [Line Items]
Interest rate (as a percent)			10.60%
Gross Investment | $		$ 184,351,000
Percentage of Investment		46.80%
Number of Loans | loan		1
Number of properties | property		15
Average Investment per Bed/Unit | $ / item		98.32
Mortgage Loans | Mortgage loans with 10.6% Interest Maturing 2043 | SNF | SNF Beds
Real Estate [Line Items]
Number of beds/units		1,875
Mortgage Loans | Mortgage loans with 9.6% Interest Maturing 2045 [Member] | SNF
Real Estate [Line Items]
Interest rate (as a percent)		9.60%
Gross Investment | $		$ 39,026,000
Percentage of Investment		9.90%
Number of Loans | loan		1
Number of properties | property		4
Average Investment per Bed/Unit | $ / item		81.30
Mortgage Loans | Mortgage loans with 9.6% Interest Maturing 2045 [Member] | SNF | SNF Beds
Real Estate [Line Items]
Number of beds/units		480
Mortgage Loans | Mortgage loans with 9.8% Interest Maturing 2045 | SNF
Real Estate [Line Items]
Interest rate (as a percent)		9.80%
Gross Investment | $		$ 19,750,000
Percentage of Investment		5.00%
Number of Loans | loan		1
Number of properties | property		2
Average Investment per Bed/Unit | $ / item		98.26
Mortgage Loans | Mortgage loans with 9.8% Interest Maturing 2045 | SNF | SNF Beds
Real Estate [Line Items]
Number of beds/units		201
Mortgage Loans | Mortgage Loans with 10.1% Interest Maturing 2045 | SNF
Real Estate [Line Items]
Interest rate (as a percent)		10.10%
Gross Investment | $		$ 14,875,000
Percentage of Investment		3.80%
Number of Loans | loan		1
Number of properties | property		1
Average Investment per Bed/Unit | $ / item		101.88
Mortgage Loans | Mortgage Loans with 10.1% Interest Maturing 2045 | SNF | SNF Beds
Real Estate [Line Items]
Number of beds/units		146

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Real Estate Investments - Mortgage Loans Activity (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($) a property loan item	Dec. 31, 2021 USD ($) item	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Mortgage Loans
Originations and funding under mortgage loans receivable		$ 40,732,000	$ 88,955,000	$ 4,253,000
Application of interest reserve		6,192,000	298,000
Scheduled principal payments received		(1,175,000)	(1,175,000)	(1,065,000)
Mortgage loan premium amortization		(6,000)	(6,000)	(4,000)
Provision (recovery) for loan loss reserve		(457,000)	(881,000)	(32,000)
Net increase (decrease) in mortgage loans receivable		$ 45,286,000	87,191,000	3,152,000
Number of senior mortgage loans | loan		2
Area of land | a		7.6
Loan Term		4 years
Interest rate (as a percent)		7.25%
Internal Rate of Return		8.00%
Gross Investment		$ 58,972,000
Number of beds/units | item		217
Extension term number of options		2
Extension term		1 year
Carrying Amount of Mortgages		$ 389,728,000	344,442,000	257,251,000	$ 254,099,000
Additions to mortgage loans			$ 9,900,000
Minimum
Mortgage Loans
Interest rate (as a percent)			4.00%
Maximum
Mortgage Loans
Loan Term		4 years
Interest rate (as a percent)			8.00%
Mortgage Loans
Mortgage Loans
Gross Investment		$ 393,658,000
Number of properties | property		41
Percentage of Investment		100.00%
Additions to mortgage loans		$ 2,000,000	$ 540,000
Mezzanine loan
Mortgage Loans
Loan Term		5 years
Interest rate (as a percent)		8.00%
Number of beds/units | property		621
Mezzanine loan | Subsequent Event
Mortgage Loans
Number of beds/units | item	136
Mortgages With 8.89 Percent Interest With Escalation [Member] | Mortgage Loans
Mortgage Loans
Additions to mortgage loans				$ 2,000,000
SNF | Mortgage Loans
Mortgage Loans
Interest rate (as a percent)		2.25%
SNF | Mortgage loans with 7.5% Interest Maturing 2022 | Mortgage Loans
Mortgage Loans
Number of beds/units | item		91
ALF
Mortgage Loans
Number of beds/units | item		74
Missouri | SNF | Mortgage loans with 7.5% Interest Maturing 2022 | Mortgage Loans
Mortgage Loans
Loan Term			1 year
Interest rate (as a percent)			7.50%
Gross Investment			$ 1,638,000
Number of beds/units | item			91
Amount With held in Reserve			$ 142,000
Louisiana | SNF | Mortgage loans with 7.5% Interest Maturing 2022 | Mortgage Loans
Mortgage Loans
Loan Term			3 years
Interest rate (as a percent)			7.50%
Gross Investment			$ 27,047,000
Number of beds/units | item			189
Extension term number of options | item			1
Extension term			12 months
Florida | ALF | Mortgages With 7.75% Interest | Mortgage Loans
Mortgage Loans
Loan Term			4 years
Interest rate (as a percent)			7.75%
Gross Investment			$ 11,724,000
Number of beds/units | item			68
Amount With held in Reserve			$ 806,000
Origination/Funding			4,177,000
Application of mortgage premium			$ 156,000
California | Mortgage Loans
Mortgage Loans
Loan Term			4 years
Amount With held in Reserve			$ 4,496,000
Number of real estate properties acquired | item			13
Carrying Amount of Mortgages			$ 48,006,000
Funded commitment			6,097,000
Commitment for working capital			$ 650,000
California | ALF | Mortgages With 7.75% Interest | Mortgage Loans
Mortgage Loans
Interest rate (as a percent)			7.25%
North Carolina | Subsequent Event
Mortgage Loans
Payments to Acquire Real Estate	$ 10,750,000
Loan Term	2 years
Interest rate (as a percent)	7.25%
Internal Rate of Return	9.00%
North Carolina | Mortgage Loans
Mortgage Loans
Interest rate (as a percent)		7.30%
Carrying Amount of Mortgages		$ 788,000
North Carolina | ALF
Mortgage Loans
Number of properties | property		4
SNF Beds | Mortgage Loans
Mortgage Loans
Number of beds/units | item		2,891

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Real Estate Investments - Mortgage Loans - Scheduled Principal Payments (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Real estate investments
Carrying value of mortgage loans	$ 389,728	$ 344,442
Mortgage Loans
Real estate investments
Carrying value of mortgage loans	389,728	$ 344,442
Scheduled principal payments on mortgage loan receivables
2023	3,061
2024	30,522
2025	71,801
2026	34,972
2027	1,175
Thereafter	252,127
Total	$ 393,658

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Investment in Unconsolidated Joint Ventures - Investment (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($) item property	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($) property
Investment in Unconsolidated Joint Ventures
Liquidation proceeds				$ 17,848,000
Number of beds/units | item		217
Carrying Value		$ 19,340,000	$ 19,340,000
Application of Interest Reserve		6,192,000	150,000
Subsequent Event
Investment in Unconsolidated Joint Ventures
Percentage of cash return	9.00%
Amount of joint venture investment	$ 121,321,000
Joint Venture
Investment in Unconsolidated Joint Ventures
Number of properties owned by joint venture for sale | property				4
Liquidation proceeds				$ 17,848,000
Additional proceeds				758,000
Joint Venture | Not primary beneficiary
Investment in Unconsolidated Joint Ventures
Capital Contributions			8,000,000	11,398,000
Income Recognized		1,504,000	1,417,000	432,000
Cash Interest Earned		351,000		432,000
Application of Interest Reserve		$ 1,153,000	1,292,000
Preferred Equity Investment | Joint Venture | Not primary beneficiary
Investment in Unconsolidated Joint Ventures
Number of beds/units | item		95
Carrying Value		$ 19,340,000
Combination ALF, MC, ILF | Preferred Equity Investment | Joint Venture | Not primary beneficiary
Investment in Unconsolidated Joint Ventures
Capital Contributions				58,000
Income Recognized				231,000
Cash Interest Earned				231,000
Combination ALF, MC, ILF | Preferred Equity Investment | Joint Venture | Not primary beneficiary | Arizona
Investment in Unconsolidated Joint Ventures
Number of beds/units | property		4
UDP | Joint Venture | Not primary beneficiary | Preferred Equity Investment
Investment in Unconsolidated Joint Ventures
Income Recognized		$ 1,054,000
Cash Interest Earned		351,000
Application of Interest Reserve		$ 703,000
UDP | Preferred Equity Investment | Joint Venture | Not primary beneficiary
Investment in Unconsolidated Joint Ventures
Capital Contributions			8,000,000	6,340,000
Income Recognized			967,000	169,000
Cash Interest Earned				169,000
Application of Interest Reserve			880,000
UDP | Preferred Equity Investment | Joint Venture | Not primary beneficiary | Subsequent Event
Investment in Unconsolidated Joint Ventures
Number of beds/units | item	267
Preferred equity investment in a joint venture	$ 13,000,000
Percentage of internal rate of return	14.00%
UDP | Preferred Equity Investment | Joint Venture | Not primary beneficiary | Washington
Investment in Unconsolidated Joint Ventures
Preferred return percentage		12.00%
Contractual cash portion		8.00%
Number of beds/units | item		267
Carrying Value		$ 13,000,000
Percentage of Investment		11.60%
Percentage of cash return		8.00%
Percentage of internal rate of return		12.00%
UDP | Preferred Equity Investment | Joint Venture | Not primary beneficiary
Investment in Unconsolidated Joint Ventures
Capital Contributions				5,000,000
Income Recognized				32,000
Cash Interest Earned				$ 32,000
Combination ALF/MC | Joint Venture | Not primary beneficiary | Preferred Equity Investment
Investment in Unconsolidated Joint Ventures
Income Recognized		$ 450,000
Application of Interest Reserve		$ 450,000
Combination ALF/MC | Preferred Equity Investment | Not primary beneficiary | Internal Rate of Return is Until Eight Percent | Maximum
Investment in Unconsolidated Joint Ventures
Percentage of cash return		9.00%
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary
Investment in Unconsolidated Joint Ventures
Income Recognized			450,000
Application of Interest Reserve			$ 412,000
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary | Internal Rate of Return is Until Eight Percent
Investment in Unconsolidated Joint Ventures
Percentage of internal rate of return		8.00%
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary | The Internal Rate of Return is Between Twelve and Fourteen Percent | Minimum
Investment in Unconsolidated Joint Ventures
Percentage of internal rate of return		12.00%
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary | The Internal Rate of Return is Between Twelve and Fourteen Percent | Maximum
Investment in Unconsolidated Joint Ventures
Percentage of internal rate of return		14.00%
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary | Washington
Investment in Unconsolidated Joint Ventures
Preferred return percentage		12.00%
Contractual cash portion		7.00%
Number of beds/units | item		95
Carrying Value		$ 6,340,000
Percentage of Investment		15.50%
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary | Washington | Minimum
Investment in Unconsolidated Joint Ventures
Preferred return percentage		12.00%
Combination ALF/MC | Preferred Equity Investment | Joint Venture | Not primary beneficiary | Washington | Internal Rate of Return is Until Eight Percent | Minimum
Investment in Unconsolidated Joint Ventures
Percentage of cash return		7.00%

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Notes Receivable (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) loan property
Notes Receivable
Interest rate (as a percent)	7.25%
Internal Rate of Return	8.00%
Gross Investment	$ 58,972
Number of Loans | property	14
Mezzanine loan
Notes Receivable
Interest rate (as a percent)	8.00%
Mezzanine loan | Mezzanine loan with 8% interest rate, 2023 maturity | ALF
Notes Receivable
Interest rate (as a percent)	8.00%
Internal Rate of Return	12.00%
Gross Investment	$ 7,460
Number of Loans | loan	1
Mezzanine loan | Mezzanine loan with 8% interest rate, 2024 maturity | ILF
Notes Receivable
Interest rate (as a percent)	8.00%
Internal Rate of Return	10.50%
Gross Investment	$ 4,355
Number of Loans | loan	1
Mezzanine loan | Mezzanine loan loan 8% interest rate, 2027 maturity | ALF
Notes Receivable
Interest rate (as a percent)	8.00%
Internal Rate of Return	11.00%
Gross Investment	$ 25,000
Number of Loans | loan	1
Working capital loans | Working capital loan 5% interest rate, 2023 maturity | ALF
Notes Receivable
Interest rate (as a percent)	5.00%
Gross Investment	$ 380
Number of Loans | loan	1
Working capital loans | Working capital loan 7% interest rate, 2023 maturity | ALF
Notes Receivable
Interest rate (as a percent)	7.00%
Gross Investment	$ 500
Number of Loans | loan	1
Working capital loans | Working capital loan 5% interest rate, 2024 maturity | ALF
Notes Receivable
Interest rate (as a percent)	5.00%
Gross Investment	$ 184
Number of Loans | loan	1
Working capital loans | Working capital loan 4% interest rate, 2024 maturity | SNF
Notes Receivable
Interest rate (as a percent)	4.00%
Gross Investment	$ 13,531
Number of Loans | loan	1
Working capital loans | Working capital loan 5% interest rate, 2025 maturity | ALF
Notes Receivable
Interest rate (as a percent)	5.00%
Gross Investment	$ 932
Number of Loans | loan	1
Working capital loans | Working capital loan 7.5% interest rate, 2027 maturity | ALF
Notes Receivable
Interest rate (as a percent)	7.50%
Gross Investment	$ 550
Number of Loans | loan	1
Working capital loans | Working capital loan 6.5% interest rate, 2030 maturity | SNF
Notes Receivable
Interest rate (as a percent)	6.50%
Gross Investment	$ 138
Number of Loans | loan	1
Working capital loans | Working capital loan 7.1% interest rate, 2030 maturity | ALF
Notes Receivable
Interest rate (as a percent)	7.10%
Gross Investment	$ 1,607
Number of Loans | loan	2
Working capital loans | Working capital loan 7% interest rate, 2031 maturity | ALF
Notes Receivable
Interest rate (as a percent)	7.00%
Gross Investment	$ 2,693
Number of Loans | loan	1
Working capital loans | Working capital loan 8% interest rate, 2032 maturity | SNF
Notes Receivable
Interest rate (as a percent)	8.00%
Gross Investment	$ 1,642
Number of Loans | loan	1

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Notes Receivable - Components (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Notes receivable activities
Notes receivable loan loss reserve	$ (589)	$ (286)
Total	58,383	28,337
Mezzanine loan
Notes receivable activities
Mezzanine loan	36,815	11,815
Other loans
Notes receivable activities
Mezzanine loan	$ 22,157	$ 16,808

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Notes Receivable - Other Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Financing Receivable, after Allowance for Credit Loss [Abstract]
Advances under notes receivable	$ 37,192	$ 16,353	$ 2,078
Interest reserve withheld		353
Principal payments received under notes receivable	(6,843)	(2,694)	(5,275)
Reclassified to lease incentives			300
Provision (recovery) for credit losses	(303)	(140)	35
Net increase (decrease) in notes receivable	$ 30,046	$ 13,872	$ (3,462)

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Notes Receivable - New Loan Commitment (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($) property item	Dec. 31, 2021 USD ($) item	Dec. 31, 2020 USD ($)
Notes receivable activities
Gross Investment		$ 58,972,000
Principal payments received on notes receivable		6,843,000	$ 2,694,000	$ 5,275,000
Amounts funded		$ 37,192,000	16,353,000	2,078,000
Number of property		5
Loan Term		4 years
Extension term number of options		2
Extension term		1 year
Interest rate (as a percent)		7.25%
Number of real estate property communities | property		5
Number of units | item		217
Interest reserve withheld			353,000
Funded under working capital		$ 8,767,000	$ 540,000	$ 4,253,000
Mortgage Loans
Notes receivable activities
Gross Investment		$ 393,658,000
Minimum
Notes receivable activities
Interest rate (as a percent)			4.00%
Maximum
Notes receivable activities
Loan Term		4 years
Interest rate (as a percent)			8.00%
Mezzanine loan
Notes receivable activities
Mezzanine loan		$ 36,815,000	$ 11,815,000
Amounts funded		$ 25,000,000
Number of property | property		5
Loan Term		5 years
Interest rate (as a percent)		8.00%
IRR on mortgage loan on real estate property		11.00%
Number of units | property		621
Notes receivable, gross		$ 36,815,000	$ 11,815,000
Mezzanine loan | Adjustment
Notes receivable activities
Working capital loan funded		1,867,000
Mezzanine loan | Maximum
Notes receivable activities
Working capital loan funded		2,000,000
Mezzanine loan | loan with 8% for the first 18 months increasing to 10.5% thereafter
Notes receivable activities
Interest rate (as a percent)			10.50%
Mezzanine loan | Loan with 8.0% for the first 18 months increasing to 10.5% thereafter with an internal rate of return ("IRR") of 10.5%.
Notes receivable activities
Mezzanine loan			$ 4,355,000
Loan Term			3 years
Extension term number of options | item			2
Extension term			12 months
Interest rate (as a percent)			8.00%
Notes receivable, gross			$ 4,355,000
Interest reserve withheld			$ 353,000
Subsequent Event | Mezzanine loan
Notes receivable activities
Principal payments received on notes receivable	$ 4,545,000
Exit IRR	$ 190,000
Number of units | item	136
Subsequent Event | Notes Receivable
Notes receivable activities
Number of units | item	136
HMG Healthcare, LLC | Secured loan maturing in September 2022
Notes receivable activities
Mezzanine loan		$ 25,000,000
Number of properties in transition | item		11
Notes receivable, gross		$ 25,000,000
HMG Healthcare, LLC | Mezzanine loan
Notes receivable activities
Funded under working capital		$ 9,761,000

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Lease Incentives (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Lease Incentives
Non-contingent lease incentives	$ 1,789	$ 2,678

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Lease Incentives - Non-Contingent Lease Incentive Activity (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) item property	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Lease Incentives
Non-contingent lease incentives funded	$ 418	$ 824	$ 220
Non-contingent amortization of lease incentives	(877)	(608)	(426)
Non-contingent lease, adjustment for collectability of lease incentives	(256)
Non-contingent lease, other adjustments	(174)		115
Net (decrease) increase in non-contingent lease incentives	$ (889)	$ 216	(91)
Reclassified to lease incentives			300
Non-contingent lease incentives, Write off			$ (185)
Number of properties with lease incentives write-offs | item	12
Number of properties with lease incentive adjustment | property	2

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Debt Obligations - Bank Borrowings (Details)	1 Months Ended	3 Months Ended	12 Months Ended
	Dec. 31, 2022 USD ($) item	Dec. 31, 2022 USD ($) item	Dec. 31, 2022 USD ($) item
Debt Obligations
Basis spread over base rate (as a percent)	10.00%	10.00%
Number of term loans | item	2	2	2
Revolving line of credit
Debt Obligations
Unused commitment fee (as a percent)			0.20%
Revolving line of credit | LIBOR
Debt Obligations
Basis spread over base rate (as a percent)			1.15%
Credit Agreement
Debt Obligations
Maximum available under facility	$ 500,000,000	$ 500,000,000	$ 500,000,000
Contingent increase in maximum borrowing capacity	1,000,000,000	1,000,000,000	$ 1,000,000,000
Additional extension period option			1 year
Revolving Credit Facility
Debt Obligations
Maximum available under facility	400,000,000	400,000,000	$ 400,000,000
Term loans
Debt Obligations
Maximum available under facility	$ 50,000,000	$ 50,000,000	$ 50,000,000
Term loans | LIBOR
Debt Obligations
Basis spread over base rate (as a percent)			1.35%

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Debt Obligations - Interest Rate Swap Agreement (Details)	12 Months Ended
	Dec. 31, 2022 USD ($) item	Dec. 31, 2021 USD ($)
Debt Obligations
Number of interest rate swaps | item	2
Notional Amount	$ 100,000,000
Fair Value	$ 8,719,000
Interest Rate Swap
Debt Obligations
Number of interest rate swaps | item	2
Interest Rate Swap | Minimum
Debt Obligations
Debt instrument term	4 years
Interest Rate Swap | Maximum
Debt Obligations
Debt instrument term	5 years
Interest Rate Swap | Cash Flow Hedging
Debt Obligations
Increase (decrease) in fair value	$ 8,891,000,000	$ (172,000)
Interest Rate Swap | Cash Flow Hedging | Maturing on November 19, 2025
Debt Obligations
Notional Amount	50,000,000
Fair Value	4,003,000
Interest Rate Swap | Cash Flow Hedging | Maturing on November 19, 2026
Debt Obligations
Notional Amount	50,000,000
Fair Value	$ 4,716,000
Interest Rate Swap | Cash Flow Hedging | LIBOR | Maturing on November 19, 2025
Debt Obligations
Swap rate (in percentage)	2.62%
Interest Rate Swap | Cash Flow Hedging | LIBOR | Maturing on November 19, 2026
Debt Obligations
Swap rate (in percentage)	2.76%

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Debt Obligations - Senior Unsecured Notes (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Debt Obligations
Interest rate (as a percent)	7.25%
Minimum
Debt Obligations
Interest rate (as a percent)		4.00%
Maximum
Debt Obligations
Interest rate (as a percent)		8.00%
Senior Unsecured Notes
Debt Obligations
Face amount of debt	$ 75,000,000
Fixed interest rate (as a percent)	3.66%
Debt instrument term	10 years
Senior Unsecured Notes | Minimum
Debt Obligations
Interest rate (as a percent)	3.66%
Senior Unsecured Notes | Maximum
Debt Obligations
Interest rate (as a percent)	5.03%
Revolving line of credit
Financial covenants
Maximum ratio of total indebtedness to total asset value	0.5
Maximum ratio of secured debt to total asset value	0.35
Maximum ratio of unsecured debt to the value of the unencumbered asset pool	0.6
Minimum ratio of EBITDA to fixed charges	1.50

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Debt Obligations - Component (Details) - USD ($)	1 Months Ended	12 Months Ended
	Jan. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Debt Obligations
Applicable Interest Rate (as a percent)		4.24%
Outstanding Balance		$ 767,854,000	$ 722,719,000
Available for borrowing		270,000,000	289,100,000
Borrowings		269,000,000	304,400,000	$ 24,000,000
Payments on debt		$ 223,060,000	230,560,000	68,160,000
Revolving line of credit
Debt Obligations
Applicable Interest Rate (as a percent)		5.38%
Outstanding Balance		$ 130,000,000	110,900,000
Available for borrowing		270,000,000	289,100,000
Borrowings		194,000,000	204,400,000	24,000,000
Payments on debt		$ 174,900,000	183,400,000	28,000,000
Term loans
Debt Obligations
Applicable Interest Rate (as a percent)		2.69%
Outstanding Balance		$ 99,511,000	99,363,000
Borrowings			100,000,000
Senior Unsecured Notes
Debt Obligations
Applicable Interest Rate (as a percent)		4.25%
Outstanding Balance		$ 538,343,000	512,456,000
Borrowings		75,000,000
Payments on debt		$ 48,160,000	$ 47,160,000	$ 40,160,000
Subsequent Event | Revolving line of credit
Debt Obligations
Outstanding Balance	$ 292,700,000
Available for borrowing	107,300,000
Borrowings	162,700,000
Subsequent Event | Senior Unsecured Notes
Debt Obligations
Outstanding Balance	531,343,000
Payments on debt	$ 7,000,000

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Debt Obligations - Borrowings and Repayments (Details) - USD ($)	1 Months Ended	12 Months Ended
	Jan. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Borrowings
Borrowings from revolving line of credit		$ 194,000,000	$ 204,400,000	$ 24,000,000
Total		269,000,000	304,400,000	24,000,000
Repayments
Revolving line of credit		(174,900,000)	(183,400,000)	(28,000,000)
Senior unsecured notes		(48,160,000)	(47,160,000)	(40,160,000)
Total		(223,060,000)	(230,560,000)	(68,160,000)
Borrowings from term loans		269,000,000	304,400,000	24,000,000
Outstanding Balance		767,854,000	722,719,000
Available for borrowing		270,000,000	289,100,000
Revolving line of credit
Borrowings
Total		194,000,000	204,400,000	24,000,000
Repayments
Total		(174,900,000)	(183,400,000)	(28,000,000)
Borrowings from term loans		194,000,000	204,400,000	24,000,000
Outstanding Balance		130,000,000	110,900,000
Available for borrowing		270,000,000	289,100,000
Term loans
Borrowings
Total			100,000,000
Repayments
Borrowings from term loans			100,000,000
Outstanding Balance		99,511,000	99,363,000
Senior Unsecured Notes
Borrowings
Total		75,000,000
Repayments
Total		(48,160,000)	(47,160,000)	$ (40,160,000)
Borrowings from term loans		75,000,000
Outstanding Balance		$ 538,343,000	$ 512,456,000
Subsequent Event | Revolving line of credit
Borrowings
Total	$ 162,700,000
Repayments
Borrowings from term loans	162,700,000
Outstanding Balance	292,700,000
Available for borrowing	107,300,000
Subsequent Event | Senior Unsecured Notes
Borrowings
Borrowings from revolving line of credit	162,700,000
Repayments
Senior unsecured notes	(7,000,000)
Total	(7,000,000)
Outstanding Balance	$ 531,343,000

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Debt Obligations - Future Maturities (Details) - USD ($)	1 Months Ended	12 Months Ended
	Jan. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Scheduled Principal Payments
2023		$ 49,160,000
2024		49,160,000
2025		229,500,000
2026		101,500,000
2027		54,500,000
Thereafter		286,000,000
Total		769,820,000
Other information
Borrowings		269,000,000	$ 304,400,000	$ 24,000,000
Outstanding Balance		767,854,000	722,719,000
Available for borrowing		270,000,000	289,100,000
Payments on debt		223,060,000	230,560,000	68,160,000
Revolving line of credit
Scheduled Principal Payments
2025		130,000,000
Total		130,000,000
Other information
Borrowings		194,000,000	204,400,000	24,000,000
Outstanding Balance		130,000,000	110,900,000
Available for borrowing		270,000,000	289,100,000
Payments on debt		174,900,000	183,400,000	28,000,000
Revolving line of credit | Subsequent Event
Other information
Borrowings	$ 162,700,000
Outstanding Balance	292,700,000
Available for borrowing	107,300,000
Term loans
Scheduled Principal Payments
2025		50,000,000
2026		50,000,000
Total		100,000,000
Other information
Borrowings			100,000,000
Outstanding Balance		99,511,000	99,363,000
Senior Unsecured Notes
Scheduled Principal Payments
2023		49,160,000
2024		49,160,000
2025		49,500,000
2026		51,500,000
2027		54,500,000
Thereafter		286,000,000
Total		539,820,000
Other information
Borrowings		75,000,000
Outstanding Balance		538,343,000	512,456,000
Payments on debt		$ 48,160,000	$ 47,160,000	$ 40,160,000
Senior Unsecured Notes | Subsequent Event
Other information
Outstanding Balance	531,343,000
Payments on debt	$ 7,000,000

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Equity - Noncontrolling Interest (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2023 USD ($) item lease	Dec. 31, 2022 USD ($) Center property lease item	Dec. 31, 2021 USD ($)
Noncontrolling interest
Gross Consolidated Assets		$ 1,656,103,000	$ 1,504,825,000
Non-controlling interests		21,940,000	$ 8,413,000
Contribution to JV		$ 61,661,000
Skilled nursing center purchased | Center		3
Real estate property acquired		$ 75,825,000
Lease term		10 years
Lease renewal term	5 years	5 years
Number of operating lease renewals | lease		2
JV Partner
Noncontrolling interest
Contribution to JV		$ 14,325,000
SNF
Noncontrolling interest
Contribution to JV		$ 61,661,000
Skilled nursing center purchased | item		3
Real estate property acquired		$ 75,825,000
Lease term		10 years
Lease renewal term		5 years
Number of operating lease renewals | lease		2
Purchase Price		$ 51,534,000
Number of properties acquired | property		4
SNF | JV Partner
Noncontrolling interest
Contribution to JV		$ 14,325,000
Partnership
Noncontrolling interest
Gross Consolidated Assets		143,556,000
Non-controlling interests		21,940,000
Virginia | 2019 Acquisitions | Partnership | ALF & MC
Noncontrolling interest
Gross Consolidated Assets		76,767,000
Non-controlling interests		14,325,000
Oregon | 2018 Acquisitions | Partnership | ALF & MC
Noncontrolling interest
Gross Consolidated Assets		18,452,000
Non-controlling interests		1,164,000
Oregon | 2018 Acquisitions | Partnership | ILF
Noncontrolling interest
Gross Consolidated Assets		14,650,000
Non-controlling interests		2,906,000
Wisconsin | 2017 Acquisitions | Partnership | ILF/ALF/MC
Noncontrolling interest
Gross Consolidated Assets		22,007,000
Non-controlling interests		2,305,000
South Carolina | 2017 Acquisitions | Partnership | ALF
Noncontrolling interest
Gross Consolidated Assets		11,680,000
Non-controlling interests		$ 1,240,000
Subsequent Event
Noncontrolling interest
Contribution to JV	$ 117,900,000
Lease term	10 years
Lease renewal term	5 years
Number of operating lease renewals | lease	2
Amount of joint venture investment	$ 121,321,000
Number of Assisted Living and Memory Care Communities | item	11
Percentage of contractual initial cash yield	7.25%
Percentage of contractual initial cash yield in year three	7.50%
Percentage of floor on initial cash yield	2.00%
Percentage of ceiling on initial cash yield	4.00%
Maximum percentage of purchase option to buy properties	50.00%
Joint Venture Cash Return	9.00%

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Equity - Class of Stock Disclosures - Common Stock (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Equity
Proceeds from common stock issued, net of issuance costs	$ 68,156,000
Equity Distribution Agreements
Equity
Shares common stock sold	1,792,400
Amount available under effective shelf registration statement	$ 130,631,000
Common Stock
Equity
Number of shares repurchased	39,463	87,249	76,574
Common Stock | Equity Distribution Agreements
Equity
Maximum offering capacity under shelf registration statement	$ 200,000,000
Shares common stock sold		0	0
Proceeds from common stock issued, net of issuance costs	68,156,000
Reclassification of accumulated costs to additional paid in capital	$ 513,000

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Equity - Stock Repurchase Plan (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Mar. 31, 2020
Equity
Shares authorized for repurchase		5,000,000
Number of shares purchased	615,827
Average price per share	$ 29.25
Total purchase price of shares	$ 18,012,000

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Equity - Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended			3 Months Ended									12 Months Ended
	Mar. 31, 2023	Feb. 28, 2023	Jan. 31, 2023	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Dividend Distributions
Paid													$ 91,509	$ 90,494	$ 90,262
Dividends declared and paid per common share					$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57
Common Stock cash distributions					$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 2.280	$ 2.280	$ 2.280
Subsequent Event | Dividend Payable, January 31, 2023
Dividend Distributions
Dividends declared and paid per common share				$ 0.19
Subsequent Event | Dividend Payable, February 28, 2023
Dividend Distributions
Dividends declared and paid per common share		$ 0.19
Subsequent Event | Dividend Payable, March 31, 2023
Dividend Distributions
Dividends declared and paid per common share	$ 0.19
Common Stock
Dividend Distributions
Declared					$ 91,509				$ 90,494				$ 91,509	$ 90,494	$ 90,262
Paid													$ 91,509	$ 90,494	$ 90,262
Dividends declared and paid per common share													$ 0.19	$ 0.19	$ 0.19
Common Stock | Subsequent Event | Dividend Payable, January 31, 2023
Dividend Distributions
Dividends declared and paid per common share	0.19	0.19	$ 0.19
Common Stock | Subsequent Event | Dividend Payable, February 28, 2023
Dividend Distributions
Dividends declared and paid per common share		$ 0.19
Common Stock | Subsequent Event | Dividend Payable, March 31, 2023
Dividend Distributions
Dividends declared and paid per common share	$ 0.19
Performance-based stock units | Common Stock
Dividend Distributions
Paid														$ 764	$ 586

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Equity - Stock-Based Compensation plans (Details)	Dec. 31, 2022 shares	Dec. 31, 2021 shares	Dec. 31, 2020 shares	Dec. 31, 2019 shares
2015 Plan
Stock Based Compensation Plans
Total shares reserved for issuance of common stock related to the conversion of preferred stock	1,545,722	1,900,000
Ratio of shares subject to award granted			1
Stock options
Stock Based Compensation Plans
Options outstanding (in shares)	10,000	15,000	15,000	15,000
Options exercisable (in shares)	10,000	15,000	15,000

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Equity - Restricted Stock and performance-based stock units (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Restricted stock and performance-based stock units
Restricted stock and performance based stock units activity
Granted (in shares)	221,542	182,240	167,375
Compensation expense
Remaining compensation expense	$ 8,765,000
Restricted stock and performance-based stock units | 2023
Compensation expense
Remaining compensation expense	5,603,000
Restricted stock and performance-based stock units | 2024
Compensation expense
Remaining compensation expense	2,853,000
Restricted stock and performance-based stock units | 2025
Compensation expense
Remaining compensation expense	$ 309,000
Restricted stock and performance-based stock units | Grant Date Price $42.27 | Three year vesting
Restricted stock and performance based stock units activity
Granted (in shares)	122,865
Granted (in dollars per share)	$ 33.94
Restricted stock and performance-based stock units | Grant Date Price $42.27 | TSR Targets
Restricted stock and performance based stock units activity
Granted (in shares)	86,332
Granted (in dollars per share)	$ 33.94
Restricted stock and performance-based stock units | Grant Date Price $39.40 | Vesting Date, May 27, 2021
Restricted stock and performance based stock units activity
Granted (in shares)	12,345
Restricted stock and performance-based stock units | Grant Date Price $48.95 | Three year vesting
Restricted stock and performance based stock units activity
Granted (in shares)		95,293
Granted (in dollars per share)		$ 42.27
Vesting period	3 years
Restricted stock and performance-based stock units | Grant Date Price $49.98 | TSR Targets
Restricted stock and performance based stock units activity
Granted (in shares)		71,892
Granted (in dollars per share)		$ 42.27
Restricted stock and performance-based stock units | Grant Date Price $38.45 | Three year vesting
Restricted stock and performance based stock units activity
Granted (in shares)		3,000
Granted (in dollars per share)		$ 43.14
Restricted stock and performance-based stock units | Grant Date Price $38.45 | Vesting Date, May 29, 2020
Restricted stock and performance based stock units activity
Granted (in shares)		12,055
Granted (in dollars per share)		$ 39.40
Restricted stock and performance-based stock units | Grant Date Price $46.54 | Three year vesting
Restricted stock and performance based stock units activity
Granted (in shares)			76,464
Granted (in dollars per share)			$ 48.95
Vesting period		3 years
Restricted stock and performance-based stock units | Grant Date Price $46.54 | TSR Targets
Restricted stock and performance based stock units activity
Granted (in shares)			66,027
Granted (in dollars per share)			$ 49.98
Restricted stock and performance-based stock units | Grant Date Price $38.18 | Three year vesting
Restricted stock and performance based stock units activity
Vesting period			3 years
Restricted stock and performance-based stock units | Grant Date Price $38.18 | TSR Targets
Restricted stock and performance based stock units activity
Vesting period	4 years
Restricted stock and performance-based stock units | Grant Date Price $38.18 | Accelerated TSR Targets
Restricted stock and performance based stock units activity
Vesting period	3 years
Restricted stock and performance-based stock units | Grant Date Price $44.73 | Vesting Date, May 27, 2021
Restricted stock and performance based stock units activity
Granted (in dollars per share)	$ 38.48
Restricted stock and performance-based stock units | Grant Date Price $44.73 | Vesting Date, May 30, 2019
Restricted stock and performance based stock units activity
Granted (in shares)			9,884
Granted (in dollars per share)			$ 38.45
Restricted stock
Restricted stock and performance based stock units activity
Outstanding at the beginning of the period (in shares)	197,422	180,440	163,569
Granted (in shares)	135,210	110,348	101,348
Vested (in shares)	(103,396)	(93,366)	(84,477)
Outstanding at the end of the period (in shares)	229,236	197,422	180,440
Restricted stock | Grant Date Price $38.45 | Three year vesting
Restricted stock and performance based stock units activity
Granted (in shares)			15,000
Granted (in dollars per share)			$ 38.45
Vesting period			3 years
Performance-based stock units
Restricted stock and performance based stock units activity
Outstanding at the beginning of the period (in shares)	0
Granted (in shares)	86,332	71,892	66,027
Vested (in shares)	0	(108,720)	(81,574)
Outstanding at the end of the period (in shares)		0
Compensation expense
Compensation expense related to share-based award	$ 7,964,000	$ 7,760,000	$ 7,012,000

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Equity - Options (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Nonqualified stock option activity
Outstanding, beginning of period	15,000	15,000	15,000
Granted (in shares)			0
Canceled	(5,000)
Outstanding, end of period	10,000	15,000	15,000
Options exercisable (in shares)	10,000	15,000	15,000
Weighted Average Price
Outstanding at the beginning of the year (in dollars per share)	$ 38.43	$ 38.43	$ 38.43
Canceled	38.43
Outstanding at the end of the year (in dollars per share)	38.43	38.43	38.43
Exercisable at the end of the period (in dollars per share)	$ 38.43	$ 38.43	$ 38.43
Other information
Aggregate intrinsic value of exercisable options at the end of the year	$ 0
Weighted average remaining contractual life of options exercisable	8 months 12 days	1 year 2 months 12 days	2 years 2 months 12 days
Compensation expense related to share-based award	$ 0	$ 0	$ 0

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Commitments and Contingencies - Summary of Commitments (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) property
Commitments and Contingencies
Investment Commitment	$ 101,150
2022 Funding	25,328
Total Commitment funded	33,890
Remaining commitment	67,260
Skilled Nursing Centers
Commitments and Contingencies
Fair value of earn-out liability	3,000
Earn-out liability, Write off	$ 3,000
Number of properties acquired | property	4
Real estate properties
Commitments and Contingencies
Investment Commitment	$ 22,102
2022 Funding	7,263
Total Commitment funded	8,315
Remaining commitment	13,787
Accrued incentives and earn-out liabilities
Commitments and Contingencies
Investment Commitment	19,000
Remaining commitment	19,000
Mortgage loans
Commitments and Contingencies
Investment Commitment	32,507
2022 Funding	5,873
Total Commitment funded	9,613
Remaining commitment	22,894
Commitments To Expand and Renovate Properties
Commitments and Contingencies
Investment Commitment	14,507
Contingent Funding Commitments
Commitments and Contingencies
Investment Commitment	18,000
Notes receivable
Commitments and Contingencies
Investment Commitment	27,541
2022 Funding	12,192
Total Commitment funded	15,962
Remaining commitment	$ 11,579

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Distributions (Details) - $ / shares	3 Months Ended								12 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Distributions
Minimum distribution of taxable income (as a percent)									90.00%
Ordinary taxable distribution									$ 1.095	$ 1.220	$ 0.936
Return of capital										0.750
Unrecaptured Section 1250 gain									0.502	0.252	0.894
Long-term capital gain									0.683	0.058	0.450
Total	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 2.280	$ 2.280	$ 2.280

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Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Net income									$ 100,584	$ 56,224	$ 95,677
Less income allocated to non-controlling interests									(560)	(363)	(384)
Less income allocated to participating securities:
Non-forfeitable dividends on participating securities									(531)	(458)	(397)
Income allocated to participating securities									(49)		(25)
Total net income allocated to participating securities									(580)	(458)	(422)
Net income available to common stockholders									99,444	55,403	94,871
Net income for diluted net income per share									$ 99,444	$ 55,403	$ 94,871
Shares for basic net income per share									39,894,000	39,156,000	39,179,000
Effect of dilutive securities:
Total effect of dilutive securities (in shares)									173,000		85,000
Shares for diluted net income per share									40,067,000	39,156,000	39,264,000
Basic net income per share (in dollars per share)	$ 0.44	$ 0.33	$ 1.37	$ 0.36	$ 0.32	$ 0.28	$ 0.46	$ 0.35	$ 2.49	$ 1.41	$ 2.42
Diluted net income per share (in dollars per share)	$ 0.44	$ 0.32	$ 1.36	$ 0.36	$ 0.32	$ 0.28	$ 0.46	$ 0.35	$ 2.48	$ 1.41	$ 2.42
Performance-based stock units
Effect of dilutive securities:
Stock options and performance-based stock units (in shares)									173,000		85,000
Performance-based stock units would be earned based on TSR targets					0					0

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Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Quarterly Financial Information
Revenues	$ 47,839	$ 43,503	$ 43,024	$ 40,787	$ 39,441	$ 37,472	$ 38,129	$ 40,280	$ 175,153	$ 155,322	$ 159,337
Net income available to common stockholders	$ 17,809	$ 13,159	$ 54,065	$ 14,275	$ 12,726	$ 10,909	$ 18,126	$ 13,642
Net income per common share available to common stockholders:
Basic (in dollars per share)	$ 0.44	$ 0.33	$ 1.37	$ 0.36	$ 0.32	$ 0.28	$ 0.46	$ 0.35	$ 2.49	$ 1.41	$ 2.42
Diluted (in dollars per share)	0.44	0.32	1.36	0.36	0.32	0.28	0.46	0.35	2.48	1.41	2.42
Dividends per share declared (in dollars per share)	0.57	0.57	0.57	0.57	0.57	0.57	0.57	0.57
Dividends per share paid (in dollars per share)	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 2.280	$ 2.280	$ 2.280

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Fair Value Measurements (Details)	Dec. 31, 2022 USD ($) item	Dec. 31, 2021 USD ($) item
Fair value measurements
Number of interest rate swaps | item	2
Notional Amount	$ 100,000,000
Mortgage loans receivable, net of credit loss reserve	389,728,000	$ 344,442,000
Notes receivable, net of credit loss reserve	58,383,000	28,337,000
Outstanding Balance	767,854,000	722,719,000
Senior unsecured notes, net of debt issue costs	$ 538,343,000	$ 512,456,000
Level 3 | Senior Unsecured Notes maturing before 2030 | Discount Rate
Fair value measurements
Future cash outflows discount rate (as a percent) | item	6.50	3.0
Level 3 | Senior Unsecured Notes maturing 2030 and after | Discount Rate
Fair value measurements
Future cash outflows discount rate (as a percent) | item	7.00	3.25
Level 3 | Financing Receivable | Discount Rate
Fair value measurements
Future cash inflows discount rate (as a percent)	7.6
Level 3 | Mortgage Loans Receivable | Discount Rate
Fair value measurements
Future cash inflows discount rate (as a percent)	9.3	9.5
Level 3 | Notes Receivable | Discount Rate
Fair value measurements
Future cash inflows discount rate (as a percent)	7.1	5.6
Carrying Value
Fair value measurements
Mortgage loans receivable, net of credit loss reserve	$ 389,728,000	$ 344,442,000
Revolving line of credit	130,000,000	110,900,000
Outstanding Balance	99,511,000	99,363,000
Senior unsecured notes, net of debt issue costs	538,343,000	512,456,000
Carrying Value | Financing Receivable
Fair value measurements
Notes receivable, net of credit loss reserve	75,999,000
Carrying Value | Notes Receivable
Fair value measurements
Notes receivable, net of credit loss reserve	58,383,000	28,337,000
Fair Value
Fair value measurements
Revolving line of credit	130,000,000	110,900,000
Outstanding Balance	100,000,000	100,000,000
Fair Value | Financing Receivable
Fair value measurements
Notes receivable, net of credit loss reserve	76,033,000
Fair Value | Notes Receivable
Fair value measurements
Notes receivable, net of credit loss reserve	61,858,000	28,653,000
Fair Value | Level 3
Fair value measurements
Mortgage loans receivable, net of credit loss reserve	461,276,000	405,162,000
Senior unsecured notes, net of debt issue costs	$ 477,653,000	$ 540,045,000

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Subsequent Events - Lease Renewals (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2023 Center item	Dec. 31, 2022 Center item
Subsequent Event [Line Items]
Lease renewal term	5 years	5 years
Skilled nursing center purchased | Center		3
Number of units		217
SNF
Subsequent Event [Line Items]
Lease renewal term		5 years
Skilled nursing center purchased		3
Subsequent Event
Subsequent Event [Line Items]
Lease renewal term	5 years
Subsequent Event | Brookdale Senior Living | Florida
Subsequent Event [Line Items]
Number of units	216
Subsequent Event | Brookdale Senior Living | SNF
Subsequent Event [Line Items]
Skilled nursing center purchased | Center	2
Additional term of lessor's operating lease renewal	5 years
Subsequent Event | Brookdale Senior Living | SNF | Florida
Subsequent Event [Line Items]
Number of units	216

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Subsequent Events - Financing Receivable (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2023 USD ($) item lease	Dec. 31, 2022 USD ($) lease
Subsequent Event [Line Items]
Contribution to JV		$ 61,661,000
Lease term		10 years
Number of operating lease renewals | lease		2
Lease renewal term	5 years	5 years
Subsequent Event
Subsequent Event [Line Items]
Amount of joint venture investment	$ 121,321,000
Contribution to JV	$ 117,900,000
Number of assisted living and memory care communities | item	11
Lease term	10 years
Number of operating lease renewals | lease	2
Lease renewal term	5 years
Percentage of contractual initial cash yield	7.25%
Percentage of contractual initial cash yield in year three	7.50%
Percentage of floor on initial cash yield	2.00%
Percentage of ceiling on initial cash yield	4.00%
Maximum percentage of purchase option to buy properties	50.00%
Percentage of cash return	9.00%

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Subsequent Events - Mortgage Loans (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($) item property	Dec. 31, 2021 USD ($)
Subsequent Event [Line Items]
Loan Term		4 years
Interest rate (as a percent)		7.25%
Internal Rate of Return		8.00%
Gross Investment		$ 58,972,000
Number of beds/units | item		217
Mezzanine loan
Subsequent Event [Line Items]
Loan Term		5 years
Interest rate (as a percent)		8.00%
Number of beds/units | property		621
Mezzanine loan		$ 36,815,000	$ 11,815,000
Mortgage Loans
Subsequent Event [Line Items]
Gross Investment		$ 393,658,000
Percentage of Investment		100.00%
Mortgage Loans | North Carolina
Subsequent Event [Line Items]
Interest rate (as a percent)		7.30%
Subsequent Event | North Carolina
Subsequent Event [Line Items]
Payments to Acquire Real Estate	$ 10,750,000
Loan Term	2 years
Interest rate (as a percent)	7.25%
Internal Rate of Return	9.00%
Subsequent Event | Mezzanine loan
Subsequent Event [Line Items]
Number of beds/units | item	136

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Subsequent Events - Notes Receivable (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($) item property	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Subsequent Events
Gross Investment		$ 58,972,000
Principal payments received on notes receivable		$ 6,843,000	$ 2,694,000	$ 5,275,000
Number of beds/units | item		217
Mortgage Loans
Subsequent Events
Gross Investment		$ 393,658,000
Mezzanine loan
Subsequent Events
Financing Receivable, Gross		$ 36,815,000	$ 11,815,000
IRR on mortgage loan on real estate property		11.00%
Number of beds/units | property		621
Subsequent Event | Notes Receivable
Subsequent Events
Number of beds/units | item	136
Subsequent Event | Mezzanine loan
Subsequent Events
Principal payments received on notes receivable	$ 4,545,000
Exit IRR	$ 190,000
Number of beds/units | item	136

XML

Subsequent Events - Unconsolidated Joint Ventures (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($) item	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Subsequent Event [Line Items]
Number of beds/units		217
Income from unconsolidated joint ventures | $		$ 1,504,000	$ 1,417,000	$ 432,000
Not primary beneficiary | Joint Venture | Preferred Equity Investment
Subsequent Event [Line Items]
Number of beds/units		95
Not primary beneficiary | Joint Venture | Preferred Equity Investment | UDP | Washington
Subsequent Event [Line Items]
Number of beds/units		267
Percentage of internal rate of return		12.00%
Subsequent Event | Not primary beneficiary | Joint Venture | Preferred Equity Investment | UDP
Subsequent Event [Line Items]
Preferred equity investment in a joint venture | $	$ 13,000,000
Number of beds/units	267
Income from unconsolidated joint ventures | $	$ 1,675,000
Percentage of internal rate of return	14.00%

XML

Subsequent Events - Debt Obligations (Details) - USD ($)	1 Months Ended	12 Months Ended
	Jan. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Debt Obligations
Income from unconsolidated joint ventures		$ 1,504,000	$ 1,417,000	$ 432,000
Borrowings from revolving line of credit		194,000,000	204,400,000	24,000,000
Revolving line of credit		130,000,000	110,900,000
Payments on debt		48,160,000	47,160,000	$ 40,160,000
Outstanding Balance		767,854,000	722,719,000
Senior Unsecured Notes
Debt Obligations
Outstanding Balance		538,343,000	512,456,000
Revolving line of credit
Debt Obligations
Outstanding Balance		$ 130,000,000	$ 110,900,000
Subsequent Event | Senior Unsecured Notes
Debt Obligations
Borrowings from revolving line of credit	$ 162,700,000
Revolving line of credit	292,700,000
Maximum available under facility	107,300,000
Payments on debt	7,000,000
Outstanding Balance	531,343,000
Subsequent Event | Revolving line of credit
Debt Obligations
Outstanding Balance	$ 292,700,000

XML

Subsequent Events - Equity (Details) - $ / shares	1 Months Ended			3 Months Ended									12 Months Ended
	Mar. 31, 2023	Feb. 28, 2023	Jan. 31, 2023	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Equity
Dividends declared and paid per common share					$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57
Common Stock
Equity
Dividends declared and paid per common share													$ 0.19	$ 0.19	$ 0.19
Dividend Payable, January 31, 2023 | Subsequent Event
Equity
Dividends declared and paid per common share				$ 0.19
Dividend Payable, January 31, 2023 | Subsequent Event | Common Stock
Equity
Dividends declared and paid per common share	$ 0.19	$ 0.19	$ 0.19
Dividend Payable, February 28, 2023 | Subsequent Event
Equity
Dividends declared and paid per common share		0.19
Dividend Payable, February 28, 2023 | Subsequent Event | Common Stock
Equity
Dividends declared and paid per common share		$ 0.19
Dividend Payable, March 31, 2023 | Subsequent Event
Equity
Dividends declared and paid per common share	0.19
Dividend Payable, March 31, 2023 | Subsequent Event | Common Stock
Equity
Dividends declared and paid per common share	$ 0.19

XML

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Valuation and qualifying accounts
Balance at beginning of period	$ 3,759	$ 2,738	$ 2,741
(Recovered) charged to costs and expenses	1,528	1,021	(3)
Balance at end of period	5,287	3,759	2,738
Loan loss reserves
Valuation and qualifying accounts
Balance at beginning of period	3,473	2,592	2,560
(Recovered) charged to costs and expenses	457	881	32
Balance at end of period	3,930	3,473	2,592
Financing receivable loss reserve
Valuation and qualifying accounts
(Recovered) charged to costs and expenses	768
Balance at end of period	768
Other notes receivable allowance
Valuation and qualifying accounts
Balance at beginning of period	286	146	181
(Recovered) charged to costs and expenses	303	140	(35)
Balance at end of period	$ 589	$ 286	$ 146

XML

SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION - By Property (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Initial Cost to Company
Land	$ 125,686
Buildings and Improvements	1,199,600
Costs Capitalized Subsequent to acquisition	85,419
Gross Amount at Which Carried As of Year End
Land	125,686
Buildings and Improvements	1,285,019
Total	1,410,705	$ 1,408,557	$ 1,452,001	$ 1,484,571
Accum Deprec	391,487	$ 374,606	$ 349,643	$ 347,755
SNF
Initial Cost to Company
Land	53,990
Buildings and Improvements	513,766
Costs Capitalized Subsequent to acquisition	33,218
Gross Amount at Which Carried As of Year End
Land	53,990
Buildings and Improvements	546,984
Total	600,974
Accum Deprec	182,308
ALF
Initial Cost to Company
Land	68,788
Buildings and Improvements	678,526
Costs Capitalized Subsequent to acquisition	50,499
Gross Amount at Which Carried As of Year End
Land	68,788
Buildings and Improvements	729,025
Total	797,813
Accum Deprec	207,529
Other School and Land
Initial Cost to Company
Land	2,908
Buildings and Improvements	7,308
Costs Capitalized Subsequent to acquisition	1,702
Gross Amount at Which Carried As of Year End
Land	2,908
Buildings and Improvements	9,010
Total	11,918
Accum Deprec	1,650
School
Initial Cost to Company
Land	1,965
Buildings and Improvements	7,308
Costs Capitalized Subsequent to acquisition	1,702
Gross Amount at Which Carried As of Year End
Land	1,965
Buildings and Improvements	9,010
Total	10,975
Accum Deprec	1,650
Land
Initial Cost to Company
Land	943
Gross Amount at Which Carried As of Year End
Land	943
Total	943
134 Alamogordo, NM | SNF
Initial Cost to Company
Land	210
Buildings and Improvements	2,593
Costs Capitalized Subsequent to acquisition	641
Gross Amount at Which Carried As of Year End
Land	210
Buildings and Improvements	3,234
Total	3,444
Accum Deprec	1,742
218 Albuquerque, NM | SNF
Initial Cost to Company
Land	1,696
Buildings and Improvements	3,891
Costs Capitalized Subsequent to acquisition	530
Gross Amount at Which Carried As of Year End
Land	1,696
Buildings and Improvements	4,421
Total	6,117
Accum Deprec	2,293
219 Albuquerque, NM | SNF
Initial Cost to Company
Land	1,950
Buildings and Improvements	8,910
Costs Capitalized Subsequent to acquisition	207
Gross Amount at Which Carried As of Year End
Land	1,950
Buildings and Improvements	9,117
Total	11,067
Accum Deprec	4,513
220 Albuquerque, NM | SNF
Initial Cost to Company
Land	2,463
Buildings and Improvements	7,647
Costs Capitalized Subsequent to acquisition	9
Gross Amount at Which Carried As of Year End
Land	2,463
Buildings and Improvements	7,656
Total	10,119
Accum Deprec	3,751
252 Amarillo, TX | SNF
Initial Cost to Company
Land	844
Costs Capitalized Subsequent to acquisition	7,925
Gross Amount at Which Carried As of Year End
Land	844
Buildings and Improvements	7,925
Total	8,769
Accum Deprec	2,488
247 Arlington, TX | SNF
Initial Cost to Company
Land	1,016
Buildings and Improvements	13,649
Costs Capitalized Subsequent to acquisition	132
Gross Amount at Which Carried As of Year End
Land	1,016
Buildings and Improvements	13,781
Total	14,797
Accum Deprec	4,988
325 Austin, TX | SNF
Initial Cost to Company
Land	896
Buildings and Improvements	9,562
Gross Amount at Which Carried As of Year End
Land	896
Buildings and Improvements	9,562
Total	10,458
Accum Deprec	202
319 Blue Springs, MO | SNF
Initial Cost to Company
Land	2,644
Buildings and Improvements	13,942
Costs Capitalized Subsequent to acquisition	73
Gross Amount at Which Carried As of Year End
Land	2,644
Buildings and Improvements	14,015
Total	16,659
Accum Deprec	1,508
007 Bradenton, FL | SNF
Initial Cost to Company
Land	330
Buildings and Improvements	2,720
Costs Capitalized Subsequent to acquisition	160
Gross Amount at Which Carried As of Year End
Land	330
Buildings and Improvements	2,880
Total	3,210
Accum Deprec	2,418
256 Brownwood, TX | SNF
Initial Cost to Company
Land	164
Buildings and Improvements	6,336
Costs Capitalized Subsequent to acquisition	29
Gross Amount at Which Carried As of Year End
Land	164
Buildings and Improvements	6,365
Total	6,529
Accum Deprec	2,188
177 Chesapeake, VA | SNF
Initial Cost to Company
Land	388
Buildings and Improvements	3,469
Costs Capitalized Subsequent to acquisition	2,777
Gross Amount at Which Carried As of Year End
Land	388
Buildings and Improvements	6,246
Total	6,634
Accum Deprec	4,110
257 Cincinnati, OH | SNF
Initial Cost to Company
Land	1,890
Buildings and Improvements	25,110
Costs Capitalized Subsequent to acquisition	224
Gross Amount at Which Carried As of Year End
Land	1,890
Buildings and Improvements	25,334
Total	27,224
Accum Deprec	5,945
125 Clovis, NM | SNF
Initial Cost to Company
Land	561
Buildings and Improvements	5,539
Costs Capitalized Subsequent to acquisition	307
Gross Amount at Which Carried As of Year End
Land	561
Buildings and Improvements	5,846
Total	6,407
Accum Deprec	3,155
129 Clovis, NM | SNF
Initial Cost to Company
Land	598
Buildings and Improvements	5,902
Costs Capitalized Subsequent to acquisition	59
Gross Amount at Which Carried As of Year End
Land	598
Buildings and Improvements	5,961
Total	6,559
Accum Deprec	3,236
267 Cold Spring, KY | SNF
Initial Cost to Company
Land	2,050
Buildings and Improvements	21,496
Costs Capitalized Subsequent to acquisition	196
Gross Amount at Which Carried As of Year End
Land	2,050
Buildings and Improvements	21,692
Total	23,742
Accum Deprec	6,014
253 Colton, CA | SNF
Initial Cost to Company
Land	2,474
Buildings and Improvements	15,158
Gross Amount at Which Carried As of Year End
Land	2,474
Buildings and Improvements	15,158
Total	17,632
Accum Deprec	4,803
246 Crowley, TX | SNF
Initial Cost to Company
Land	2,247
Buildings and Improvements	14,276
Costs Capitalized Subsequent to acquisition	187
Gross Amount at Which Carried As of Year End
Land	2,247
Buildings and Improvements	14,463
Total	16,710
Accum Deprec	5,266
235 Daleville, VA | SNF
Initial Cost to Company
Land	279
Buildings and Improvements	8,382
Gross Amount at Which Carried As of Year End
Land	279
Buildings and Improvements	8,382
Total	8,661
Accum Deprec	3,180
258 Dayton, OH | SNF
Initial Cost to Company
Land	373
Buildings and Improvements	26,627
Gross Amount at Which Carried As of Year End
Land	373
Buildings and Improvements	26,627
Total	27,000
Accum Deprec	6,344
196 Dresden, TN | SNF
Initial Cost to Company
Land	31
Buildings and Improvements	1,529
Costs Capitalized Subsequent to acquisition	1,073
Gross Amount at Which Carried As of Year End
Land	31
Buildings and Improvements	2,602
Total	2,633
Accum Deprec	1,400
298 Forth Worth, TX | SNF
Initial Cost to Company
Land	2,785
Buildings and Improvements	7,546
Costs Capitalized Subsequent to acquisition	413
Gross Amount at Which Carried As of Year End
Land	2,785
Buildings and Improvements	7,959
Total	10,744
Accum Deprec	3,086
326 Forth Worth, TX | SNF
Initial Cost to Company
Land	922
Buildings and Improvements	12,268
Gross Amount at Which Carried As of Year End
Land	922
Buildings and Improvements	12,268
Total	13,190
Accum Deprec	267
026 Gardendale, AL | SNF
Initial Cost to Company
Land	100
Buildings and Improvements	7,550
Costs Capitalized Subsequent to acquisition	2,084
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	9,634
Total	9,734
Accum Deprec	7,078
248 Granbury, TX | SNF
Initial Cost to Company
Land	836
Buildings and Improvements	6,693
Costs Capitalized Subsequent to acquisition	363
Gross Amount at Which Carried As of Year End
Land	836
Buildings and Improvements	7,056
Total	7,892
Accum Deprec	3,132
250 Hewitt, TX | SNF
Initial Cost to Company
Land	1,780
Buildings and Improvements	8,220
Costs Capitalized Subsequent to acquisition	391
Gross Amount at Which Carried As of Year End
Land	1,780
Buildings and Improvements	8,611
Total	10,391
Accum Deprec	2,787
318 Kansas City, MO | SNF
Initial Cost to Company
Land	1,229
Buildings and Improvements	18,369
Costs Capitalized Subsequent to acquisition	69
Gross Amount at Which Carried As of Year End
Land	1,229
Buildings and Improvements	18,438
Total	19,667
Accum Deprec	1,755
008 Lecanto, FL | SNF
Initial Cost to Company
Land	351
Buildings and Improvements	2,665
Costs Capitalized Subsequent to acquisition	2,737
Gross Amount at Which Carried As of Year End
Land	351
Buildings and Improvements	5,402
Total	5,753
Accum Deprec	4,287
322 Longview, Tx | SNF
Initial Cost to Company
Land	1,405
Buildings and Improvements	12,176
Gross Amount at Which Carried As of Year End
Land	1,405
Buildings and Improvements	12,176
Total	13,581
Accum Deprec	1,274
300 Mansfield, TX | SNF
Initial Cost to Company
Land	2,890
Buildings and Improvements	13,110
Gross Amount at Which Carried As of Year End
Land	2,890
Buildings and Improvements	13,110
Total	16,000
Accum Deprec	3,377
053 Mesa, AZ | SNF
Initial Cost to Company
Land	305
Buildings and Improvements	6,909
Costs Capitalized Subsequent to acquisition	1,876
Gross Amount at Which Carried As of Year End
Land	305
Buildings and Improvements	8,785
Total	9,090
Accum Deprec	6,610
242 Mission, TX | SNF
Initial Cost to Company
Land	1,111
Buildings and Improvements	16,602
Costs Capitalized Subsequent to acquisition	82
Gross Amount at Which Carried As of Year End
Land	1,111
Buildings and Improvements	16,684
Total	17,795
Accum Deprec	5,727
233 Nacogdoches, TX | SNF
Initial Cost to Company
Land	394
Buildings and Improvements	7,456
Costs Capitalized Subsequent to acquisition	268
Gross Amount at Which Carried As of Year End
Land	394
Buildings and Improvements	7,724
Total	8,118
Accum Deprec	2,848
249 Nacogdoches, TX | SNF
Initial Cost to Company
Land	1,015
Buildings and Improvements	11,109
Costs Capitalized Subsequent to acquisition	358
Gross Amount at Which Carried As of Year End
Land	1,015
Buildings and Improvements	11,467
Total	12,482
Accum Deprec	4,575
245 Newberry, SC | SNF
Initial Cost to Company
Land	439
Buildings and Improvements	4,639
Costs Capitalized Subsequent to acquisition	879
Gross Amount at Which Carried As of Year End
Land	439
Buildings and Improvements	5,518
Total	5,957
Accum Deprec	2,374
244 Newberry, SC | SNF
Initial Cost to Company
Land	919
Buildings and Improvements	5,454
Costs Capitalized Subsequent to acquisition	200
Gross Amount at Which Carried As of Year End
Land	919
Buildings and Improvements	5,654
Total	6,573
Accum Deprec	2,277
251 Pasadena, TX | SNF
Initial Cost to Company
Land	1,155
Buildings and Improvements	14,345
Costs Capitalized Subsequent to acquisition	522
Gross Amount at Which Carried As of Year End
Land	1,155
Buildings and Improvements	14,867
Total	16,022
Accum Deprec	4,685
193 Phoenix, AZ | SNF
Initial Cost to Company
Land	300
Buildings and Improvements	9,703
Costs Capitalized Subsequent to acquisition	92
Gross Amount at Which Carried As of Year End
Land	300
Buildings and Improvements	9,795
Total	10,095
Accum Deprec	6,608
094 Portland, OR | SNF
Initial Cost to Company
Land	100
Buildings and Improvements	1,925
Costs Capitalized Subsequent to acquisition	3,152
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	5,077
Total	5,177
Accum Deprec	4,147
254 Red Oak, TX | SNF
Initial Cost to Company
Land	1,427
Buildings and Improvements	17,173
Costs Capitalized Subsequent to acquisition	244
Gross Amount at Which Carried As of Year End
Land	1,427
Buildings and Improvements	17,417
Total	18,844
Accum Deprec	5,550
197 Ripley, TN | SNF
Initial Cost to Company
Land	20
Buildings and Improvements	985
Costs Capitalized Subsequent to acquisition	1,638
Gross Amount at Which Carried As of Year End
Land	20
Buildings and Improvements	2,623
Total	2,643
Accum Deprec	1,468
133 Roswell, NM | SNF
Initial Cost to Company
Land	568
Buildings and Improvements	5,235
Costs Capitalized Subsequent to acquisition	1,396
Gross Amount at Which Carried As of Year End
Land	568
Buildings and Improvements	6,631
Total	7,199
Accum Deprec	3,521
325 San Antonio, TX | SNF
Initial Cost to Company
Land	1,676
Buildings and Improvements	15,470
Costs Capitalized Subsequent to acquisition	20
Gross Amount at Which Carried As of Year End
Land	1,676
Buildings and Improvements	15,490
Total	17,166
Accum Deprec	320
281 Slinger, WI | SNF
Initial Cost to Company
Land	464
Buildings and Improvements	13,482
Gross Amount at Which Carried As of Year End
Land	464
Buildings and Improvements	13,482
Total	13,946
Accum Deprec	3,916
234 St. Petersburg, FL | SNF
Initial Cost to Company
Land	1,070
Buildings and Improvements	7,930
Costs Capitalized Subsequent to acquisition	500
Gross Amount at Which Carried As of Year End
Land	1,070
Buildings and Improvements	8,430
Total	9,500
Accum Deprec	2,892
243 Stephenville TX | SNF
Initial Cost to Company
Land	670
Buildings and Improvements	10,117
Costs Capitalized Subsequent to acquisition	616
Gross Amount at Which Carried As of Year End
Land	670
Buildings and Improvements	10,733
Total	11,403
Accum Deprec	3,811
178 Tappahannock, VA | SNF
Initial Cost to Company
Land	375
Buildings and Improvements	1,327
Costs Capitalized Subsequent to acquisition	397
Gross Amount at Which Carried As of Year End
Land	375
Buildings and Improvements	1,724
Total	2,099
Accum Deprec	1,569
270 Trinity, FL | SNF
Initial Cost to Company
Land	1,653
Buildings and Improvements	12,748
Gross Amount at Which Carried As of Year End
Land	1,653
Buildings and Improvements	12,748
Total	14,401
Accum Deprec	3,781
192 Tucson, AZ | SNF
Initial Cost to Company
Land	276
Buildings and Improvements	8,924
Costs Capitalized Subsequent to acquisition	112
Gross Amount at Which Carried As of Year End
Land	276
Buildings and Improvements	9,036
Total	9,312
Accum Deprec	6,091
305 Union, KY | SNF
Initial Cost to Company
Land	858
Buildings and Improvements	24,116
Gross Amount at Which Carried As of Year End
Land	858
Buildings and Improvements	24,116
Total	24,974
Accum Deprec	3,426
299 Weatherford, TX | SNF
Initial Cost to Company
Land	836
Buildings and Improvements	11,902
Costs Capitalized Subsequent to acquisition	280
Gross Amount at Which Carried As of Year End
Land	836
Buildings and Improvements	12,182
Total	13,018
Accum Deprec	3,962
323 Webster, TX | SNF
Initial Cost to Company
Land	2,310
Buildings and Improvements	8,713
Gross Amount at Which Carried As of Year End
Land	2,310
Buildings and Improvements	8,713
Total	11,023
Accum Deprec	200
236 Wytheville, VA | SNF
Initial Cost to Company
Land	647
Buildings and Improvements	12,167
Gross Amount at Which Carried As of Year End
Land	647
Buildings and Improvements	12,167
Total	12,814
Accum Deprec	5,363
077 Ada, OK | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	1,650
Costs Capitalized Subsequent to acquisition	180
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	1,830
Total	1,930
Accum Deprec	1,106
105 Arvada, CO | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,810
Costs Capitalized Subsequent to acquisition	7,072
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	9,882
Total	9,982
Accum Deprec	4,027
304 Athens, GA | ALF
Initial Cost to Company
Land	1,056
Buildings and Improvements	13,326
Costs Capitalized Subsequent to acquisition	111
Gross Amount at Which Carried As of Year End
Land	1,056
Buildings and Improvements	13,437
Total	14,493
Accum Deprec	2,422
063 Athens, TX | ALF
Initial Cost to Company
Land	96
Buildings and Improvements	1,510
Costs Capitalized Subsequent to acquisition	113
Gross Amount at Which Carried As of Year End
Land	96
Buildings and Improvements	1,623
Total	1,719
Accum Deprec	1,125
320 Auburn Hills, MI | ALF
Initial Cost to Company
Land	1,964
Buildings and Improvements	4,577
Costs Capitalized Subsequent to acquisition	1,149
Gross Amount at Which Carried As of Year End
Land	1,964
Buildings and Improvements	5,726
Total	7,690
Accum Deprec	1,056
269 Aurora, CO | ALF
Initial Cost to Company
Land	850
Buildings and Improvements	8,583
Gross Amount at Which Carried As of Year End
Land	850
Buildings and Improvements	8,583
Total	9,433
Accum Deprec	2,566
260 Aurora, CO | ALF
Initial Cost to Company
Land	831
Buildings and Improvements	10,071
Costs Capitalized Subsequent to acquisition	327
Gross Amount at Which Carried As of Year End
Land	831
Buildings and Improvements	10,398
Total	11,229
Accum Deprec	2,866
117 Beatrice, NE | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,173
Costs Capitalized Subsequent to acquisition	243
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,416
Total	2,516
Accum Deprec	1,517
277 Burr Ridge, IL | ALF
Initial Cost to Company
Land	1,400
Buildings and Improvements	11,102
Gross Amount at Which Carried As of Year End
Land	1,400
Buildings and Improvements	11,102
Total	12,502
Accum Deprec	2,735
278 Castle Rock, CO | ALF
Initial Cost to Company
Land	759
Buildings and Improvements	5,091
Gross Amount at Which Carried As of Year End
Land	759
Buildings and Improvements	5,091
Total	5,850
Accum Deprec	1,573
311 Cedarburg, WI | ALF
Initial Cost to Company
Land	924
Buildings and Improvements	21,083
Gross Amount at Which Carried As of Year End
Land	924
Buildings and Improvements	21,083
Total	22,007
Accum Deprec	2,946
160 Central, SC | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,321
Costs Capitalized Subsequent to acquisition	119
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,440
Total	2,540
Accum Deprec	1,272
263 Chatham, NJ | ALF
Initial Cost to Company
Land	5,365
Buildings and Improvements	36,399
Costs Capitalized Subsequent to acquisition	587
Gross Amount at Which Carried As of Year End
Land	5,365
Buildings and Improvements	36,986
Total	42,351
Accum Deprec	10,105
307 Clovis, CA | ALF
Initial Cost to Company
Land	2,542
Buildings and Improvements	19,126
Gross Amount at Which Carried As of Year End
Land	2,542
Buildings and Improvements	19,126
Total	21,668
Accum Deprec	3,022
308 Clovis, CA | ALF
Initial Cost to Company
Land	3,054
Buildings and Improvements	14,172
Gross Amount at Which Carried As of Year End
Land	3,054
Buildings and Improvements	14,172
Total	17,226
Accum Deprec	2,154
279 Corpus Christi, TX | ALF
Initial Cost to Company
Land	880
Buildings and Improvements	11,440
Costs Capitalized Subsequent to acquisition	298
Gross Amount at Which Carried As of Year End
Land	880
Buildings and Improvements	11,738
Total	12,618
Accum Deprec	2,753
292 De Forest, WI | ALF
Initial Cost to Company
Land	485
Buildings and Improvements	5,568
Costs Capitalized Subsequent to acquisition	47
Gross Amount at Which Carried As of Year End
Land	485
Buildings and Improvements	5,615
Total	6,100
Accum Deprec	1,191
057 Dodge City, KS | ALF
Initial Cost to Company
Land	84
Buildings and Improvements	1,666
Costs Capitalized Subsequent to acquisition	30
Gross Amount at Which Carried As of Year End
Land	84
Buildings and Improvements	1,696
Total	1,780
Accum Deprec	1,156
083 Durant, OK | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	1,769
Costs Capitalized Subsequent to acquisition	157
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	1,926
Total	2,026
Accum Deprec	1,162
107 Edmond, OK | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	1,365
Costs Capitalized Subsequent to acquisition	659
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,024
Total	2,124
Accum Deprec	1,226
163 Ft. Collins, CO | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,961
Costs Capitalized Subsequent to acquisition	3,674
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	6,635
Total	6,735
Accum Deprec	3,147
170 Ft. Collins, CO | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	3,400
Costs Capitalized Subsequent to acquisition	4,928
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	8,328
Total	8,428
Accum Deprec	3,669
132 Ft. Meyers, FL | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,728
Costs Capitalized Subsequent to acquisition	272
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	3,000
Total	3,100
Accum Deprec	1,717
315 Ft. Worth, TX | ALF
Initial Cost to Company
Land	1,534
Buildings and Improvements	11,099
Costs Capitalized Subsequent to acquisition	34
Gross Amount at Which Carried As of Year End
Land	1,534
Buildings and Improvements	11,133
Total	12,667
Accum Deprec	1,424
100 Fremont ,OH | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,435
Costs Capitalized Subsequent to acquisition	203
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,638
Total	2,738
Accum Deprec	1,663
267 Frisco, TX | ALF
Initial Cost to Company
Land	1,000
Buildings and Improvements	5,154
Gross Amount at Which Carried As of Year End
Land	1,000
Buildings and Improvements	5,154
Total	6,154
Accum Deprec	1,667
314 Frisco, TX | ALF
Initial Cost to Company
Land	2,216
Buildings and Improvements	10,417
Costs Capitalized Subsequent to acquisition	119
Gross Amount at Which Carried As of Year End
Land	2,216
Buildings and Improvements	10,536
Total	12,752
Accum Deprec	1,367
296 Glenview, IL | ALF
Initial Cost to Company
Land	2,800
Buildings and Improvements	14,248
Gross Amount at Which Carried As of Year End
Land	2,800
Buildings and Improvements	14,248
Total	17,048
Accum Deprec	2,764
167 Goldsboro, NC | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,385
Costs Capitalized Subsequent to acquisition	170
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,555
Total	2,655
Accum Deprec	1,217
056 Great Bend, KS | ALF
Initial Cost to Company
Land	80
Buildings and Improvements	1,570
Costs Capitalized Subsequent to acquisition	68
Gross Amount at Which Carried As of Year End
Land	80
Buildings and Improvements	1,638
Total	1,718
Accum Deprec	1,234
102 Greeley, CO | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,310
Costs Capitalized Subsequent to acquisition	612
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,922
Total	3,022
Accum Deprec	1,686
284 Green Bay, WI | ALF
Initial Cost to Company
Land	1,660
Buildings and Improvements	19,079
Costs Capitalized Subsequent to acquisition	475
Gross Amount at Which Carried As of Year End
Land	1,660
Buildings and Improvements	19,554
Total	21,214
Accum Deprec	4,448
286 Greenfield, WI | SNF
Initial Cost to Company
Land	818
Buildings and Improvements	8,014
Costs Capitalized Subsequent to acquisition	232
Gross Amount at Which Carried As of Year End
Land	818
Buildings and Improvements	8,246
Total	9,064
Accum Deprec	1,755
164 Greenville, NC | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,478
Costs Capitalized Subsequent to acquisition	198
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,676
Total	2,776
Accum Deprec	1,418
062 Greenville, TX | ALF
Initial Cost to Company
Land	42
Buildings and Improvements	1,565
Costs Capitalized Subsequent to acquisition	105
Gross Amount at Which Carried As of Year End
Land	42
Buildings and Improvements	1,670
Total	1,712
Accum Deprec	1,134
161 Greenwood, SC | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,638
Costs Capitalized Subsequent to acquisition	337
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,975
Total	3,075
Accum Deprec	1,544
295 Jacksonville, FL | ALF
Initial Cost to Company
Land	1,389
Buildings and Improvements	12,756
Costs Capitalized Subsequent to acquisition	1,056
Gross Amount at Which Carried As of Year End
Land	1,389
Buildings and Improvements	13,812
Total	15,201
Accum Deprec	2,702
066 Jacksonville, TX | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	1,900
Costs Capitalized Subsequent to acquisition	90
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	1,990
Total	2,090
Accum Deprec	1,361
310 Kansas City, MO | ALF
Initial Cost to Company
Land	1,072
Buildings and Improvements	15,552
Gross Amount at Which Carried As of Year End
Land	1,072
Buildings and Improvements	15,552
Total	16,624
Accum Deprec	2,071
285 Kenosha, WI | ALF
Initial Cost to Company
Land	936
Buildings and Improvements	12,361
Costs Capitalized Subsequent to acquisition	498
Gross Amount at Which Carried As of Year End
Land	936
Buildings and Improvements	12,859
Total	13,795
Accum Deprec	2,625
255 Littleton, CO | ALF
Initial Cost to Company
Land	1,882
Buildings and Improvements	8,248
Gross Amount at Which Carried As of Year End
Land	1,882
Buildings and Improvements	8,248
Total	10,130
Accum Deprec	2,226
268 Littleton, CO | ALF
Initial Cost to Company
Land	1,200
Buildings and Improvements	8,688
Gross Amount at Which Carried As of Year End
Land	1,200
Buildings and Improvements	8,688
Total	9,888
Accum Deprec	2,670
148 Longmont, CO | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,640
Costs Capitalized Subsequent to acquisition	64
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,704
Total	2,804
Accum Deprec	1,645
060 Longview, TX | ALF
Initial Cost to Company
Land	38
Buildings and Improvements	1,568
Costs Capitalized Subsequent to acquisition	134
Gross Amount at Which Carried As of Year End
Land	38
Buildings and Improvements	1,702
Total	1,740
Accum Deprec	1,180
261 Louisville, CO | ALF
Initial Cost to Company
Land	911
Buildings and Improvements	11,703
Costs Capitalized Subsequent to acquisition	390
Gross Amount at Which Carried As of Year End
Land	911
Buildings and Improvements	12,093
Total	13,004
Accum Deprec	3,283
301 Louisville, KY | ALF
Initial Cost to Company
Land	1,021
Buildings and Improvements	11,871
Costs Capitalized Subsequent to acquisition	123
Gross Amount at Which Carried As of Year End
Land	1,021
Buildings and Improvements	11,994
Total	13,015
Accum Deprec	2,305
114 Loveland, CO | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,865
Costs Capitalized Subsequent to acquisition	324
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	3,189
Total	3,289
Accum Deprec	1,995
068 Lufkin, TX | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	1,950
Costs Capitalized Subsequent to acquisition	106
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,056
Total	2,156
Accum Deprec	1,400
061 Marshall, TX | ALF
Initial Cost to Company
Land	38
Buildings and Improvements	1,568
Costs Capitalized Subsequent to acquisition	544
Gross Amount at Which Carried As of Year End
Land	38
Buildings and Improvements	2,112
Total	2,150
Accum Deprec	1,477
293 McHenry, IL | ALF
Initial Cost to Company
Land	1,289
Buildings and Improvements	28,976
Costs Capitalized Subsequent to acquisition	987
Gross Amount at Which Carried As of Year End
Land	1,289
Buildings and Improvements	29,963
Total	31,252
Accum Deprec	6,257
058 McPherson, KS | ALF
Initial Cost to Company
Land	79
Buildings and Improvements	1,571
Costs Capitalized Subsequent to acquisition	67
Gross Amount at Which Carried As of Year End
Land	79
Buildings and Improvements	1,638
Total	1,717
Accum Deprec	1,223
313 Medford, OR | ALF
Initial Cost to Company
Land	636
Buildings and Improvements	17,816
Gross Amount at Which Carried As of Year End
Land	636
Buildings and Improvements	17,816
Total	18,452
Accum Deprec	1,788
316 Medford, OR | ALF
Initial Cost to Company
Land	750
Buildings and Improvements	13,650
Costs Capitalized Subsequent to acquisition	250
Gross Amount at Which Carried As of Year End
Land	750
Buildings and Improvements	13,900
Total	14,650
Accum Deprec	1,874
239 Merritt Island, FL | ALF
Initial Cost to Company
Land	550
Buildings and Improvements	6,928
Costs Capitalized Subsequent to acquisition	115
Gross Amount at Which Carried As of Year End
Land	550
Buildings and Improvements	7,043
Total	7,593
Accum Deprec	3,056
104 Millville, NJ | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,825
Costs Capitalized Subsequent to acquisition	848
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	3,673
Total	3,773
Accum Deprec	2,174
231 Monroeville, PA | ALF
Initial Cost to Company
Land	526
Buildings and Improvements	5,334
Costs Capitalized Subsequent to acquisition	439
Gross Amount at Which Carried As of Year End
Land	526
Buildings and Improvements	5,773
Total	6,299
Accum Deprec	2,317
280 Merrells Inlet, SC | ALF
Initial Cost to Company
Land	2,490
Buildings and Improvements	14,185
Costs Capitalized Subsequent to acquisition	129
Gross Amount at Which Carried As of Year End
Land	2,490
Buildings and Improvements	14,314
Total	16,804
Accum Deprec	3,278
294 Murrieta, CA | ALF
Initial Cost to Company
Land	2,022
Buildings and Improvements	11,136
Gross Amount at Which Carried As of Year End
Land	2,022
Buildings and Improvements	11,136
Total	13,158
Accum Deprec	2,586
289 Neenah, WI | ALF
Initial Cost to Company
Land	694
Buildings and Improvements	20,839
Costs Capitalized Subsequent to acquisition	251
Gross Amount at Which Carried As of Year End
Land	694
Buildings and Improvements	21,090
Total	21,784
Accum Deprec	4,316
166 New Bern, NC | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,427
Costs Capitalized Subsequent to acquisition	170
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,597
Total	2,697
Accum Deprec	1,254
118 Newark, OH | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,435
Costs Capitalized Subsequent to acquisition	383
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,818
Total	2,918
Accum Deprec	1,703
143 Niceville, FL | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,680
Costs Capitalized Subsequent to acquisition	108
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,788
Total	2,888
Accum Deprec	1,676
095 Norfolk, NE | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,123
Costs Capitalized Subsequent to acquisition	311
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,434
Total	2,534
Accum Deprec	1,541
306 Oaklawn, IL | ALF
Initial Cost to Company
Land	1,591
Buildings and Improvements	13,772
Gross Amount at Which Carried As of Year End
Land	1,591
Buildings and Improvements	13,772
Total	15,363
Accum Deprec	2,325
302 Overland Park, KS | ALF
Initial Cost to Company
Land	1,951
Buildings and Improvements	11,882
Costs Capitalized Subsequent to acquisition	281
Gross Amount at Which Carried As of Year End
Land	1,951
Buildings and Improvements	12,163
Total	14,114
Accum Deprec	2,496
232 Pittsburgh, PA | ALF
Initial Cost to Company
Land	470
Buildings and Improvements	2,615
Costs Capitalized Subsequent to acquisition	360
Gross Amount at Which Carried As of Year End
Land	470
Buildings and Improvements	2,975
Total	3,445
Accum Deprec	1,264
165 Rocky Mount, NC | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,494
Costs Capitalized Subsequent to acquisition	378
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,872
Total	2,972
Accum Deprec	1,359
059 Salina, KS | ALF
Initial Cost to Company
Land	79
Buildings and Improvements	1,571
Costs Capitalized Subsequent to acquisition	303
Gross Amount at Which Carried As of Year End
Land	79
Buildings and Improvements	1,874
Total	1,953
Accum Deprec	1,250
084 San Antonio, TX | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	1,900
Costs Capitalized Subsequent to acquisition	45
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	1,945
Total	2,045
Accum Deprec	1,240
092 San Antonio, TX | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,055
Costs Capitalized Subsequent to acquisition	577
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,632
Total	2,732
Accum Deprec	1,411
288 Sheboygan, WI | ALF
Initial Cost to Company
Land	1,168
Buildings and Improvements	5,382
Costs Capitalized Subsequent to acquisition	379
Gross Amount at Which Carried As of Year End
Land	1,168
Buildings and Improvements	5,761
Total	6,929
Accum Deprec	1,384
149 Shelby, NC | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,805
Costs Capitalized Subsequent to acquisition	312
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	3,117
Total	3,217
Accum Deprec	1,782
312 Spartanburg, SC | ALF
Initial Cost to Company
Land	254
Buildings and Improvements	9,906
Costs Capitalized Subsequent to acquisition	1,520
Gross Amount at Which Carried As of Year End
Land	254
Buildings and Improvements	11,426
Total	11,680
Accum Deprec	2,627
150 Spring Hill, FL | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,650
Costs Capitalized Subsequent to acquisition	104
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,754
Total	2,854
Accum Deprec	1,662
103 Springfield, OH | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,035
Costs Capitalized Subsequent to acquisition	363
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,398
Total	2,498
Accum Deprec	1,490
321 Sterling Heights, MI | ALF
Initial Cost to Company
Land	1,133
Buildings and Improvements	11,487
Costs Capitalized Subsequent to acquisition	1,133
Gross Amount at Which Carried As of Year End
Land	1,133
Buildings and Improvements	12,620
Total	13,753
Accum Deprec	1,643
162 Sumter, SC | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,351
Costs Capitalized Subsequent to acquisition	656
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	3,007
Total	3,107
Accum Deprec	1,393
140 Tallahassee, FL | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	3,075
Costs Capitalized Subsequent to acquisition	140
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	3,215
Total	3,315
Accum Deprec	1,925
098 Tiffin, OH | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,435
Costs Capitalized Subsequent to acquisition	366
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,801
Total	2,901
Accum Deprec	1,678
282 Tinley Park, IL | ALF
Initial Cost to Company
Land	702
Buildings and Improvements	11,481
Gross Amount at Which Carried As of Year End
Land	702
Buildings and Improvements	11,481
Total	12,183
Accum Deprec	2,608
088 Troy, OH | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,435
Costs Capitalized Subsequent to acquisition	821
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	3,256
Total	3,356
Accum Deprec	1,950
080 Tulsa, OK | ALF
Initial Cost to Company
Land	200
Buildings and Improvements	1,650
Costs Capitalized Subsequent to acquisition	148
Gross Amount at Which Carried As of Year End
Land	200
Buildings and Improvements	1,798
Total	1,998
Accum Deprec	1,091
093 Tulsa, OK | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,395
Costs Capitalized Subsequent to acquisition	42
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,437
Total	2,537
Accum Deprec	1,553
238 Tupelo, MS | ALF
Initial Cost to Company
Land	1,170
Buildings and Improvements	8,230
Costs Capitalized Subsequent to acquisition	52
Gross Amount at Which Carried As of Year End
Land	1,170
Buildings and Improvements	8,282
Total	9,452
Accum Deprec	3,133
075 Tyler, TX | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	1,800
Costs Capitalized Subsequent to acquisition	144
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	1,944
Total	2,044
Accum Deprec	1,207
091 Waco, TX | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,235
Costs Capitalized Subsequent to acquisition	770
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	3,005
Total	3,105
Accum Deprec	1,563
096 Wahoo, NE | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,318
Costs Capitalized Subsequent to acquisition	166
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,484
Total	2,584
Accum Deprec	1,628
108 Watauga, TX | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	1,668
Costs Capitalized Subsequent to acquisition	38
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	1,706
Total	1,806
Accum Deprec	1,076
109 Weatherford, OK | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	1,669
Costs Capitalized Subsequent to acquisition	698
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,367
Total	2,467
Accum Deprec	1,454
309 West Chester, OH | ALF
Initial Cost to Company
Land	2,355
Buildings and Improvements	13,553
Costs Capitalized Subsequent to acquisition	212
Gross Amount at Which Carried As of Year End
Land	2,355
Buildings and Improvements	13,765
Total	16,120
Accum Deprec	2,235
276 Westminster, CO | ALF
Initial Cost to Company
Land	1,425
Buildings and Improvements	9,575
Gross Amount at Which Carried As of Year End
Land	1,425
Buildings and Improvements	9,575
Total	11,000
Accum Deprec	2,660
110 Wheelersburg, OH | ALF
Initial Cost to Company
Land	29
Buildings and Improvements	2,435
Costs Capitalized Subsequent to acquisition	349
Gross Amount at Which Carried As of Year End
Land	29
Buildings and Improvements	2,784
Total	2,813
Accum Deprec	1,720
303 Wichita, KS | ALF
Initial Cost to Company
Land	1,422
Buildings and Improvements	9,957
Costs Capitalized Subsequent to acquisition	285
Gross Amount at Which Carried As of Year End
Land	1,422
Buildings and Improvements	10,242
Total	11,664
Accum Deprec	2,162
259 Wichita, KS | ALF
Initial Cost to Company
Land	730
Costs Capitalized Subsequent to acquisition	9,682
Gross Amount at Which Carried As of Year End
Land	730
Buildings and Improvements	9,682
Total	10,412
Accum Deprec	2,911
283 Wichita, KS | ALF
Initial Cost to Company
Land	624
Buildings and Improvements	13,946
Gross Amount at Which Carried As of Year End
Land	624
Buildings and Improvements	13,946
Total	14,570
Accum Deprec	2,373
076 Wichita Falls, TX | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	1,850
Costs Capitalized Subsequent to acquisition	126
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	1,976
Total	2,076
Accum Deprec	1,225
120 Wichita Falls, TX | ALF
Initial Cost to Company
Land	100
Buildings and Improvements	2,750
Costs Capitalized Subsequent to acquisition	143
Gross Amount at Which Carried As of Year End
Land	100
Buildings and Improvements	2,893
Total	2,993
Accum Deprec	1,841
264 Williamstown, NJ | ALF
Initial Cost to Company
Land	711
Buildings and Improvements	8,649
Gross Amount at Which Carried As of Year End
Land	711
Buildings and Improvements	8,649
Total	9,360
Accum Deprec	2,411
265 Williamstown, NJ | ALF
Initial Cost to Company
Land	711
Buildings and Improvements	6,637
Gross Amount at Which Carried As of Year End
Land	711
Buildings and Improvements	6,637
Total	7,348
Accum Deprec	1,982
297 Las Vegas, NV | School
Initial Cost to Company
Land	1,965
Buildings and Improvements	7,308
Costs Capitalized Subsequent to acquisition	1,702
Gross Amount at Which Carried As of Year End
Land	1,965
Buildings and Improvements	9,010
Total	10,975
Accum Deprec	1,650
271 Howell, MI | Land
Initial Cost to Company
Land	420
Gross Amount at Which Carried As of Year End
Land	420
Total	420
272 Milford, MI | Land
Initial Cost to Company
Land	450
Gross Amount at Which Carried As of Year End
Land	450
Total	450
275 Yale, MI | Land
Initial Cost to Company
Land	73
Gross Amount at Which Carried As of Year End
Land	73
Total	$ 73

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SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION - Additional Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Real Estate and Accumulated Depreciation
Aggregate cost basis for Federal income tax purposes	$ 1,420,258
Computer Equipment | Minimum
Real Estate and Accumulated Depreciation
Useful life	3 years
Computer Equipment | Maximum
Real Estate and Accumulated Depreciation
Useful life	5 years
Furniture and Fixtures | Minimum
Real Estate and Accumulated Depreciation
Useful life	5 years
Furniture and Fixtures | Maximum
Real Estate and Accumulated Depreciation
Useful life	15 years
Building | Minimum
Real Estate and Accumulated Depreciation
Useful life	35 years
Building | Maximum
Real Estate and Accumulated Depreciation
Useful life	50 years
Site Improvements | Minimum
Real Estate and Accumulated Depreciation
Useful life	10 years
Site Improvements | Maximum
Real Estate and Accumulated Depreciation
Useful life	20 years
Building Improvements | Minimum
Real Estate and Accumulated Depreciation
Useful life	10 years
Building Improvements | Maximum
Real Estate and Accumulated Depreciation
Useful life	50 years

XML

SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION - Summary (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Carrying cost
Balance at beginning of period	$ 1,408,557	$ 1,452,001	$ 1,484,571
Acquisitions	51,817		13,581
Improvements	9,099	6,298	23,612
Capitalized interest			354
Cost of real estate sold	(55,346)	(49,742)	(66,140)
Impairment loss from real estate investments	(3,422)		(3,977)
Ending balance	1,410,705	1,408,557	1,452,001
Accumulated depreciation
Balance at beginning of period	374,606	349,643	347,755
Depreciation expense	37,394	38,192	38,945
Cost of real estate sold	(20,513)	(13,229)	(37,057)
Ending balance	$ 391,487	$ 374,606	$ 349,643

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SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE - Summary (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) property item	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Mortgage loans on real estate
Number of properties | property	41
Number of beds/units | item	3,699
Interest rate (as a percent)	7.25%
Balloon Amount	$ 368,520
Current Monthly Debt Service	3,073
Face amount of originated mortgages	400,025
Carrying Amount of Mortgages	389,728	$ 344,442	$ 257,251	$ 254,099
Principal Amount of Loans Subject to Delinquent Principal or Interest	$ 0
Loan Term	4 years
Number of Assisted Communities | item	13
Michigan | Mortgage Loans on Real Estate Maturing in 2043 | Property with 1875 Beds/Units
Mortgage loans on real estate
Number of properties | property	15
Number of beds/units | item	1,875
Interest rate (as a percent)	10.60%
Balloon Amount	$ 163,214
Current Monthly Debt Service	1,623
Face amount of originated mortgages	190,214
Carrying Amount of Mortgages	$ 182,514
Michigan | Mortgage Loans on Real Estate Maturing in 2045 | Property with 501 Beds/Units
Mortgage loans on real estate
Number of properties | property	4
Number of beds/units | item	480
Interest rate (as a percent)	9.60%
Balloon Amount	$ 35,576
Current Monthly Debt Service	311
Face amount of originated mortgages	39,406
Carrying Amount of Mortgages	$ 38,636
Michigan | Mortgage Loans on Real Estate Maturing in 2045 | Property with 146 Beds/Units
Mortgage loans on real estate
Number of properties | property	1
Number of beds/units | item	146
Interest rate (as a percent)	10.10%
Balloon Amount	$ 14,325
Current Monthly Debt Service	125
Face amount of originated mortgages	15,000
Carrying Amount of Mortgages	$ 14,726
Michigan | Mortgage Loans on Real Estate Maturing in 2045 | Property with 205 Beds/Units
Mortgage loans on real estate
Number of properties | property	2
Number of beds/units | item	201
Interest rate (as a percent)	9.80%
Balloon Amount	$ 19,750
Current Monthly Debt Service	162
Face amount of originated mortgages	19,750
Carrying Amount of Mortgages	19,553
Principal Amount of Loans Subject to Delinquent Principal or Interest	$ 0
Florida | Mortgage Loans on Real Estate Maturing in 2025 | Property with 68 Beds/Units
Mortgage loans on real estate
Number of properties | property	1
Number of beds/units | item	68
Interest rate (as a percent)	7.80%
Balloon Amount	$ 14,308
Current Monthly Debt Service	92
Face amount of originated mortgages	14,308
Carrying Amount of Mortgages	14,165
Principal Amount of Loans Subject to Delinquent Principal or Interest	$ 0
Louisiana | Mortgage Loans on Real Estate Maturing in 2024 | Property with 189 Beds/Units
Mortgage loans on real estate
Number of properties | property	1
Number of beds/units | item	189
Interest rate (as a percent)	7.50%
Balloon Amount	$ 29,346
Current Monthly Debt Service	186
Face amount of originated mortgages	29,346
Carrying Amount of Mortgages	29,054
Principal Amount of Loans Subject to Delinquent Principal or Interest	$ 0
Missouri | Mortgage Loans on Real Estate Maturing in 2022
Mortgage loans on real estate
Interest rate (as a percent)	7.50%
Balloon Amount	$ 1,887
Current Monthly Debt Service	12
Face amount of originated mortgages	1,887
Carrying Amount of Mortgages	1,867
Principal Amount of Loans Subject to Delinquent Principal or Interest	$ 0
North Carolina | Mortgage Loans on Real Estate Maturing in 2025 | Property with 478 Beds/Units
Mortgage loans on real estate
Number of properties | property	12
Number of beds/units | item	478
Interest rate (as a percent)	7.30%
Balloon Amount	$ 51,531
Current Monthly Debt Service	318
Face amount of originated mortgages	51,531
Carrying Amount of Mortgages	51,016
Principal Amount of Loans Subject to Delinquent Principal or Interest	$ 0
South Carolina | Mortgage Loans on Real Estate Maturing in 2025 | Property with 45 Beds/Units
Mortgage loans on real estate
Number of properties | property	1
Number of beds/units | item	45
Interest rate (as a percent)	7.30%
Balloon Amount	$ 4,787
Current Monthly Debt Service	30
Face amount of originated mortgages	4,787
Carrying Amount of Mortgages	4,739
Principal Amount of Loans Subject to Delinquent Principal or Interest	$ 0
Minimum
Mortgage loans on real estate
Interest rate (as a percent)		4.00%
Maximum
Mortgage loans on real estate
Interest rate (as a percent)		8.00%
Loan Term	4 years
Mortgage Loans | North Carolina
Mortgage loans on real estate
Interest rate (as a percent)	7.30%
Balloon Amount	$ 796
Current Monthly Debt Service	5
Face amount of originated mortgages	796
Carrying Amount of Mortgages	788
Principal Amount of Loans Subject to Delinquent Principal or Interest	$ 0
Mortgage Loans | North Carolina | Property with 217 Beds/Units
Mortgage loans on real estate
Number of properties | property	4
Number of beds/units | item	217
Interest rate (as a percent)	7.30%
Balloon Amount	$ 33,000
Current Monthly Debt Service	209
Face amount of originated mortgages	33,000
Carrying Amount of Mortgages	32,670
Principal Amount of Loans Subject to Delinquent Principal or Interest	$ 0

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SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE - Number of Loans (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) loan property
Mortgage loans on real estate
Number of Loans | property	14
Original loan amounts	$ 400,025
First-lien mortgage loans | Mortgage Loans between 500,000 and 2,000,000
Mortgage loans on real estate
Number of Loans | loan	2
First-lien mortgage loans | Mortgage Loans between 500,000 and 2,000,000 | Minimum
Mortgage loans on real estate
Original loan amounts	$ 500
First-lien mortgage loans | Mortgage Loans between 500,000 and 2,000,000 | Maximum
Mortgage loans on real estate
Original loan amounts	$ 2,000
First-lien mortgage loans | Mortgage Loans between 2,001,000 and 3,000,000
Mortgage loans on real estate
Number of Loans | loan	0
First-lien mortgage loans | Mortgage Loans between 2,001,000 and 3,000,000 | Minimum
Mortgage loans on real estate
Original loan amounts	$ 2,001
First-lien mortgage loans | Mortgage Loans between 2,001,000 and 3,000,000 | Maximum
Mortgage loans on real estate
Original loan amounts	$ 3,000
First-lien mortgage loans | Mortgage Loans between 3,001,000 and 4,000,000
Mortgage loans on real estate
Number of Loans | loan	0
First-lien mortgage loans | Mortgage Loans between 3,001,000 and 4,000,000 | Minimum
Mortgage loans on real estate
Original loan amounts	$ 3,001
First-lien mortgage loans | Mortgage Loans between 3,001,000 and 4,000,000 | Maximum
Mortgage loans on real estate
Original loan amounts	$ 4,000
First-lien mortgage loans | Mortgage Loans between 4,001,000 and 5,000,000
Mortgage loans on real estate
Number of Loans | loan	0
First-lien mortgage loans | Mortgage Loans between 4,001,000 and 5,000,000 | Minimum
Mortgage loans on real estate
Original loan amounts	$ 4,001
First-lien mortgage loans | Mortgage Loans between 4,001,000 and 5,000,000 | Maximum
Mortgage loans on real estate
Original loan amounts	$ 5,000
First-lien mortgage loans | Mortgage Loans between 5,001,000 and 6,000,000
Mortgage loans on real estate
Number of Loans | loan	0
First-lien mortgage loans | Mortgage Loans between 5,001,000 and 6,000,000 | Minimum
Mortgage loans on real estate
Original loan amounts	$ 5,001
First-lien mortgage loans | Mortgage Loans between 5,001,000 and 6,000,000 | Maximum
Mortgage loans on real estate
Original loan amounts	$ 6,000
First-lien mortgage loans | Mortgage Loans between 6,001,000 and 7,000,000
Mortgage loans on real estate
Number of Loans | loan	0
First-lien mortgage loans | Mortgage Loans between 6,001,000 and 7,000,000 | Minimum
Mortgage loans on real estate
Original loan amounts	$ 6,001
First-lien mortgage loans | Mortgage Loans between 6,001,000 and 7,000,000 | Maximum
Mortgage loans on real estate
Original loan amounts	$ 7,000
First-lien mortgage loans | Mortgage Loans over 7,000,000
Mortgage loans on real estate
Number of Loans | loan	8
First-lien mortgage loans | Mortgage Loans over 7,000,000 | Minimum
Mortgage loans on real estate
Original loan amounts	$ 7,001

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SCHEDULE IV MORTGAGE LOANS ON REAL ESTATE - Rollforward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Mortgage loans on real estate
Balance at the beginning of the period	$ 344,442	$ 257,251	$ 254,099
New mortgage loans	31,965	88,415
Other additions	8,767	540	4,253
Application of interest reserve	6,192	298
Amortization of mortgage premium	(6)	(6)	(4)
Collections of principal	(1,175)	(1,175)	(1,065)
Loan loss reserve	(457)	(881)	(32)
Balance at the end of the period	$ 389,728	$ 344,442	$ 257,251