Notes Receivable (Tables)

6 Months Ended

Jun. 30, 2023

Notes Receivable.

Summary of investments in notes receivable

The following table sets forth information regarding our investment in notes receivable at June 30, 2023 (dollar amounts in thousands):

Interest			Type of	Gross				Type of
Rate	IRR	Maturity	Loan	Investment			# of loans	Property
5.0%	—	2023	Working capital	$	370		1	ALF
5.0%	—	2024	Working capital		1,050		1	ALF
4.0%	—	2024	Working capital		13,531		1	SNF
5.0%	—	2025	Working capital		831		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		500		1	ALF
7.3%	—	2030	Working capital		1,107		1	ALF
7.0%	—	2031	Working capital		2,693		1	ALF
8.3%	—	2032	Working capital		642		1	SNF
				$	46,412	(1) (2)	11

(1) Excludes the impact of credit loss reserve.

(2) Subsequent to June 30, 2023, we originated a $17,000 mezzanine loan for recapitalization of an existing 130-unit ILF/ALF/MC in Georgia as well as the construction of 89 additional units. The loan term is five years at an initial yield of 8.75% and an IRR of 12%.

Summary of mezzanine loans and other loan arrangements

The following table is a summary of our notes receivable components as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Mezzanine loans	$	25,000	$	36,815
Other loans		21,412		22,157
Notes receivable credit loss reserve		(463)		(589)
Total	$	45,949	$	58,383

Summary of notes receivable activity

The following table summarizes our notes receivable activity for the six months ended June 30, 2023 and 2022 (in thousands):

	Six Months Ended June 30,
		2023			2022
Advances under notes receivable	$	866		$	36,788	(2)
Principal payments received under notes receivable		(13,426)	(1)		(6,618)
Provision (recovery) for credit losses		126			(301)
Net (decrease) increase in notes receivable	$	(12,434)		$	29,869

(1) During 2023, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190 from a mezzanine loan prepayment. The mezzanine loan was on a 136-unit ILF in Oregon. Additionally, another $7,461 mezzanine loan was effectively prepaid through converting it as part of our $51,111 investment in a participating interest in an existing mortgage loan that is secured by a 203-unit ALF, ILF and MC located in Georgia. We recorded $1,380 of interest income in connection with the effective prepayment of the mezzanine loan.

(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 independent living, assisted living and memory care.