XML 25 R15.htm IDEA: XBRL DOCUMENT

Equity

9 Months Ended

Sep. 30, 2023

7.	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 September 30, 2023, we have the following consolidated VIEs (in thousands):


									Gross
Investment				Property					Consolidated			Non-Controlling
Year		Purpose		Type		State			Assets ⁽¹⁾			Interests
2023		Owned real estate	⁽²⁾	ILF/ALF/MC		OH		$	54,714		$	9,134
2023		Owned real estate	⁽³⁾	ALF/MC		NC			121,321			3,831
2022		Owned real estate	⁽⁴⁾	SNF		FL			76,712			14,325
2018		Owned real estate		ILF		OR			14,650			2,907
2018		Owned real estate and development		ALF/MC		OR			18,452			1,231
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								$	319,536		$	34,973

(1)	Includes the total real estate investments and excludes intangible assets.

(2)	During the second quarter of 2023, we entered into a JV that purchased an ILF/ALF/MC in Ohio with a total of 242 units. For more information see Acquisitions above in Note 2.

(3)	During the first quarter of 2023, we entered into a JV that purchased 11 ALF and MC with a total of 523 units. For more information regarding this transaction see Financing Receivable above in Note 2.

(4)	During 2022, we entered into a JV that purchased three SNFs with a total of 299 beds. For more information regarding this transaction see Financing Receivable above in Note 2.

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 stock. During the nine months ended September 30, 2023, we sold 48,500 shares of common stock for $1,777,000 in net proceeds under our Equity Distribution Agreements. In conjunction with the sale of common stock, we incurred $80,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received. At September 30, 2023, we had $128,822,000 available under the Equity Distribution Agreements.

During the nine months ended September 30, 2023 and 2022, we acquired 43,933 shares and 39,463 shares, respectively, of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

Available Shelf Registration. 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 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):


		Nine Months Ended September 30,
		2023						2022
		Declared			Paid			Declared			Paid
Common Stock ⁽¹⁾		$	70,767		$	70,767		$	68,202		$	68,202

(1)	Represents $0.19 per share per month for the nine months ended September 30, 2023 and 2022.

In October 2023, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2023, payable on October 31, November 30, and December 29, 2023, respectively, to stockholders of record on October 23, November 22, and December 21, 2023, respectively.

Stock-Based Compensation. During the second quarter of 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 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.

At September 30, 2023, we had 5,000 stock options outstanding and exercisable. During each of the nine months ended September 30, 2023 and 2022, 5,000 stock options expired and were cancelled. During the nine months ended September 30, 2023 and 2022, no stock options were granted or exercised.

The following table summarizes our restricted stock activity for the nine months ended September 30, 2023 and 2022:


		Nine Months Ended September 30,
		2023			2022
Outstanding, January 1			229,236			197,422
Granted			146,020			135,210
Vested			(115,551)			(103,396)
Cancelled			(1,085)			—
Outstanding, September 30			258,620			229,236

No performance-based stock units vested during the nine months ended September 30, 2023, and 2022.

During the nine months ended September 30, 2023 and 2022, we granted restricted stock and performance-based stock units under the 2021 Plan as follows:


		No. of		Price per
Year		Shares/Units		Share			Reward Type		Vesting Period
2023		127,960		$	37.16		Restricted stock		ratably over 3 years
		86,867		$	37.16		Performance-based stock units		TSR targets ⁽¹⁾
		15,060		$	31.54		Restricted stock		May 24,2024
		3,000		$	35.45		Restricted stock		July 25, 2024
		232,887

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

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

Compensation expense recognized related to the vesting of restricted common stock and performance-based stock units for the nine months ended September 30, 2023 and 2022 were $6,349,000 and $5,951,000, respectively. At September 30, 2023, 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 (in thousands):


		Remaining
		Compensation
Vesting Date		Expense
October - December 2023		$	2,132
2024			6,026
2025			3,238
2026			356
Total		$	11,752