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Loans Receivable | 9 Months Ended
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Sep. 30, 2020
Receivables [Abstract] |
Loans Receivable | Loans Receivable The following table summarizes the Company’s loans receivable (in thousands):
| September 30, 2020 |  |  | December 31, 2019 |  |  |  |
Secured mortgage loans(1) | $ | 212,393 |  |  |  | $ | 161,964 |  |  |  |  |
Mezzanine and other | 52,052 |  |  |  | 27,752 |  |  |  |  |
Unamortized discounts, fees, and costs | 887 |  |  |  | 863 |  |  |  |  |
Reserve for loan losses | (11,547) |  |  |  | — |  |  |  |  |
Loans receivable including loans receivable held for sale | 253,785 |  |  |  | 190,579 |  |  |  |  |
Loans receivable held for sale | (22,623) |  |  |  | — |  |  |  |  |
Loans receivable, net | $ | 231,162 |  |  |  | $ | 190,579 |  |  |  |  |
_______________________________________ (1)At September 30, 2020, the Company had $14 million remaining of commitments to fund $196 million of senior housing development and redevelopment projects. At December 31, 2019, the Company had $25 million remaining of commitments to fund $174 million of senior housing development and redevelopment projects. Loans Receivable Held for Sale At September 30, 2020, two secured mortgage loans with an aggregate carrying value of $11 million and three mezzanine loans with an aggregate carrying value of $12 million were classified as assets held for sale. 2020 Loans Receivable Transactions For certain residents that qualify, CCRCs may offer to lend residents the necessary funds to satisfy the entrance fee requirements so that they are able to move into a community while still continuing the process of selling their previous home. The loans are due upon sale of the previous residence. Upon completing the CCRC Acquisition (see Note 3) in January 2020, the Company began consolidating 13 CCRCs, which held approximately $30 million of such notes receivable from various community residents at the time of acquisition. At September 30, 2020, the Company held $21 million of such receivables, which is included in mezzanine and other in the table above. Loans Receivable Internal Ratings In connection with the Company’s quarterly review process or upon the occurrence of a significant event, loans receivable are reviewed and assigned an internal rating of Performing, Watch List, or Workout. Loans that are deemed Performing meet all present contractual obligations, and collection and timing of all amounts owed is reasonably assured. Watch List Loans are defined as loans that do not meet the definition of Performing or Workout. Workout Loans are defined as loans in which the Company has determined, based on current information and events, that: (i) it is probable it will be unable to collect all amounts due according to the contractual terms of the agreement, (ii) the borrower is delinquent on making payments under the contractual terms of the agreement, and (iii) the Company has commenced action or anticipates pursuing action in the near term to seek recovery of its investment. The following table summarizes, by year of origination, the Company’s internal ratings for loans receivables, net of reserves for loan losses, as of September 30, 2020 (dollars in thousands):
Investment Type |  | Year of Origination |  | Total
| 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |
Secured mortgage loans(1) |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |
Performing loans |  | $ | 36,805 |  |  | $ | 58,998 |  |  | $ | — |  |  | $ | 114,459 |  |  | $ | — |  |  | $ | 210,262 |
Watch list loans |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Workout loans |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total secured mortgage loans |  | $ | 36,805 |  |  | $ | 58,998 |  |  | $ | — |  |  | $ | 114,459 |  |  | $ | — |  |  | $ | 210,262 |
Mezzanine and other(1) |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |
Performing loans |  | $ | 18,966 |  |  | $ | 14,243 |  |  | $ | — |  |  | $ | — |  |  | $ | 8,453 |  |  | $ | 41,662 |
Watch list loans |  | — |  |  | — |  |  | — |  |  | 1,861 |  |  | — |  |  | 1,861 |
Workout loans |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total mezzanine and other |  | $ | 18,966 |  |  | $ | 14,243 |  |  | $ | — |  |  | $ | 1,861 |  |  | $ | 8,453 |  |  | $ | 43,523 |
_______________________________________ (1)Includes loans receivable held for sale. Reserve for Loan Losses The Company evaluates the liquidity and creditworthiness of its borrowers on a quarterly basis. The Company’s evaluation considers industry and economic conditions, individual and portfolio property performance, credit enhancements, liquidity, and other factors. The Company’s borrowers furnish property, portfolio, and guarantor/operator-level financial statements, among other information, on a monthly or quarterly basis, which the Company utilizes to calculate the debt service coverages used in its assessment of internal ratings, which is a primary credit quality indicator. Debt service coverage information is evaluated together with other property, portfolio, and operator performance information, including revenue, expense, net operating income, occupancy, rental rates, capital expenditures, and EBITDA (defined as earnings before interest, tax, and depreciation and amortization), along with other liquidity measures. In its assessment of current expected credit losses for loans receivable and unfunded loan commitments, the Company utilizes past payment history of its borrowers, current economic conditions, and forecasted economic conditions through the maturity date of each loan to estimate a probability of default and a resulting loss for each loan receivable. Future economic conditions are based primarily on near-term economic forecasts from the Federal Reserve and reasonable assumptions for long-term economic trends. The following table summarizes the Company’s reserve for loan losses at September 30, 2020 (in thousands):
| September 30, 2020
| Secured Mortgage Loans |  | Mezzanine and Other |  | Total
Reserve for loan losses, December 31, 2019 | $ | — |  |  | $ | — |  |  | $ | — |
Cumulative-effect of adopting of ASU 2016-13 to beginning retained earnings | 513 |  |  | 907 |  |  | 1,420 |
Provision for expected loan losses | 1,851 |  |  | 8,276 |  |  | 10,127 |
Reserve for loan losses, September 30, 2020 | $ | 2,364 |  |  | $ | 9,183 |  |  | $ | 11,547 |
Additionally, at September 30, 2020, a liability of $111,000 related to expected credit losses for unfunded loan commitments was included in accounts payable, accrued liabilities, and other liabilities. Credit loss expenses and recoveries are recorded in impairments and loan loss reserves (recoveries), net. During the three months ended September 30, 2020, the net credit loss recovery was $3 million, and during the nine months ended September 30, 2020, the net credit loss expense was $10 million. The change in the provision for expected loan losses during the three months ended September 30, 2020 is primarily due to a more positive economic outlook and classifying certain loans as held for sale at September 30, 2020.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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