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Loans Receivable | 12 Months Ended
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Dec. 31, 2020
Receivables [Abstract] |
Loans Receivable | Loans Receivable The following table summarizes the Company’s loans receivable (in thousands):
|  |  |  |  | December 31,
|  |  |  |  | 2020 |  |  |  |  |  | 2019
Secured mortgage loans(1) |  |  |  |  | $ | 161,530 |  |  |  |  |  |  | $ | 161,964 |
Mezzanine and other |  |  |  |  | 44,347 |  |  |  |  |  |  | 27,752 |
Unamortized discounts, fees, and costs |  |  |  |  | (222) |  |  |  |  |  |  | 863 |
Reserve for loan losses |  |  |  |  | (10,280) |  |  |  |  |  |  | — |
Loans receivable, net |  |  |  |  | $ | 195,375 |  |  |  |  |  |  | $ | 190,579 |
_______________________________________ (1)At December 31, 2020, the Company had $11 million remaining of commitments to fund $81 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. 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 December 31, 2020, the Company held $23 million of such receivables, which are included in mezzanine and other in the table above. In November 2020, the Company sold one mezzanine loan with a $10 million principal balance for $8 million, resulting in a $2 million loss. In December 2020, the Company sold one secured mortgage loan with a $115 million principal balance for $109 million, resulting in a $6 million loss. SHOP Seller Financing In December 2020, in conjunction with the sale of four SHOP facilities in the Atria SHOP Portfolio for $94 million (see Note 5), the Company provided the buyer with financing of $61 million. The remainder of the sales price was received in cash at the time of sale. The financing is secured by the buyer's equity ownership in the four properties. In conjunction with the sale of 32 SHOP facilities in the Sunrise Senior Housing Portfolio for $664 million in January 2021 (see Note 5), the Company provided the buyer with financing of $410 million. The remainder of the sales price was received in cash at the time of sale. The financing is secured by the buyer's equity ownership in each property. In conjunction with the sale of 16 additional SHOP facilities for $230 million in January 2021 (see Note 5), the Company provided the buyer with financing of $150 million. The remainder of the sales price was received in cash at the time of sale. The financing is secured by the buyer's equity ownership in each property. In December 2019, the Company sold two SHOP facilities in Florida for $56 million and provided the buyer with initial financing of $45 million. The remainder of the sales price was received in cash at the time of sale. Additionally, the Company agreed to provide up to $10 million of redevelopment funding (80% of the estimated cost of redevelopment), $7 million of which has been funded as of December 31, 2020. The initial and redevelopment financings are secured by the buyer's equity ownership in the property. 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 December 31, 2020 (dollars in thousands):
Investment Type |  | Year of Origination |  | Total
| 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |
Secured mortgage loans |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |
Performing loans |  | $ | 95,800 |  |  | $ | 61,772 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 157,572 |
Watch list loans |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Workout loans |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total secured mortgage loans |  | $ | 95,800 |  |  | $ | 61,772 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 157,572 |
Mezzanine and other |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |
Performing loans |  | $ | 23,263 |  |  | $ | 12,252 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 35,515 |
Watch list loans |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,288 |  |  | 2,288 |
Workout loans |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total mezzanine and other |  | $ | 23,263 |  |  | $ | 12,252 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,288 |  |  | $ | 37,803 |
Real Estate Secured Loans The following table summarizes the Company’s loans receivable secured by real estate at December 31, 2020 (dollars in thousands):
Final Maturity Date |  | Number of Loans |  | Payment Terms |  | Principal Amount(1) |  | Carrying Amount
2021 |  | 1 |  | Monthly interest-only payments, accrues interest at 7.5% and secured by a senior housing facility under development in Texas |  | $ | 2,250 |  |  | $ | 2,250 |
2021 |  | 1 |  | Monthly interest-only payments, accrues interest at 7.5% and secured by a senior housing facility under development in Florida |  | 8,289 |  |  | 8,289 |
2021 |  | 4 |  | Monthly interest-only payments, accrues interest at 3.5% and secured by senior housing facilities in Florida and California |  | 61,018 |  |  | 57,861 |
2022 |  | 1 |  | Monthly interest-only payments, accrues interest at 5.5% and secured by equity interests in 11 senior housing facilities in California |  | 25,000 |  |  | 24,462 |
2026 |  | 1 |  | Monthly interest-only payments, accrues interest at the greater of 2% or LIBOR, plus 4.25% and secured by a senior housing facility under development in Florida |  | 51,716 |  |  | 51,233 |
2026 |  | 1 |  | Monthly interest-only payments, accrues interest at the greater of 2% or LIBOR, plus 4.25% and secured by a senior housing facility under development in California |  | 13,257 |  |  | 13,477 |
|  | 9 |  |  |  | $ | 161,530 |  |  | $ | 157,572 |
_______________________________________ (1)Represents future contractual principal payments to be received on loans receivable secured by real estate. During the years ended December 31, 2020, 2019, and 2018, the Company recognized $13 million, $6 million, and $5 million, respectively, of interest income related to loans secured by real estate. 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 December 31, 2020 (in thousands):
| December 31, 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 | 2,639 |  |  | 6,221 |  |  | 8,860 |
Reserve for loan losses, December 31, 2020 | $ | 3,152 |  |  | $ | 7,128 |  |  | $ | 10,280 |
Additionally, at December 31, 2020, a liability of $1 million 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 year ended December 31, 2020, the net credit loss expense was $18 million. The change in the provision for expected loan losses during the year ended December 31, 2020 is primarily due to the current and anticipated economic impact of COVID-19. Other Secured Loans Tandem Health Care Loan From July 2012 through May 2015, the Company funded, in aggregate, $257 million under a collateralized mezzanine loan facility (the “Mezzanine Loan”) to certain affiliates of Tandem Health Care (together with is affiliates, “Tandem”). In March 2018, the Company sold the Mezzanine Loan to a third party for approximately $112 million, which resulted in an impairment recovery, net of transaction costs and fees, of $3 million included in other income (expense), net. The Company holds no further economic interest in the operations of Tandem. U.K. Bridge Loan In 2016, the Company provided a £105 million ($131 million at closing) bridge loan (the “U.K. Bridge Loan”) to Maria Mallaband Care Group Ltd. ("MMCG") to fund the acquisition of a portfolio of seven care homes in the U.K. Under the U.K. Bridge Loan, the Company retained a three-year call option to acquire those seven care homes at a future date for £105 million, subject to certain conditions precedent being met. In March 2018, upon resolution of all conditions precedent, the Company began the process of exercising its call option to acquire the seven care homes and concluded that it should consolidate the real estate. As a result, the Company derecognized the outstanding loan receivable of £105 million and recognized a £29 million ($41 million) loss on consolidation. Refer to Note 19 for further discussion regarding impact of consolidating the seven care homes during the first quarter of 2018. In June 2018, the Company completed the process of exercising the above-mentioned call option. The seven care homes acquired through the call option were included in the U.K. JV transaction (see Note 5).

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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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