XML 37 R14.htm IDEA: XBRL DOCUMENT
v3.23.1

Loans Receivable | 3 Months Ended
--- | ---
Mar. 31, 2023
Receivables [Abstract] |
Loans Receivable | Loans Receivable The following table summarizes the Company’s loans receivable (in thousands):
| March 31, 2023 |  | December 31, 2022
Secured loans(1) | $ | 214,238 |  |  | $ | 350,837 |
CCRC resident loans | 36,470 |  |  | 33,083 |
Unamortized discounts, fees, and costs | (1,407) |  |  | (808) |
Reserve for loan losses | (6,152) |  |  | (8,280) |
Loans receivable, net | $ | 243,149 |  |  | $ | 374,832 |
_______________________________________ (1)At each of March 31, 2023 and December 31, 2022, the Company had $40 million remaining of commitments to fund additional loans for senior housing redevelopment and capital expenditure projects. Sunrise Senior Housing Portfolio Seller Financing In conjunction with the sale of 32 SHOP facilities for $664 million in January 2021, the Company provided the buyer with initial financing of $410 million. The remainder of the sales price was received in cash at the time of sale. Additionally, the Company agreed to provide up to $92 million of additional financing for capital expenditures (up to 65% of the estimated cost of capital expenditures). As of March 31, 2023, the additional financing was reduced to $40 million, of which $0.4 million had been funded. The initial and additional financing is secured by the buyer’s equity ownership in each property. In June 2021, February 2022, July 2022, and December 2022, the Company received principal repayments of $246 million, $8 million, $27 million, and $10 million, respectively, in conjunction with the disposition of the underlying collateral. At each of March 31, 2023 and December 31, 2022, this secured loan had an outstanding principal balance of $120 million. Other Seller Financing In conjunction with the sale of 16 additional SHOP facilities for $230 million in January 2021, 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. Upon maturity in January 2023, the borrower did not make the required principal repayment. In February 2023, the borrower made a partial principal repayment of $102 million and the remaining balance owed was refinanced with the Company. In connection with the refinance, the maturity date of the loan was extended to January 2024 and the interest rate on the loan was increased to a variable rate based on Term SOFR (plus an 11 basis point adjustment related to SOFR transition) plus 6.0% for the first six months of the extended term, increasing to 7.0% for the last six months of the extended term. The Company also received a $1 million extension fee in connection with the refinance, which is recognized in interest income over the remaining term of the loan. 2023 Other Loans Receivable Transactions In February 2023, the Company received full repayment of the outstanding balance of one $35 million secured loan. In April 2023, the Company received full repayment of the outstanding balance of one $14 million secured loan. 2022 Other Loans Receivable Transactions In May 2022, the Company received full repayment of the outstanding balance of a $2 million secured loan. In November 2022, the Company received full repayment of the outstanding balance of a $1 million mezzanine loan. In December 2022, the Company extended the maturity dates of four secured loans with an aggregate outstanding balance of $61 million, originally scheduled to mature in December 2022, by one year to December 2023. In connection with the extensions, the interest rates on the loans were increased to a variable rate based on Term SOFR (plus an 11 basis point adjustment related to SOFR transition) with a floor of 8.5% for the first six months of the extended term, increasing to a floor of 10.5% for the last six months of the extended term. Two of these secured loans were repaid during 2023 as discussed above. CCRC Resident Loans 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. At March 31, 2023 and December 31, 2022, the Company held $36 million and $33 million, respectively, of such notes receivable. 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 receivable, net of unamortized discounts, fees, and reserves for loan losses, as of March 31, 2023 (in thousands):
Investment Type |  | Year of Origination |  | Total
| 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 | Prior |
Secured loans |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |  |
Performing loans |  | $ | — |  |  | $ | — |  |  | $ | 163,562 |  |  | $ | 43,117 |  |  | $ | — |  | $ | — |  |  | $ | 206,679 |
Watch list loans |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  | — |  |  | — |
Workout loans |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  | — |  |  | — |
Total secured loans |  | $ | — |  |  | $ | — |  |  | $ | 163,562 |  |  | $ | 43,117 |  |  | $ | — |  | $ | — |  |  | $ | 206,679 |
Current period gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  | $ | — |  |  | $ | — |
Current period recoveries |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  | — |  |  | — |
Current period net write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  | $ | — |  |  | $ | — |
CCRC resident loans |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating: |  |  |  |  |  |  |  |  |  |  |  |  |
Performing loans |  | $ | 14,482 |  |  | $ | 21,910 |  |  | $ | — |  |  | $ | 78 |  |  | $ | — |  | $ | — |  |  | $ | 36,470 |
Watch list loans |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  | — |  |  | — |
Workout loans |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  | — |  |  | — |
Total CCRC resident loans |  | $ | 14,482 |  |  | $ | 21,910 |  |  | $ | — |  |  | $ | 78 |  |  | $ | — |  | $ | — |  |  | $ | 36,470 |
Current period gross write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  | $ | — |  |  | $ | — |
Current period recoveries |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  | — |  |  | — |
Current period net write-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  | $ | — |  |  | $ | — |
Reserve for Loan Losses The Company evaluates the liquidity and creditworthiness of its borrowers on a quarterly basis to determine whether any updates to the future expected losses recognized upon inception are necessary. The Company’s evaluation considers industry and economic conditions, individual and portfolio property performance, credit enhancements, liquidity, and other factors. The determination of loan losses also considers concentration of credit risk associated with the senior housing industry to which its loans receivable relate. 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, NOI, 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 (in thousands):
| March 31, 2023 |  | December 31, 2022
| Secured Loans |  | Other(1) |  | Total |  | Secured Loans |  | Other(1) |  | Total
Reserve for loan losses, beginning of period | $ | 8,280 |  |  | $ | — |  |  | $ | 8,280 |  |  | $ | 1,804 |  |  | $ | 9 |  |  | $ | 1,813 |
Provision for expected loan losses | (171) |  |  | — |  |  | (171) |  |  | 6,527 |  |  | 7 |  |  | 6,534 |
Expected loan losses (recoveries) related to loans sold or repaid | (1,957) |  |  | — |  |  | (1,957) |  |  | (51) |  |  | (16) |  |  | (67) |
Reserve for loan losses, end of period | $ | 6,152 |  |  | $ | — |  |  | $ | 6,152 |  |  | $ | 8,280 |  |  | $ | — |  |  | $ | 8,280 |
_______________________________________ (1)Includes CCRC resident loans and other loan activity. Additionally, at March 31, 2023 and December 31, 2022, a liability of $0.7 million and $0.8 million, respectively, related to expected credit losses for unfunded loan commitments was included in accounts payable, accrued liabilities, and other liabilities. The change in the reserve for expected loan losses during the three months ended March 31, 2023 is primarily due to principal repayments on seller financing, partially offset by increased interest rates on variable rate loans.

X
- 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 https://asc.fasb.org/subtopic&trid=2196772 + Details
Name: | us-gaap_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_ReceivablesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration