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REAL ESTATE INVESTMENTS, NET | 6 Months Ended
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Jun. 30, 2023
Real Estate [Abstract] |
REAL ESTATE INVESTMENTS, NET | REAL ESTATE INVESTMENTS, NET The following table summarizes the Company’s investment in owned properties held for use at June 30, 2023 and December 31, 2022 (dollars in thousands):
| June 30, 2023 |  | December 31, 2022
Land | $ | 266,010 |  |  | $ | 238,738 |
Buildings and improvements | 1,575,661 |  |  | 1,483,133 |
Integral equipment, furniture and fixtures | 97,755 |  |  | 97,199 |
Identified intangible assets | 2,832 |  |  | 2,832 |
Real estate investments | 1,942,258 |  |  | 1,821,902 |
Accumulated depreciation and amortization | (414,024) |  |  | (400,492) |
Real estate investments, net | $ | 1,528,234 |  |  | $ | 1,421,410 |
As of June 30, 2023, 222 of the Company’s 224 facilities were leased to various operators under triple-net leases. All of these leases contain annual escalators based on the percentage change in the Consumer Price Index (“CPI”) (but not less than zero), some of which are subject to a cap, or fixed rent escalators. Two of the Company’s 224 facilities are non-operational and are leased under a short term lease with an expected remaining term of less than one year as of June 30, 2023. As of June 30, 2023, 15 facilities were held for sale. See Note 4, Impairment of Real Estate Investments, Assets Held for Sale, Net and Asset Sales, for additional information. As of June 30, 2023, the Company’s total future contractual minimum rental income for all of its tenants, excluding operating expense reimbursements and assets held for sale, was as follows (dollars in thousands):
Year | Amount
2023 (six months) | $ | 98,155 |
2024 | 197,155 |
2025 | 198,310 |
2026 | 198,853 |
2027 | 195,687 |
2028 | 193,433 |
Thereafter | 941,966 |
Total | $ | 2,023,559 |
Tenant Purchase Options Certain of the Company’s operators hold purchase options allowing them to acquire properties they currently lease from the Company. A summary of these purchase options is presented below (dollars in thousands):
Asset Type(1) | Properties | Lease Expiration | Option Period Open Date(2) |  | Option Type(3) | Current Cash Rent(4)
SNF | 1 |  | March 2029 | 4/1/2022 | (5) | A / B(7) | 832 |
SNF / Campus | 2 | (8) | October 2032 | 1/1/2024 | (6) | A | 1,097 |
SNF | 4 |  | November 2034 | 12/1/2024 | (5) | A | 3,891 |
(1) Excludes a purchase option on an 11 building SNF portfolio classified as held for sale as of June 30, 2023 and representing $5.1 million of current cash rent. Tenant is currently not eligible to elect the option. (2) The Company has not received notice of exercise for the option periods that are currently open. (3) Option type includes: A - Fixed base price. B - Fixed capitalization rate on lease revenue. (4) Based on annualized cash revenue for contracts in place as of June 30, 2023. (5) Option window is open until the expiration of the lease term. (6) Option window is open for six months from the option period open date. (7) Purchase option reflects two option types. (8) Includes one property classified as held for sale as of June 30, 2023. Rental Income The following table summarizes components of the Company’s rental income (dollars in thousands):
| For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
Rental Income | 2023 |  | 2022 |  | 2023 |  | 2022
Contractual rent due(1) | $ | 47,752 |  |  | $ | 46,801 |  |  | $ | 93,922 |  |  | $ | 93,779 |
Straight-line rent | (7) |  |  | 5 |  |  | (14) |  |  | 11 |
Adjustment for collectibility(2) | — |  |  | — |  |  | — |  |  | (977) |
Total | $ | 47,745 |  |  | $ | 46,806 |  |  | $ | 93,908 |  |  | $ | 92,813 |
(1) Includes initial cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. Tenant operating expense reimbursements for the three months ended June 30, 2023 and 2022 were $1.2 million and $0.7 million, respectively. Tenant operating expense reimbursements for the six months ended June 30, 2023 and 2022 were $1.9 million and $1.3 million, respectively. (2) During the six months ended June 30, 2022, and in accordance with Accounting Standards Codification 842, the Company evaluated the collectibility of lease payments through maturity and determined that it was not probable that the Company would collect substantially all of the contractual obligations from four existing and former operators. As such, the Company reversed $0.7 million of operating expense reimbursements, $0.2 million of contractual rent and $0.1 million of straight-line rent during the six months ended June 30, 2022. If lease payments are subsequently deemed probable of collection, the Company will reestablish the receivable which will result in an increase in rental income for such recoveries. Recent Real Estate Acquisitions The following table summarizes the Company’s acquisitions for the six months ended June 30, 2023 (dollars in thousands):
Type of Property | Purchase Price(1) |  | Initial Annual Cash Rent(2) |  | Number of Properties |  | Number of Beds/Units(3)
Skilled nursing | $ | 107,858 |  |  | $ | 9,085 |  |  | 7 |  |  | 871 |
Multi-service campuses | 25,276 |  |  | 1,916 |  |  | 1 |  |  | 168 |
Assisted living | 39,319 |  |  | 3,495 |  |  | 4 |  |  | 241 |
Total | $ | 172,453 |  |  | $ | 14,496 |  |  | 12 |  |  | 1,280 |
(1) Purchase price includes capitalized acquisition costs. (2) Initial annual cash rent represents initial cash rent for the first twelve months excluding the impact of rent abatement in the first one to three months, if applicable. (3) The number of beds/units includes operating beds at the acquisition date. Lease Amendments Amended Premier Lease. Effective January 1, 2023, the Company amended its master lease with affiliates of Premier Senior Living, LLC (“Premier”). In connection with the lease amendment, the Company reduced the annual cash rent by $1.7 million, to approximately $2.6 million. The Premier lease, as amended, had a remaining term at the date of amendment of approximately 8 years with two five-year renewal options and CPI-based rent escalators. Noble VA Lease Termination and New Pennant Lease. Effective March 16, 2023, two ALFs in Wisconsin were removed from a master lease with affiliates of Noble VA Holdings (“Noble VA”) and the Company terminated the applicable Noble VA master lease. Annual cash rent under the applicable Noble VA master lease prior to lease termination was approximately $2.3 million. In connection with the lease termination, the Company entered into a new lease with The Pennant Group, Inc. (“Pennant”) with respect to the two ALFs. The applicable Pennant lease had an initial term at the date of the lease of approximately 15 years with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the new lease was approximately $0.8 million and the master lease provides Pennant with three months deferred rent to be repaid before the expiration or termination of the lease. Amended Hillstone Lease. On March 24, 2023, the Company amended its master lease with affiliates of Hillstone Healthcare, Inc. (“Hillstone”). In connection with the lease amendment, the Company agreed to defer rent of approximately $0.7 million for 12 months from December 2022 through November 2023 to be repaid as a percentage of adjusted gross revenues of one underlying facility, as defined in the amended lease, beginning January 1, 2025, until deferred rent has been paid in full. The amended Hillstone lease had a remaining term at the date of amendment of approximately 7 years with two five-year renewal options and 2% fixed rent escalators. Amended Momentum Lease. On April 1, 2023, the Company acquired one SNF. In connection with the acquisition, the Company amended its existing triple-net master lease with affiliates of Momentum Skilled Services (“Momentum”) to include the one SNF and extended the initial lease term. The Momentum master lease, as amended, had a remaining term at the date of amendment of approximately 15 years, with two five-year renewal options and CPI-based rent escalators. Annual rent under the amended lease increased by approximately $1.0 million.

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- Definition The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 976 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//976/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 978 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//978/tableOfContent Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 970 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//970/tableOfContent Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 972 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//972/tableOfContent Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 974 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//974/tableOfContent + Details
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