
Operator	Date	Properties	Asset Class	Land		Building and Improvements		Total
Silverado Senior Living	Q1 2023	2	ALF	$	3,894	$	33,599	$	37,493
Bickford	Q1 2023	1	ALF	1,746		15,542		17,288
				$	5,640	$	49,141	$	54,781

In February 2023, we acquired two memory care communities operated by Silverado Senior Living for approximately $37.5 million. The newly developed properties opened in 2022 and include a 60-unit community in Summerlin, Nevada and a 60-unit community in Frederick, Maryland. They are leased pursuant to 20-year leases with a first-year lease rate of 7.5% and annual escalators of 2.0%.

In February 2023, we also acquired a 64-unit ALF in Chesapeake, Virginia from Bickford. The acquisition price was $17.3 million, including the satisfaction of an outstanding construction note receivable of $14.2 million including interest, cash consideration of $0.5 million and approximately $0.1 million in closing costs. The acquisition price also included a reduction of $2.5 million in Bickford’s outstanding pandemic-related rent deferrals that has been recognized in “Rental income” during the nine months ended September 30, 2023. We added the community to an existing master lease with Bickford at an initial rate of 8.0%.

During the nine months ended September 30, 2023, we completed the following dispositions of real estate properties within our Real Estate Investments portfolio as described below ($ in thousands):


Operator	Date	Properties	Asset Class	Net Proceeds		Net Real Estate Investment		Gain		Impairment2
BAKA Enterprises, LLC1,3	Q1 2023	1	ALF	$	7,478	$	7,505	$	—	$	(27)
Bickford1	Q1 2023	1	ALF	2,553		1,421		1,132		—
Chancellor Senior Living1,3	Q2 2023	1	ALF	2,355		1,977		378		—
Milestone Retirement1,3,4	Q2 2023	2	ALF	3,803		3,934		—		(131)
Chancellor Senior Living1,3	Q2 2023	1	ALF	7,633		6,140		1,493		—
Milestone Retirement1,3,4	Q2 2023	1	ALF	1,602		1,452		150		—
Chancellor Senior Living	Q2 2023	1	ALF	23,724		14,476		9,248		—
Chancellor Senior Living1,3	Q3 2023	1	ALF	2,923		2,292		631		—
				$	52,071	$	39,197	$	13,032	$	(158)

2 Impairments are included in “Loan and realty losses” in the Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2023.

4 The Company provided aggregate financing of approximately $0.7 million, net of discounts, on these transactions in the form of notes receivable.

Rental income associated with assets held for sale at September 30, 2023 totaled $0.6 million and $1.9 million for the three and nine months ended September 30, 2023, respectively, and $0.6 million and $1.6 million for the three and nine months ended September 30, 2022, respectively. During the first quarter of 2023, one property in our Real Estate Investments portfolio was classified as held for sale with a net real estate balance of $5.0 million and two properties, previously classified as held for sale with an aggregate net real estate balance of $12.3 million, were reclassified as held for use.

During the three months ended September 30, 2023, we recorded impairment charges of approximately $1.2 million for one property in our Real Estate Investments segment. During the nine months ended September 30, 2023, we recorded impairment charges of approximately $1.6 million for four properties in our Real Estate Investments segment, of which $0.5 million related to three properties either sold or classified as assets held for sale. The impairment charges are included in “Loan and realty losses” in the Condensed Consolidated Statements of Income.

We reduce the carrying value of impaired properties to their estimated fair value or, with respect to the properties classified as held for sale, to estimated fair value less costs to sell. To estimate the fair values of the properties, we utilized a market approach which considered binding agreements for sales (Level 1 inputs), non-binding offers to purchase from unrelated third parties and/or broker quotes of estimated values (Level 3 inputs), and/or independent third-party valuations (Level 1 and 3 inputs).

During the fourth quarter of 2023, we sold three ALFs located in Florida for combined consideration of approximately $5.4 million in cash, net of transaction costs plus $1.6 million of seller financing in connection with one of the transactions. The properties were classified in assets held for sale on the Condensed Consolidated Balance Sheet as of September 30, 2023, with an aggregate book value of $5.9 million. Prior impairment charges recognized on the properties totaled $1.3 million.

The following table contains information regarding concentration in our Real Estate Investments portfolio of tenants or affiliates of tenants, that exceed 10% of total revenues for the nine months ended September 30, 2023 and 2022, excluding $2.6 million for our corporate office, a credit loss reserve of $15.8 million and $344.4 million in real estate assets in the SHOP segment ($ in thousands):


	as of September 30, 2023					Revenues1
	Asset	Gross Real		Notes		Nine Months Ended September 30,
	Class	Estate		Receivable		2023			2022

Senior Living Communities, LLC (“Senior Living”)	EFC	$	573,631	$	48,950	$	38,466	16%	$	38,325	18%
Bickford2	ALF	429,043		16,827		29,280		12%	N/A		N/A
National HealthCare Corporation (“NHC”)	SNF	133,770		—		28,159		12%	27,875		13%
All others, net	Various	1,293,210		192,991		99,867		41%	109,766		53%
Escrow funds received from tenants
for property operating expenses	Various	—		—		8,738		4%	7,553		4%
		$	2,429,654	$	258,768	204,510			183,519
Resident fees and services3						35,860		15%	24,005		12%
						$	240,370		$	207,524

2 Revenues for the nine months ended September 30, 2022 are included in “All others, net” since they are less than 10% for that period.

At September 30, 2023, the two states in which we had an investment concentration of 10% or more were South Carolina (12.1%) and Texas (10.7%).

As of September 30, 2023, we leased ten retirement communities to Senior Living. We recognized straight-line rent of $(0.9) million and $0.3 million from Senior Living for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, we leased three ILFs and 32 SNFs to NHC, a publicly held company, under a master lease (four of which are subleased to other parties for whom the lease payments are guaranteed to us by NHC). Straight-line rent of $(0.9) million and $(0.1) million was recognized for NHC for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, we leased 39 facilities to Bickford under four leases. During the second quarter of 2022, we converted Bickford to the cash basis of revenue recognition based upon information obtained from Bickford regarding its financial condition that raised substantial doubt as to its ability to continue as a going concern. As a result, we wrote off approximately $18.1 million of straight-line rents receivable and $7.1 million of lease incentives, that were included in “Other assets, net” on the Condensed Consolidated Balance Sheet, to rental income in 2022.

During the three and nine months ended September 30, 2023, Bickford repaid $0.8 million and $1.3 million, respectively, of its outstanding pandemic-related deferrals in addition to the reduction in deferrals of $2.5 million recognized in connection with the acquisition of the ALF located in Chesapeake, Virginia from Bickford. As of September 30, 2023, Bickford’s outstanding pandemic-related deferrals were $19.0 million.

Cash rent received from Bickford for the three and nine months ended September 30, 2023 was $8.6 million and $24.5 million, respectively, which excludes $2.5 million of rental income related to the reduction of pandemic-related rent deferrals recognized in connection with the acquisition of the ALF from Bickford in the first quarter of 2023 located in Chesapeake, Virginia (discussed above).

We placed two additional operators on the cash basis of accounting for their leases during 2022. Rental income associated with these tenants totaled $3.4 million and $10.0 million for the three and nine months ended September 30, 2023, respectively.

Certain of our leases contain purchase options allowing tenants to acquire the leased properties by a fixed base price plus a specified share in any appreciation or a fixed base price. At September 30, 2023, tenants had purchase options on three properties with an aggregate net investment of $58.8 million that will become exercisable between 2027 and 2028. Rental income from these properties with tenant purchase options was $1.8 million and $5.4 million for the three and nine months ended September 30, 2023, respectively, and $1.8 million and $5.3 million for the three and nine months ended September 30, 2022, respectively.

We cannot reasonably estimate at this time the probability that any purchase options will be exercised in the future. Consideration to be received from the exercise of any tenant purchase option is expected to exceed our net investment in the leased property or properties.

Future minimum lease payments to be received by us under our operating leases at September 30, 2023, are as follows ($ in thousands):

Most of our existing leases contain annual escalators in rent payments. Some of our leases contain escalators that are determined annually based on a variable index or other factors that are indeterminable at the inception of the lease. The table below indicates the rental income recognized as a result of fixed and variable lease escalators ($ in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Lease payments based on fixed escalators	$	57,200	$	53,394	$	169,675	$	172,767
Lease payments based on variable escalators	1,830		1,224		5,879		2,452
Straight-line rent, net of write-offs	1,040		2,476		6,011		(11,360)
Escrow funds received from tenants for property operating expenses	2,908		2,358		8,738		7,553
Amortization and write-off of lease incentives	(723)		(58)		(1,798)		(7,477)
Rental income	$	62,255	$	59,394	$	188,505	$	163,935