Investment in Unconsolidated Joint Ventures (Tables)

3 Months Ended

Mar. 31, 2019

Investment in Unconsolidated Joint Ventures

Summary of investments in unconsolidated joint ventures

The following table summarizes our investments in unconsolidated joint ventures (dollar amounts in thousands):


	Type	Type		Total		Currently		Number
	of	of		Preferred		Paid in		of		Investment			Carrying
State	Properties	Investment		Return		Cash		Beds/ Units		Commitment			Value
Arizona	ALF/MC/ILF	Preferred Equity	(1)	15	%	7	%	585	$	25,650		$	24,325
Florida	ALF/IL/MC	Mezzanine	(2)	15	%	15	%	99		2,900	(3)		3,190	(3)
Total								684	$	28,550		$	27,515

(1)

We have concluded that the JV is a variable interest entity (“VIE”) in accordance with GAAP. However, because we do not control the entity, nor do we have any role in the day-to-day management, we are not the primary beneficiary of the JV. Therefore, we account for the JV investment using the equity method.

(2)

We evaluated this acquisition, development and construction (“ADC”) arrangement and determined that the characteristics are similar to jointly-owned investments or partnerships, and accordingly, this investment is accounted for as unconsolidated joint venture under the equity method of accounting instead of loan accounting.

(3)

Since interest payments were deferred and no interest was recorded for the first twelve months of the loan, we used the effective interest method in accordance with GAAP to recognize interest income and recorded the difference between the effective interest income and cash interest income to the loan principal balance.

Summary of capital contributions, income recognized and cash interest received from investments in unconsolidated joint ventures

The following table summarizes our capital contributions, income recognized, and cash interest received related to our investments in unconsolidated joint ventures (in thousands):


	Type
	of			Capital			Income			Cash Interest
Year	Properties			Contribution			Recognized			Received
2019	ALF/MC/ILF		$	293		$	553		$	552
	ALF/IL/MC			—			128			121
	ALF/MC	(1)		—	(1)		404	(1)		432	(1)
Total 2019			$	293		$	1,085		$	1,105

2018	ALF/MC/ILF			380			429			446
	ALF/IL/MC			—			128			97
	ALF/MC	(1)		—	(1)		74	(1)		—	(1)
Total 2018			$	380		$	631		$	543

(1) We had a $3,400 mezzanine loan commitment for the development of a 127-unit seniors housing community in Florida with a total preferred return of 15%. The mezzanine loan was an ADC arrangement which we determined it to have characteristics similar to a jointly-owned arrangement and recorded it as an unconsolidated joint venture. During the first quarter of 2019, the mezzanine loan was paid off.