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Notes Receivable | 6 Months Ended
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Jun. 30, 2023
Notes Receivable. |
Notes Receivable |
4. | Notes Receivable
Notes receivable consist of a mezzanine loan and working capital loans. The following table sets forth information regarding our investment in notes receivable at June 30, 2023 (dollar amounts in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest | ​ | ​ | ​ | ​ | ​ | Type of | ​ | Gross | ​ | ​ | ​ | ​ | Type of | ​
Rate | ​ | IRR | ​ | Maturity | ​ | Loan | ​ | Investment | ​ | ​ | # of loans | ​ | Property | ​
5.0% | ​ | — | ​ | 2023 | ​ | Working capital | ​ | $ | 370 | ​ | ​ | 1 | ​ | ALF | ​
5.0% | ​ | — | ​ | 2024 | ​ | Working capital | ​ | ​ | 1,050 | ​ | ​ | 1 | ​ | ALF | ​
4.0% | ​ | — | ​ | 2024 | ​ | Working capital | ​ | ​ | 13,531 | ​ | ​ | 1 | ​ | SNF |
5.0% | ​ | — | ​ | 2025 | ​ | Working capital | ​ | ​ | 831 | ​ | ​ | 1 | ​ | ALF | ​
7.5% | ​ | — | ​ | 2027 | ​ | Working capital | ​ | ​ | 550 | ​ | ​ | 1 | ​ | ALF | ​
8.0% | ​ | 11.0% | ​ | 2027 | ​ | Mezzanine | ​ | ​ | 25,000 | ​ | ​ | 1 | ​ | ALF | ​
6.5% | ​ | — | ​ | 2030 | ​ | Working capital | ​ | ​ | 138 | ​ | ​ | 1 | ​ | SNF | ​
7.1% | ​ | — | ​ | 2030 | ​ | Working capital | ​ | ​ | 500 | ​ | ​ | 1 | ​ | ALF | ​
7.3% | ​ | — | ​ | 2030 | ​ | Working capital | ​ | ​ | 1,107 | ​ | ​ | 1 | ​ | ALF | ​
7.0% | ​ | — | ​ | 2031 | ​ | Working capital | ​ | ​ | 2,693 | ​ | ​ | 1 | ​ | ALF | ​
8.3% | ​ | — | ​ | 2032 | ​ | Working capital | ​ | ​ | 642 | ​ | ​ | 1 | ​ | SNF | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 46,412 | (1) (2) | ​ | 11 | ​ | ​ | ​
(1) | Excludes the impact of credit loss reserve.
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(2) | Subsequent to June 30, 2023, we originated a $17,000 mezzanine loan for recapitalization of an existing 130-unit ILF/ALF/MC in Georgia as well as the construction of 89 additional units. The loan term is five years at an initial yield of 8.75% and an IRR of 12%.
The following table is a summary of our notes receivable components as of June 30, 2023 and December 31, 2022 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | June 30, 2023 | ​ | December 31, 2022 |
Mezzanine loans | $ | 25,000 | ​ | $ | 36,815 | ​
Other loans | ​ | 21,412 | ​ | ​ | 22,157 | ​
Notes receivable credit loss reserve | ​ | (463) | ​ | ​ | (589) | ​
Total | $ | 45,949 | ​ | $ | 58,383 | ​
​ The following table summarizes our notes receivable activity for the six months ended June 30, 2023 and 2022 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | Six Months Ended June 30,
​ | ​ | 2023 | ​ | ​ | 2022 | ​
Advances under notes receivable | $ | 866 | ​ | $ | 36,788 | (2)
Principal payments received under notes receivable | ​ | (13,426) | (1) | ​ | (6,618) | ​
Provision (recovery) for credit losses | ​ | 126 | ​ | ​ | (301) | ​
Net (decrease) increase in notes receivable | $ | (12,434) | ​ | $ | 29,869 | ​
(1) | During 2023, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190 from a mezzanine loan prepayment. The mezzanine loan was on a 136-unit ILF in Oregon. Additionally, another $7,461 mezzanine loan was effectively prepaid through converting it as part of our $51,111 investment in a participating interest in an existing mortgage loan that is secured by a 203-unit ALF, ILF and MC located in Georgia. We recorded $1,380 of interest income in connection with the effective prepayment of the mezzanine loan.
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(2) | During 2022, we originated a $25,000 mezzanine loan for the recapitalization of a five-property seniors housing portfolio. The mezzanine loan has a term of approximately five years, with two one-year extension options and bears interest at 8% with an IRR of 11%. The five communities are located in Oregon and Montana, have a total of 621 units, and include independent living, assisted living and memory care.
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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 -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//310-10/tableOfContent + Details
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