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Real Estate Investments | 12 Months Ended
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Dec. 31, 2023
Real Estate Investments |
Real Estate Investments | 5. Real Estate Investments Owned Properties. As of December 31, 2023, we owned 134 health care real estate properties consisting of 83 ALFs, 50 SNFs and one behavioral health care hospital located in 23 states. These properties are operated by 22 operators. Independent living communities, assisted living communities, memory care communities and combinations thereof are included in the assisted living property classification (collectively “ALF”). Any reference to the number of properties, number of units, number of beds, and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board. Depreciation expense on buildings and improvements, including properties classified as held-for-sale, was $37,303,000, $37,394,000, and $38,192,000 for the years ended December 31, 2023, 2022 and 2021, respectively. Future minimum base rents receivable under the remaining non-cancelable terms of operating leases excluding the effects of straight-line rent, amortization of lease incentives and renewal options are as follows (in thousands):
​ | ​ | ​ | ​ | ​
​ |  | Cash |
​ | ​ | Rent (1) |
2024 | ​ | $ | 118,411 | ​
2025 | ​ |  | 102,414 | ​
2026 | ​ |  | 83,765 | ​
2027 | ​ |  | 79,080 | ​
2028 | ​ |  | 66,556 | ​
Thereafter | ​ |  | 168,031 | ​
(1) | Represents contractual cash rent, except for certain master leases which are based on estimated cash.
Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent receivable upon renewal being greater or less than that currently being paid. During 2023, Brookdale Senior Living Communities, Inc. (“Brookdale”) elected not to exercise its renewal option under a master lease that matured on December 31, 2023. The 35-property assisted living portfolio was apportioned as follows:
| ● | We re-leased 17 communities with a total of 738 units to Brookdale under a new master lease. This new master lease includes six properties in Colorado, six properties in Texas, four in Kansas and one in Ohio. The new master lease, which commenced in January 2024, is for six years at an initial annual rent of $9,325,000, escalating by approximately 2% annually. The lease includes a purchase option that can be exercised in 2029. We also agreed to fund $4,500,000 for capital expenditures for the first two years of the lease at an initial rate of 8.0%, escalating by approximately 2.0% annually thereafter;
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| ● | Five communities in Oklahoma, with a total of 184 units, were transferred and are now being operated by an existing LTC operator. The new master lease, which commenced in November 2023, is for three years, with one four-year extension, at an initial annual rent of $960,000, increasing to $984,000 in the second year, and $1,150,000 in the third year. Additionally, the new master lease includes a purchase option that can be exercised starting in November 2027 through October 2029 if the lessee exercises its four-year extension option;
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| ● | Five communities in North Carolina, with a total of 210 units, were transferred and are now being operated by an operator new to us. The new master lease, which commenced in January 2024, is for six years at an initial annual rent of $3,300,000, escalating 3.0% annually thereafter; and
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| ● | Eight communities across three states including four in Florida, three in South Carolina and one in Oklahoma with a total of 341 units, were sold for $27,959,000. We received proceeds of $23,232,000, net of transaction costs and seller financing. We provided seller financing collateralized by two of the Florida properties, with a
|  | total of 92 units. The $4,000,000 seller-financed mortgage loan is two years, with a one-year extension, at an interest rate of 8.75%.
Additionally, during 2023, a master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed at the contractual rate for another five years extending the maturity to November 2028. The centers have a total of 216 beds and are located in Florida. Also, during 2023, a master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed for another two years extending the maturity to December 2025. The master lease was renewed at the contractual annual cash rent of $1,005,000 increasing 2.5% per year. As amended, this master lease provides the lessee with a purchase option available through December 31, 2024. The centers have a total of 141 beds and are located in Tennessee. Further, during 2023, a master lease covering three skilled nursing centers that was scheduled to mature in 2024 was renewed at the contractual rate for another five years extending the maturity to August 2029. The centers have a total of 613 beds and are located in Arizona. During 2023, we transitioned a portfolio of eight assisted living communities with 500 units in Illinois, Ohio and Michigan to Encore Senior Living (“Encore”). We agreed to provide assistance in the second quarter of 2023 to the former operator of this portfolio and as part of transition, we received repayment of $1,250,000 of deferred rent which represents $934,000 of April and May 2023 deferred rent and $316,000 of unrecorded deferred rent provided in 2022. Cash rent under the new two-year lease with Encore is based on mutually agreed upon fair market rent beginning in September 2023. Subsequent to December 31, 2023, a master lease covering 11 skilled nursing centers that was scheduled to mature in January 2024 was renewed for seven months extending the maturity to August 2024. The master lease was renewed at the current annualized rent of $8,000,000, or $4,667,000 for seven months in 2024. The centers have a total of 1,444 beds and are located in Texas. Also, subsequent to December 31, 2023, we transitioned two assisted living communities, which are located in Georgia and South Carolina with a combined 159-units, to an operator new to LTC. The new two-year master lease commenced on January 1, 2024, and provides two one-year extension periods. Cash rent is zero for the first six months. Thereafter, cash rent is based on mutually agreed upon fair market rent. We monitor the collectability of our receivable balances, including deferred rent receivable balances, on an ongoing basis. We write-off uncollectable operator receivable balances, including straight-line rent receivable and lease incentives balances, as a reduction to rental income in the period such balances are no longer probable of being collected. Therefore, recognition of rental income is limited to the lesser of the amount of cash collected or rental income reflected on a straight-line basis for those customer receivable balances deemed uncollectable. We wrote-off straight-line rent receivable and lease incentives balances of $26,000, $256,000 and $758,000 for the years ended December 31, 2023, 2022 and 2021, respectively. We continue to take into account the current financial condition of our operators, including consideration of the impact of COVID-19, in our estimation of uncollectable accounts and deferred rents receivable at December 31, 2023. We are closely monitoring the collectability of such rents and will adjust future estimations as appropriate as further information becomes known. The following table summarizes components of our rental income for the years ended December 31, 2023, 2022 and 2021 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, | ​
Rental Income | ​ | ​ | 2023 | ​ | ​ | 2022 | ​ | ​ | 2021 | ​
Contractual cash rental income | ​ | $ | 116,702 | (1) | $ | 115,230 | (2) | $ | 107,692 | ​
Variable cash rental income | ​ | ​ | 13,525 | (3) | ​ | 15,516 | (3) | ​ | 14,332 | (3)
Straight-line rent | ​ | ​ | (2,078) | (4) | ​ | (1,369) | (5) | ​ | 467 | ​
Adjustment of lease incentives and rental income | ​ | ​ | (26) | (6) | ​ | (256) | (6) | ​ | (758) | (6)
Amortization of lease incentives | ​ | ​ | (773) | ​ | ​ | (877) | ​ | ​ | (608) | ​
Total | ​ | $ | 127,350 | ​ | $ | 128,244 | ​ | $ | 121,125 | ​
(1) | Increased primarily due to rental income from acquisitions and transitioned portfolios, repayment of deferred rent and annual rent escalations, partially offset by sold properties.
​
(2) | Increased primarily due to rent received from transitioned portfolios, rental income from acquisitions, completed development projects, annual rent escalations, and lease termination fee income of $1,181 received in connection with the sale of a 74-unit ALF partially offset by decreased rent from the sold properties.
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(3) | The variable cash rental income for the years ended December 31, 2023, 2022 and 2021 primarily includes reimbursement of real estate taxes by our lessees.
​
(4) | Decreased primarily due to deferred rent repayment and normal amortization.
​
(5) | Decreased primarily due to a deferred rent repayment, normal amortization and the impact of the 50% reduction of 2021 rent escalations for those leases accounted for on a straight-line basis.
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(6) | Represents straight-line rent receivable and lease incentives write-offs.
​ Some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. The following table summarizes information about purchase options included in our lease agreements as of December 31, 2023 (dollar amount in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Type | ​ | Number | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | of | ​ | of | ​ | ​ | Gross | ​ | ​ | Net Book | ​ | Option | ​
State | ​ | Property | ​ | Properties | ​ | ​ | Investments (1) | ​ | ​ | Value | ​ | Window | ​
California | ​ | ALF/MC | ​ | 2 | ​ | $ | 38,895 | ​ | $ | 32,778 | ​ | 2023-2029 | ​
Florida | ​ | MC | ​ | 1 | ​ | ​ | 7,680 | ​ | ​ | 4,611 | ​ | 2029 | (2)
Florida | ​ | SNF | ​ | 3 | ​ | ​ | 76,690 | ​ | ​ | 76,690 | ​ | 2025-2027 | (3)
North Carolina | ​ | ALF/MC | ​ | 11 | ​ | ​ | 121,321 | ​ | ​ | 121,321 | ​ | 2025-2028 | (4)
Ohio | ​ | MC | ​ | 1 | ​ | ​ | 16,161 | ​ | ​ | 13,488 | ​ | 2024-2025 | ​
Ohio | ​ | ILF/ALF/MC | ​ | 1 | ​ | ​ | 54,717 | ​ | ​ | 53,448 | ​ | 2025-2027 | ​
Oklahoma | ​ | ALF/MC | ​ | 5 | ​ | ​ | 11,202 | ​ | ​ | 4,394 | ​ | 2027-2029 | (5)
South Carolina | ​ | ALF/MC | ​ | 1 | ​ | ​ | 11,680 | ​ | ​ | 8,475 | ​ | 2029 | ​
Tennessee | ​ | SNF | ​ | 2 | ​ | ​ | 5,275 | ​ | ​ | 2,263 | ​ | 2023-2024 | ​
Texas | ​ | SNF | ​ | 4 | ​ | ​ | 52,726 | ​ | ​ | 50,388 | ​ | 2027-2029 | (6)
Total | ​ | ​ | ​ | ​ | ​ | $ | 396,347 | ​ | $ | 367,856 | ​ | ​ | ​
(1) | Gross investments include previously recorded impairment losses, if any.
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(2) | During 2023, we recorded an impairment loss of $7,522. See Impairment Loss below for more information.
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(3) | During 2022, we entered into a joint venture to purchase three SNFs with a total of 299 beds. The JV leased the properties under a 10-year master lease. For more information regarding this transaction, see Financing Receivables below.
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(4) | During 2023, we entered into a JV that purchased 11 ALFs and MCs with a total of 523 units and leased the communities under a 10-year master lease. The master lease provides the operator with the option to buy up to 50% of the properties at the beginning of the third lease year, and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit IRR of 9.0% on any portion of the properties being purchased. For more information regarding this transaction see Financing Receivables below.
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(5) | During 2023, we transferred five ALFs in Oklahoma with a total of 184 units from Brookdale to an existing operator. The new master lease, which commenced in November 2023, includes a purchase option that can be exercised starting in November 2027 through October 2029 if the lessee exercises its four-year extension option.
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(6) | During 2022, we purchased four SNFs and leased these properties under a master lease with an existing operator. The master lease allows the operator to elect either an earn-out payment or purchase option. If neither is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the earn-out see Note 11. Commitments and Contingencies.
Impairment Loss. We performed recoverability analysis on the carrying value of the communities listed in the table below and concluded that their carrying value may not be recoverable through future undiscounted cash flows. The following table summarizes information regarding impairment losses recorded during the years ended December 31, 2023 and 2022 (dollar amounts in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Type | ​ | Number | ​ | Number | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | of | ​ | of | ​ | of | ​ | Impairment | ​
Year | ​ | State | ​ | Properties | ​ | Properties | ​ | Beds/Units | ​ | Loss | ​
2023 | ​ | Florida | ​ | ALF | ​ | 1 | ​ | 70 | ​ | $ | 434 | (1)
​ | ​ | Florida | ​ | ALF | ​ | 1 | ​ | 60 | ​ | ​ | 7,522 | ​
​ | ​ | Mississippi | ​ | ALF | ​ | 1 | ​ | 67 | ​ | ​ | 4,554 | (2)
​ | ​ | Texas | ​ | ALF | ​ | 7 | ​ | 248 | ​ | ​ | 3,265 | ​
​ | ​ | ​ | ​ | ​ | ​ | 10 | ​ | 445 | ​ | $ | 15,775 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2022 | ​ | Florida | ​ | ALF | ​ | 1 | ​ | 70 | ​ | $ | 1,222 | (1)
​ | ​ | Kentucky | ​ | ALF | ​ | 1 | ​ | 60 | ​ | ​ | 1,286 | (3)
​ | ​ | Colorado | ​ | ALF | ​ | 1 | ​ | — | ​ | ​ | 914 | (4)
​ | ​ | ​ | ​ | ​ | ​ | 3 | ​ | 130 | ​ | $ | 3,422 | ​
(1) | In conjunction with the ongoing negotiations to sell this community, we recorded a $434 impairment loss during the three months ended March 31, 2023, and a $1,222 impairment loss during the fourth quarter of 2022. This community was sold during the second quarter of 2023 for $4,850 and we recorded a net gain on sale of $64 as a result of this transaction.
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(2) | This community was sold during the fourth quarter of 2023 for $1,650 and we recorded a net loss on sale of $219 as a result of this transaction.
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(3) | This community was classified as held-for sale at December 31, 2022 and sold during the first quarter of 2023 for $11,000. We recorded a net gain on sale of $57 as a result of this transaction. See Properties Held-for-Sale below for more information regarding this community.
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(4) | This community was closed during 2022.
Properties Held-for-Sale. The following summarizes our held-for sale properties as of December 31, 2023 and 2022 (dollar amounts in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Type | ​ | Number | ​ | Number | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | of | ​ | of | ​ | of | ​ | ​ | Gross | ​ | ​ | Accumulated | ​
​ | ​ | State | ​ | Property | ​ | Properties | ​ | Beds/units | ​ | ​ | Investment | ​ | ​ | Depreciation | ​
2023 | ​ | WI | ​ | ALF | (1) | 1 | ​ | 110 | ​ | $ | 22,007 | ​ | $ | 3,616 | ​
2022 | ​ | KY | ​ | ALF | (2) | 1 | ​ | 60 | ​ | ​ | 13,015 | ​ | ​ | 2,305 | ​
(1) | This community was sold during the first quarter of 2024.
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(2) | This community was sold during the first quarter of 2023.
​ Acquisitions. The following table summarizes our acquisitions for the years ended December 31, 2023 through 2021 (dollar amounts in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Cash | ​ | ​ | ​ | ​ | Non- | ​ | ​ | ​ | ​ | ​ | ​ | Number | ​ | Number
​ | ​ | ​ | ​ | Paid at | ​ | Assumed | ​ | ​ | Controlling | ​ | Transaction | ​ | ​ | Assets | ​ | of | ​ | of
Year | ​ | Type of Property | ​ | Acquisition | ​ | Liabilities | ​ | ​ | Interest | ​ | Costs | ​ | ​ | Acquired | ​ | Properties | ​ | Beds/Units
2023 | ​ | ALF (1) | ​ | $ | 43,759 | ​ | $ | 9,767 | ​ | $ | 9,133 | ​ | $ | 363 | ​ | $ | 63,022 | (2) | 1 | ​ | 242
2022 | ​ | SNF (3) | ​ | ​ | 51,817 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 51,817 | ​ | 4 | ​ | 339
2021 | ​ | n/a | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | — | ​ | —
(1) | We entered into a $54,134 Joint Venture (“JV”) and contributed $45,000 into the JV that purchased an ILF/ALF/MC in Ohio. Under the JV agreement, the seller, our JV partner, has the option to purchase the campus between the third and fourth lease years for LTC’s allocation of the JV investment plus an IRR of 9.75%. The campus was leased to Encore Senior Living (“Encore”) under a 10-year term with an initial yield of 8.25% on LTC’s allocation of the JV investment. LTC committed to fund $2,100 of lease incentives under the Encore lease of which $1,458 has been funded.
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(2) | Includes $8,309 tax abatement intangible included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets.
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(3) | The properties are located in Texas and are leased to an affiliate of an existing operator under a 10-year lease with two 5-year renewal options. Additionally, the lease provides either an earn-out payment or purchase option but not both. If neither option is elected within the timeframe defined in the lease, both elections are terminated. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. The purchase option is available beginning in the sixth lease year through the end of the seventh lease year. The initial cash yield is 8% for the first year, increasing to 8.25% for the second year, then increases annually by 2.0% to 4.0% based on the change in the Medicare Market Basket Rate. In connection with the transaction, we provided the lessee a 10-year working capital loan for up to $2,000 at 8% for first year, increasing to 8.25% for the second year, then increasing annually with the lease rate. During 2023, the working capital loan was fully repaid. Accordingly, the working capital commitment has been terminated.
Intangible Assets. The following is a summary of our intangible assets as of December 31, 2023 and 2022 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2023 | ​ | December 31,2022
​ | ​ | ​ | ​ | ​ | ​ | ​ | Accumulated | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Accumulated | ​ | ​ | ​ | ​
Assets | ​ | ​ | Cost | ​ | ​ | ​ | Amortization | ​ | ​ | ​ | Net | ​ | ​ | Cost | ​ | ​ | ​ | Amortization | ​ | ​ | ​ | Net
In-place leases | ​ | $ | 11,348 | (1) | ​ | $ | (6,109) | (2) | ​ | $ | 5,239 | ​ | $ | 9,474 | (1) | ​ | $ | (5,362) | (2) | ​ | $ | 4,112
Tax abatement intangible | ​ | ​ | 8,309 | (3) | ​ | ​ | (405) | (3) | ​ | ​ | 7,904 | ​ | ​ | — | (3) | ​ | ​ | — | (3) | ​ | ​ | —
(1) | Included in the Buildings and improvements line item in our Consolidated Balance Sheets.
​
(2) | Included in the Accumulated depreciation and amortization line item in our Consolidated Balance Sheets.
​
(3) | Included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets.
The following table provides future amortization expenses related to the intangible assets at December 31, 2023 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Total |  | 2024 |  | 2025 |  | 2026 |  | 2027 |  | 2028 |  | Thereafter
In-place leases (1) | ​ | $ | 5,239 | ​ | $ | 877 | ​ | $ | 825 | ​ | $ | 740 | ​ | $ | 675 | ​ | $ | 532 | ​ | $ | 1,590
Tax abatement intangible (2) | ​ |  | 7,904 | ​ |  | 692 | (1) |  | 692 | ​ |  | 692 | ​ |  | 692 | ​ |  | 692 | ​ |  | 4,444
​ | ​ | $ | 13,143 | ​ | $ | 1,569 | ​ | $ | 1,517 | ​ | $ | 1,432 | ​ | $ | 1,367 | ​ | $ | 1,224 | ​ | $ | 6,034
(1) | Recorded as depreciation expense included in the Depreciation and amortization line item on our Consolidated Statements of Income.
​
(2) | Recorded as Property tax expense on our Consolidated Statements of Income.
Developments and Improvements. During the years ended December 31, 2023, 2022 and 2021, we invested the following in development and improvement projects (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Year Ended December 31, | ​
Type of Property | ​ | ​ | 2023 | ​ | ​ | ​ | 2022 | ​ | ​ | 2021 | ​
​ | ​ | Developments | ​ | Improvements | ​ | ​ | Developments | ​ | Improvements | ​ | ​ | Developments | ​ | Improvements | ​
Assisted Living Communities | ​ | $ | — | ​ | $ | 3,112 | ​ | ​ | $ | 105 | ​ | $ | 5,538 | ​ | ​ | $ | — | ​ | $ | 5,846 | ​
Skilled Nursing Centers | ​ | ​ | — | ​ | ​ | 6,487 | ​ | ​ | ​ | — | ​ | ​ | 2,897 | ​ | ​ | ​ | — | ​ | ​ | 452 | ​
Other | ​ | ​ | — | ​ | ​ | 87 | ​ | ​ | ​ | — | ​ | ​ | 559 | ​ | ​ | ​ | — | ​ | ​ | — | ​
Total | ​ | $ | — | ​ | $ | 9,686 | ​ | ​ | $ | 105 | ​ | $ | 8,994 | ​ | ​ | $ | — | ​ | $ | 6,298 | ​
​ Property Sales. During the years ended December 31, 2023, 2022 and 2021 we recorded net gain on sale of real estate of $37,296,000, $37,830,000 and $7,462,000, respectively. The following table summarizes property sales during the years ended December 31, 2023 through 2021 (dollar amounts in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Type | ​ | Number | ​ | Number | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | of | ​ | of | ​ | of | ​ | ​ | Sales | ​ | ​ | Carrying | ​ | ​ | Net | ​
Year | ​ | State | ​ | Properties | ​ | Properties | ​ | Beds/Units | ​ | ​ | Price | ​ | ​ | Value | ​ | ​ | Gain (Loss) (1) | ​
2023 | ​ | Florida | ​ | ALF | ​ | 5 | ​ | 246 | ​ | $ | 23,600 | ​ | $ | 9,084 | ​ | $ | 13,327 | ​
​ | ​ | Kentucky | ​ | ALF | ​ | 1 | ​ | 60 | ​ | ​ | 11,000 | ​ | ​ | 10,720 | ​ | ​ | 57 | ​
​ | ​ | Mississippi | ​ | ALF | ​ | 1 | ​ | 67 | ​ | ​ | 1,650 | ​ | ​ | 1,639 | ​ | ​ | (220) | ​
​ | ​ | New Jersey | ​ | ALF | ​ | 1 | ​ | 39 | ​ | ​ | 2,000 | ​ | ​ | 1,552 | ​ | ​ | 266 | ​
​ | ​ | New Mexico | ​ | SNF | ​ | 2 | ​ | 235 | ​ | ​ | 21,250 | ​ | ​ | 5,523 | ​ | ​ | 15,287 | ​
​ | ​ | Nebraska | ​ | ALF | ​ | 3 | ​ | 117 | ​ | ​ | 2,984 | ​ | ​ | 2,934 | ​ | ​ | — | ​
​ | ​ | Oklahoma | ​ | ALF | ​ | 1 | ​ | 37 | ​ | ​ | 800 | ​ | ​ | 777 | ​ | ​ | 11 | ​
​ | ​ | Pennsylvania | ​ | ALF | ​ | 2 | ​ | 130 | ​ | ​ | 11,128 | ​ | ​ | 6,054 | ​ | ​ | 4,860 | ​
​ | ​ | South Carolina | ​ | ALF | ​ | 3 | ​ | 128 | ​ | ​ | 8,409 | ​ | ​ | 4,446 | ​ | ​ | 3,708 | ​
Total | ​ | ​ | ​ | ​ | ​ | 19 | ​ | 1,059 | ​ | $ | 82,821 | ​ | $ | 42,729 | ​ | $ | 37,296 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2022 | ​ | California | ​ | ALF | ​ | 2 | ​ | 232 | ​ | $ | 43,715 | ​ | $ | 17,832 | ​ | $ | 25,867 | ​
​ | ​ | California | ​ | SNF | ​ | 1 | ​ | 121 | ​ | ​ | 13,250 | ​ | ​ | 1,846 | ​ | ​ | 10,846 | ​
​ | ​ | Texas | ​ | SNF | ​ | 1 | ​ | — | ​ | ​ | 485 | ​ | ​ | 697 | ​ | ​ | (441) | ​
​ | ​ | Virginia | ​ | ALF | ​ | 1 | ​ | 74 | ​ | ​ | 16,895 | ​ | ​ | 15,549 | ​ | ​ | 1,344 | (2)
​ | ​ | n/a | ​ | n/a | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 214 | (3)
Total | ​ | ​ | ​ | ​ | ​ | 5 | ​ | 427 | ​ | $ | 74,345 | ​ | $ | 35,924 | ​ | $ | 37,830 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
2021 | ​ | Florida | ​ | ALF | ​ | 1 | ​ | — | ​ | $ | 2,000 | ​ | $ | 2,626 | ​ | $ | (858) | ​
​ | ​ | Nebraska | ​ | ALF | ​ | 1 | ​ | 40 | ​ | ​ | 900 | ​ | ​ | 1,079 | ​ | ​ | (200) | ​
​ | ​ | Washington | ​ | SNF | ​ | 1 | ​ | 123 | ​ | ​ | 7,700 | ​ | ​ | 4,513 | ​ | ​ | 2,562 | ​
​ | ​ | Wisconsin | ​ | ALF | ​ | 3 | ​ | 263 | ​ | ​ | 35,000 | ​ | ​ | 28,295 | ​ | ​ | 5,595 | ​
​ | ​ | n/a | ​ | n/a | ​ | — | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 363 | (3)
Total | ​ | ​ | ​ | ​ | ​ | 6 | ​ | 426 | ​ | $ | 45,600 | ​ | $ | 36,513 | ​ | $ | 7,462 | ​
(1) | Calculation of net gain (loss) includes cost of sales and write-off of straight-line rent receivable and lease incentives, when applicable.
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(2) | In connection with this sale, the former operator paid us a lease termination fee of $1,181 which is not included in the gain on sale.
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(3) | We recognized additional gain due to the reassessment adjustment of the holdbacks related to properties sold during 2020 and
| 2019, under the expected value model per ASC Topic 606, Contracts with Customers.
Financing Receivables. During 2023 and 2022, we entered into two joint ventures (“JV”) and contributed into the JVs for the purchase of properties through sale and leaseback transactions. Concurrently, each of these JVs leased the purchased properties back to an affiliate of the seller and provided the seller-lessee with purchase options. We determined that each of these sale and leaseback transactions meet the accounting criteria to be presented as Financing receivables on our Consolidated Balance Sheets and recorded the rental revenue from these properties as Interest income from financing receivables on our Consolidated Statements of Income. See Note 2. Summary of Significant Accounting Policies within our consolidated financial statements for more information. The following tables provide information regarding our investments in financing receivables during the years ended December 31, 2023 and 2022 (dollar amounts in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Type | ​ | Number | ​ | Number | ​ | ​ | ​ | ​ | ​ | ​
Investment | ​ | ​ | ​ | of | ​ | of | ​ | of | ​ | ​ | Gross | ​ | ​ | LTC
Year | ​ | State | ​ | Properties | ​ | Properties | ​ | Beds/Units | ​ | ​ | Investments | ​ | ​ | Contributions
2023 | ​ | NC | ​ | ALF/MC | ​ | 11 | ​ | 523 | ​ | $ | 121,321 | ​ | $ | 117,490
2022 | ​ | FL | ​ | SNF | ​ | 3 | ​ | 299 | ​ | ​ | 76,691 | ​ | ​ | 61,661
​ | ​ | ​ | ​ | ​ | ​ | 14 | ​ | 822 | ​ | $ | 198,012 | ​ | $ | 179,151
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Type | ​ | ​ | ​ | Initial | ​ | Interest Income from Financing Receivables
of | ​ | Lease | ​ | Contractual | ​ | During
Properties | ​ | Maturity | ​ | Cash Yield | ​ | ​ | 2023 | ​ | ​ | 2022
ALF/MC | ​ | 2033 | ​ | 7.25 | % | ​ | $ | 9,625 | ​ | $ | —
SNF | ​ | 2032 | ​ | 7.25 | % | ​ | ​ | 5,618 | ​ | ​ | 1,762
​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 15,243 | ​ | $ | 1,762
(1) | The JV leased these communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. The JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit Internal Rate of Return (“IRR”) of 9.0%. Upon origination we recorded $1.2 million Provision for credit losses equal to 1% of the financing receivable balance related to this investment.
​
(2) | The JV leased the centers back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year.
Mortgage Loans. The following table summarizes our investments in mortgage loans secured by first mortgages at December 31, 2023 (dollar amounts in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Type | ​ | Percentage | ​ | Number of | ​ | Investment
​ | ​ | ​ | ​ | ​ | ​ | Gross | ​ | of | ​ | of | ​ | ​ | ​ | ​ | ​ | SNF | ​ | ALF | ​ | per
Interest Rate | ​ | Maturity | ​ | State | ​ | Investment | ​ | Property | ​ | Investment | ​ | Loans (1) | ​ | Properties (2) | ​ | Beds | ​ | Units | ​ | Bed/Unit
7.5% | ​ | 2024 | ​ | MO | ​ | $ | 1,999 | ​ | OTH | ​ | 0.4 | % | 1 | ​ | — | (3) | — | ​ | — | ​ | $ | n/a
7.5% | ​ | 2024 | ​ | LA | ​ | ​ | 29,346 | ​ | SNF | ​ | 6.1 | % | 1 | ​ | 1 | ​ | 189 | ​ | — | ​ | $ | 155.27
7.5% | ​ | 2024 | ​ | GA | ​ | ​ | 51,111 | ​ | ALF | ​ | 10.6 | % | 1 | ​ | 1 | ​ | — | ​ | 203 | ​ | $ | 251.78
8.8% | ​ | 2025 | ​ | FL | ​ | ​ | 4,000 | ​ | ALF | ​ | 0.8 | % | 1 | ​ | 2 | ​ | — | ​ | 92 | ​ | $ | 43.48
7.8% | ​ | 2025 | ​ | FL | ​ | ​ | 16,706 | ​ | ALF | ​ | 3.4 | % | 1 | ​ | 1 | ​ | — | ​ | 112 | ​ | $ | 149.16
7.3% | ​ | 2025 | ​ | NC | ​ | ​ | 10,750 | ​ | ALF | ​ | 2.2 | % | 1 | ​ | 1 | ​ | — | ​ | 45 | ​ | $ | 238.89
7.3% (4) | ​ | 2025 | ​ | NC/SC | ​ | ​ | 58,331 | ​ | ALF | ​ | 12.1 | % | 1 | ​ | 13 | ​ | — | ​ | 523 | ​ | $ | 111.53
7.3% (4) | ​ | 2026 | ​ | NC | ​ | ​ | 34,043 | ​ | ALF | ​ | 7.1 | % | 1 | ​ | 4 | ​ | — | ​ | 217 | ​ | $ | 156.88
7.3% (4) | ​ | 2026 | ​ | NC | ​ | ​ | 826 | ​ | OTH | ​ | 0.2 | % | 1 | ​ | — | (5) | — | ​ | — | ​ | $ | n/a
8.8% | ​ | 2028 | ​ | IL | ​ | ​ | 16,500 | ​ | SNF | ​ | 3.4 | % | 1 | ​ | 1 | ​ | 150 | ​ | — | ​ | $ | 110.00
10.8% (6) | ​ | 2043 | ​ | MI | ​ | ​ | 183,968 | ​ | SNF | ​ | 38.2 | % | 1 | ​ | 15 | ​ | 1,875 | ​ | — | ​ | $ | 98.12
9.8% (6) | ​ | 2045 | ​ | MI | ​ | ​ | 39,950 | ​ | SNF | ​ | 8.3 | % | 1 | ​ | 4 | ​ | 480 |  | — | ​ | $ | 83.23
10.1% (6) | ​ | 2045 | ​ | MI | ​ |  | 19,700 | ​ | SNF | ​ | 4.1 | % | 1 | ​ | 2 | ​ | 201 |  | — | ​ | $ | 98.01
10.3% (6) | ​ | 2045 | ​ | MI | ​ | ​ | 14,850 | ​ | SNF | ​ | 3.1 | % | 1 | ​ | 1 | ​ | 146 | ​ | — | ​ | $ | 101.71
Total | ​ | ​ | ​ | ​ | ​ | $ | 482,080 | ​ | ​ | ​ | 100.0 | % | 14 | ​ | 46 | ​ | 3,041 |  | 1,192 | ​ | $ | 113.89
(1) | Some loans contain certain guarantees and/or provide for certain facility fees.
​
(2) | Our mortgage loans are secured by properties located in eight states with eight borrowers.
​
(3) | Represents a mortgage loan secured by a parcel of land for the future development of a 91-bed post-acute SNF.
​
(4) | Represents the initial rate. This loan has an IRR of 8%.
​
(5) | Represents a mortgage loan secured by a parcel of land in North Carolina held for future development of a seniors housing community.
​
(6) | Mortgage loans provide for 2.25% annual increases in the interest rate after a certain time period.
​ ​ The following table summarizes our mortgage loan activity for the years ended December 31, 2023, 2022 and 2021 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31, | ​
​ | ​ | 2023 | ​ | ​ | 2022 | ​ | 2021 |
Originations and funding under mortgage loans receivable | ​ | $ | 97,058 | (1) | ​ | $ | 40,732 | (2) | $ | 88,955 | (3)
Application of interest reserve | ​ | ​ | 1,722 | ​ | ​ | ​ | 6,192 | ​ | ​ | 298 | ​
Scheduled principal payments received | ​ | ​ | (10,351) | ​ | ​ | ​ | (1,175) | ​ | ​ | (1,175) | ​
Mortgage loan premium amortization | ​ | ​ | (7) | ​ | ​ | ​ | (6) | ​ | ​ | (6) | ​
Provision for loan loss reserve | ​ | ​ | (884) | ​ | ​ | ​ | (457) | ​ | ​ | (881) | ​
Net increase in mortgage loans receivable | ​ | $ | 87,538 | ​ | ​ | $ | 45,286 | ​ | $ | 87,191 | ​
​
(1) | We originated the following during 2023:
​
| (a) | $10,750 mortgage loan secured by a 45-unit MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%;
​
| (b) | $51,111 mortgage loan investment secured by a 203-unit ILF, ALF and MC located in Georgia. We acquired a participating interest owned by existing lenders for $42,251 in addition to converting our $7,461 mezzanine loan in the property into a participating interest in the mortgage loan. The mortgage loan matures in October 2024 and our investment is at an initial rate of 7.5% with an IRR of 7.75%. We recorded $1,380 of additional interest income in connection with the effective prepayment of the mezzanine loan in the first quarter of 2023;
​
| (c) | $16,500 senior loan for the purchase of a 150-bed Medicare focused SNF in Illinois. The mortgage loan matures in June 2028 and our investment is at an interest rate of 8.75%;
​
| (d) | $4,947 of contractual additional funding under other mortgage loans receivable;
​
| (e) | $13,750 of seller financing collateralized by four ALFs. $9,750 was repaid subsequently and two ALFs were released from collateral. The net $4,000 seller-financed mortgage loan is for two-years, with a one-year extension, at the interest rate of 8.75%; and
​
| (f) | $19,500 mortgage loan commitment for the construction of an 85-unit ALF and MC in Michigan. The borrower contributed $12,100 of equity which will initially fund the construction. Once all of the borrower’s equity has been drawn, we will begin funding the commitment. The loan term is approximately three years at a rate of 8.75%, and includes two, one-year extensions, each of which is contingent on certain coverage thresholds.
​
(2) | We originated two senior mortgage loans, secured by four ALFs operated by an existing operator, as well as a land parcel in North Carolina. The communities have a combined total of 217 units, with an average age of less than four years. The land parcel is approximately 7.6 acres adjacent to one of the ALFs and is being held for the future development of a seniors housing community. The mortgage loans have a four-year term, an interest rate of 7.25% and an IRR of 8%. We also funded an additional $2,000 under an existing mortgage loan.
​
(3) | We funded the following during 2021:
| (a) | $1,638 mortgage loan secured by a parcel of land for the future development of a 91-bed post-acute SNF in Missouri and withheld an interest reserve of $142. The mortgage loan term is one year at a yield of 7.5%;
| (b) | $27,047 mortgage loan secured by a 189-bed SNF in Louisiana with a regional operator new to us. The mortgage loan has a three-year term with one 12-month extension option and a yield of 7.5%;
| (c) | $11,724 mortgage loan secured by a 68-unit ALF and MC in Florida operated by a regional operator new to us. At origination, we withheld an interest reserve of $806 and applied $156 of the reserve during 2021. The mortgage loan term is approximately 4 years at a 7.75% yield and includes an additional $4,177 loan commitment for the construction of a memory care addition to the property to be funded at a later date subject to satisfaction of various conditions;
| (d) | $48,006 mortgage loan for the purchase of a 13-property seniors housing portfolio located in North (12) and South Carolina (1). The communities are operated by an existing LTC operator. At origination, we withheld an interest reserve of $4,496. The loan term is 4 years at a 7.25% yield and includes a commitment of $6,097 for capital improvements and $650 for working capital; and
​
| (e) | $540 additional capital funding under our existing mortgage loans.
​ At December 31, 2023 and 2022 the carrying values of the mortgage loans, net of loan loss reserves were $477,266,000 and $389,728,000, respectively. Scheduled principal payments on mortgage loan receivables are as follows (in thousands): ​
​ | ​ | ​ | ​ | ​
​ |  | Scheduled |
​ | ​ | Principal |
2024 | ​ | $ | 83,137 | ​
2025 | ​ |  | 90,466 | ​
2026 | ​ |  | 35,549 | ​
2027 | ​ |  | 680 | ​
2028 | ​ |  | 17,180 | ​
Thereafter | ​ |  | 255,068 | ​
Total | ​ | $ | 482,080 | ​
​ ​

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- Definition The entire disclosure for real estate owned (as defined). Generally, the largest component of real estate owned by lenders is assets taken in settlement of troubled loans through surrender or foreclosure. Real estate investments, real estate loans that qualify as investments in real estate, and premises that are no longer used in operations may also be included in real estate owned. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Section 45 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org//1943274/2147481990/310-10-45-3 + Details
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