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Notes Receivable

3 Months Ended

Mar. 31, 2024

4.	Notes Receivable

Notes receivable consist of mezzanine loans and working capital loans. The following table summarizes our investments in notes receivable at March 31, 2024 (dollar amounts in thousands):


Interest				Type of	Gross				Type of
Rate	IRR		Maturity	Loan	Investment			# of loans	Property
4.0%	—		2024	Working capital	$	13,531		1	SNF
5.0%	—		2025	Working capital		732		1	ALF
8.0%	11.0	%	2027	Mezzanine		25,000		1	ALF
8.8%	12.0	%	2028	Mezzanine		17,000		1	ALF
6.5%	—		2030	Working capital		138		1	SNF
7.3%	—		2030	Working capital		500		1	ALF
7.4%	—		2030	Working capital		957		1	ALF
0.0%	—		2031	Working capital		2,693		1	ALF
					$	60,551	⁽¹⁾	8

(1)	Excludes the impact of credit loss reserve.

The following table is a summary of our notes receivable components as of March 31, 2024 and December 31, 2023 (in thousands):


	At March 31, 2024		At December 31, 2023
Mezzanine loans	$	42,000	$	42,000
Working capital loans		18,551		19,101
Notes receivable credit loss reserve		(605)		(611)
Total	$	59,946	$	60,490

The following table summarizes our notes receivable activity for the three months ended March 31, 2024 and 2023 (in thousands):


	Three Months Ended March 31,
		2024		2023
Advances under notes receivable	$	—	$	605
Principal payments received under notes receivable		(550)		(12,641)	⁽¹⁾
Recovery of credit losses		6		120
Net decrease in notes receivable	$	(544)	$	(11,916)

(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.