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Real Estate Investments

6 Months Ended

Jun. 30, 2024

2.	Real Estate Investments

Assisted living communities, independent 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 or facilities, number of units, number of beds, number of operators and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s review of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board.

Owned Properties. Our owned properties are leased pursuant to non-cancelable operating leases. Each lease is a triple net lease which requires the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities. Many of the leases contain renewal options. The majority of our leases contain provisions for specified annual increases over the rents of the prior year.

The following table summarizes our investments in owned properties at June 30, 2024 (dollar amounts in thousands):


								Average
			Percentage		Number	Number of		Investment
	Gross		of		of	SNF	ALF	per
Type of Property	Investment		Investment		Properties ⁽¹⁾	Beds	Units	Bed/Unit
Assisted Living	$	732,398	54.6	%	74	—	4,421	$	165.66
Skilled Nursing		597,666	44.5	%	50	6,113	236	$	94.14
Other ⁽²⁾		12,005	0.9	%	1	118	—		—
Total	$	1,342,069	100.0	%	125	6,231	4,657

(1)	We own properties in 23 states that are leased to 24 different operators.

(2)	Includes three parcels of land held-for-use, and one behavioral health care hospital.

Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent payable 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 (dollar amounts in thousands):


		Type	Number		Number		First
Lease		of	of		of		Year		Lease
Commencement	State	Property	Properties		Units		Rent		Term
November 2023	OK	ALF	5	⁽¹⁾	184	$	960		Three years
January 2024	CO, KS, OH, TX	ALF	17	⁽²⁾	738		9,325		Six years
January 2024	NC	ALF	5	⁽³⁾	210		3,300		Six years
			27		1,132	$	13,585

		Type	Number		Number
		of	of		of		Sales		Net
Year sold	State	Property	Properties		Units		Price		Proceeds ⁽⁴⁾
2023	FL	ALF	4		176	$	18,750	$	14,310	⁽⁵⁾
2023	OK	ALF	1		37		800		769
2023	SC	ALF	3		128		8,409		8,153
			8		341	$	27,959	$	23,232

Total			35		1,473

(1)

These communities were transitioned to an existing LTC operator. 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. Rent increases to $984 in the second year, and $1,150 in the third year.

(2)

These communities were re-leased to Brookdale under a new master lease. Rent escalates by approximately 2.0% annually. The new master lease includes a purchase option that can be exercised in 2029. We also agreed to fund $7,200 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.

(3)	These communities were transitioned to an operator new to us. Rent escalates by approximately 3.0% annually.

(4)	Net of transaction costs and seller financing, if any.

(5)	We provided seller financing collateralized by two of the Florida properties, with a total of 92 units. The $4,000 seller-financed mortgage loan has a two-year term, with a one-year extension, at an interest rate of 8.75%.

During the three months ended March 31, 2024, 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 centers have a total of 1,444 beds and are located in Texas. During the three months ended June 30, 2024, this master lease was amended to extend the lease term to December 31, 2028, with two five-year renewal options. The annual rent increased from $8,000,000 to $9,000,000 for 2024. Rent will increase to $9,500,000 for 2025, and $10,000,000 for 2026, escalating 3.3% annually thereafter. As a condition of the amended master lease, the operator paid $1,544,000 during the three months ended June 30, 2024, and $10,376,000 subsequent to June 30, 2024, towards its $13,531,000 working capital note. The remaining $1,611,000 balance of the working capital note is interest-free and will be repaid in installments through 2028.

Additionally, during the six months ended June 30, 2024, another operator exercised its renewal option under its master lease for five years, from March 2025 through February 2030. Annual cash rent for 2024 is $8,004,000 escalating 2.5% annually. The master lease covers 666 beds across four skilled nursing centers, three in Texas and one in Wisconsin, and a behavioral health care hospital in Nevada.

We monitor the collectability of our receivable balances, including deferred rent receivable balances, on an ongoing basis. We write-off uncollectible 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 uncollectible. During the six months ended June 30, 2024 and 2023, we wrote-off straight-line rent receivable and lease incentive balances of $321,000 and $26,000, respectively.

We continue to take into account the current financial condition of our operators, in our estimation of uncollectible accounts at June 30, 2024. 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 three and six months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended						Six Months Ended
	June 30,						June 30,
Rental Income		2024			2023			2024			2023
Contractual cash rental income	$	28,976		$	29,014		$	59,927	⁽¹⁾	$	58,139	⁽¹⁾
Variable cash rental income		3,255			3,176			6,636			6,460
Straight-line rent		(48)	⁽²⁾		(423)	⁽²⁾		(598)	⁽²⁾		(888)	⁽²⁾
Adjustment of lease incentives and rental income		(321)	⁽³⁾		(26)	⁽⁴⁾		(321)	⁽³⁾		(26)	⁽⁴⁾
Amortization of lease incentives		(205)			(204)			(438)			(413)
Total	$	31,657		$	31,537		$	65,206		$	63,272

(1)

Increased primarily due to $2,377 repayment of rent credit in connection with the sale of our interest in a consolidated joint venture (“JV), rental income from 2023 acquisitions and annual rent escalations and contractual rent increases, partially offset by property sales and transitioned portfolios.

(2)	Straight-line rent adjustment decreased due to lease extensions and more leases accounted for on a straight-line basis.

(3)	Represents a straight-line rent receivable write-off related to a lease converting to fair market rent reset.

(4)	Represents a lease incentive balance write-off related to a lease termination.

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 (dollar amounts in thousands):


	Type	Number
	of	of		Gross		Net Book	Option
State	Property	Properties		Investments ⁽¹⁾		Value	Window
California	ALF/MC	2	$	38,895	$	32,307	2023-2029
Colorado/Kansas/Ohio/Texas	ALF/MC	17		59,492		26,371	2029	⁽²⁾
Florida	SNF	3		76,647		76,647	2025-2027
Georgia/South Carolina	ALF/MC	2		31,754		24,789	2027
North Carolina	ALF/MC	11		121,419		121,419	2025-2028	⁽³⁾
North Carolina	ALF	5		14,404		6,736	2029	⁽⁴⁾
North Carolina	ALF	4		41,000		41,000	2024-2028	⁽⁵⁾
North Carolina/ South Carolina	ALF/MC	13		122,460		122,460	2024-2028	⁽⁶⁾
Ohio	MC	1		16,161		13,268	2024-2025
Ohio	ILF/ALF/MC	1		54,758		52,399	2025-2027
Oklahoma	ALF/MC	5		11,221		4,251	2027-2029	⁽⁷⁾
Tennessee	SNF	2		5,275		2,192	2023-2024
Texas	SNF	4		52,726		49,684	2027-2029	⁽⁸⁾
Texas	MC	1		12,743		9,520	2026-2028	⁽⁹⁾
Total			$	658,955	$	583,043

(1)	Gross investments include previously recorded impairment losses, if any.

(2)	During 2023, we released 17 ALFs with a total of 738 units to Brookdale under a new six-year master lease. The new master lease commenced in January 2024 and includes a purchase option that can be exercised in 2029. See above for more information.

(3)

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 Internal Rate of Return (“IRR”) of 9.0% on any portion of the properties being purchased. For more information regarding this transaction see Financing Receivables below.

(4)	During 2023, we transferred five ALFs with a total of 210 units from Brookdale to an operator new to us. The new master lease commenced in January 2024 and includes a purchase option that can be exercised in 2029. See above for more information.

(5)

During 2024, we entered into a joint venture agreement with ALG Senior Living (“ALG”) and obtained a 92.7% controlling interest in the $41,000 newly formed JV that owns four ALFs in North Carolina with a total of 217 units. The JV leased the communities back to an affiliate of the seller under a 10-year master lease agreement. The master lease includes a purchase option that can be exercised through 2028, with an exit IRR of 8.0%. For more information regarding this transaction see Financing Receivables below.

(6)

During 2024, we entered into a joint venture agreement with ALG and obtained a 52.6% controlling interest in the $122,460 newly formed JV that owns 13 ALFs and MCs in North Carolina (12) and South Carolina (1) with a total of 523 units. The JV leased the communities back to an affiliate of the seller under a 10-year master lease agreement. The master lease includes a purchase option that can be exercised through 2028, with an exit IRR of 8.0%. For more information regarding this transaction see Financing Receivables below.

(7)

During 2023, we transferred five ALFs in Oklahoma with a total of 184 units from Brookdale to an existing operator. The new master lease commenced in November 2023 and includes a purchase option that can be exercised starting in November 2027 through October 2029 if the lessee exercises its four-year extension option. See above for more information.

(8)

During 2022, we purchased four skilled nursing centers and leased these properties under a 10-year lease with an existing operator. The lease allows the operator to elect either an earn-out payment or purchase option. If neither option is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the earn-out see Note 8. Commitments and Contingencies.

(9)	During 2024, we transferred this community to an operator new to us. The new master lease commenced in April 2024 and includes a purchase option that can be exercised in May 2026 through April 2028, if the lessee exercises its one-year extension option.

Impairment Loss. During the six months ended June 30, 2024, we did not record an impairment loss. During the six months ended June 30, 2023, in conjunction with ongoing negotiations and planned sale of two assisted living communities located in Florida and one assisted living community located in Mississippi, we performed recoverability analysis on the carrying value of these communities and concluded that their carrying values may not be recoverable through future undiscounted cash flows. Accordingly, we recorded an aggregate impairment loss of $12,510,000 during the six months ended June 30, 2023.

Properties Held -for-Sale. The following summarizes our held-for-sale properties as of June 30, 2024 and December 31, 2023 (dollar amounts in thousands):

Type

Number

Gross

Accumulated

State

Property

Properties

Beds/units

Investment

Depreciation

At June 30, 2024

ALF

⁽¹⁾

6,154

(1,906)

At December 31, 2023

ALF

⁽²⁾

110

22,007

(3,616)

(1)	This community was sold subsequent to June 30, 2024.

(2)	This community was sold during the three months ended March 31, 2024.

Acquisitions. The following table summarizes our acquisitions for the six months ended June 30, 2024 and 2023 (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
2024	OTH ⁽¹⁾	$	300	$	—	$	—	$	19	$	319		—	—
2023	ALF ⁽²⁾		43,759		9,767		9,133		363		63,022	⁽³⁾	1	242

(1)	During the six months ended June 30, 2024, we acquired a parcel of land in Kansas adjacent to an existing community operated by Brookdale. Rent was increased by 8.0% of our total cost of the investment.

(2)

We entered into a $54,134 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. Rent is expected to be approximately $3,900 per year.

(3)	Includes $8,585 tax abatement intangible included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets.

Intangible Assets. We make estimates as part of our allocation of the purchase price of acquisitions to various components of acquisition based upon the fair value of each component. In determining fair value, we use current appraisals or other third-party opinions of value. The most significant components of our allocations are typically the allocation of fair value to land and buildings, and for certain of our acquisitions, in-place leases and other intangible assets. In the case of the value of in-place leases, we make the best estimates based on the evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during the hypothetical expected lease-up periods, market conditions and costs to execute similar leases. The following is a summary of the carrying amount of intangible assets as of June 30, 2024 and December 31, 2023 (in thousands):


	June 30, 2024								December 31, 2023
					Accumulated								Accumulated
Assets		Cost			Amortization			Net		Cost			Amortization			Net
In-place leases	$	11,155	⁽¹⁾	$	(6,434)	⁽²⁾	$	4,721	$	11,348	⁽¹⁾	$	(6,109)	⁽²⁾	$	5,239
Tax abatement intangible	$	8,309	⁽³⁾	$	(752)	⁽³⁾	$	7,557	$	8,309	⁽³⁾	$	(405)	⁽³⁾	$	7,904

(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.

Improvements. During the six months ended June 30, 2024 and 2023, we invested in the following capital improvement projects (in thousands):


	Six Months Ended June 30,
Type of Property	2024		2023
Assisted Living Communities	$	2,787	$	2,000
Skilled Nursing Centers		848		1,143
Other		—		87
Total	$	3,635	$	3,230

Properties Sold. During the three and six months ended June 30, 2024, we recorded a net loss on sale of $32,000 and a net gain on sale of $3,219,000, respectively. During the three and six months ended June 30, 2023, we recorded a net gain on sale of $302,000 and $15,675,000, respectively. The following table summarizes property sales during the six months ended June 30, 2024 and 2023 (dollar amounts in thousands):


		Type	Number	Number
		of	of	of		Sales			Carrying			Net
Year	State	Properties	Properties	Beds/Units		Price			Value			(Loss) Gain ⁽¹⁾
2024	Florida	ALF	1	60	$	4,500		$	4,579		$	(335)
	Texas	ALF	5	208		1,600			1,282			(380)
	Texas	ALF	2	—		500			389			8
	Wisconsin	ALF	1	110		20,193	⁽²⁾		16,195	⁽²⁾		3,986
	n/a	n/a	—	—		—			—			(60)	⁽³⁾
Total ⁽⁴⁾			9	378	$	26,793		$	22,445		$	3,219

2023	Florida	ALF	1	70	$	4,850		$	4,082		$	65
	Kentucky	ALF	1	60		11,000			10,710			57
	New Jersey	ALF	1	39		2,000			1,552			266
	New Mexico	SNF	2	235		21,250			5,379			15,287
Total			5	404	$	39,100		$	21,723		$	15,675

(

(1)	Calculation of net gain includes cost of sales and write-off of straight-line receivable and lease incentives, when applicable.

(2)	Represents the price to sell our portion of interest in a JV, net of the JV partner’s $2,305 contributions in the joint venture.

(3)	We recognized additional loss due to additional incurred costs related to properties sold during 2023.

(4)	Subsequent to June 30, 2024, we sold an 80-unit ALF located in Texas for $7,959 to the existing operator. At June 30, 2024, the community was classified as held-for-sale and had a gross book value of $6,154 and a net book value of $4,248.

Financing Receivables. As part of our acquisitions, we may invest in sale and leaseback transactions. In accordance with the accounting guidance, we must determine whether each sale and leaseback transaction qualifies as a sale. Generally, an option for the seller-lessee to repurchase a real estate asset precludes accounting for the transfer of the asset as a sale and the purchased assets should be presented as financing receivables.

During 2022 through 2024, we entered into joint venture agreements and contributed into these 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. Accordingly, these sale and leaseback transactions meet the accounting criteria to be presented as financing receivables. Furthermore, we determined that we exercise power over and receive benefits from each of these joint ventures. Therefore, we consolidated the joint ventures as Financing Receivables on our Consolidated Balance Sheets and recorded the rental revenue from these joint ventures as Interest income from financing receivables on our Consolidated Statements of Income.

The following tables provide information regarding our investments in financing receivables (dollar amounts in thousands):


									Type	Number	Number		Investment
Interest		Investment				Gross		LTC	of	of	of		per
Rate		Year	Maturity	State		Investments		Contributions	Properties	Properties	Beds/Units		Bed/Unit
7.25%	⁽¹⁾	2022	2032	FL	$	76,647	$	62,476	SNF	3	299	$	256.34
7.25%	⁽²⁾	2023	2033	NC		121,418		117,587	ALF/MC	11	523	$	232.16
7.25%	⁽³⁾	2024	2034	NC/SC		122,460		64,450	ALF/MC	13	523	$	234.15
7.25%	⁽⁴⁾	2024	2034	NC		41,000		37,985	ALF	4	217	$	188.94
					$	361,525	$	282,498		31	1,562

(1)

During 2022, we entered into a JV with an operator new to us. The JV purchased three SNFs and 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.

(2)

During 2023, we entered into a JV with ALG. The JV purchased 11 ALFs and MCs and 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 Consumer Price Index(“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 IRR of 9.0%. During the second quarter of 2024, we deferred a total of $1,466 interest income from financing receivables for May and June 2024 and agreed to defer up to approximately $250 per month for July through December 2024.

(3)

During the second quarter of 2024, we funded an additional $5,546 under a mortgage loan receivable due from an ALG affiliate secured by 13 ALFs and MCs located in North Carolina (12) and South Carolina (1). We then entered into a newly formed $122,460 JV with ALG, whereby we exchanged our $64,450 mortgage loan receivable for a 53% controlling interest in the JV. Concurrently, ALG contributed these properties to the joint venture for a 47% non-controlling interest. The JV leased the properties to an ALG affiliate under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option exercisable through 2028, with an exit IRR of 8.0%.

(4)

During the second quarter of 2024, we funded an additional $2,766 under a mortgage loan receivable due from an ALG affiliate secured by four ALFs located in North Carolina. We then entered into a newly formed $41,000 JV with ALG, whereby we exchanged $37,985 mortgage loan receivables for a 93% controlling interest in the JV. Concurrently, ALG contributed these properties and a parcel of land to the joint venture for a 7% non-controlling interest. The JV leased the properties to an ALG affiliate under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option exercisable through 2028, with an exit IRR of 8.0%.

The following table summarizes our financing receivables activities for the six months ended June 30, 2024 and 2023 (dollar amounts in thousands):


	Six Months Ended June 30,
	2024			2023
Investment and funding under financing receivables	$	163,557	⁽¹⁾	$	121,332	⁽²⁾
Amortization of capital costs		(44)			(43)
Provision for loan loss reserve		(1,635)	⁽¹⁾		(1,213)	⁽²⁾
	$	161,878		$	120,076

(1)	During 2024, we entered into two joint venture agreements with affiliates of ALG. We recorded an aggregate Provision for Credit losses of $1,635 equal to 1.0% of the investment balance. See above for more information.

(2)	During 2023, we entered into a joint venture agreement with an affiliate of ALG. We recorded Provision for credit losses of $1,213 equal to 1.0% of the investment balance. See above for more information.

Mortgage Loans. The following table sets forth information regarding our investments in mortgage loans secured by first mortgages at June 30, 2024 (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	LA		29,346	SNF	7.5	%	1	1		189	—	$	155.27
7.5%	2024	GA		51,111	ALF	13.0	%	1	1		—	203	$	251.78
8.8%	2025	FL		4,000	ALF	1.0	%	1	2		—	92	$	43.48
7.8%	2025	FL		16,706	ALF	4.3	%	1	1		—	112	$	149.16
7.3%	2025	NC		10,750	ALF	2.7	%	1	1		—	45	$	238.89
8.8% ⁽³⁾	2026	MI		6,878	UDP	1.7	%	1	—	⁽³⁾	—	—	$	n/a
8.8%	2028	IL		16,500	SNF	4.2	%	1	1		150	—	$	110.00
10.8% ⁽⁴⁾	2043	MI		183,709	SNF	46.7	%	1	15		1,875	—	$	97.98
9.8% ⁽⁴⁾	2045	MI		39,850	SNF	10.1	%	1	4		480	—	$	83.02
10.3% ⁽⁴⁾	2045	MI		19,700	SNF	5.0	%	1	2		201	—	$	98.01
10.5% ⁽⁴⁾	2045	MI		14,825	SNF	3.8	%	1	1		146	—	$	101.54
Total ⁽⁵⁾			$	393,375		100.0	%	11	29		3,041	452	$	112.62

(1)	Some loans contain certain guarantees and provide for certain facility fees.

(2)	Our mortgage loans are secured by properties located in six states with eight borrowers.

(3)

During the third quarter of 2023, we committed to fund a $19,500 mortgage loan for the construction of an 85-unit ALF and MC in Michigan. The borrower contributed $12,100 of equity, which initially funded the construction. In 2024, once all of the borrower’s equity was drawn, we began funding the commitment. Our remaining commitment is $12,600. The 8.75% interest-only loan matures in September 2026 and includes two, one-year extensions, each of which is contingent on certain coverage thresholds.

(4)	Mortgage loans provide for 2.25% annual increases in the interest rate.

(5)

Subsequent to June 30, 2024, we committed to fund a $26,120 mortgage loan for the construction of a 116-unit ILF/ALF/MC in Illinois. The borrower contributed $12,300 of equity which will initially fund the construction. The loan term is approximately six years at a current rate of 9.0% and IRR of 9.5%.

The following table summarizes our mortgage loan activity for the six months ended June 30, 2024 and 2023 (in thousands):


	Six Months Ended June 30,
	2024			2023
Originations and funding under mortgage loans receivable	$	15,957	⁽¹⁾	$	81,727	⁽³⁾
Exchange of mortgage loans for controlling interests in joint ventures accounted for as financing receivables		(102,435)	⁽²⁾		—
Pay-offs received		(2,013)			—
Application of interest reserve		169			1,609
Scheduled principal payments received		(380)			(251)
Mortgage loan premium amortization		(3)			(4)
Recovery (provision) for loan loss reserve		887			(831)
Net (decrease) increase in mortgage loans receivable	$	(87,818)		$	82,250

(1)	The following funding occurred:

(a)

$6,878 under a $19,500 mortgage loan commitment for the construction of an 85-unit ALF and MC in Michigan. The borrower contributed $12,100 of equity upon origination in July 2023, which was used to initially fund the construction. Our remaining commitment is $12,600. The interest-only 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;

(b)

$5,546 of additional funding under a mortgage loan receivable agreement with an ALG affiliate secured by 13 ALFs and MCs in North Carolina (12) and South Carolina (1). During the three months ended June 30, 2024, we exchanged this $64,450 mortgage loan receivable for a controlling interest in a JV investment with an ALG affiliate. See Financing Receivables above for more information;

(c)

$2,766 of additional funding under a mortgage loan receivable agreement with an ALG affiliate secured by four ALFs in North Carolina. During the three months ended June 30, 2024, we exchanged this $37,985 mortgage loan receivable for a controlling interest in a JV investment with an ALG affiliate. See Financing Receivables above for more information; and

(d)

$767 of additional funding.

(2)	The following occurred:

(a)

$64,450 mortgage loan receivable due from an ALG affiliate was exchanged for a controlling interest in a JV. See (1)(b) above for more information;

(b)

$37,985 mortgage loan receivable due from an ALG affiliate was exchanged for a controlling interest in a JV. See (1)(c) above for more information; and

(3)	The following funding and originations occurred:

(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%; and

(d)

$3,366 of additional funding under other mortgage loans receivable.