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Notes Receivable

6 Months Ended

Jun. 30, 2024

Notes Receivable.

Notes Receivable

4.	Notes Receivable

Notes receivable consist of mezzanine loans and working capital loans. The following table summarizes our investments in notes receivable at June 30, 2024 (dollar amounts in thousands):


Interest							Type of		Gross						Type of
Rate		IRR			Maturity		Loan		Investment				# of loans		Property
8.3%		—			2025		Working capital		$	50			1		ALF
9.0%		—			2025		Working capital			138			1		ALF
5.0%		—			2025		Working capital			532			1		ALF
8.0%		11.0	%		2027		Mezzanine			25,000			1		ALF
12.0%		—			2028		Working capital			11,987	⁽¹⁾		1		SNF
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
									$	58,995	⁽²⁾		10

(1)	Subsequent to June 30, 2024, the operator repaid $10,376 on its $11,987 working capital note. The remaining balance of this working capital note is interest-free and will be paid in installments through 2028.

(2)	Excludes the impact of credit loss reserve.

The following table is a summary of our notes receivable components as of June 30, 2024 and December 31, 2023 (in thousands):


	At June 30, 2024			At December 31, 2023
Mezzanine loans	$	42,000		$	42,000
Working capital loans		16,995			19,101
Notes receivable credit loss reserve		(590)			(611)
Total	$	58,405		$	60,490

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


	Six Months Ended June 30,
		2024			2023
Advances under notes receivable	$	188		$	866
Principal payments received under notes receivable		(2,294)			(13,426)	⁽¹⁾
Recovery of credit losses		21			126
Net decrease in notes receivable	$	(2,085)		$	(12,434)

(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.