Schedule of assisted living portfolio property

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%.

Summary of information about purchase options included in our lease agreements

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.

Summary of 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.

Schedule of developments and improvement projects

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

Schedule of investments in financing receivables

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%.

Summary of investments in mortgage loans secured by first mortgages

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%.