XML 37 R26.htm IDEA: XBRL DOCUMENT

Investment in Unconsolidated Joint Ventures (Tables)

9 Months Ended

Sep. 30, 2024

Investment in Unconsolidated Joint Ventures

Summary of the preferred equity investments

The following table provides information regarding these preferred equity investments (dollar amounts in thousands):

Type

Total

Contractual

Number

of

Preferred

Cash

of

Carrying

State

Properties

Investment

Return

Portion

Beds/ Units

Value

Texas

SNF/ALF

Senior Loan

⁽¹⁾

9.2

%

9.2

%

104

$

11,262

⁽¹⁾

Washington

ALF/MC

Preferred Equity

⁽²⁾

12.0

%

7.0

%

95

6,340

⁽²⁾

Washington

ILF/ALF

Preferred Equity

⁽³⁾

14.0

%

8.0

%

267

13,000

⁽³⁾

Total

466

$

30,602

(1)

We originated a $12,700 mortgage loan to a current operator secured by a SNF/ALF in Texas. The investment commitment amount includes $11,164, funded during the three months ended June 30, 2024, an interest reserve of $750 and a capital expenditure reserve of $786. In accordance with GAAP, this mortgage loan was determined to be an ADC loan and is accounted for as an unconsolidated JV. The campus has 104 beds (70 skilled nursing and 34 assisted living). The five-year mortgage loan is interest-only at a current rate of 9.15%.

(2)

Our investment represents 15.5% of the total investment. The preferred equity investment earns an initial cash rate of 7% increasing to 9% in year four until the IRR is 8%. After achieving an 8% IRR, the cash rate drops to 8% with an IRR ranging between 12% to 14%, depending upon timing of redemption. We have the option to require the JV partner to purchase our preferred equity interest at any time between August 17, 2031 and December 31, 2036.

(3)

Our investment represents 11.6% of the estimated total investment. The preferred equity investment earns an initial cash rate of 8% with an IRR of 14%. The JV partner has the option to buy out our investment at any time after August 31, 2023 at the IRR rate. Also, we have the option to require the JV partner to purchase our preferred equity interest at any time between August 31, 2027 and prior to the end of the first renewal term of the lease.

Summary of capital contributions, income recognized and cash interest received from investments in unconsolidated joint ventures

The following table summarizes our capital contributions, income recognized, and cash interest received related to our investments in unconsolidated joint ventures during the nine months ended September 30, 2024 and 2023 (in thousands):


	Type
	of		Income		Cash Income		Non-cash
Year	Properties		Recognized		Earned		Income Accrued
2024	SNF/ALF	$	589	$	589	$	—
	ALF/MC		359		359		—
	ILF/ALF ⁽¹⁾		791		—		791
Total		$	1,739	$	948	$	791
			`
2023	ALF/MC	$	337	$	—	$	337
	UDP ⁽¹⁾		790		—		790
Total		$	1,127	$	—	$	1,127

(1)	The JV developed and owns a 267-unit ILF and ALF in Washington. The development project was completed during the fourth quarter of 2023.