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Notes Receivable (Tables)

9 Months Ended

Sep. 30, 2024

Notes Receivable.

Summary of investments in notes receivable

Notes receivable consist of mezzanine loans and working capital loans. The following table summarizes our investments in notes receivable at September 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%		—			2026		Working capital			290			1		ALF
8.0%		11.0	%		2027		Mezzanine			25,000			1		ALF
0.0%		—			2028		Working capital			1,545			1		SNF
8.8%		12.0	%		2028		Mezzanine			17,000			1		ALF
6.5%		—			2030		Working capital			138			2		SNF
7.4%		—			2030		Working capital			500			1		ALF
7.4%		—			2030		Working capital			957			1		ALF
0.0%		—			2031		Working capital			2,693			1		ALF
									$	48,173	⁽¹⁾		10

(1)	Excludes the impact of credit loss reserve.

Summary of mezzanine loans and other loan arrangements

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


	At September 30, 2024			At December 31, 2023
Mezzanine loans	$	42,000		$	42,000
Working capital loans		6,173			19,101
Notes receivable credit loss reserve		(482)			(611)
Total	$	47,691		$	60,490

Summary of notes receivable activity

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


	Nine Months Ended September 30,
		2024			2023
Advances under notes receivable	$	340		$	19,258
Principal payments received under notes receivable		(13,268)	⁽¹⁾		(14,537)	⁽²⁾
Recovery of credit losses		129			(48)
Net (decrease) increase in notes receivable	$	(12,799)		$	4,673

(1)

During 2024, we received $11,986 towards the paydown of a $13,531 working capital note. The remaining $1,545 balance of the working capital note is interest free and will be repaid in installments through 2028. Additionally, we received an aggregate $1,282 related to the payoff of two working capital notes.

(2)

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. Subsequent to September 30, 2024, the $51,111 mortgage loan was paid off.