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General (Policies) | 3 Months Ended
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Mar. 31, 2025
General |
Basis of Presentation | We have prepared consolidated financial statements included herein without audit and in the opinion of management have included all adjustments necessary for a fair presentation of the consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to rules and regulations governing the presentation of interim financial statements. The accompanying consolidated financial statements include the accounts of our company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results for a full year.
Income taxes | No provision has been made for federal or state income taxes. Our company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As such, we generally are not taxed on income that is distributed to our stockholders.
Credit loss reserve | We apply Accounting Standards Codification Topic 326, Financial Instruments-Credit Losses (“ASC 326”), which requires a forward-looking “expected loss” model, to estimate our loan losses. We determined our Financing receivables, Mortgage loans receivable and Notes receivable line items on our Consolidated Balance Sheets are within the scope of ASC 326. Financing receivables. We obtained controlling interests in JVs that acquired properties through sale and leaseback transactions. The JVs concurrently leased the purchased properties to affiliates of sellers and provided the sellers-lessees with purchase options. We consolidated the JVs as Financing receivables on our Consolidated Balance Sheets. For more information regarding these transactions See Note 2. Real Estate Investments above. At March 31, 2025, we had investments in four JVs accounted for as financing receivables that owned 31 properties in three states. In addition to owning the properties through our controlling interests in the JVs, generally, these leases provide one or more of the following: security deposits, property tax impounds, repair and maintenance escrows and other credit enhancements such as corporate or personal guarantees or letters of credit. Mortgage loans. As part of our strategy of making investments in properties used in the provision of long-term health care services, we provided mortgage loan financing on such properties. At March 31, 2025, we had nine mortgage loans secured by 27 properties in four states with six borrowers. In addition to a lien on the mortgaged properties, the loans are generally secured by non-real estate assets of the properties and contain certain other security provisions in the form of letters of credit and/or security deposits. Notes receivable. Our notes receivable consist of mezzanine loans and working capital notes. Security for these notes can include all or a portion of the following credit enhancements: secured second mortgage, pledge of equity interests and personal/corporate guarantees. The following table summarizes our financial instruments within the scope of ASC 326 by year of origination (dollar amounts in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Year of origination (1) | ​ | At March 31, 2025
Investment Type: | ​ | 2025 | ​ | 2024 | ​ | 2023 | ​ | 2022 | ​ | 2021 | ​ | Prior | ​ | Total | ​ | Credit loss reserve
Financing receivables | ​ | $ | — | ​ | $ | 163,460 | ​ | $ | 121,419 | ​ | $ | 76,581 | ​ | $ | — | ​ | $ | — | ​ | $ | 361,460 | ​ | $ | 3,615
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Mortgage loans receivable | ​ | $ | — | ​ | $ | — | ​ | $ | 45,922 | ​ | $ | — | ​ | $ | 16,706 | ​ | $ | 254,899 | ​ | $ | 317,527 | ​ | $ | 3,169
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Mezzanine loans | ​ | $ | — | ​ | $ | — | ​ | $ | 17,000 | ​ | $ | 25,000 | ​ | $ | — | ​ | $ | — | ​ | $ | 42,000 | ​ | $ | 420
Working Capital loans | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,829 | ​ | ​ | 957 | ​ | ​ | 2,786 | ​ | ​ | 28
Total Notes Receivable | ​ | $ | — | ​ | $ | — | ​ | $ | 17,000 | ​ | $ | 25,000 | ​ | $ | 1,829 | ​ | $ | 957 | ​ | $ | 44,786 | ​ | $ | 448
(1) | Excludes paid-off loans. Additional funding, if any, is included in the year of the origination of the initial loan.
We monitor the credit quality of our financial instruments through a variety of methods determined by the underlying collateral or other protective rights, operator’s payment history and other internal metrics. Our monitoring process includes periodic review of financial statements for each facility, scheduled property inspections and review of covenant compliance, industry conditions and current and future economic conditions. The future economic conditions are based on the economic data from the Federal Reserve and reasonable assumptions for the future economic trends. In determining the “expected” credit loss reserves on these instruments, we utilize the probability of default and discounted cash flow methods. Further, we stress-test the results to reflect the impact of unknown adverse future events including recessions.

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