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Senior Living Community Management Agreements | 6 Months Ended
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Jun. 30, 2023
Risks and Uncertainties [Abstract] |
Senior Living Community Management Agreements | Senior Living Community Management Agreements Our managed senior living communities are operated by third parties pursuant to management agreements. Five Star Senior Living, or Five Star, which is an operating division of AlerisLife, manages many of our SHOP communities. Five Star manages these communities pursuant to an amended and restated master management agreement, or the Master Management Agreement, that we and Five Star are party to. AlerisLife guarantees the payment and performance of each of its applicable subsidiary's obligations under the applicable management agreements pursuant to an amended and restated guaranty agreement. In February 2022, we closed a senior living community that had previously been managed by Five Star. We are assessing opportunities to redevelop that property. This community was one of the 108 communities that we and Five Star agreed in 2021 to transition to other third party managers or close. As of December 31, 2021, we had transitioned the other 107 senior living communities, containing 7,340 living units, from Five Star to other third party managers. We incurred costs related to retention and other transition costs for these communities. We recorded $517 and $1,445 for the three and six months ended June 30, 2022, respectively, of these costs to acquisition and certain other transaction related costs in our condensed consolidated statements of comprehensive income (loss). In connection with ABP Trust’s acquisition of AlerisLife, as described in Note 10, we entered into a Consent and Amendment Agreement, or the Consent Agreement, on February 2, 2023, pursuant to which, among other things, we agreed to amend the Master Management Agreement. See Note 10 for further information regarding the acquisition of AlerisLife, including the related amendment to the Master Management Agreement. Our Senior Living Communities Managed by Five Star. Five Star managed 119 and 120 of our senior living communities as of June 30, 2023 and 2022, respectively. We lease our senior living communities that are managed by Five Star to our taxable REIT subsidiaries, or TRSs. We incurred management fees payable to Five Star of $9,890 and $8,971 for the three months ended June 30, 2023 and 2022, respectively, and $19,904 and $17,903 for the six months ended June 30, 2023 and 2022, respectively. For the three months ended June 30, 2023 and 2022, $9,315 and $8,274, respectively, of the total management fees were expensed to property operating expenses in our condensed consolidated statements of comprehensive income (loss) and $575 and $697, respectively, were capitalized in our condensed consolidated balance sheets. For the six months ended June 30, 2023 and 2022, $18,452 and $16,416, respectively, of the total management fees were expensed to property operating expenses in our condensed consolidated statements of comprehensive income (loss) and $1,452 and $1,487, respectively, were capitalized in our condensed consolidated balance sheets. The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets. We incurred fees of $334 and $1,736 for the three months ended June 30, 2023 and 2022, respectively, and $1,213 and $3,652 for the six months ended June 30, 2023 and 2022, respectively, with respect to rehabilitation services Five Star provided at our senior living communities that are payable by us. These amounts are included in property operating expenses in our condensed consolidated statements of comprehensive income (loss). We lease to Five Star space at certain of our senior living communities, which it uses to provide certain outpatient rehabilitation and wellness services. Our Senior Living Communities Managed by Other Third Party Managers. Several other third party managers managed 111 and 107 of our senior living communities as of June 30, 2023 and 2022, respectively. We lease our senior living communities that are managed by these third party managers to our TRSs. We incurred management fees payable to these third party managers of $5,357 and $5,218 for the three months ended June 30, 2023 and 2022, respectively, and $10,595 and $10,326 for the six months ended June 30, 2023 and 2022, respectively. These amounts are included in property operating expenses in our condensed consolidated financial statements. The following table presents residents fees and services revenue from all of our managed senior living communities disaggregated by the type of contract and payer:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
Revenue from contracts with customers: |  | 2023 |  | 2022 |  | 2023 |  | 2022
Basic housing and support services |  | $ | 226,606 |  |  | $ | 196,999 |  |  | $ | 448,793 |  |  | $ | 389,873 |
Medicare and Medicaid programs |  | 21,740 |  |  | 18,966 |  |  | 43,397 |  |  | 38,783 |
Private pay and other third party payer SNF services |  | 36,500 |  |  | 34,541 |  |  | 72,248 |  |  | 67,298 |
Total residents fees and services |  | $ | 284,846 |  |  | $ | 250,506 |  |  | $ | 564,438 |  |  | $ | 495,954 |

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- Definition The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 275 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//275/tableOfContent + Details
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