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Senior Living Community Management Agreements | 6 Months Ended
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Jun. 30, 2024
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 for us pursuant to a master management agreement. AlerisLife guarantees the payment and performance of each of its applicable subsidiary's obligations under the applicable management agreements. In connection with ABP Trust’s acquisition of AlerisLife on March 20, 2023, we amended the master management agreement with AlerisLife to eliminate any change of control default or event of default provisions. See Note 11 for further information regarding ABP Trust's acquisition of AlerisLife. Our Senior Living Communities Managed by Five Star. Five Star managed 119 of our senior living communities as of both June 30, 2024 and 2023. 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 $10,444 and $9,890 for the three months ended June 30, 2024 and 2023, respectively, and $20,851 and $19,904 for the six months ended June 30, 2024 and 2023, respectively. For the three months ended June 30, 2024 and 2023, $9,995 and $9,315, respectively, of the total management fees were expensed to property operating expenses in our condensed consolidated statements of comprehensive income (loss) and $449 and $575, respectively, were capitalized in our condensed consolidated balance sheets. For the six months ended June 30, 2024 and 2023, $19,993 and $18,452, respectively, of the total management fees were expensed to property operating expenses in our condensed consolidated statements of comprehensive income (loss) and $858 and $1,452, 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 $0 and $334 for the three months ended June 30, 2024 and 2023, respectively, and $10 and $1,213 for the six months ended June 30, 2024 and 2023, 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 space to Five Star at certain of our senior living communities, which, prior to June 17, 2024, Five Star used to provide certain outpatient rehabilitation and wellness services through the Ageility branded business. Beginning on June 17, 2024, Five Star subleases this space to a subsidiary of Fox Rehabilitation, which acquired the Ageility branded business from AlerisLife on that date. Our Senior Living Communities Managed by Other Third Party Managers. Several other third party managers managed 111 of our senior living communities as of both June 30, 2024 and 2023. We lease our senior living communities that are managed by these third party managers to our TRSs. In March 2024, we terminated our management agreement with one of our third party managers which manages certain of our communities located in Wisconsin and Illinois and transitioned these communities to another third party manager with which we have an existing relationship. The terms of the management agreement for these communities are generally consistent with the terms of the existing management agreements with our other third party managers. We paid transition costs, including termination and other fees, of $1,826 during the second quarter of 2024, and expect to incur additional costs during 2024, related to the transition of these communities. We incurred management fees payable to these third party managers of $5,758 and $5,357 for the three months ended June 30, 2024 and 2023, respectively, and $11,483 and $10,595 for the six months ended June 30, 2024 and 2023, respectively. These amounts are included in property operating expenses in our condensed consolidated statements of comprehensive income (loss). 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: |  | 2024 |  | 2023 |  | 2024 |  | 2023
Basic housing and support services |  | $ | 241,116 |  |  | $ | 226,606 |  |  | $ | 484,771 |  |  | $ | 448,793 |
Medicare and Medicaid programs |  | 24,483 |  |  | 21,740 |  |  | 48,332 |  |  | 43,397 |
Private pay and other third party payer SNF services |  | 42,923 |  |  | 36,500 |  |  | 83,545 |  |  | 72,248 |
Total residents fees and services |  | $ | 308,522 |  |  | $ | 284,846 |  |  | $ | 616,648 |  |  | $ | 564,438 |

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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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