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Fair Value Measurements
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements
4. Fair Value Measurements

Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash are reflected in the accompanying consolidated balance sheets at amounts considered by management to reasonably approximate fair value due to their short maturity of 90 days or less.

Marketable Securities

As of December 31, 2024 and 2023, marketable securities of $19.9 million and $29.8 million, respectively, are stated at fair value based on valuations provided by third-party pricing services and are classified within Level 2 of the valuation hierarchy.

Interest Rate Derivatives

The Company's derivative assets include interest rate cap and swap instruments that effectively manage the risk above certain interest rates for a portion of the Company's long-term variable rate debt. The Company has not designated the interest rate cap and swap instruments as hedging instruments and as such, changes in the fair value of the instruments are recognized in earnings in the period of the change. The interest rate derivative positions are valued using models developed by the respective counterparty that use as their basis readily available observable market parameters (such as forward yield curves) and are classified within Level 2 of the valuation hierarchy. The Company considers the credit risk of its counterparties when evaluating the fair value of its derivatives.

The following table summarizes the Company's SOFR interest rate cap instruments as of December 31, 2024.

($ in millions)
Notional balance$783.8 
Weighted average fixed cap rate4.18 %
Weighted average remaining term0.7 years
Estimated asset fair value (included in other assets, net)$4.1 

As of December 31, 2023, the estimated asset fair value of the interest rate cap instruments was $13.3 million included in other assets, net.
The following table summarizes the Company's SOFR interest rate swap instrument as of December 31, 2024.

($ in millions)
Notional balance$230.0 
Fixed interest rate4.06 %
Remaining term0.8 years
Estimated fair value (included in other liabilities)$(0.1)

As of December 31, 2023, the estimated asset fair value of the interest rate swap instrument was $1.6 million included in other assets, net.

Long-Term Debt

The Company estimates the fair value of its debt primarily using a discounted cash flow analysis based upon the Company's current borrowing rate for debt with similar maturities and collateral securing the indebtedness. The Company estimates the fair value of its convertible senior notes based on valuations provided by third-party pricing services. The Company had outstanding long-term debt with a carrying amount of approximately $4.1 billion and $3.7 billion as of December 31, 2024 and 2023, respectively. Fair value of the long-term debt is approximately $3.8 billion and $3.4 billion as of December 31, 2024 and 2023, respectively. The Company's fair value of long-term debt disclosure is classified within Level 2 of the valuation hierarchy.

As part of the acquisition of 11 senior living communities on December 17, 2024, the Company assumed $194.5 million of existing 4.92% fixed rate agency debt which is scheduled to mature in March 2027. The Company estimated the fair value of the assumed debt using a discounted cash flow analysis based upon the Company's current borrowing rate for debt with similar maturities and collateral securing the indebtedness (Level 2). The Company recognized $188.6 million of long-term debt as of the acquisition date based upon on its estimated fair value.

On October 3, 2024, the Company issued $369.4 million aggregate principal amount of its 3.50% convertible senior notes due 2029 (the “2029 Notes”) pursuant to convertible notes issuance and exchange transactions. The Company estimated the fair value of the issued debt based upon the cash proceeds obtained for the new subscriptions in the issuance transactions (Level 2). The Company recognized $362.2 million of long-term debt as of the date of the exchange and subscription transactions based upon on its estimated fair value. Refer to Note 7 for additional information on the convertible notes issuance and exchange transactions.

Asset Impairment Expense

The following is a summary of asset impairment expense.

For the Years Ended December 31,
(in millions)202420232022
Operating lease right-of-use assets$4.6 $8.3 $13.7 
Property, plant and equipment and leasehold intangibles, net4.0 6.3 15.9 
Investment in unconsolidated ventures— 26.0 — 
Asset impairment$8.6 $40.6 $29.6 

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset group may not be recoverable. In estimating the recoverability of asset groups for purposes of the Company’s long-lived asset impairment testing, the Company utilizes future cash flow projections that are developed internally. Any estimates of future cash flow projections necessarily involve predicting unknown future circumstances and events and require significant management judgments and estimates. In arriving at the cash flow projections, the Company considers its historic operating results, approved budgets and business plans, future demographic factors, expected revenue and expense growth rates, estimated asset holding periods, estimated capitalization rates, and other factors. Future events may indicate differences from management's current judgments and estimates which could, in turn, result in future impairments.
Operating Lease Right-of-Use Assets

During the years ended December 31, 2024, 2023, and 2022, the Company evaluated operating lease right-of-use assets for impairment and identified communities with a carrying amount of the assets in excess of the estimated future undiscounted net cash flows expected to be generated by the assets. The Company compared the estimated fair value of the assets to their carrying amount for these identified communities and recorded an impairment charge for the excess of carrying amount over fair value. During the year ended December 31, 2024, 2023, and 2022 the Company recognized the right-of-use assets for the operating leases for 22 communities, 12 communities, and eight communities, respectively, on the consolidated balance sheet at the estimated fair value of $7.3 million, $16.4 million, and $30.9 million, respectively. In the aggregate, the Company recorded a non-cash impairment charge of $4.6 million, $8.3 million, and $13.7 million for the years ended December 31, 2024, 2023, and 2022, respectively, to operating lease right-of-use assets. These impairment charges are primarily due to lower than expected occupancy and decreased future cash flow estimates at certain leased communities over the remaining lease term, and reflect the amount by which the carrying amounts of the assets exceeded their estimated fair value.

The fair values of the operating lease right-of-use assets were estimated utilizing a discounted cash flow approach based upon projected community cash flows and market data, including management fees and a market supported lease coverage ratio, all of which are considered Level 3 inputs within the valuation hierarchy. The estimated future cash flows were discounted at a rate that is consistent with a weighted average cost of capital from a market participant perspective.

Property, Plant and Equipment and Leasehold Intangibles, Net

During the years ended December 31, 2024, 2023, and 2022, the Company evaluated property, plant and equipment and leasehold intangibles for impairment and identified properties with a carrying amount of the assets in excess of the estimated future undiscounted net cash flows expected to be generated by the assets. The Company compared the estimated fair value of the assets to their carrying amount for these identified properties and recorded an impairment charge for the excess of carrying amount over fair value.

The Company recorded property, plant and equipment and leasehold intangibles non-cash impairment charges in its operating results of $4.0 million, $6.3 million, and $15.9 million for the years ended December 31, 2024, 2023, and 2022, respectively. These impairment charges are primarily due to property damage sustained at certain communities, lower than expected occupancy and decreased future cash flow estimates at certain communities, and/or the completed or potential disposition of underperforming communities and reflect the amount by which the carrying amounts of the assets exceeded their estimated fair value.

Investment in Unconsolidated Ventures

The Company evaluates realization of its investment in unconsolidated ventures accounted for using the equity method if circumstances indicate the Company's investment is other than temporarily impaired. During the three months ended December 31, 2023, the Company recognized a non-cash impairment charge of $26.0 million on its investment in the HCS Venture as a result of the Company's decision to sell its equity interest prior to the recovery of its market value. The Company determined the $27.4 million fair value of its investment based primarily on the sale agreements with the purchasers. The fair value measurement is classified within Level 2 of the valuation hierarchy.