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LOANS RECEIVABLE AND OTHER INVESTMENTS
 9 Months Ended
Sep. 30, 2018
Receivables [Abstract]  
LOANS RECEIVABLE AND OTHER INVESTMENTS
LOANS RECEIVABLE AND OTHER INVESTMENTS
As of September 30, 2018 and December 31, 2017, the Company’s loans receivable and other investments consisted of the following (dollars in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2018
 
 
Investment
 
Quantity
as of
September 30, 2018
 
Property Type
 
Principal Balance
as of
September 30,
2018 (1)
 
Book Value
as of
September 30, 2018
 
Book Value
as of
December 31, 2017
 
Weighted Average Contractual Interest Rate / Rate of Return
 
Weighted Average Annualized Effective Interest Rate / Rate of Return
 
Maturity Date
as of
September 30, 2018
Loans Receivable:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage
 
1

 
Specialty Hospital
 
$
16,525

 
$
16,525

 
$
12,351

 
10.0
%
 
10.0
%
 
01/31/27
Construction
 
2

 
Senior Housing
 
4,266

 
4,329

 
2,733

 
8.0
%
 
7.7
%
 
04/30/21- 09/30/22
Mezzanine
 
1

 
Skilled Nursing
 
25,000

 
2,291

 
10,239

 
10.0
%
 
41.9
%
 
05/25/20
Pre-development
 
1

 
Senior Housing
 
2,357

 
2,357

 
2,357

 
9.0
%
 
9.0
%
 
04/01/20
Other
 
17

 
Multiple
 
41,619

 
39,002

 
38,324

 
7.7
%
 
8.6
%
 
01/31/18- 08/31/28
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22

 
 
 
89,767

 
64,504

 
66,004

 
8.8
%
 
10.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan loss reserve
 
 
 
—

 
(1,249
)
 
(97
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
89,767

 
$
63,255

 
$
65,907

 
 
 
 
 
 
Other Investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred Equity
 
11

 
Skilled Nursing / Senior Housing
 
46,616

 
47,096

 
48,483

 
12.1
%
 
12.1
%
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
33

 
 
 
$
136,383

 
$
110,351

 
$
114,390

 
9.9
%
 
10.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

(1) 
Principal balance includes amounts funded and accrued but unpaid interest / preferred return and excludes capitalizable fees.
In connection with the CCP Merger, the Company acquired 18 loans receivable investments with a principal balance of $83.3 million and fair value of $58.2 million as of August 17, 2017.
Of the loans acquired in connection with the CCP Merger, eight loans receivable investments with a principal balance of $36.3 million were considered to have deteriorated credit quality, and based on the collateral or expected cash flows, the fair value was determined to be $11.3 million and the accretable yield was $3.5 million as of August 17, 2017. During the nine months ended September 30, 2018, one loan with deteriorated credit quality was repaid in full. As of September 30, 2018 and December 31, 2017, the book value of these loans was $4.5 million and $10.0 million, respectively.
The following table presents changes in the accretable yield for the three and nine months ended September 30, 2018 (in thousands):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30, 2018
Accretable yield, beginning of period
 
$
1,081

 
$
2,483

Accretion recognized in earnings
 
(348
)
 
(2,477
)
Net reclassification from nonaccretable difference
 
—

 
727

Accretable yield, end of period
 
$
733

 
$
733

 
 
 
 
 

During each of the three and nine months ended September 30, 2018, the Company recorded a $0.6 million provision for specific loan losses, and during the three and nine months ended September 30, 2018, the Company increased its portfolio-based loan loss reserve by $0.3 million and $0.6 million, respectively.
As of September 30, 2018, the Company had a $0.6 million specific loan loss reserve, and the portfolio-based loan loss reserve was $0.7 million. As of September 30, 2018, the Company considered one loan receivable investment to be impaired, which had a principal balance of $1.3 million and $1.4 million as of September 30, 2018 and December 31, 2017, respectively. As of September 30, 2018, two loans receivable investments with an aggregate book value of $1.3 million were on nonaccrual status. Additionally, as of September 30, 2018, the Company recognized interest income related to three loans receivable, with an aggregate book value of $7.0 million, that were more than 90 days past due. As of September 30, 2018, the Company did not consider any preferred equity investments to be impaired, and no preferred equity investments were on nonaccrual status.
As of December 31, 2017, the Company had no specific loan loss reserve, and the portfolio-based loan loss reserve was $0.1 million. As of December 31, 2017, the Company did not consider any loans receivable investments to be impaired, and one loan receivable with a book value of $0 was on nonaccrual status.
During the three and nine months ended September 30, 2017, the Company recorded a provision for specific loan losses of $3.0 million and $4.8 million, respectively, related to four loans receivable investments, two of which were written-off during the nine months ended September 30, 2017, and reduced its portfolio-based loan loss reserve by $32,000 and $0.3 million, respectively.