IMPAIRMENT OF REAL ESTATE AND DISPOSITIONS

9 Months Ended

Sep. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

IMPAIRMENT OF REAL ESTATE AND DISPOSITIONS

IMPAIRMENT OF REAL ESTATE AND DISPOSITIONS

Impairment of Real Estate

During the nine months ended September 30, 2024 and 2023, the Company recognized real estate impairment of $18.5 million primarily related to four skilled nursing/transitional care facilities that have sold and two non-operational facilities, and $7.1 million related to one skilled nursing/transitional care facility that has sold, respectively.

To estimate the fair value of the impaired facilities, the Company utilized a market approach which considered binding sale agreements, non-binding offers from unrelated third parties or model-derived valuations with significant unobservable inputs, including comparable sales and other local and national industry market data (Level 3 measurements), as applicable. The Company utilized sales price per square foot values ranging from $4 to $73 in its fair value calculations for the two non-operational facilities impaired during the nine months ended September 30, 2024.

The Company continues to evaluate additional assets for sale as part of its initiative to recycle capital and further improve its portfolio quality. This could lead to a shorter hold period and could result in the determination that the full amount of the Company’s investment is not recoverable, resulting in an impairment charge or loss on sale which could be material.

Dispositions

The following table summarizes the Company’s dispositions for the periods presented (dollars in millions):

	Nine Months Ended September 30,
	2024		2023
Number of facilities	8		27
Consideration, net of closing costs	$	40.5	$	256.2
Net carrying value	44.5		332.1
Net loss on sale	$	(4.0)	$	(75.9)

Related to these facilities, the Company recognized net loss of $8.2 million and $79.6 million during the nine months ended September 30, 2024 and 2023, respectively, which includes (i) impairment of $5.7 million and $7.1 million for the nine months ended September 30, 2024 and 2023, respectively, and (ii) net loss on sale.

The sale of the disposition facilities does not represent a strategic shift that has or will have a major effect on the Company’s operations and financial results, and therefore the results of operations attributable to these facilities have remained in continuing operations.