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Real Estate and Other Activities (Tables)

3 Months Ended

Mar. 31, 2022

We acquired or invested in the following net assets (in thousands):


	For the Three Months Ended March 31,
	2022			2021

Land and land improvements	$	9,671		$	—
Buildings		204,526			—
Intangible lease assets — subject to amortization (weighted-average useful life of 13.2 years for 2022)		5,461			—
Mortgage loans		—			1,090,400
Investments in unconsolidated real estate joint ventures		399,456			—
Investments in unconsolidated operating entities		131,105			688,017
Liabilities assumed		(25,424	)		—
Total net assets acquired	$	724,795		$	1,778,417

Summary of Status on Current Development Projects

See table below for a status summary of our current development projects (in thousands):


Property	Commitment		Costs Incurred as of March 31, 2022		Estimated Rent Commencement Date
Ernest (Stockton, California)	$	47,700	$	37,104	3Q 2022
Steward (Texarkana, Texas)		169,408		56,890	2Q 2024
	$	217,108	$	93,994

Components of Total Investment in Financing Leases

At March 31, 2022, leases on 13 Ernest facilities and five Prime Healthcare Services, Inc. facilities are accounted for as direct financing leases and leases on 13 of our Prospect Medical Holdings, Inc. (“Prospect”) facilities and five of our Ernest facilities are accounted for as a financing. The components of our total investment in financing leases consisted of the following (in thousands):


	As of March 31, 2022			As of December 31, 2021
Minimum lease payments receivable	$	1,172,338		$	1,183,855
Estimated residual values		203,818			203,818
Less: Unearned income and allowance for credit loss		(905,874	)		(918,584	)
Net investment in direct financing leases		470,282			469,089
Other financing leases (net of allowance for credit loss)		1,592,945			1,584,238
Total investment in financing leases	$	2,063,227		$	2,053,327

Summary of Loans (Net of Allowance for Credit Loss)

The following is a summary of our investments in unconsolidated real estate joint ventures by operator (amounts in thousands):


Operator	As of March 31, 2022		As of December 31, 2021
Median Kliniken S.á.r.l ("MEDIAN")	$	505,883	$	517,648
Swiss Medical Network		473,235		476,193
Steward (Macquarie Transaction)		400,367		—
Policlinico di Monza		93,833		95,468
HM Hospitales		61,196		63,618
Total	$	1,534,514	$	1,152,927

Investments in Unconsolidated Operating Entities

Our investments in unconsolidated operating entities are noncontrolling investments that are typically made in conjunction with larger real estate transactions in which the operators are vetted as part of our overall underwriting process. We make these investments from time-to-time in order to enhance our overall return and provide for certain minority rights and protections.

The following is a summary of our investments in unconsolidated operating entities (amounts in thousands):


Operator	As of March 31, 2022		As of December 31, 2021
Steward (loan investment)	$	363,236	$	360,164
International joint venture		231,403		219,387
Springstone, LLC ("Springstone")		192,958		187,450
Priory		167,478		42,315
Swiss Medical Network		157,431		159,208
Steward (equity investment)		139,000		139,000
Prospect		112,319		112,283
Aevis Victoria SA ("Aevis")		76,029		61,271
Aspris Children's Services ("Aspris")		15,988		8,356
Total	$	1,455,842	$	1,289,434

The increase during the 2022 first quarter is primarily due to our investment in the Priory syndicated term loan as described under "New Investments" in this Note 3.

Summary of Operating Results from Properties

The properties sold during 2022 do not meet the definition of discontinued operations. However, the following represents the operating results from these properties for the periods presented (in thousands):


	For the Three Months Ended March 31,
	2022			2021
Revenues(1)	$	20,093		$	30,991
Real estate depreciation and amortization(2)		(100	)		(7,403	)
Property-related expenses		(204	)		(351	)
Other income(3)		451,609			72
Income from real estate dispositions, net	$	471,398		$	23,309

(1)

Includes $4.5 million of straight-line rent write-offs associated with the non-Macquarie disposal transactions for the three months ended March 31, 2022.

(2)

Lower in 2022 as we stopped depreciating the properties making up the Macquarie Transaction once deemed held for sale in September 2021.

(3)

Includes $451.6 million of gains (net of $125 million write-off of straight-line rent receivables related to the Macquarie Transaction) for the three months ended March 31, 2022.

Summary of Investments in Unconsolidated Operating Entities.

The following is a summary of our investments in unconsolidated operating entities (amounts in thousands):


Operator	As of March 31, 2022		As of December 31, 2021
Steward (loan investment)	$	363,236	$	360,164
International joint venture		231,403		219,387
Springstone, LLC ("Springstone")		192,958		187,450
Priory		167,478		42,315
Swiss Medical Network		157,431		159,208
Steward (equity investment)		139,000		139,000
Prospect		112,319		112,283
Aevis Victoria SA ("Aevis")		76,029		61,271
Aspris Children's Services ("Aspris")		15,988		8,356
Total	$	1,455,842	$	1,289,434

Summary of Activity in Credit Loss reserves

The following table summarizes the activity in our credit loss reserves (in thousands):


	For the Three Months Ended March 31,
	2022			2021
Balance at beginning of the year	$	48,527		$	8,726
Provision for credit loss		5,412			—
Expected credit losses related to financial instruments sold or repaid		(6	)		(4	)
Balance at end of the period	$	53,933		$	8,722