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Real Estate and Other Activities (Tables)
 9 Months Ended
Sep. 30, 2023
Real Estate [Abstract]  
Net Assets Acquired

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

 

 

 

For the Nine Months
Ended September 30,

 

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

Land and land improvements

 

$

28,916

 

 

$

34,925

 

Buildings

 

 

114,966

 

 

 

312,645

 

Intangible lease assets — subject to amortization (weighted-average useful
   life of 24.8 years for 2023 and 20.4 years for 2022)

 

 

16,305

 

 

 

19,839

 

Mortgage loans

 

 

—

 

 

 

100,000

 

Investments in unconsolidated real estate joint ventures

 

 

—

 

 

 

399,456

 

Investments in unconsolidated operating entities

 

 

50,000

 

 

 

131,105

 

Other loans

 

 

25,000

 

 

 

—

 

Liabilities assumed

 

 

—

 

 

 

(25,727

)

 

 

$

235,187

 

 

$

972,243

 

Loans repaid(1)

 

 

(22,900

)

 

 

—

 

Total net assets acquired

 

$

212,287

 

 

$

972,243

 
(1)
The 2023 column includes a $23 million mortgage loan that was converted to fee simple ownership of one property as described under Lifepoint Transaction below.
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
September 30, 2023

 

 

Estimated Rent
Commencement
Date

IMED Hospitales ("IMED") (Spain)

 

$

44,848

 

 

$

43,103

 

 

4Q 2023

Lifepoint Behavioral Health (Texas)

 

 

31,600

 

 

 

17,790

 

 

1Q 2024

IMED (Spain)

 

 

36,280

 

 

 

13,775

 

 

3Q 2024

IMED (Spain)

 

 

49,790

 

 

 

17,045

 

 

1Q 2025

Steward (Texas)

 

 

169,408

 

 

 

90,445

 

 

2Q 2026

 

 

$

331,926

 

 

$

182,158

 

 

 
Summary of Operating Results from Properties

The properties sold during 2023 and 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 September 30,

For the Nine Months
Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues(1)

 

$

5,632

 

 

$

(9,358

)

 

$

36,560

 

 

$

75,289

 

Real estate depreciation and amortization

 

 

—

 

 

 

(5,905

)

 

 

(4,991

)

 

 

(20,207

)

Property-related expenses

 

 

(569

)

 

 

(407

)

 

 

(2,430

)

 

 

(6,226

)

Real estate and other impairment charges(2)

 

 

(3,750

)

 

 

—

 

 

 

(93,288

)

 

 

—

 

Other (expense) income(3)

 

 

(2,455

)

 

 

62,053

 

 

 

(13,433

)

 

 

518,219

 

(Loss) income from real estate dispositions, net

 

$

(1,142

)

 

$

46,383

 

 

$

(77,582

)

 

$

567,075

 

 

(1)
Includes approximately $35 million and $42 million of straight-line rent write-offs associated with the non-Macquarie disposal transactions for the three and nine months ended September 30, 2022, respectively.
(2)
Includes an approximate $82 million net impairment charge (including $37.4 million of straight-line rent write-offs) associated with the Australia Transaction and an approximate $11 million non-cash impairment charge associated with the repurchase of three Prime facilities for the nine months ended September 30, 2023.
(3)
Includes $68.8 million and $536.8 million of gains (net of $125 million write-off of straight-line rent receivables related to the Macquarie Transaction) for the three and nine months ended September 30, 2022.
Components of Total Investment in Financing Leases The components of our total investment in financing leases consisted of the following (in thousands):

 

 

 

As of September 30,
   2023

 

 

As of December 31,
   2022

 

Minimum lease payments receivable

 

$

616,686

 

 

$

880,253

 

Estimated unguaranteed residual values

 

 

203,818

 

 

 

203,818

 

Less: Unearned income and allowance for credit loss

 

 

(576,309

)

 

 

(731,915

)

Net investment in direct financing leases

 

 

244,195

 

 

 

352,156

 

Other financing leases (net of allowance for credit loss)

 

 

989,141

 

 

 

1,339,167

 

Total investment in financing leases

 

$

1,233,336

 

 

$

1,691,323

 
Summary of Investments in Unconsolidated Operating Entities

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

 

Operator

 

Ownership Percentage

As of September 30,
   2023

 

 

As of December 31,
   2022

 

MEDIAN

 

50%

$

461,930

 

 

$

482,735

 

Swiss Medical Network

 

70%

 

432,919

 

 

 

454,083

 

Steward (Macquarie Transaction)

 

50%

 

431,224

 

 

 

417,701

 

Policlinico di Monza

 

50%

 

82,327

 

 

 

86,245

 

HM Hospitales

 

45%

 

53,325

 

 

 

57,139

 

Total

 

 

$

1,461,725

 

 

$

1,497,903

 

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

 

 

Operator

 

As of September 30,
   2023

 

 

As of December 31,
   2022

 

PHP Holdings

 

$

684,418

 

 

$

—

 

Steward (loan investment)

 

 

362,589

 

 

 

362,831

 

International joint venture

 

 

230,153

 

 

 

231,402

 

Swiss Medical Network

 

 

171,334

 

 

 

157,145

 

Priory

 

 

157,547

 

 

 

156,575

 

Steward (equity investment)

 

 

125,862

 

 

 

125,862

 

Aevis Victoria SA ("Aevis")

 

 

79,738

 

 

 

72,904

 

Aspris Children's Services ("Aspris")

 

 

15,996

 

 

 

16,023

 

Lifepoint Behavioral

 

 

11,093

 

 

 

200,827

 

Caremax

 

 

5,117

 

 

 

8,526

 

Prospect

 

 

—

 

 

 

112,777

 

Total

 

$

1,843,847

 

 

$

1,444,872

 
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 September 30,

 

 

 

2023

 

 

2022

 

Balance at beginning of the period

 

$

87,105

 

 

$

55,250

 

Provision (recovery) for credit loss, net

 

 

165

 

 

 

(19,677

)

Expected credit loss reserve related to financial instruments
     sold, repaid, or satisfied

 

 

(63

)

 

 

(26,362

)

Balance at end of the period

 

$

87,207

 

 

$

9,211

 

 

 

 

 

 

 

 

 

 

For the Nine Months
Ended September 30,

 

 

 

2023

 

 

2022

 

Balance at beginning of the year

 

$

121,146

 

 

$

48,527

 

Provision (recovery) for credit loss, net

 

 

1,513

 

 

 

(12,920

)

Expected credit loss reserve related to financial instruments
     sold, repaid, or satisfied

 

 

(35,452

)

 

 

(26,396

)

Balance at end of the period

 

$

87,207

 

 

$

9,211

 
Schedule of Concentrations of Credit Risk See below for our concentration details (dollars in thousands):

Total Assets by Operator

 

 

 

As of September 30, 2023

 

 

As of December 31, 2022

 

Operators

 

Total Assets (1)

 

 

Percentage of
Total Assets

 

 

Total Assets (1)

 

 

Percentage of
Total Assets

 

Steward

 

$

3,768,586

 

 

 

19.8

%

 

$

4,762,673

 

 

 

24.2

%

Circle Health Ltd ("Circle")

 

 

2,043,689

 

 

 

10.8

%

 

 

2,062,474

 

 

 

10.5

%

Priory

 

 

1,339,742

 

 

 

7.0

%

 

 

1,290,213

 

 

 

6.6

%

Prospect

 

 

1,065,752

 

 

 

5.6

%

 

 

1,483,599

 

 

 

7.5

%

Lifepoint Behavioral

 

 

806,350

 

 

 

4.2

%

 

 

985,959

 

 

 

5.0

%

Other operators

 

 

7,544,787

 

 

 

39.8

%

 

 

7,461,923

 

 

 

38.0

%

Other assets

 

 

2,435,976

 

(2)

 

12.8

%

 

 

1,611,159

 

 

 

8.2

%

Total

 

$

19,004,882

 

 

 

100.0

%

 

$

19,658,000

 

 

 

100.0

%
(1)
Total assets by operator are generally comprised of real estate assets, mortgage loans, investments in unconsolidated real estate joint ventures, investments in unconsolidated operating entities, and other loans.
(2)
Includes our investment in PHP Holdings of $684 million as part of the Prospect Transaction as further described above in this same Note 3.

 

Total Assets by U.S. State and Country

 

 

As of September 30, 2023

 

 

As of December 31, 2022

 

U.S. States and Other Countries

 

Total Assets

 

 

Percentage of
Total Assets

 

 

Total Assets

 

 

Percentage of
Total Assets

 

Texas

 

$

2,009,435

 

 

 

10.6

%

 

$

1,967,948

 

 

 

10.0

%

Florida

 

 

1,356,050

 

 

 

7.1

%

 

 

1,324,555

 

 

 

6.8

%

California

 

 

1,227,372

 

 

 

6.4

%

 

 

1,450,112

 

 

 

7.4

%

Massachusetts

 

 

844,804

 

 

 

4.5

%

 

 

761,694

 

 

 

3.9

%

Utah

 

 

829,434

 

 

 

4.4

%

 

 

1,224,484

 

 

 

6.2

%

All other states

 

 

3,757,534

 

 

 

19.8

%

 

 

4,245,306

 

 

 

21.6

%

Other domestic assets

 

 

1,775,974

 

 

 

9.3

%

 

 

1,028,946

 

 

 

5.2

%

Total U.S.

 

$

11,800,603

 

 

 

62.1

%

 

$

12,003,045

 

 

 

61.1

%

United Kingdom

 

$

4,108,393

 

 

 

21.6

%

 

$

4,083,244

 

 

 

20.8

%

Germany

 

 

716,959

 

 

 

3.8

%

 

 

664,900

 

 

 

3.4

%

Switzerland

 

 

683,991

 

 

 

3.6

%

 

 

748,947

 

 

 

3.8

%

Australia

 

 

290,321

 

 

 

1.5

%

 

 

854,582

 

 

 

4.3

%

Spain

 

 

233,724

 

 

 

1.2

%

 

 

222,316

 

 

 

1.1

%

All other countries

 

 

510,889

 

 

 

2.7

%

 

 

498,753

 

 

 

2.5

%

Other international assets

 

 

660,002

 

 

 

3.5

%

 

 

582,213

 

 

 

3.0

%

Total international

 

$

7,204,279

 

 

 

37.9

%

 

$

7,654,955

 

 

 

38.9

%

Grand total

 

$

19,004,882

 

 

 

100.0

%

 

$

19,658,000

 

 

 

100.0

%

Total Assets by Facility Type

 

 

As of September 30, 2023

 

 

As of December 31, 2022

 

Facility Types

 

Total Assets

 

 

Percentage of
Total Assets

 

 

Total Assets

 

 

Percentage of
Total Assets

 

General acute care hospitals

 

$

12,105,205

 

 

 

63.7

%

 

$

13,386,376

 

 

 

68.1

%

Behavioral health facilities

 

 

2,525,664

 

 

 

13.3

%

 

 

2,727,326

 

 

 

13.9

%

Inpatient rehabilitation hospitals

 

 

1,430,494

 

 

 

7.5

%

 

 

1,418,603

 

 

 

7.2

%

Long-term acute care hospitals

 

 

274,971

 

 

 

1.5

%

 

 

277,772

 

 

 

1.4

%

Freestanding ER/urgent care facilities

 

 

232,572

 

 

 

1.2

%

 

 

236,764

 

 

 

1.2

%

Other assets

 

 

2,435,976

 

 

 

12.8

%

 

 

1,611,159

 

 

 

8.2

%

Total

 

$

19,004,882

 

 

 

100.0

%

 

$

19,658,000

 

 

 

100.0

%

Total Revenues by Operator

 

 

 

For the Three Months Ended September 30,

 

 

 

2023

 

 

2022

 

Operators

 

Total Revenues

 

 

Percentage of
Total Revenues

 

 

Total Revenues

 

 

Percentage of
Total Revenues

 

Steward

 

$

70,664

 

 

 

23.0

%

(1)

$

101,262

 

 

 

28.7

%

Circle

 

 

49,207

 

 

 

16.1

%

 

 

45,531

 

 

 

12.9

%

CommonSpirit

 

 

29,355

 

 

 

9.6

%

 

 

—

 

 

 

—

 

Priory

 

 

28,335

 

 

 

9.2

%

 

 

18,611

 

 

 

5.3

%

Lifepoint Behavioral

 

 

18,553

 

 

 

6.1

%

 

 

21,960

 

 

 

6.2

%

Ernest

 

 

18,225

 

 

 

5.9

%

 

 

15,530

 

 

 

4.4

%

Other operators

 

 

92,237

 

 

 

30.1

%

 

 

149,445

 

 

 

42.5

%

Total

 

$

306,576

 

 

 

100.0

%

 

$

352,339

 

 

 

100.0

%
(1)
Excluding the $49 million reserve in the 2023 third quarter related to a different operator, revenue concentration would have been 19.9%; in line with total assets concentration.

 

Total Revenues by U.S. State and Country

 

 

 

For the Three Months Ended September 30,

 

 

 

2023

 

 

2022

 

U.S. States and Other Countries

 

Total Revenues

 

 

Percentage of
Total Revenues

 

 

Total Revenues

 

 

Percentage of
Total Revenues

 

Texas

 

$

40,423

 

 

 

13.2

%

 

$

41,572

 

 

 

11.8

%

Utah

 

 

30,559

 

 

 

10.0

%

 

 

34,701

 

 

 

9.8

%

Florida

 

 

28,443

 

 

 

9.3

%

 

 

25,572

 

 

 

7.3

%

Arizona

 

 

17,056

 

 

 

5.6

%

 

 

16,442

 

 

 

4.7

%

Ohio

 

 

9,303

 

 

 

3.0

%

 

 

10,839

 

 

 

3.1

%

All other states

 

 

64,044

 

 

 

20.8

%

 

 

115,677

 

 

 

32.8

%

Total U.S.

 

$

189,828

 

 

 

61.9

%

 

$

244,803

 

 

 

69.5

%

United Kingdom

 

$

90,655

 

 

 

29.6

%

 

$

76,191

 

 

 

21.6

%

Germany

 

 

10,000

 

 

 

3.3

%

 

 

7,926

 

 

 

2.2

%

All other countries

 

 

16,093

 

 

 

5.2

%

 

 

23,419

 

 

 

6.7

%

Total international

 

$

116,748

 

 

 

38.1

%

 

$

107,536

 

 

 

30.5

%

Grand total

 

$

306,576

 

 

 

100.0

%

 

$

352,339

 

 

 

100.0

%