XML 44 R30.htm IDEA: XBRL DOCUMENT v3.24.0.1
Real Estate and Other Activities (Tables)
 12 Months Ended
Dec. 31, 2023
Real Estate [Abstract]  
Net Assets Acquired

For the years ended December 31, 2023, 2022, and 2021, we acquired or invested in the following net assets (in thousands):

 

 

2023

 

 

2022

 

 

2021

 

Land and land improvements

 

$

28,916

 

 

$

135,301

 

 

$

642,312

 

Buildings

 

 

114,966

 

 

 

487,698

 

 

 

2,381,654

 

Intangible lease assets — subject to amortization
   (weighted-average useful life of 24.8 years in 2023,
   21.3 years in 2022, and 34.5 years in 2021)

 

 

16,305

 

 

 

45,394

 

 

 

262,385

 

Mortgage loans(1)

 

 

—

 

 

 

159,735

 

 

 

1,113,300

 

Investments in unconsolidated real estate joint ventures

 

 

—

 

 

 

399,456

 

 

 

—

 

Investments in unconsolidated operating entities

 

 

50,000

 

 

 

131,105

 

 

 

1,033,096

 

Other loans

 

 

25,000

 

 

 

—

 

 

 

—

 

Liabilities assumed

 

 

—

 

 

 

(25,727

)

 

 

(82,508

)

 

$

235,187

 

 

$

1,332,962

 

 

$

5,350,239

 

Loans repaid(1)

 

 

(22,900

)

 

 

—

 

 

 

(1,103,410

)

Total net assets acquired

 

$

212,287

 

 

$

1,332,962

 

 

$

4,246,829

 

 

(1)
The 2023 column includes a $23 million mortgage loan that was converted to fee simple ownership of one property as described under the Lifepoint Transaction below. The 2021 column includes an £800 million mortgage loan advanced to the Priory Group (“Priory”) in the first quarter of 2021 and converted to fee simple ownership of 35 properties in the second quarter of 2021 as described 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
December 31, 2023

 

 

Estimated Rent
Commencement
Date

IMED (Spain)

 

$

50,099

 

 

$

49,534

 

 

1Q 2024

Lifepoint Behavioral Health (Texas)

 

 

31,600

 

 

 

24,023

 

 

1Q 2024

IMED (Spain)

 

 

37,879

 

 

 

17,876

 

 

3Q 2024

IMED (Spain)

 

 

51,984

 

 

 

18,640

 

 

1Q 2025

 

$

171,562

 

 

$

110,073

 

 

 
Summary of Operating Results from Properties

The following represents the operating results from properties sold for the periods presented (in thousands):

 

 

 

For the Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

Revenues

 

$

37,332

 

 

$

75,084

 

 

$

75,464

 

Real estate depreciation and amortization

 

 

(4,991

)

 

 

(20,312

)

 

 

(21,467

)

Property-related expenses

 

 

(2,467

)

 

 

(5,492

)

 

 

(3,479

)

Real estate and other impairment charges(1)

 

 

(96,405

)

 

 

—

 

 

 

—

 

Other (expense) income

 

 

(1,661

)

 

 

(1,082

)

 

 

(1,075

)

(Loss) income from real estate dispositions, net

 

$

(68,192

)

 

$

48,198

 

 

$

49,443

 
(1)
Includes an approximate $86 million net impairment charge (including $37.4 million of straight-line rent write-offs) associated with the Australia Transaction and an approximate $11 million impairment charge associated with the repurchase of three Prime facilities.
Amortization Expense from Existing Lease Intangible Assets

We recorded amortization expense related to intangible lease assets of $332.5 million (including $286 million for accelerating the amortization of the in-place lease intangibles related to the Utah properties associated with the Steward Utah Transaction as described in this same Note 3), $55.9 million, and $56.0 million in 2023, 2022, and 2021, respectively, and expect to recognize amortization expense from existing lease intangible assets as follows (amounts in thousands):

 

For the Year Ended December 31:

 

 

 

2024

 

$

40,934

 

2025

 

 

40,081

 

2026

 

 

39,933

 

2027

 

 

39,664

 

2028

 

 

39,330

 
Summary of Total Future Minimum Lease Payments to be Received

The following table summarizes total future minimum lease payments to be received, excluding operating expense reimbursements, tenant recoveries, and other lease/loan-related adjustments to revenue (i.e., straight-line rents, deferred revenues, or reserves/write-offs), from tenants under noncancelable leases as of December 31, 2023 (amounts in thousands):

 

 

 

Total Under
Operating Leases

 

 

Total Under
Financing Leases

 

 

Total

 

2024

 

$

979,053

 

 

$

111,929

 

 

$

1,090,982

 

2025

 

 

994,198

 

 

 

114,224

 

 

 

1,108,422

 

2026

 

 

1,010,217

 

 

 

116,566

 

 

 

1,126,783

 

2027

 

 

1,064,958

 

 

 

118,954

 

 

 

1,183,912

 

2028

 

 

1,077,981

 

 

 

121,390

 

 

 

1,199,371

 

Thereafter

 

 

25,489,598

 

 

 

3,079,714

 

 

 

28,569,312

 

 

$

30,616,005

 

 

$

3,662,777

 

 

$

34,278,782

 
Components of Total Investment in Financing Leases The components of our total investment in financing leases consisted of the following (in thousands):

 

 

 

As of December 31, 2023

 

 

As of December 31, 2022

 

Minimum lease payments receivable

 

$

611,669

 

 

$

880,253

 

Estimated unguaranteed residual values

 

 

203,818

 

 

 

203,818

 

Less: Unearned income and allowance for credit loss

 

 

(571,059

)

 

 

(731,915

)

Net investment in direct financing leases

 

 

244,428

 

 

 

352,156

 

Other financing leases (net of allowance for credit loss)

 

 

987,202

 

 

 

1,339,167

 

Total investment in financing leases

 

$

1,231,630

 

 

$

1,691,323

 
Summary of Details Related to Investments [Table Text Block]

Due to the operational and liquidity challenges that Steward is facing, we moved to the cash basis of accounting for our leases and loans with Steward effective December 31, 2023. This resulted in the reserving of all unpaid rent and interest receivables at December 31, 2023 and the reversal of previously recognized straight-line rent receivables. See table below for a detail of these and other charges recorded related to our investments in Steward in the 2023 fourth quarter (in millions):

Description

 

Amount

 

 

Income Statement
Classification

Reserve of unpaid rent and lease incentives

 

$

154

 

 

Rent billed

Reserve of straight-line rent receivables

 

 

224

 

 

Straight-line rent

Reserve of unpaid interest receivables

 

 

35

 

 

Interest and other income

Impairment charge on equity investment and other
   assets (1)

 

 

171

 

 

Real estate and other impairment charges, net

Impairment charge on real estate assets (2)

 

 

100

 

 

Real estate and other impairment charges, net

Reserve of unpaid rent and straight-line rent
   receivables in the MAM partnership

 

 

30

 

 

Earnings from equity interests

Total

 

$

714

 

 

 
(1)
For our non-real estate investments in Steward, we compared our carrying value of all such investments to the fair value of the underlying collateral, which resulted in a $90 million impairment to our equity investment. The remaining charge relates to reserving for other outstanding receivables, including receivables for reimbursement of property taxes and insurance.
(2)
For the real estate leased to Steward, we made a comparison of the projected undiscounted future cash flows with the net book value of each asset. For less than 10 of these properties, the carrying value was deemed not recoverable, and we recorded an impairment charge to reduce the carrying value to its estimated fair value. In estimating fair value for these properties, we, along with assistance from a third-party, independent valuation firm, used a combination of cost, market and income approaches using Level 3 inputs. The cost approach used comparable sales to value the land and cost manuals to value the improvements. The value derived from the market approach was based on sale prices of similar properties. For the income approach, we divided the expected operating income (i.e. rent revenue less expenses, if any) from the property by a market capitalization rate (range from 6.5% to 9.5%).
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 December 31, 2023

 

 

As of December 31, 2022

 

Swiss Medical Network

 

70%

 

$

472,434

 

 

$

454,083

 

MEDIAN

 

50%

 

 

471,336

 

 

 

482,735

 

Steward (Macquarie Transaction)

 

50%

 

 

394,052

 

 

 

417,701

 

Policlinico di Monza

 

50%

 

 

80,562

 

 

 

86,245

 

HM Hospitales

 

45%

 

 

56,071

 

 

 

57,139

 

Total

 

 

 

$

1,474,455

 

 

$

1,497,903

 

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

 

Operator

 

As of December 31,
2023

 

 

As of December 31,
2022

 

PHP Holdings

 

$

699,535

 

 

$

—

 

Steward (loan investment)

 

 

361,591

 

 

 

362,831

 

International joint venture

 

 

225,960

 

 

 

231,402

 

Swiss Medical Network

 

 

186,113

 

 

 

157,145

 

Priory

 

 

163,837

 

 

 

156,575

 

Aevis Victoria SA ("Aevis")

 

 

77,345

 

 

 

72,904

 

Steward (equity investment)

 

 

35,696

 

 

 

125,862

 

Aspris Children's Services ("Aspris")

 

 

15,986

 

 

 

16,023

 

Lifepoint Behavioral

 

 

11,429

 

 

 

200,827

 

Caremax

 

 

1,148

 

 

 

8,526

 

Prospect

 

 

—

 

 

 

112,777

 

Total

 

$

1,778,640

 

 

$

1,444,872

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

Total Assets by Operator

 

 

 

As of December 31, 2023

 

 

As of December 31, 2022

 

Operators

 

Total Assets (1)

 

 

Percentage of
Total Assets

 

 

Total Assets (1)

 

 

Percentage of
Total Assets

 

Steward

 

$

3,518,537

 

 

 

19.2

%

 

$

4,762,673

 

 

 

24.2

%

Circle

 

 

2,119,392

 

 

 

11.6

%

 

 

2,062,474

 

 

 

10.5

%

Priory

 

 

1,391,005

 

 

 

7.6

%

 

 

1,290,213

 

 

 

6.6

%

Prospect

 

 

1,092,974

 

 

 

6.0

%

 

 

1,483,599

 

 

 

7.5

%

Lifepoint Behavioral Health

 

 

813,527

 

 

 

4.4

%

 

 

985,959

 

 

 

5.0

%

Other operators

 

 

7,352,012

 

 

 

40.2

%

 

 

7,461,923

 

 

 

38.0

%

Other assets

 

 

2,017,397

 

(2)

 

11.0

%

 

 

1,611,159

 

 

 

8.2

%

Total

 

$

18,304,844

 

 

 

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 $700 million as part of the Prospect Transaction as further described in this same Note 3.

Total Assets by U.S. State and Country (a)

 

 

 

As of December 31, 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

 

$

1,891,482

 

 

 

10.3

%

 

$

1,967,948

 

 

 

10.0

%

Florida

 

 

1,348,210

 

 

 

7.4

%

 

 

1,324,555

 

 

 

6.8

%

California

 

 

1,252,674

 

 

 

6.8

%

 

 

1,450,112

 

 

 

7.4

%

Utah

 

 

824,048

 

 

 

4.5

%

 

 

1,224,484

 

 

 

6.2

%

Massachusetts

 

 

732,550

 

 

 

4.0

%

 

 

761,694

 

 

 

3.9

%

All other states

 

 

3,726,145

 

 

 

20.4

%

 

 

4,245,306

 

 

 

21.6

%

Other domestic assets

 

 

1,397,170

 

 

 

7.6

%

 

 

1,028,946

 

 

 

5.2

%

Total U.S.

 

$

11,172,279

 

 

 

61.0

%

 

$

12,003,045

 

 

 

61.1

%

United Kingdom

 

$

4,261,944

 

 

 

23.3

%

 

$

4,083,244

 

 

 

20.8

%

Switzerland

 

 

735,891

 

 

 

4.0

%

 

 

748,947

 

 

 

3.8

%

Germany

 

 

734,630

 

 

 

4.0

%

 

 

664,900

 

 

 

3.4

%

Spain

 

 

252,529

 

 

 

1.4

%

 

 

222,316

 

 

 

1.1

%

Finland

 

 

218,322

 

 

 

1.2

%

 

 

224,152

 

 

 

1.1

%

All other countries

 

 

309,022

 

 

 

1.7

%

 

 

1,129,183

 

 

 

5.7

%

Other international assets

 

 

620,227

 

 

 

3.4

%

 

 

582,213

 

 

 

3.0

%

Total international

 

$

7,132,565

 

 

 

39.0

%

 

$

7,654,955

 

 

 

38.9

%

Grand total

 

$

18,304,844

 

 

 

100.0

%

 

$

19,658,000

 

 

 

100.0

%

Total Assets by Facility Type (a)

 

 

 

As of December 31, 2023

 

 

As of December 31, 2022

 

Facility Types

 

Total Assets

 

 

Percentage of
Total Assets

 

 

Total Assets

 

 

Percentage of
Total Assets

 

General acute care hospitals

 

$

11,764,151

 

 

 

64.3

%

 

$

13,386,376

 

 

 

68.1

%

Behavioral health facilities

 

 

2,576,983

 

 

 

14.1

%

 

 

2,727,326

 

 

 

13.9

%

Inpatient rehabilitation hospitals

 

 

1,445,399

 

 

 

7.9

%

 

 

1,418,603

 

 

 

7.2

%

Long-term acute care hospitals

 

 

270,849

 

 

 

1.5

%

 

 

277,772

 

 

 

1.4

%

Freestanding ER/urgent care facilities

 

 

230,065

 

 

 

1.2

%

 

 

236,764

 

 

 

1.2

%

Other assets

 

 

2,017,397

 

 

 

11.0

%

 

 

1,611,159

 

 

 

8.2

%

Total

 

$

18,304,844

 

 

 

100.0

%

 

$

19,658,000

 

 

 

100.0

%

 

(a)
For geographic and facility type concentration metrics in the tables above, we allocate our investments in operating entities pro rata based on the gross book value of the real estate. Such pro rata allocations are subject to change from period to period.