QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
(Nasdaq Global Select Market) |
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
PART I—FINANCIAL INFORMATION | ||||||||
Item 1. | Financial Statements (Unaudited) | |||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II—OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 6. | ||||||||
March 31, 2022 | December 31, 2021 | ||||||||||
Assets: | |||||||||||
Real estate investments, net | $ | $ | |||||||||
Other real estate investments | |||||||||||
Assets held for sale, net | |||||||||||
Cash and cash equivalents | |||||||||||
Accounts and other receivables | |||||||||||
Prepaid expenses and other assets, net | |||||||||||
Deferred financing costs, net | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Equity: | |||||||||||
Senior unsecured notes payable, net | $ | $ | |||||||||
Senior unsecured term loan, net | |||||||||||
Unsecured revolving credit facility | |||||||||||
Accounts payable, accrued liabilities and deferred rent liabilities | |||||||||||
Dividends payable | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 11) | |||||||||||
Equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Cumulative distributions in excess of earnings | ( | ( | |||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
For the Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Revenues: | |||||||||||
Rental income | $ | $ | |||||||||
Interest and other income | |||||||||||
Total revenues | |||||||||||
Expenses: | |||||||||||
Depreciation and amortization | |||||||||||
Interest expense | |||||||||||
Property taxes | |||||||||||
Impairment of real estate investments | |||||||||||
Provision for loan losses, net | |||||||||||
Property operating expenses | |||||||||||
General and administrative | |||||||||||
Total expenses | |||||||||||
Other income (loss): | |||||||||||
Gain (loss) on sale of real estate | ( | ||||||||||
Net (loss) income | $ | ( | $ | ||||||||
(Loss) earnings per common share: | |||||||||||
Basic | $ | ( | $ | ||||||||
Diluted | $ | ( | $ | ||||||||
Weighted-average number of common shares: | |||||||||||
Basic | |||||||||||
Diluted |
Common Stock | Additional Paid-in Capital | Cumulative Distributions in Excess of Earnings | Total Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Vesting of restricted common stock, net of shares withheld for employee taxes | ( | — | ( | ||||||||||||||||||||||||||
Amortization of stock-based compensation | — | — | — | ||||||||||||||||||||||||||
Common dividends ($ | — | — | — | ( | ( | ||||||||||||||||||||||||
Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Cumulative Distributions in Excess of Earnings | Total Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balance at January 1, 2021 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Issuance of common stock, net | — | ||||||||||||||||||||||||||||
Vesting of restricted common stock, net of shares withheld for employee taxes | ( | — | ( | ||||||||||||||||||||||||||
Amortization of stock-based compensation | — | — | — | ||||||||||||||||||||||||||
Common dividends ($ | — | — | — | ( | ( | ||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
For the Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization (including below-market ground leases) | |||||||||||
Amortization of deferred financing costs | |||||||||||
Amortization of stock-based compensation | |||||||||||
Straight-line rental income | ( | ( | |||||||||
Adjustment for collectibility of rental income | |||||||||||
(Gain) loss on sale of real estate | ( | ||||||||||
Impairment of real estate investments | |||||||||||
Provision for loan losses, net | |||||||||||
Change in operating assets and liabilities: | |||||||||||
Accounts and other receivables | ( | ||||||||||
Prepaid expenses and other assets, net | ( | ||||||||||
Accounts payable, accrued liabilities and deferred rent liabilities | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Acquisitions of real estate, net of deposits applied | ( | ( | |||||||||
Purchases of equipment, furniture and fixtures and improvements to real estate | ( | ( | |||||||||
Investment in other loans receivable | ( | ( | |||||||||
Principal payments received on real estate mortgage and other loans receivable | |||||||||||
Net proceeds from sales of real estate | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from the issuance of common stock, net | |||||||||||
Borrowings under unsecured revolving credit facility | |||||||||||
Net-settle adjustment on restricted stock | ( | ( | |||||||||
Dividends paid on common stock | ( | ( | |||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
Net increase in cash and cash equivalents | |||||||||||
Cash and cash equivalents as of the beginning of period | |||||||||||
Cash and cash equivalents as of the end of period | $ | $ | |||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Interest paid | $ | $ | |||||||||
Supplemental schedule of noncash investing and financing activities: | |||||||||||
Increase in dividends payable | $ | $ | |||||||||
Transfer of pre-acquisition costs to acquired assets | $ | $ | |||||||||
March 31, 2022 | December 31, 2021 | ||||||||||
Land | $ | $ | |||||||||
Buildings and improvements | |||||||||||
Integral equipment, furniture and fixtures | |||||||||||
Identified intangible assets | |||||||||||
Real estate investments | |||||||||||
Accumulated depreciation and amortization | ( | ( | |||||||||
Real estate investments, net | $ | $ |
Year | Amount | ||||
2022 (nine months) | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Thereafter | |||||
Total | $ |
Asset Type | Properties | Lease Expiration | Next Option Open Date | Option Type(1) | Current Cash Rent(2) | ||||||||||||||||||
ALF | October 2034 | 1/1/2022 | (3) | A | $ | ||||||||||||||||||
SNF | November 2030 | 1/1/2022 | (3) | C | |||||||||||||||||||
SNF | March 2029 | 4/1/2022 | (4) | B / C(5) | |||||||||||||||||||
SNF / Campus | October 2032 | 1/1/2023 | (3) | B | |||||||||||||||||||
SNF | November 2034 | 12/1/2024 | (4) | B | |||||||||||||||||||
ALF | October 2034 | 1/1/2026 | (3) | A |
For the Three Months Ended March 31, | |||||||||||
Rental Income | 2022 | 2021 | |||||||||
Contractual rent due(1) | $ | $ | |||||||||
Straight-line rent | |||||||||||
Adjustment for collectibility(2) | ( | ||||||||||
Lease termination revenue(3) | |||||||||||
Total | $ | $ |
Type of Property | Purchase Price(1) | Initial Annual Cash Rent | Number of Properties | Number of Beds/Units(2) | |||||||||||||||||||
Skilled nursing | $ | $ | |||||||||||||||||||||
Multi-service campuses | |||||||||||||||||||||||
Total | $ | $ |
As of March 31, 2022 | |||||||||||||||||||||||||||||||||||
Investment | Financial Statement Line Item | Principal Balance as of March 31, 2022 | Book Value as of March 31, 2022 | Book Value as of December 31, 2021 | Weighted Average Contractual Interest Rate | Maturity Date | |||||||||||||||||||||||||||||
Mezzanine loan receivable | Other real estate investments | $ | $ | $ | % | 11/30/2025 | |||||||||||||||||||||||||||||
Other loans receivable | Prepaid expenses and other assets, net | % | 9/1/2023 - 12/31/2023 | ||||||||||||||||||||||||||||||||
Expected credit loss | Prepaid expenses and other assets, net | ( | ( | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ |
For the Three Months Ended March 31, | |||||||||||
Investment | 2022 | 2021 | |||||||||
Mezzanine loan receivable | $ | $ | |||||||||
Other | |||||||||||
Total | $ | $ |
Level 1 | Level 2 | Level 3 | Balance as of March 31, 2022 | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Mezzanine loan receivable | $ | $ | $ | $ |
Level 1 | Level 2 | Level 3 | Balance as of December 31, 2021 | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Mezzanine loan receivable | $ | $ | $ | $ |
March 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
Level | Face Value | Carrying Amount | Fair Value | Face Value | Carrying Amount | Fair Value | |||||||||||||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||||||||||||||
Senior unsecured notes payable | 2 | $ | $ | $ | $ | $ | $ |
March 31, 2022 | December 31, 2021 | ||||||||||||||||||||||
Principal Amount | Deferred Loan Fees | Carrying Value | Principal Amount | Deferred Loan Fees | Carrying Value | ||||||||||||||||||
Senior unsecured notes payable | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||
Senior unsecured term loan | ( | ( | |||||||||||||||||||||
Unsecured revolving credit facility | |||||||||||||||||||||||
$ | $ | ( | $ | $ | $ | ( | $ |
For the Three Months Ended | ||||||||
March 31, 2021 | ||||||||
Number of shares | ||||||||
Average sales price per share | $ | |||||||
Gross proceeds(1) | $ |
For the Three Months Ended | |||||
March 31, 2022 | |||||
Dividends declared per share | $ | ||||
Dividends payment date | |||||
Dividends payable as of record date | $ | ||||
Dividends record date |
Shares | Weighted Average Share Price | ||||||||||
Unvested balance at December 31, 2021 | $ | ||||||||||
Granted: | |||||||||||
RSAs | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Unvested balance at March 31, 2022 | $ |
For the Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Stock-based compensation expense | $ | $ |
For the Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Numerator: | |||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Less: Net income allocated to participating securities | ( | ( | |||||||||
Numerator for basic and diluted earnings available to common stockholders | $ | ( | $ | ||||||||
Denominator: | |||||||||||
Weighted-average basic common shares outstanding | |||||||||||
Dilutive performance stock awards | |||||||||||
Weighted-average diluted common shares outstanding | |||||||||||
(Loss) earnings per common share, basic | $ | ( | $ | ||||||||
(Loss) earnings per common share, diluted | $ | ( | $ | ||||||||
Antidilutive unvested RSAs, performance awards and TSR Awards excluded from the computation |
Number of Facilities | Number of Beds/Units | Percentage of Total Revenue(1) | ||||||||||||||||||||||||||||||||||||||||||
Operator(2) | SNF | Campus | ALF/ILF | SNF | Campus | ALF/ILF | ||||||||||||||||||||||||||||||||||||||
March 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Ensign | % | |||||||||||||||||||||||||||||||||||||||||||
Priority Management Group | % | |||||||||||||||||||||||||||||||||||||||||||
March 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
Ensign | % | |||||||||||||||||||||||||||||||||||||||||||
Priority Management Group | % |
Number of Facilities | Number of Beds/Units | Percentage of Total Revenue(1) | ||||||||||||||||||||||||||||||||||||||||||
State | SNF | Campus | ALF/ILF | SNF | Campus | ALF/ILF | ||||||||||||||||||||||||||||||||||||||
CA | % | |||||||||||||||||||||||||||||||||||||||||||
TX | % | |||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended | |||||
March 31, 2021 | |||||
Number of shares | 702 | ||||
Average sales price per share | $ | 23.62 | |||
Gross proceeds(1) | $ | 16,579 |
Three Months Ended | Increase (Decrease) | Percentage Difference | |||||||||||||||||||||
March 31, 2022 | December 31, 2021 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Rental income | $ | 46,007 | $ | 49,118 | $ | (3,111) | (6) | % | |||||||||||||||
Interest and other income | 469 | 619 | (150) | (24) | % | ||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Depreciation and amortization | 13,575 | 14,056 | (481) | (3) | % | ||||||||||||||||||
Interest expense | 5,742 | 5,689 | 53 | 1 | % | ||||||||||||||||||
Property taxes | 1,420 | 1,108 | 312 | 28 | % | ||||||||||||||||||
Impairment of real estate investments | 59,683 | — | 59,683 | * | |||||||||||||||||||
Provision for loan losses, net | 3,844 | — | 3,844 | * | |||||||||||||||||||
Property operating expenses | 447 | — | 447 | * | |||||||||||||||||||
General and administrative | 5,215 | 10,738 | (5,523) | (51) | % | ||||||||||||||||||
Other income: | |||||||||||||||||||||||
Gain on sale of real estate | 186 | 115 | 71 | 62 | % |
Three Months Ended March 31, | Increase (Decrease) | Percentage Difference | |||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Rental income | $ | 46,007 | $ | 45,246 | $ | 761 | 2 | % | |||||||||||||||
Interest and other income | 469 | 505 | (36) | (7) | % | ||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Depreciation and amortization | 13,575 | 13,473 | 102 | 1 | % | ||||||||||||||||||
Interest expense | 5,742 | 5,762 | (20) | — | % | ||||||||||||||||||
Property taxes | 1,420 | 696 | 724 | 104 | % | ||||||||||||||||||
Impairment of real estate investments | 59,683 | — | 59,683 | * | |||||||||||||||||||
Provision for loan losses, net | 3,844 | — | 3,844 | * | |||||||||||||||||||
Property operating expenses | 447 | — | 447 | * | |||||||||||||||||||
General and administrative | 5,215 | 5,142 | 73 | 1 | % | ||||||||||||||||||
Other income (loss): | |||||||||||||||||||||||
Gain (loss) on sale of real estate | 186 | (192) | 378 | (197) | % |
For the Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Net cash provided by operating activities | $ | 34,579 | $ | 33,949 | |||||||
Net cash used in investing activities | (24,072) | (133,300) | |||||||||
Net cash (used in) provided by financing activities | (3,816) | 110,901 | |||||||||
Net increase in cash and cash equivalents | 6,691 | 11,550 | |||||||||
Cash and cash equivalents as of the beginning of period | 19,895 | 18,919 | |||||||||
Cash and cash equivalents as of the end of period | $ | 26,586 | $ | 30,469 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | ||||||||||||
January 1 - January 31, 2022 | 30,556 | $ | 20.84 | |||||||||||
February 1 - February 28, 2022 | 108,131 | 19.75 | ||||||||||||
March 1 - March 31, 2022 | — | — | ||||||||||||
Total | 138,687 | $ | 19.99 |
Exhibit Number | Description of the Document | |||||||
*101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
*101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
*101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
*101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
*101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
*101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
*104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |||||||
* Filed herewith | ||||||||
** Furnished herewith |
CareTrust REIT, Inc. | |||||||||||
May 5, 2022 | By: | /s/ David M. Sedgwick | |||||||||
David M. Sedgwick | |||||||||||
President and Chief Executive Officer (duly authorized officer) | |||||||||||
May 5, 2022 | By: | /s/ William M. Wagner | |||||||||
William M. Wagner | |||||||||||
Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer) |
By: | /s/ David M. Sedgwick | |||||||
David M. Sedgwick | ||||||||
President and Chief Executive Officer |
By: | /s/ William M. Wagner | |||||||
William M. Wagner | ||||||||
Chief Financial Officer and Treasurer |
/s/ David M. Sedgwick | ||||||||
Name: | David M. Sedgwick | |||||||
Title: | President and Chief Executive Officer | |||||||
Date: | May 5, 2022 | |||||||
/s/ William M. Wagner | ||||||||
Name: | William M. Wagner | |||||||
Title: | Chief Financial Officer and Treasurer | |||||||
Date: | May 5, 2022 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued (shares) | 0 | 0 |
Preferred stock, outstanding (shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (shares) | 500,000,000 | 500,000,000 |
Common stock, issued (shares) | 96,487,066 | 96,296,673 |
Common stock, outstanding (shares) | 96,487,066 | 96,296,673 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Revenues: | ||
Rental income | $ 46,007 | $ 45,246 |
Interest and other income | 469 | 505 |
Total revenues | 46,476 | 45,751 |
Expenses: | ||
Depreciation and amortization | 13,575 | 13,473 |
Interest expense | 5,742 | 5,762 |
Property taxes | 1,420 | 696 |
Impairment of real estate investments | 59,683 | 0 |
Provision for loan losses, net | 3,844 | 0 |
Property operating expenses | 447 | 0 |
General and administrative | 5,215 | 5,142 |
Total expenses | 89,926 | 25,073 |
Other income (loss): | ||
Gain (loss) on sale of real estate | 186 | (192) |
Net (loss) income | $ (43,264) | $ 20,486 |
(Loss) earnings per common share: | ||
Basic (in usd per share) | $ (0.45) | $ 0.21 |
Diluted (in usd per share) | $ (0.45) | $ 0.21 |
Weighted-average number of common shares: | ||
Basic (in shares) | 96,410 | 95,378 |
Diluted (in shares) | 96,410 | 95,385 |
Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Statement of Stockholders' Equity [Abstract] | ||
Common dividends (in usd per share) | $ 0.275 | $ 0.265 |
Organization |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | ORGANIZATION Description of Business—CareTrust REIT, Inc.’s (“CareTrust REIT” or the “Company”) primary business consists of acquiring, financing, developing and owning real property to be leased to third-party tenants in the healthcare sector. As of March 31, 2022, the Company owned and leased to independent operators, 228 skilled nursing facilities (“SNFs”), multi-service campuses, assisted living facilities (“ALFs”) and independent living facilities (“ILFs”) consisting of 23,834 operational beds and units located in 29 states with the highest concentration of properties by rental income located in California, Texas, Louisiana, Idaho and Arizona. As of March 31, 2022, the Company also had other real estate investments consisting of one mezzanine loan receivable with a carrying value of $15.2 million. COVID-19—The COVID-19 pandemic has had and may continue to have an adverse impact on the economy generally and the Company’s business, results of operations and financial condition. The duration and extent of the COVID-19 pandemic’s effect on the Company’s operational and financial performance, and the operational and financial performance of the Company’s tenants, will depend on future developments, which are highly uncertain and cannot be predicted at this time, including the rate of public acceptance and usage of vaccines and the effectiveness of vaccines in limiting the spread of COVID-19 and its variants, resurgences of COVID-19 and, in particular, new and more contagious and/or vaccine resistant variants, actions taken to contain the spread of COVID-19 and how quickly and to what extent normal economic and operating conditions can resume. The adverse impact of the COVID-19 pandemic on the Company’s business, results of operations and financial condition could be material.
|
Summary of Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation—The accompanying condensed consolidated financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the disclosures required by GAAP for a complete set of annual audited financial statements. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. In the opinion of management, all adjustments which are of a normal and recurring nature and considered necessary for a fair presentation of the results of the interim periods presented have been included. The results of operations for the interim periods are not necessarily indicative of results for the full year. All intercompany transactions and account balances within the Company have been eliminated. Recent Accounting Pronouncements—In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), that provides optional relief to applying reference rate reform to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”). For U.S. Dollar LIBOR, the overnight, one-month, three-month, six-month and one-year LIBOR rates will be discontinued in June 2023, while other U.S. Dollar LIBOR rates were discontinued at the end of 2021. The amendments in this update are effective immediately and may be applied through December 31, 2022. Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.
|
Real Estate Investments, Net |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Investments, Net | REAL ESTATE INVESTMENTS, NET The following table summarizes the Company’s real estate properties held for investment at March 31, 2022 and December 31, 2021 (dollars in thousands):
As of March 31, 2022, 226 of the Company’s 228 facilities were leased to various operators under triple-net leases. All of these leases contain annual escalators based on the percentage change in the Consumer Price Index (“CPI”) (but not less than zero), some of which are subject to a cap, or fixed rent escalators. Two of the Company’s 228 facilities are non-operational and are leased under a short term lease with an expected term of less than one year as of March 31, 2022. As of March 31, 2022, 27 facilities were held for sale. As of March 31, 2022, the Company’s total future contractual minimum rental income for all of its tenants, excluding operating expense reimbursements, was (dollars in thousands):
Tenant Purchase Options Certain of the Company’s operators hold purchase options allowing them to acquire properties they currently lease from the Company. A summary of these purchase options is presented below (dollars in thousands):
(1) Option type includes: A - Fixed base price plus a specified share on any appreciation. B - Fixed base price. C - Fixed capitalization rate on lease revenue. (2) Based on annualized cash revenue for contracts in place as of March 31, 2022. (3) Option window is open for six months. (4) Option window is open until the expiration of the lease term. (5) Purchase option reflects two option types. Rental Income The following table summarizes components of the Company’s rental income (dollars in thousands):
(1) Includes initial cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. (2) During the three months ended March 31, 2022, and in accordance with Accounting Standards Codification 842, the Company evaluated the collectibility of lease payments through maturity and determined that it was not probable that the Company would collect substantially all of the contractual obligations from four existing and former operators. As such, the Company reversed $0.7 million of operating expense reimbursements, $0.2 million of contractual rent and $0.1 million of straight-line rent during the three months ended March 31, 2022. If lease payments are subsequently deemed probable of collection, the Company will increase rental income for such recoveries. (3) During the three months ended March 31, 2021, in connection with the agreement to terminate its lease agreements with Metron Integrated Health Systems (“Metron”) and to sell the facilities to a third party, the Company received approximately $0.1 million in lease termination revenue from Metron affiliates. Recent Real Estate Acquisitions The following table summarizes the Company’s acquisitions for the three months ended March 31, 2022 (dollars in thousands):
(1) Purchase price includes capitalized acquisition costs. (2) The number of beds/units includes operating beds at the acquisition date. Lease Amendments Pennant Partial Lease Termination and Amended Ensign Master Lease. On March 1, 2022, operations at one ALF in Arizona operated by affiliates of The Pennant Group, Inc. (“Pennant”) were transferred to affiliates of The Ensign Group, Inc. (“Ensign”). In connection with the transfer, the Company amended the Pennant master lease to reflect the removal of the ALF and amended an existing triple-net master lease with Ensign to include the one ALF. The applicable Ensign master lease has a remaining term of approximately 11 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the applicable Ensign master lease, as amended, increased by approximately $0.3 million and annual cash rent under the Pennant master lease, as amended, decreased by the same amount. Amended Eduro Master Lease. On February 1, 2022, the Company acquired one SNF. In conjunction with the acquisition, the Company amended its existing triple-net master lease with affiliates of Eduro Healthcare, LLC (“Eduro”) to include the one SNF and extended the initial lease term. The Eduro master lease, as amended, has a remaining term of approximately 12 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the Eduro master lease, as amended, increased by approximately $0.8 million. Amended WLC Master Lease. On March 1, 2022, the Company acquired one multi-service campus. In conjunction with the acquisition, the Company amended its existing triple-net master lease with affiliates of WLC Management Firm, LLC (“WLC”) to include the one multi-service campus. The WLC master lease, as amended, has a remaining term of approximately 12 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the WLC master lease, as amended, increased by approximately $1.2 million.
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Impairment of Real Estate Investments, Assets Held for Sale, Net and Asset Sales |
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Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Impairment of Real Estate Investments, Assets Held for Sale, Net and Asset Sales | IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE, NET AND ASSET SALES In connection with the Company’s ongoing review and monitoring of its investment portfolio and the performance of its tenants, the Company determined to pursue the sale of 27 properties and repurposing three properties representing an aggregate of approximately 10% of contractual cash rent as of March 31, 2022. As of March 31, 2022, the Company determined that these 27 properties met the criteria to be classified as assets held for sale and, in connection with this determination, the Company recognized an aggregate impairment charge of $59.7 million related to 20 of the 27 held for sale properties, which is reported in impairment of real estate investments in the condensed consolidated statements of operations for the three months ended March 31, 2022. The impairment charge was recognized to write down the properties’ aggregate carrying value to their aggregate fair value, less estimated costs to sell. As of March 31, 2022, the net book value of these 27 properties was $141.7 million, which is comprised of the real estate assets. The fair value of the assets held for sale was based on estimated sales prices, which are considered to be Level 3 measurements within the fair value hierarchy. Estimated sales prices were determined using a market approach (comparable sales model), which relies on certain assumptions by management, including: (i) comparable market transactions, (ii) estimated prices per unit, and (iii) negotiations with prospective buyers. There are inherent uncertainties in making these assumptions. For the Company’s impairment calculations, the Company’s fair value estimates primarily relied on a market approach and utilized prices per unit ranging from $40,000 to $175,000, with a weighted average price per unit of $91,000. During the first quarter of 2022, the Company determined that one ALF that was classified as held for sale at December 31, 2021 no longer met the held for sale criteria. The Company reclassified this ALF’s carrying value of $4.8 million out of assets held for sale and recorded catch-up depreciation of approximately $0.1 million during the three months ended March 31, 2022. On February 22, 2022, the Company closed on the sale of one SNF, operated by affiliates of Cascadia Healthcare, LLC (“Cascadia”), consisting of 83 beds located in Washington with a carrying value of $0.8 million, for net sales proceeds of $1.0 million. During the three months ended March 31, 2022, the Company recorded a gain of $0.2 million in connection with the sale. There was no rent reduction under the Cascadia master lease in connection with the sale.
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Other Real Estate Investments, Net |
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Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Real Estate Investments, Net | OTHER REAL ESTATE INVESTMENTS As of March 31, 2022 and December 31, 2021, the Company’s loans receivable and other investments consisted of the following (dollars in thousands):
Expected credit losses and recoveries are recorded in provision for loan losses, net in the condensed consolidated statements of operations. During the three months ended March 31, 2022, the Company recorded a $4.6 million expected credit loss related to two other loans receivable that were placed on non-accrual status, including an unfunded loan commitment of $0.4 million, net of a loan loss recovery of $0.8 million related to a loan previously written-off. As of December 31, 2021, the Company had no expected credit loss and did not consider any loan receivable investments to be impaired. The following table summarizes the interest and other income recognized from the Company’s loans receivable and other investments during the quarter ended March 31, 2022 and 2021 (dollars in thousands):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. GAAP guidance defines three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and, depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. The Company does not expect that changes in classifications between levels will be frequent. Items Measured at Fair Value on a Recurring Basis The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021, aggregated by the level in the fair value hierarchy within which those instruments fall (dollars in thousands):
Mezzanine loan receivable: The fair value of the mezzanine loan receivable was estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements. As such, the Company classifies the instrument as Level 3 due to the significant unobservable inputs used in determining market interest rates for investments with similar terms. Future changes in market interest rates could materially impact the estimated discounted cash flows. As of March 31, 2022 and December 31, 2021, the Company did not have any loans measured at fair value that were 90 days or more past due. For the three months ended March 31, 2022, there were no classification changes in assets and liabilities with Level 3 inputs in the fair value hierarchy. Items Disclosed at Fair Value Considerable judgment is necessary to estimate the fair value disclosure of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the face value, carrying amount and fair value of the Notes (as defined in Note 7, Debt, below) as of March 31, 2022 and December 31, 2021 using Level 2 inputs is as follows (dollars in thousands):
Cash and cash equivalents, accounts and other receivables, accounts payable, and accrued liabilities: The carrying value for these instruments approximate their fair values due to the short-term nature of these instruments. Senior unsecured notes payable: The fair value of the Notes was determined using third-party quotes derived from orderly trades. Unsecured revolving credit facility and senior unsecured term loan: The fair values approximate their carrying values as the interest rates are variable and approximate prevailing market interest rates for similar debt arrangements.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT The following table summarizes the balance of the Company’s indebtedness as of March 31, 2022 and December 31, 2021 (dollars in thousands):
Senior Unsecured Notes Payable 2028 Senior Notes. On June 17, 2021, the Company’s wholly owned subsidiary, CTR Partnership, L.P. (the “Operating Partnership”), and its wholly owned subsidiary, CareTrust Capital Corp. (together with the Operating Partnership, the “Issuers”) completed a private offering of $400.0 million aggregate principal amount of 3.875% Senior Notes due 2028 (the “Notes”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act of 1933, as amended. The Notes were issued at par, resulting in gross proceeds of $400.0 million and net proceeds of approximately $393.8 million after deducting underwriting fees and other offering expenses. The Notes mature on June 30, 2028. The Notes accrue interest at a rate of 3.875% per annum payable semiannually in arrears on June 30 and December 30 of each year, commencing on December 30, 2021. The Issuers may redeem some or all of the Notes at any time prior to March 30, 2028 at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest on the Notes, if any, to, but not including, the redemption date, plus a “make-whole” premium. At any time on or after March 30, 2028, the Issuers may redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed plus accrued interest on the Notes, if any, to, but not including, the redemption date. In addition, at any time on or prior to June 30, 2024, up to 40% of the aggregate principal amount of the Notes may be redeemed with the net proceeds of certain equity offerings at a redemption price of 103.875% of the aggregate principal amount of Notes to be redeemed plus accrued and unpaid interest on the Notes, if any, to, but not including, the redemption date. If certain changes of control of the Company occur, the Issuers will be required to make an offer to holders of the Notes to repurchase their Notes at a price of 101% of their principal amount plus accrued and unpaid interest, if any, to, but not including, the repurchase date. The obligations under the Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by the Company and all of CareTrust’s existing and future subsidiaries (other than the Issuers) that guarantee obligations under the Amended Credit Facility (as defined below); provided, however, that such guarantees are subject to automatic release under certain customary circumstances. The indenture governing the Notes contains customary covenants such as limiting the ability of the Company and its restricted subsidiaries to: incur or guarantee additional indebtedness; incur or guarantee secured indebtedness; pay dividends or distributions on, or redeem or repurchase, capital stock; make certain investments or other restricted payments; sell assets; enter into transactions with affiliates; merge or consolidate or sell all or substantially all of their assets; and create restrictions on the ability of the Issuers and their restricted subsidiaries to pay dividends or other amounts to the Issuers. The indenture governing the Notes also requires the Company and its restricted subsidiaries to maintain a specified ratio of unencumbered assets to unsecured indebtedness. These covenants are subject to a number of important and significant limitations, qualifications and exceptions. The indenture governing the Notes also contains customary events of default. As of March 31, 2022, the Company was in compliance with all applicable financial covenants under the indenture governing the Notes. Unsecured Revolving Credit Facility and Term Loan On February 8, 2019, the Operating Partnership, as the borrower, the Company, as guarantor, CareTrust GP, LLC, and certain of the Operating Partnership’s wholly owned subsidiaries entered into an amended and restated credit and guaranty agreement with KeyBank National Association, as administrative agent, an issuing bank and swingline lender, and the lenders party thereto (the “Amended Credit Agreement”). The Amended Credit Agreement, which amended and restated the Company’s prior credit agreement, provides for: (i) an unsecured revolving credit facility (the “Revolving Facility”) with revolving commitments in an aggregate principal amount of $600.0 million, including a letter of credit subfacility for 10% of the then available revolving commitments and a swingline loan subfacility for 10% of the then available revolving commitments and (ii) an unsecured term loan credit facility (the “Term Loan” and, together with the Revolving Facility, the “Amended Credit Facility”) in an aggregate principal amount of $200.0 million. Borrowing availability under the Revolving Facility is subject to no default or event of default under the Amended Credit Agreement having occurred at the time of borrowing. Future borrowings under the Amended Credit Facility will be used for working capital purposes, for capital expenditures, to fund acquisitions and for general corporate purposes. The interest rates applicable to loans under the Revolving Facility are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.10% to 0.55% per annum or LIBOR plus a margin ranging from 1.10% to 1.55% per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt). The interest rates applicable to loans under the Term Loan are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.50% to 1.20% per annum or LIBOR plus a margin ranging from 1.50% to 2.20% per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt). In addition, the Operating Partnership will pay a facility fee on the revolving commitments under the Revolving Facility ranging from 0.15% to 0.35% per annum, based on the debt to asset value ratio of the Company and its consolidated subsidiaries (unless the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt and the Operating Partnership elects to decrease the applicable margin as described above, in which case the Operating Partnership will pay a facility fee on the revolving commitments ranging from 0.125% to 0.30% per annum based on the credit ratings of the Company’s senior long-term unsecured debt). As of March 31, 2022, the Operating Partnership had $200.0 million of borrowings outstanding under the Term Loan and $105.0 million outstanding under the Revolving Facility. The Revolving Facility has a maturity date of February 8, 2023, and includes, at the sole discretion of the Operating Partnership, two, six-month extension options. The Term Loan has a maturity date of February 8, 2026. The Amended Credit Facility is guaranteed, jointly and severally, by the Company and its wholly owned subsidiaries that are party to the Amended Credit Agreement (other than the Operating Partnership). The Amended Credit Agreement contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, amend organizational documents and pay certain dividends and other restricted payments. The Amended Credit Agreement requires the Company to comply with financial maintenance covenants to be tested quarterly, consisting of a maximum debt to asset value ratio, a minimum fixed charge coverage ratio, a minimum tangible net worth, a maximum cash distributions to operating income ratio, a maximum secured debt to asset value ratio, a maximum secured recourse debt to asset value ratio, a maximum unsecured debt to unencumbered properties asset value ratio, a minimum unsecured interest coverage ratio and a minimum rent coverage ratio. The Amended Credit Agreement also contains certain customary events of default, including the failure to make timely payments under the Amended Credit Facility or other material indebtedness, the failure to satisfy certain covenants (including the financial maintenance covenants), the occurrence of change of control and specified events of bankruptcy and insolvency. As of March 31, 2022, the Company was in compliance with all applicable financial covenants under the Amended Credit Agreement.
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Equity |
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | EQUITY Common Stock At-The-Market Offering—On March 10, 2020, the Company entered into a new equity distribution agreement to issue and sell, from time to time, up to $500.0 million in aggregate offering price of its common stock through an “at-the-market” equity offering program (the “ATM Program”). There was no ATM Program activity for the three months ended March 31, 2022. The following table summarizes the ATM Program activity for the three months ended March 31, 2021 (in thousands, except per share amounts).
(1) Total gross proceeds is before $0.2 million of commissions paid to the sales agents during the three months ended March 31, 2021 under the ATM Program. As of March 31, 2022, the Company had $476.5 million available for future issuances under the ATM Program. Share Repurchase Program—On March 20, 2020, the Company’s Board of Directors authorized a share repurchase program for up to $150.0 million of outstanding shares of the Company’s common stock (the “Repurchase Program”). Repurchases under the Repurchase Program, which expires on March 31, 2023, may be made through open market purchases, privately negotiated transactions, structured or derivative transactions, including accelerated share repurchase transactions, or other methods of acquiring shares, in each case subject to market conditions and at such times as shall be permitted by applicable securities laws and determined by management. Repurchases under the Repurchase Program may also be made pursuant to a plan adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended. The Company expects to finance any share repurchases under the Repurchase Program using available cash and may also use short-term borrowings under the Revolving Facility. Through March 31, 2022, the Company has not repurchased any shares of common stock under the Repurchase Program. As of March 31, 2022, $150.0 million remained available under the Repurchase Program. The Repurchase Program may be modified, discontinued or suspended at any time. Dividends on Common Stock—The following table summarizes the cash dividends per share of common stock declared by the Company’s Board of Directors for the first quarter of 2022 (dollars in thousands, except per share amounts):
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Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | STOCK-BASED COMPENSATION All stock-based awards are subject to the terms of the CareTrust REIT, Inc. and CTR Partnership, L.P. Incentive Award Plan (the “Plan”). The Plan provides for the granting of stock-based compensation, including stock options, restricted stock, performance awards, restricted stock units, relative total stockholder return based stock awards (“TSR Awards”) and other incentive awards to officers, employees and directors in connection with their employment with or services provided to the Company. Under the Plan, 5,000,000 shares have been authorized for awards. Under the Plan, restricted stock awards (“RSAs”) granted in fiscal 2022 vest in equal annual installments beginning on the first anniversary of the grant date over a year period. The following table summarizes the RSAs and performance award activity for the three months ended March 31, 2022:
As of March 31, 2022, the weighted-average remaining vesting period of such awards was 1.6 years. The following table summarizes the stock-based compensation expense recognized (dollars in thousands): As of March 31, 2022, there was $10.0 million of unamortized stock-based compensation expense related to the unvested RSAs, performance stock awards and TSR Awards.
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(Loss) Earnings Per Common Share |
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(Loss) Earnings Per Common Share | EARNINGS PER COMMON SHARE The following table presents the calculation of basic and diluted (loss) earnings per common share (“EPS”) for the Company’s common stock for the three months ended March 31, 2022 and 2021, and reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS (amounts in thousands, except per share amounts):
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Commitments and Contingencies |
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Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES The Company and its subsidiaries are and may become from time to time a party to various claims and lawsuits arising in the ordinary course of business, which are not individually or in the aggregate anticipated to have a material adverse effect on the Company’s results of operations, financial condition or cash flows. Claims and lawsuits may include matters involving general or professional liability asserted against the Company’s tenants, which are the responsibility of the Company’s tenants and for which the Company is entitled to be indemnified by its tenants under the insurance and indemnification provisions in the applicable leases. Capital expenditures for each property leased under the Company’s triple-net leases are generally the responsibility of the tenant, except that, for the facilities leased to subsidiaries of Ensign and Pennant, the tenant will have an option to require the Company to finance certain capital expenditures up to an aggregate of 20% of the Company’s initial investment in such property, subject to a corresponding rent increase at the time of funding. For the Company’s other triple-net master leases, the tenants also have the option to request capital expenditure funding that would generally be subject to a corresponding rent increase at the time of funding, which are subject to tenant compliance with the conditions to the Company’s approval and funding of their requests. As of March 31, 2022, the Company had committed to fund expansions, construction and capital improvements at certain triple-net leased facilities totaling $5.5 million, of which $4.4 million is subject to rent increase at the time of funding.
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Concentration of Risk |
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Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration of Risk | CONCENTRATION OF RISK Concentrations of credit risk arise when one or more tenants, operators, or obligors related to the Company’s investments are engaged in similar business activities or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. Major operator concentration - The Company has operators from which it derived 10% or more of its rental revenue for the three months ended March 31, 2022 and 2021. The following table sets forth information regarding the Company’s major operators as of March 31, 2022 and 2021:
(1) The Company’s rental income, exclusive of operating expense reimbursements. (2) Ensign is subject to the registration and reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Ensign’s financial statements, as filed with the SEC, can be found at http://www.sec.gov. The Company has not verified this information through an independent investigation or otherwise. Major geographic concentration – The following table provides information regarding the Company’s concentrations with respect to certain states, from which the Company derived 10% or more of its rental revenue for the three months ended March 31, 2022:
(1) The Company’s rental income, exclusive of operating expense reimbursements.
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Summary of Significant Accounting Policies (Policies) |
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Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation—The accompanying condensed consolidated financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the disclosures required by GAAP for a complete set of annual audited financial statements. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. In the opinion of management, all adjustments which are of a normal and recurring nature and considered necessary for a fair presentation of the results of the interim periods presented have been included. The results of operations for the interim periods are not necessarily indicative of results for the full year. All intercompany transactions and account balances within the Company have been eliminated. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements—In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), that provides optional relief to applying reference rate reform to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”). For U.S. Dollar LIBOR, the overnight, one-month, three-month, six-month and one-year LIBOR rates will be discontinued in June 2023, while other U.S. Dollar LIBOR rates were discontinued at the end of 2021. The amendments in this update are effective immediately and may be applied through December 31, 2022. Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. |
Fair Value Measurements | The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. GAAP guidance defines three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and, depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. The Company does not expect that changes in classifications between levels will be frequent.
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Real Estate Investments, Net (Tables) |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Investment in Owned Properties | The following table summarizes the Company’s real estate properties held for investment at March 31, 2022 and December 31, 2021 (dollars in thousands):
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Schedule of Total Future Contractual Minimum Rental Income | As of March 31, 2022, the Company’s total future contractual minimum rental income for all of its tenants, excluding operating expense reimbursements, was (dollars in thousands):
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Schedule Of Tenant Purchase Options | Certain of the Company’s operators hold purchase options allowing them to acquire properties they currently lease from the Company. A summary of these purchase options is presented below (dollars in thousands):
(1) Option type includes: A - Fixed base price plus a specified share on any appreciation. B - Fixed base price. C - Fixed capitalization rate on lease revenue. (2) Based on annualized cash revenue for contracts in place as of March 31, 2022. (3) Option window is open for six months. (4) Option window is open until the expiration of the lease term. (5) Purchase option reflects two option types.
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Schedule of Rental Income | The following table summarizes components of the Company’s rental income (dollars in thousands):
(1) Includes initial cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. (2) During the three months ended March 31, 2022, and in accordance with Accounting Standards Codification 842, the Company evaluated the collectibility of lease payments through maturity and determined that it was not probable that the Company would collect substantially all of the contractual obligations from four existing and former operators. As such, the Company reversed $0.7 million of operating expense reimbursements, $0.2 million of contractual rent and $0.1 million of straight-line rent during the three months ended March 31, 2022. If lease payments are subsequently deemed probable of collection, the Company will increase rental income for such recoveries. (3) During the three months ended March 31, 2021, in connection with the agreement to terminate its lease agreements with Metron Integrated Health Systems (“Metron”) and to sell the facilities to a third party, the Company received approximately $0.1 million in lease termination revenue from Metron affiliates.
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Schedule of Real Estate Acquisitions | The following table summarizes the Company’s acquisitions for the three months ended March 31, 2022 (dollars in thousands):
(1) Purchase price includes capitalized acquisition costs. (2) The number of beds/units includes operating beds at the acquisition date.
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Other Real Estate Investments, Net (Tables) |
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Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans Receivable and Other Investments | As of March 31, 2022 and December 31, 2021, the Company’s loans receivable and other investments consisted of the following (dollars in thousands):
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Schedule of Interest and Other Income | The following table summarizes the interest and other income recognized from the Company’s loans receivable and other investments during the quarter ended March 31, 2022 and 2021 (dollars in thousands):
|
Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Items Measured at Fair Value on a Recurring Basis | The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021, aggregated by the level in the fair value hierarchy within which those instruments fall (dollars in thousands):
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Summary of Face Value, Carrying Amount and Fair Value of Financial Instruments | A summary of the face value, carrying amount and fair value of the Notes (as defined in Note 7, Debt, below) as of March 31, 2022 and December 31, 2021 using Level 2 inputs is as follows (dollars in thousands):
|
Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt Instruments | The following table summarizes the balance of the Company’s indebtedness as of March 31, 2022 and December 31, 2021 (dollars in thousands):
|
Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the At-The-Market Offering Program | The following table summarizes the ATM Program activity for the three months ended March 31, 2021 (in thousands, except per share amounts).
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Schedule of Dividends on Common Stock | The following table summarizes the cash dividends per share of common stock declared by the Company’s Board of Directors for the first quarter of 2022 (dollars in thousands, except per share amounts):
|
Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restricted Stock Award and Performance Award Activity | The following table summarizes the RSAs and performance award activity for the three months ended March 31, 2022:
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Schedule of Stock-Based Compensation Expense | The following table summarizes the stock-based compensation expense recognized (dollars in thousands):
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(Loss) Earnings Per Common Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Weighted-Average Common Shares Outstanding Used in Calculation of Basic EPS to Diluted EPS | The following table presents the calculation of basic and diluted (loss) earnings per common share (“EPS”) for the Company’s common stock for the three months ended March 31, 2022 and 2021, and reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS (amounts in thousands, except per share amounts):
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Concentration of Risk (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of Concentration of Risk | Major operator concentration - The Company has operators from which it derived 10% or more of its rental revenue for the three months ended March 31, 2022 and 2021. The following table sets forth information regarding the Company’s major operators as of March 31, 2022 and 2021:
(1) The Company’s rental income, exclusive of operating expense reimbursements. (2) Ensign is subject to the registration and reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Ensign’s financial statements, as filed with the SEC, can be found at http://www.sec.gov. The Company has not verified this information through an independent investigation or otherwise. Major geographic concentration – The following table provides information regarding the Company’s concentrations with respect to certain states, from which the Company derived 10% or more of its rental revenue for the three months ended March 31, 2022:
(1) The Company’s rental income, exclusive of operating expense reimbursements.
|
Organization (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022
USD ($)
state
facility
bed
|
Dec. 31, 2021
USD ($)
|
|
Real Estate Properties [Line Items] | ||
Number of states with properties | state | 29 | |
Other real estate investments | $ | $ 15,155 | $ 15,155 |
Skilled nursing, multi-service campuses, assisted living and independent living facilities | ||
Real Estate Properties [Line Items] | ||
Number of facilities | facility | 228 | |
Number of operational beds and units in facilities | bed | 23,834 |
Real Estate Investments, Net - Real Estate Properties Held for Investment (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Real Estate [Abstract] | ||
Land | $ 236,986 | $ 251,787 |
Buildings and improvements | 1,431,631 | 1,622,019 |
Integral equipment, furniture and fixtures | 95,997 | 104,722 |
Identified intangible assets | 2,658 | 1,257 |
Real estate investments | 1,767,272 | 1,979,785 |
Accumulated depreciation and amortization | (364,383) | (389,814) |
Real estate investments, net | $ 1,402,889 | $ 1,589,971 |
Real Estate Investments, Net - Future Contractual Minimum Rental Income (Details) $ in Thousands |
Mar. 31, 2022
USD ($)
|
---|---|
Future Contractual Minimum Rental Income | |
2022 (nine months) | $ 146,848 |
2023 | 195,547 |
2024 | 194,202 |
2025 | 194,173 |
2026 | 194,278 |
2027 | 191,589 |
Thereafter | 998,873 |
Total | $ 2,115,510 |
Real Estate Investments, Net - Rental Income (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Rental Income | ||
Contractual rent due | $ 46,978 | $ 45,171 |
Straight-line rent | 6 | 12 |
Adjustments for collectibility | (977) | 0 |
Lease termination revenue | 0 | 63 |
Total | 46,007 | 45,246 |
Operating expense reimbursements | ||
Rental Income | ||
Adjustments for collectibility | (700) | |
Contractual rent | ||
Rental Income | ||
Adjustments for collectibility | (200) | |
Straight-line rent | ||
Rental Income | ||
Adjustments for collectibility | $ (100) | |
Metron | ||
Rental Income | ||
Lease termination revenue | $ 100 |
Real Estate Investments, Net - Recent Real Estate Acquisitions (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 01, 2022
facility
|
Mar. 31, 2022
USD ($)
unit
property
|
|
Business Acquisition [Line Items] | ||
Purchase Price | $ 21,921 | |
Initial Annual Cash Rent | $ 2,050 | |
Number of Properties | property | 2 | |
Number of Beds/Units | unit | 265 | |
Skilled nursing | ||
Business Acquisition [Line Items] | ||
Purchase Price | $ 8,918 | |
Initial Annual Cash Rent | $ 815 | |
Number of Properties | property | 1 | |
Number of Beds/Units | unit | 135 | |
Multi-service campuses | ||
Business Acquisition [Line Items] | ||
Purchase Price | $ 13,003 | |
Initial Annual Cash Rent | $ 1,235 | |
Number of Properties | 1 | 1 |
Number of Beds/Units | unit | 130 |
Other Real Estate Investments, Net - Loans Receivable and Other Investments (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Real Estate Properties [Line Items] | ||
Principal Amount | $ 15,922 | |
Expected credit loss | (4,594) | $ 0 |
Loan receivable | 16,084 | 18,316 |
Mezzanine loan receivable | ||
Real Estate Properties [Line Items] | ||
Principal Amount | 15,000 | |
Book value | $ 15,155 | 15,155 |
Weighted Average Contractual Interest Rate | 12.00% | |
Other loans receivable | ||
Real Estate Properties [Line Items] | ||
Principal Amount | $ 5,516 | |
Book value | $ 5,523 | $ 3,161 |
Weighted Average Contractual Interest Rate | 8.00% |
Other Real Estate Investments, Net - Interest and Other Income (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Real Estate Properties [Line Items] | ||
Interest and other income | $ 469 | $ 505 |
Mezzanine loan receivable | ||
Real Estate Properties [Line Items] | ||
Interest and other income | 450 | 450 |
Other | ||
Real Estate Properties [Line Items] | ||
Interest and other income | $ 19 | $ 55 |
Other Real Estate Investments, Net - Narrative (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022
USD ($)
loan
|
Dec. 31, 2021
USD ($)
|
|
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Expected credit loss | $ 4,594 | $ 0 |
Other loans receivable | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Expected credit loss recognized | $ 4,600 | |
Number of loans receivable with provision | loan | 2 | |
Unfunded loan commitment | $ 400 | |
Loan loss recovery | $ 800 |
Fair Value Measurements - Items Measured at Fair Value on Recurring Basis (Details) - Recurring - Mezzanine loan receivable - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Assets: | ||
Mezzanine loan receivable | $ 15,155 | $ 15,155 |
Level 1 | ||
Assets: | ||
Mezzanine loan receivable | 0 | 0 |
Level 2 | ||
Assets: | ||
Mezzanine loan receivable | 0 | 0 |
Level 3 | ||
Assets: | ||
Mezzanine loan receivable | $ 15,155 | $ 15,155 |
Fair Value Measurements - Narrative (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Greater than 90 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Mortgage loan receivable | $ 0 | $ 0 |
Fair Value Measurements - Face Value, Carrying Amount and Fair Value of Financial Instruments (Details) - Notes payable - Senior unsecured notes payable - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
Jun. 17, 2021 |
---|---|---|---|
Financial liabilities: | |||
Senior unsecured notes payable - face value | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 |
Carrying Amount | Level 2 | |||
Financial liabilities: | |||
Senior unsecured notes payable | 394,484,000 | 394,262,000 | |
Fair Value | Level 2 | |||
Financial liabilities: | |||
Senior unsecured notes payable | $ 377,000,000 | $ 410,500,000 |
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Principal Amount | $ 705,000 | $ 680,000 |
Deferred Loan Fees | (6,327) | (6,602) |
Carrying Value | 698,673 | 673,398 |
Notes payable | Senior unsecured notes payable | ||
Debt Instrument [Line Items] | ||
Principal Amount | 400,000 | 400,000 |
Deferred Loan Fees | (5,516) | (5,738) |
Carrying Value | 394,484 | 394,262 |
Term loan | Senior unsecured term loan | ||
Debt Instrument [Line Items] | ||
Principal Amount | 200,000 | 200,000 |
Deferred Loan Fees | (811) | (864) |
Carrying Value | 199,189 | 199,136 |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Principal Amount | 105,000 | 80,000 |
Deferred Loan Fees | 0 | 0 |
Carrying Value | $ 105,000 | $ 80,000 |
Debt - Senior Unsecured Notes Payable Narrative (Details) - Notes payable - 3.875% Senior Notes due 2028 - USD ($) |
Jun. 17, 2021 |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 |
Interest rate (percent) | 3.875% | ||
Gross proceeds from issuance | $ 400,000,000 | ||
Net proceeds from issuance | $ 393,800,000 | ||
Redemption price, percentage upon change of control (percent) | 101.00% | ||
Period prior to March 30 2028 | |||
Debt Instrument [Line Items] | |||
Redemption price of notes (percent) | 100.00% | ||
Period after March 30 2028 | |||
Debt Instrument [Line Items] | |||
Redemption price of notes (percent) | 100.00% | ||
Period prior to June 30 2024 | |||
Debt Instrument [Line Items] | |||
Redemption price of notes (percent) | 103.875% | ||
Percentage of principal amount (percent) | 40.00% |
Equity - Narrative (Details) - USD ($) |
3 Months Ended | 24 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Mar. 31, 2022 |
Mar. 20, 2020 |
Mar. 10, 2020 |
|
Class of Stock [Line Items] | |||||
Share repurchase program authorization | $ 150,000,000 | ||||
Shares repurchased (in shares) | 0 | ||||
Remaining available authorization | $ 150,000,000 | $ 150,000,000 | |||
ATM Program | |||||
Class of Stock [Line Items] | |||||
Issuance of common stock, net, (in shares) | 0 | 702,000 | |||
Remaining offering amount available | $ 476,500,000 | $ 476,500,000 | |||
ATM Program | Maximum | |||||
Class of Stock [Line Items] | |||||
Authorized aggregate offering price of common stock | $ 500,000,000 |
Equity - At-The-Market Offering (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Class of Stock [Line Items] | ||
Gross proceeds | $ 0 | $ 16,191 |
ATM Program | ||
Class of Stock [Line Items] | ||
Number of shares | 0 | 702,000 |
Average sales price per share (usd per share) | $ 23.62 | |
Gross proceeds | $ 16,579 | |
Commissions paid on stock issuance | $ 200 |
Equity - Dividends on Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Dividends on common stock | ||
Dividends declared per share | $ 0.275 | $ 0.265 |
Dividends payment date | Apr. 15, 2022 | |
Dividends payable as of record date | $ 26,691 | |
Dividends record date | Mar. 31, 2022 |
Stock-Based Compensation - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized for awards | shares | 5,000,000 |
Unamortized stock-based compensation expense | $ | $ 10.0 |
RSAs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period (in years) | 3 years |
RSAs and PSAs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average remaining vesting period (in years) | 1 year 7 months 6 days |
Stock-Based Compensation - Restricted Stock and Performance Awards Activity (Details) - RSAs and PSAs |
3 Months Ended |
---|---|
Mar. 31, 2022
$ / shares
shares
| |
Shares | |
Unvested, beginning balance (shares) | shares | 891,333 |
Granted (shares) | shares | 9,684 |
Vested (shares) | shares | (329,080) |
Forfeited (shares) | shares | (1,900) |
Unvested, ending balance (shares) | shares | 570,037 |
Weighted Average Share Price | |
Unvested, beginning balance (usd per share) | $ / shares | $ 20.91 |
Granted (usd per share) | $ / shares | 17.56 |
Vested (usd per share) | $ / shares | 20.10 |
Forfeited (usd per share) | $ / shares | 21.50 |
Unvested, ending balance (usd per share) | $ / shares | $ 21.32 |
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Share-based Payment Arrangement [Abstract] | ||
Stock-based compensation expense | $ 1,521 | $ 1,585 |
(Loss) Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Numerator: | ||
Net income (loss) | $ (43,264) | $ 20,486 |
Less: Net income allocated to participating securities | (117) | (119) |
Numerator for basic earnings available to common stockholders | (43,381) | 20,367 |
Numerator for basic and diluted earnings available to common stockholders | $ (43,381) | $ 20,367 |
Denominator: | ||
Weighted-average basic common shares outstanding (in shares) | 96,410 | 95,378 |
Diluted market condition stock awards (in shares) | 0 | 7 |
Weighted-average diluted common shares outstanding (in shares) | 96,410 | 95,385 |
(Loss) earnings per common share, basic (in dollars per share) | $ (0.45) | $ 0.21 |
(Loss) earnings per common share, diluted (in dollars per share) | $ (0.45) | $ 0.21 |
Antidilutive unvested RSAs, performance awards and TSR Awards excluded from the computation | 534 | 446 |
Commitments and Contingencies (Details) $ in Millions |
Mar. 31, 2022
USD ($)
|
---|---|
Ensign and Pennant | |
Other Commitments [Line Items] | |
Aggregate required financing of capital expenditures as percentage of initial investment in property (percent) | 20.00% |
Certain capital improvements at triple-net leased facilities | |
Other Commitments [Line Items] | |
Funding commitment | $ 5.5 |
Portion of funding commitment subject to rent increase at time of funding | $ 4.4 |
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