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Other Real Estate Investments, Net
 6 Months Ended
Jun. 30, 2022
Investments, All Other Investments [Abstract]  
Other Real Estate Investments, Net OTHER REAL ESTATE INVESTMENTS AND OTHER LOANS RECEIVABLE
As of June 30, 2022 and December 31, 2021, the Company’s other real estate investments consisted of the following (dollars in thousands):
As of June 30, 2022
InvestmentFacility Count and Type
Principal Balance as of June 30, 2022
Book Value as of June 30, 2022
Book Value as of December 31, 2021
Weighted Average Contractual Interest RateMaturity Date
Senior secured loan receivable
18 SNF/Campus
$75,000 $75,018 $— 8.5 %6/30/2027
Mezzanine loan receivable
9 SNF
15,000 15,150 15,155 12.0 %11/30/2025
Mezzanine loan receivable
18 SNF/Campus
25,000 25,000 — 11.0 %6/30/2032
$115,000 $115,168 $15,155 
The following table summarizes the Company’s other real estate investments activity for the six months ended June 30, 2022 and 2021 (dollars in thousands):
Six Months Ended June 30,
2022
2021
Origination of other real estate investments$100,000 $— 
Accrued interest, net13 150 
Net increase in other real estate investments$100,013 $150 
In June 2022, the Company extended a $75.0 million term loan to a skilled nursing real estate owner as part of a larger, multi-tranche, senior secured term loan facility. The senior secured term loan was structured with an “A” tranche, a “B” tranche, and a “C” tranche (with the “C” tranche being the most subordinate). The Company’s $75.0 million term loan constituted the entirety of the “C” tranche with its payments subordinated accordingly. The senior secured term loan facility is secured by an 18-facility skilled nursing portfolio in the Mid-Atlantic region, to be operated by a large, regional skilled nursing operator. In connection with the senior secured term loan facility and the borrower’s acquisition of the skilled nursing portfolio, the Company also extended to the borrower group a $25.0 million mezzanine loan. The “C” tranche of the senior secured term loan bears interest at 8.5%, less a servicing fee equal to the positive difference, if any, between the lesser of the contractual interest payment and actual payment of interest made by the borrower and a hypothetical interest payment at a rate of 8.25%, resulting in an effective interest rate of 8.375%. The “C” tranche term loan is set to mature on June 30, 2027 and may (subject to certain restrictions) be prepaid in whole or in part before the maturity date for an exit fee ranging from 1% to 3% of the loan plus unpaid interest payments through the end of the month of prepayment; provided, however, that no exit fee is payable in connection with portions of the loan being refinanced pursuant to a loan (or loans) provided by or insured by the United States Department of Housing and Urban Development, Federal Housing Administration, or a similar governmental authority. The mezzanine loan bears interest at 11% and is secured by a pledge of membership interests in an up-tier affiliate of the borrower group. The mezzanine loan is set to mature on June 30, 2032, and may (subject to certain restrictions) be prepaid in whole or in part before the maturity date, commencing on June 30, 2029, for an exit fee ranging from 1% to 3% of the loan plus unpaid interest payments through the date of prepayment. The “C” tranche term loan and mezzanine loan both require monthly interest payments. The Company elected the fair value option for both the “C” tranche term loan and the mezzanine loan. The fair value option is elected on an instrument by instrument basis and must be applied to an entire instrument and is irrevocable once elected. The Company’s primary purpose in electing the fair value option for these instruments was to align with management’s view of the underlying economics of the loans and the manner in which they are managed.
See Note 12, Subsequent Events for information regarding a $22.3 million “B” tranche term loan extended by the Company to a borrower in August 2022.
As of June 30, 2022 and December 31, 2021, the Company’s other loans receivable, included in prepaid expenses and other assets, net on the Company’s condensed consolidated balance sheets, consisted of the following (dollars in thousands):
As of June 30, 2022
Investment
Principal Balance as of June 30, 2022
Book Value as of June 30, 2022
Book Value as of December 31, 2021
Weighted Average Contractual Interest RateMaturity Date
Other loans receivable$5,377 $5,383 $3,161 8.0 %9/1/2023 - 12/31/2023
Expected credit loss(4,594)(4,594)— 
Total$783 $789 $3,161 
The following table summarizes the Company’s other loans receivable activity for the six months ended June 30, 2022 and 2021 (dollars in thousands):
Six Months Ended June 30,
2022
2021
Origination of loans receivable$2,500 $700 
Principal payments(276)(113)
Accrued interest(2)5 
Expected credit loss(5,344)— 
Loan loss recovery750 — 
Net change in other loans receivable$(2,372)$592 
Expected credit losses and recoveries are recorded in provision for loan losses, net in the condensed consolidated statements of operations. During the six months ended June 30, 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 three and six months ended June 30, 2022 and 2021 (dollars in thousands):
For the Three Months Ended June 30,
For the Six Months Ended June 30,
Investment2022202120222021
Senior secured loan receivable$17 $— $17 $— 
Mezzanine loans receivable713 455 1,163 905 
Other17 59 36 114 
Total$747 $514 $1,216 $1,019