IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE, NET AND ASSET SALES

6 Months Ended

Jun. 30, 2023

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 SALESDuring the three and six months ended June 30, 2023, the Company recognized an impairment charge on 12 and 15 facilities of $21.4 million and $23.3 million, respectively, which is reported in impairment of real estate investments in the condensed consolidated statements of operations. As of June 30, 2023, there were 15 facilities classified as held for sale, all of which have been marked down to fair value and considered Level 3 measurements within the fair value hierarchy. During the three and six months ended June 30, 2022, the Company recognized an impairment charge on one and 21 facilities of $1.7 million and $61.4 million, respectively.

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) binding agreements for sales and non-binding offers to purchase from unrelated third-parties. 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 $18,000 to $35,000, with a weighted average price per unit of $21,000.

Asset Sales and Held for Sale Reclassifications

The following table summarizes the Company’s dispositions for the three and six months ended June 30, 2023 and 2022 (dollars in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Number of facilities	3		—		4		1
Net sales proceeds(1)	$	13,234	$	—	$	16,464	$	959
Net carrying value	11,206		—		14,506		773
Net gain on sale	$	2,028	$	—	$	1,958	$	186

(1) Net sales proceeds includes $2 million of seller financing in connection with the sale of one ALF in June 2023. The $2.0 million mortgage loan is included in other real estate related investments on the Company’s condensed consolidated balance sheets.

The following table summarizes the Company’s assets held for sale activity for the periods presented (dollars in thousands):

	Net Carrying Value		Number of Facilities
December 31, 2022	$	12,291	5
Additions to assets held for sale	47,047		14
Assets sold	(14,506)		(4)
Impairment of real estate held for sale	(23,278)		—
June 30, 2023	$	21,554	15