VARIABLE INTEREST ENTITIES

9 Months Ended

Sep. 30, 2023

Noncontrolling Interests—The Company has entered into ventures with unrelated third parties to own real estate and has concluded that such ventures are VIEs. As the Company exercises power over and receives economic benefits from the VIEs, the Company is considered the primary beneficiary and consolidates the VIEs. The Company presents the portion of any equity that the Company does not own in entities that the Company controls (and thus consolidates) as noncontrolling interests and classifies those interests as a component of consolidated equity, separate from stockholders' equity, on the Company’s consolidated balance sheets. For consolidated joint ventures, the Company allocates net income or loss utilizing the hypothetical liquidation at book value method, in which the Company allocates income or loss based on the change in each unitholders’ claim on the net assets of the joint venture partners at period end after adjusting for any distributions or contributions made during such period. The Company includes net income (loss) attributable to the noncontrolling interests in net income (loss) in the consolidated statements of operations.

During the three months ended September 30, 2023, the Company entered into a joint venture (“JV”), whereunder the Company contributed $25.5 million into the JV that purchased one SNF located in California for $26.1 million. The JV partner contributed the remaining $0.6 million of equity. The Company contributed to the JV an amount equal to 95% of the JV’s total investment amount in the one newly-acquired SNF and holds 100% of the preferred equity ownership interests in the JV. In addition, the Company contributed an amount equal to 2.5% of the JV’s total investment amount in the one SNF for a 50% common ownership interest in the JV.

During the three months ended September 30, 2023, the Company entered into a JV, whereunder the Company contributed $2.4 million into the JV, which made a deposit on a potential real estate acquisition. Upon the closing date of the real estate acquisition, the Company will hold an amount equal to 95% of the JV’s total investment amount and will hold 100% of the preferred equity ownership interest and an amount equal to 2.5% of the JV’s total investment amount for a 50% common ownership interest in the JV.

Total assets and total liabilities include VIE assets and liabilities as follows (in thousands):


	September 30, 2023		December 31, 2022
Assets:






Real estate investments, net	$	26,058	$	—
Prepaid and other assets	2,800		—
Total assets	28,858		—
Liabilities:
Accounts payable, accrued liabilities and deferred rent liabilities	701		—
Total liabilities	$	701	$	—