SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTSThe Company evaluates subsequent events in accordance with ASC 855, Subsequent Events. The Company evaluates subsequent events up until the date the condensed consolidated financial statements are issued.

Unsecured Revolving Credit Facility Amendment

On October 10, 2023, the Company amended the Second Amended Credit Agreement to restate the definition of Consolidated Total Asset Value. See Note 7, Debt, for additional information.

Asset Sales

On October 20, 2023, the Company closed on the sale of one ALF consisting of 135 beds located in Florida with a carrying value of $1.6 million, which approximated the net sales proceeds received. The facility was classified as held for sale as of September 30, 2023.

New Lease Agreement

On October 24, 2023, the Company entered into a new master lease (the “New Ridgeline Lease”) with affiliates of Ridgeline to lease two ALFs in New Jersey which were non-operational and under a short-term lease. The New Ridgeline Lease has an initial term at the date of the lease of approximately 10 years from the facility opening date, which is expected to occur in the second quarter of 2024 upon final regulatory approval and final licensing of both facilities, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the new lease is approximately $1.0 million beginning on the first day of the second lease year.

Recent Acquisitions

On October 25, 2023, the Company entered and contributed $34.2 million into a JV that purchased two SNFs located in California for $35.1 million. The JV partner contributed the remaining $0.9 million of equity. Each SNF was acquired subject to a triple-net lease with affiliates of Covenant Care, LLC (“Covenant Care”) as the tenant and licensed operator. The Company contributed to the JV an amount equal to 95% of the JV’s total investment amount in the two newly-acquired SNFs 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 two SNFs for a 50% common ownership interest in the JV. Both leases assumed as part of the transaction have a remaining initial term of approximately 6 years, with two five-year renewal options and 2% fixed annual rent increases. Annual cash rent under the leases is approximately $2.0 million. In 2027, the leases provide for a rent reset in which the JV may propose rent, capped at 10% of gross revenues, effective January 1, 2027. If the proposed rent reset is not accepted, the JV has the option to replace the current tenant. The Company’s contribution was funded using proceeds from the ATM Program.