SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2024

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

The 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.

Recent Acquisitions and Investment

On April 1, 2024, the Company contributed $28.0 million to a JV that purchased two multi-service campuses located in California for $28.8 million. In exchange, the Company holds 100% of the preferred equity interests in the JV and 50% of the common equity interest in the JV. The JV partner contributed the remaining $0.8 million of the total investment in exchange for 50% of the common equity interest in the JV. In connection with the acquisition of the facilities, the Company entered into a new master lease with affiliates of Bayshire, LLC (“Bayshire”). The new lease has an initial term of approximately 15 years, with two five-year renewal options. Initial annual cash rent under the lease is approximately $2.7 million, increasing to approximately $2.9 million in the second year and $3.1 million in the third year, with 2% fixed annual escalators thereafter. The master lease provides for deferred rent in the first year of approximately $0.8 million.

On April 1, 2024, the Company acquired one multi-service campus located in California for approximately $32.3 million, which includes estimated capitalized acquisition costs. In connection with the acquisition of the facility, the Company amended an existing master lease with affiliates of Bayshire. The Bayshire lease, as amended, has a remaining initial term of approximately 10 years, with two five-year renewal options. Annual cash rent under the amended lease increased by approximately $2.6 million, increasing to approximately $3.0 million in the second year with CPI-based annual escalators thereafter.

On May 1, 2024, the Company extended a $26.7 million mortgage loan to a skilled nursing real estate owner. The mortgage loan is secured by two SNFs and bears interest at a rate of 9.1%, payable monthly. The mortgage loan is set to mature on May 1, 2031 and includes a one year extension option. The mortgage loan may (subject to certain limited exceptions) not be prepaid prior to July 31, 2029. The mortgage loan includes a purchase option with an exercise window that opens during the initial 90-day period of each of the 4th, 5th and 6th loan years, with the purchase option price for the facilities being calculated by dividing the amount of the then annual base rent by an agreed upon lease yield.