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OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS
 3 Months Ended
Mar. 31, 2025
Investments, All Other Investments [Abstract]  
OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS OTHER REAL ESTATE RELATED AND OTHER INVESTMENTS
As of March 31, 2025 and December 31, 2024, the Company’s other real estate related investments, inclusive of accrued interest, consisted of the following (dollars in thousands):
Facility Count and Type
As of March 31, 2025
Loans Receivable, at Fair Value:SNFCampusALFILF
Principal Balance as of March 31, 2025
Fair Value as of March 31, 2025(1)
Fair Value as of December 31, 2024(1)
Weighted Average Contractual Interest Rate(2), (3)
Maturity Date
Mortgage secured loans receivable(4)
614192$654,040 $658,427 $660,392 8.8 %5/31/2025 - 9/30/2039
Mezzanine loans receivable(4)
4142— 88,676 87,173 80,612 12.8 %7/25/2027 - 12/31/2034
Total$742,716 $745,600 $741,004 
As of March 31, 2025
Principal Balance as of March 31, 2025
Book Value as of March 31, 2025
Book Value as of December 31, 2024
Weighted Average Contractual Interest RateMaturity Date
Preferred equity$53,782 $54,199 $54,199 11.1 %N/A
Total$53,782 $54,199 $54,199 
Facility Count and Type
As of March 31, 2025
Financing Receivable, at Fair Value:SNFCampusALFILF
Principal Balance as of March 31, 2025
Fair Value as of March 31, 2025(5)
Fair Value as of December 31, 2024(5)
Weighted Average Effective Interest Rate(6)
Maturity Date
Financing Receivable39— 52$95,723 $96,628 $96,004 12.0 %11/30/2039
Total$95,723 $96,628 $96,004 
(1)Fair value of mortgage secured loans receivable includes $4.6 million and $3.4 million of accrued interest as of March 31, 2025 and December 31, 2024, respectively. Fair value of mezzanine loans receivable includes $1.0 million and $0.9 million of accrued interest as of March 31, 2025 and December 31, 2024, respectively.
(2)Rates are net of subservicing fee, if applicable.
(3)Three mortgage secured loans receivable and two mezzanine loans receivable use term secured overnight financing rate (“SOFR”), which are subject to a floor for certain of the loans. Term SOFR used as of March 31, 2025 was 4.32%.
(4)If the Company also has extended mezzanine financing to an affiliate of the borrower under a mortgage loan receivable, the applicable facility counts are included in both respective totals.
(5)Fair value of financing receivable includes $0.9 million and $0.3 million of accrued interest as of March 31, 2025 and December 31, 2024, respectively.
(6)The Company leased these facilities back to the seller under a 15-year contract, with two five-year renewal options. The agreement provides for an initial contractual cash yield of 11.0% for the first three years, with annual CPI-based escalators beginning in year four, subject to a 3% cap. The agreement provides for deferred payments equal to 2.0% of the contractual cash yield in the first year and 0.5% of the contractual cash yield in the second year. The agreement also provides for purchase options. At the time the seller-lessee exercises its purchase options, option proceeds will be used to repay any outstanding deferred payments as well as additional payments such that the Company receives a contractual cash yield of 12.5% on its gross investment in the applicable properties through the option exercise date. If any deferred amounts remain unpaid, beginning in year eight, the deferred amounts are to be repaid in 24 equal monthly payments. The Company has not received notice of exercise for the purchase option period currently open.
The following table summarizes the Company’s other real estate related investments activity for the three months ended March 31, 2025 and 2024 (dollars in thousands):
Three Months Ended March 31,
2025
2024
Origination of other real estate related investments$6,389 $53,165 
Accrued interest, net1,280 425 
Unrealized gain (loss) on other real estate related investments, net1,287 (612)
Prepayments of other real estate related investments(4,360)— 
Net change in other real estate related investments$4,596 $52,978 
2025 Other Real Estate Related Investment Transactions
On January 10, 2025, the Company advanced the second installment of a mezzanine loan for one SNF secured by a pledge of membership interests in an up-tier holding company of the borrower group for $6.4 million. The loan bears interest at a rate of 13%, with annual CPI-based escalators. The mezzanine loan is set to mature on December 31, 2034. The mezzanine loan may not be prepaid in whole or in part prior to maturity. The Company elected the fair value option for the mezzanine loan.
In February 2025, the Company received a partial prepayment on one mortgage loan in the amount of $4.4 million in connection with the borrower’s election to release one skilled nursing facility from the loan. The remaining outstanding balance of $2.9 million was subsequently paid off, see Note 15, Subsequent Events, for additional information.
2024 Other Real Estate Related Investment Transactions
On January 1, 2024, the Company closed on the sale of one ALF. In connection with the sale, the Company provided affiliates of the purchaser of the property with a $1.0 million mortgage loan which bears interest at a rate of 9.0%. The mortgage loan is secured by the ALF and is set to mature on January 1, 2027. The mortgage loan may be prepaid in whole before the maturity date. The Company elected the fair value option for the mortgage loan.
On January 25, 2024, the Company extended a $9.8 million mezzanine loan for a portfolio of ten SNFs located in Missouri secured by a pledge of membership interests in an up-tier holding company of the borrower group. The Company participated in the loan alongside a co-lender pursuant to a participation agreement entered into between the Company and the co-lender. Pursuant to such agreement, the Company provided $9.8 million in mezzanine loan proceeds and the co-lender provided the remaining $10.2 million of loan proceeds. As a participant in the loan, and subject to limited exceptions, the Company is entitled to receive its proportionate share of loan payments made by the borrower with each co-lender’s proportionate share being given equal weight. The loan bears interest at term SOFR plus 8.75%, with a term SOFR floor of 6%, payable monthly and net of a 0.75% subservicing fee. Commencing on February 1, 2026, monthly principal payments shall be due. The mezzanine loan is set to mature on July 25, 2027, with two six-month extension options and may (subject to certain restrictions) be prepaid in whole before the maturity date for an exit fee ranging from 1% to 2% of the loan plus unpaid interest payments equal to 24 months (less the amount of monthly interest payments made by the borrower through the date of prepayment). The Company elected the fair value option for the mezzanine loan.
On February 1, 2024, the Company extended a $7.4 million mezzanine loan for one SNF located in California secured by a pledge of membership interests in an up-tier holding company of the borrower group. The loan bears interest at 11.5%, payable monthly. The mezzanine loan is set to mature on January 31, 2029, and may not (subject to certain limited exceptions) be prepaid prior to the date that is 18 months following the loan closing. The Company elected the fair value option for the mezzanine loan.
On February 2, 2024, the Company extended a $35.0 million mezzanine loan for a portfolio of 15 SNFs located in Virginia secured by a pledge of membership interests in an up-tier holding company of the borrower group. The Company participated in the loan alongside a co-lender pursuant to a participation agreement entered into between the Company and the co-lender. Pursuant to such agreement, the Company provided $35.0 million in mezzanine loan proceeds and the co-lender provided the remaining $50.0 million of loan proceeds. As a participant in the loan, and subject to limited exceptions, the Company is entitled to receive its proportionate share of loan payments made by the borrower with each co-lender’s proportionate share being given equal weight. The loan bears interest at term SOFR plus 8.75%, with a term SOFR floor of 6%, payable monthly and net of a 0.75% subservicing fee. Commencing on February 2, 2026, monthly principal payments shall be due. The mezzanine loan is set to mature on August 1, 2027, with two six-month extension options and may (subject to certain restrictions) be prepaid in whole before the maturity date for an exit fee ranging from 1% to 2% of the loan plus unpaid interest payments equal to 18 months (less the amount of monthly interest payments made by the borrower through the date of prepayment). The Company elected the fair value option for the mezzanine loan.
Financing Receivable
On December 5, 2024, the Company invested $95.7 million, exclusive of transaction costs, to acquire a portfolio of 46 properties in Illinois in a sale and leaseback transaction with affiliates of Cascade Capital Partners, LLC (“Cascade”). In connection with the transaction, the Company entered into a new triple-net master lease with Cascade and provided Cascade with options to repurchase the properties, structured over multiple tranches, with various option window start dates, beginning December 1, 2024, and open through the remainder of the 15-year term. As such, the Company determined that the sale and leaseback transaction met the accounting criteria to be presented as a financing receivable on its consolidated balance sheets and recorded interest income from financing receivable on its consolidated statements of operations. Interest income is based on an imputed interest rate over the term of the applicable financing arrangement and as a result the interest recognized in any particular period will not equal the cash payments from the agreement in that period. Cash received from the financing receivable was $2.2 million during the three months ended March 31, 2025. The Company elected the fair value option for the financing receivable.
Other Loans Receivables
As of March 31, 2025 and December 31, 2024, 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 March 31, 2025
Investment
Principal Balance as of March 31, 2025
Book Value as of March 31, 2025
Book Value as of December 31, 2024
Weighted Average Contractual Interest RateMaturity Date
Other loans receivable$21,757 $21,820 $22,010 9.0 %9/30/2025 - 12/31/2027
Expected credit loss— (6,994)(6,994)
Total$21,757 $14,826 $15,016 
The following table summarizes the Company’s other loans receivable activity for the three months ended March 31, 2025 and 2024 (dollars in thousands):
Three Months Ended March 31,
2025
2024
Principal payments$(222)$— 
Accrued interest, net32 — 
Net change in other loans receivable$(190)$— 
Expected credit losses and recoveries are recorded in provision for loan losses, net in the condensed consolidated income statements. During both the three months ended March 31, 2025 and 2024, the Company had no additional 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 months ended March 31, 2025 and 2024 (dollars in thousands):
For the Three Months Ended March 31,
Investment20252024
Mortgage secured loans receivable$14,388 $3,772 
Mezzanine loans receivable2,821 1,895 
Preferred equity investment1,497 68 
Other loans receivable334 331 
Financing receivable2,807 — 
Other(1)
3,128 3,502 
Total$24,975 $9,568 
(1) Other income is comprised of interest income on money market funds and escrow deposits.