OPERATION EXPANSIONS

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at:


	March 31, 2024		December 31, 2023
Buildings and improvements	$	438,803	$	372,554
Leasehold improvements	63,280		58,958
Furniture, fixtures, and other	73,034		64,750
Construction in process	50,367		50,937
Land	67,659		55,593
Finance lease right-of-use assets	40,536		40,536
	733,679		643,328
Less: accumulated depreciation and amortization	(73,522)		(65,800)
Property and equipment, net	$	660,157	$	577,528

The Company did not record an impairment charge for the three months ended March 31, 2024, and 2023.

See Note 12, “Operation Expansions” for information on expansions during the three months ended March 31, 2024.

OPERATION EXPANSIONS

FASB ASC Topic 805, Business Combinations (ASC 805) defines the definition of a business to assist entities with evaluating when a set of transferred assets and activities is deemed to be a business. Determining whether a transferred set constitutes a business is important because the accounting for a business combination differs from that of an asset acquisition. The definition of a business also affects the accounting for dispositions. When substantially all of the fair value of assets acquired is concentrated in a single asset, or a group of similar assets, the assets acquired would not represent a business and business combination accounting would not be required.

2024 Expansions

During the three months ended March 31, 2024, the Company’s operations and real estate portfolio grew through a combination of long-term leases and real estate purchases, with the addition of 10 stand-alone facilities and six real estate purchases. Of the six real estate purchases, three of the properties were acquired in conjunction with the operations of the associated facility. For the other three acquired properties, the Company’s subsidiaries previously operated the respective facilities and have now acquired the real estate associated with those operations. The aggregate purchase price for these acquisitions was $79,000. These new operations added 1,334 skilled nursing beds and 174 assisted living beds operated by the Company's affiliated operating subsidiaries.

The Company’s expansion strategy has been focused on identifying both opportunistic and strategic acquisitions within its target markets that offer strong opportunities to improve both clinical and financial performance of the acquired facility. The operations added by the Company are underperforming financially and have regulatory and clinical challenges to overcome. Financial information, especially with underperforming operations, is often inadequate, inaccurate or unavailable. Consequently, the Company believes that prior operating results are not a meaningful representation of the Company’s current operating results or indicative of the integration potential of its newly acquired operating subsidiaries. The assets added during the three months ended March 31, 2024 and through the issuance of the financial statements were not material operations to the Company individually or in the aggregate. Accordingly, pro forma financial information is not presented. The additions have been included in the March 31, 2024 condensed combined/consolidated balance sheets of the Company, and the operating results have been included in the condensed combined/consolidated statements of income and comprehensive income of the Company since the date the Company gained effective control.

Expansions After Period End

Subsequent to March 31, 2024, the Company’s operations grew with the addition of 1 stand-alone facility through a long-term lease with a purchase option. The new operations added 122 skilled nursing beds operated by the Company’s affiliated operating subsidiaries.