OPERATION EXPANSIONS

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at:


	June 30, 2024		December 31, 2023
Buildings and improvements	$	533,808	$	372,554
Leasehold improvements	68,298		58,958
Furniture, fixtures, and other	80,229		64,750
Construction in process	53,589		50,937
Land	69,678		55,593
Finance lease right-of-use assets	40,536		40,536
	846,138		643,328
Less: accumulated depreciation and amortization	(82,234)		(65,800)
Property and equipment, net	$	763,904	$	577,528

The Company did not record an impairment charge for the six months ended June 30, 2024, and 2023.

See Note 12, “Operation Expansions”, for information on expansions during the six months ended June 30, 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 six months ended June 30, 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 12 stand-alone facilities and nine real estate purchases. Of the nine real estate purchases, four of the properties were acquired in conjunction with the operations of the associated facility. For the other five 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 $175,150. These new operations added 1,501 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 six months ended June 30, 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 June 30, 2024 condensed combined/consolidated balance sheets of the Company, and the operating results have been included in the condensed combined/consolidated statements of (loss) income and comprehensive (loss) income of the Company since the date the Company gained effective control.

Expansions After Period End

On August 1, 2024, the Company finalized the acquisition of operations for 12 skilled nursing and 13 assisted living and independent living facilities. The operations are located across six states, including 19 facilities in Washington, two in Nevada, and one facility each in Alaska, Arizona, California, and Montana. Collectively, these facilities comprise 1,072 skilled nursing beds and 831 assisted living and independent living units. Of these facilities, 21 are leased from a new joint venture the Company entered into on the same date for $10,000 in which it owns a 25.8% interest. The remaining four facilities are leased from unaffiliated third-party landlords.

Additionally, subsequent to June 30, 2024, the Company’s operations grew with the addition of three stand-alone facilities in Kansas through a long-term lease. The new operations added 378 skilled nursing beds operated by the Company’s affiliated operating subsidiaries.