RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 17 – RELATED PARTY TRANSACTIONS

Atria provides comprehensive property management and accounting services with respect to our senior housing communities that Atria operates, for which we pay annual management fees pursuant to long-term management agreements. For the years ended December 31, 2023, 2022 and 2021, we incurred fees to Atria of $63.4 million, $61.5 million and $50.8 million, respectively, the majority of which are recorded within property-level operating expenses in our Consolidated Statements of Income. For the year ended December 31, 2023, we incurred fees to Atria of $1.5 million primarily in connection with the transition of senior housing communities operated by Atria, which are recorded within transaction, transition and restructuring costs in our Consolidated Statements of Income. For the years ended December 31, 2022 and 2021, we paid fees to Atria of $6.1 million and $20.3 million, respectively, in connection with the sale or transition of senior housing communities operated by Atria. These fees are considered transaction costs and are primarily recorded within depreciation and amortization expense in our Consolidated Statements of Income.

We hold a 34% ownership interest in Atria, which entitles us to customary minority rights and protections, including the right to appoint two members to the Atria Board of Directors.

As of December 31, 2023, we leased 11 hospitals to Ardent pursuant to a single, triple-net master lease agreement. For the years ended December 31, 2023, 2022 and 2021, we recognized rental income from Ardent of $133.7 million, $130.5 million and $127.2 million, respectively, relating to the Ardent master lease. As of December 31, 2023, we also leased 19 outpatient medical buildings to Ardent under separate leases included in our outpatient medical and research portfolio segment and recognized rental income of $13.4 million for the year ended December 31, 2023.

As of December 31, 2023, we held a 7.5% ownership interest in Ardent, which entitles us to customary minority rights and protections, including the right to appoint one member to the Ardent Board of Directors. In May 2023, we sold approximately 24% of our ownership interest in Ardent to a third-party investor for $50.1 million in total proceeds. As a result of the sale, we recognized $33.5 million of gain for the year ended December 31, 2023 in income from unconsolidated entities in our Consolidated Statements of Income and our ownership interest in Ardent was reduced from 9.8% to 7.5%.

PMBRES provides outpatient medical building management, leasing, marketing, facility development and advisory services to highly rated hospitals and other healthcare facilities throughout the United States, for which we pay management fees and leasing commissions pursuant to long-term management agreements. For the years ended December 31, 2023, 2022 and 2021, we incurred fees to PMBRES of $10.9 million, $8.5 million and $9.2 million, respectively. Management fees are recorded within property-level operating expenses in our Consolidated Statements of Income. Leasing commissions are recorded within other assets on our Consolidated Balance Sheets and amortized over the life of the related lease.

We hold a 50% ownership interest in PMBRES, which entitles us to customary rights and protections, including the right to appoint two members to the PMBRES Board of Directors.

ESL ceased operation of its management business in early 2022 following completion of the transition of 90 senior housing communities to other operators. We held a 34% ownership interest in ESL, which entitled us to customary minority rights and protections, including the right to appoint two members to the ESL Board of Directors. ESL provided comprehensive property management and accounting services with respect to our senior housing communities that ESL operated, for which we paid annual management fees pursuant to a management agreement. For the year ended December 31, 2021, we incurred $11.8 million of fees to ESL, the majority of which are recorded within property-level operating expenses in our Consolidated Statements of Income. For the years ended December 31, 2023 and 2022, no fees were incurred. In connection with the transition of the operations of 90 senior housing communities in 2021, we paid ESL $24.0 million, which is recorded within transaction, transition and restructuring costs in our Consolidated Statements of Income.