CONCENTRATION OF CREDIT RISK

12 Months Ended

Dec. 31, 2024

NOTE 3 – CONCENTRATION OF CREDIT RISK

We use total revenues and total NOI in assessing our concentration of credit risk. See “Non-GAAP Financial Measures” included elsewhere in this Annual Report for additional disclosure and a reconciliation of net income attributable to common stockholders, as computed in accordance with GAAP, to total NOI.

We are exposed to the credit risk of our tenants in our NNN and OM&R segments because those tenants are obligated to pay us rent and, in certain instances pay or reimburse us for some or all property-related expenses, including utilities, real estate taxes, insurance, repairs and maintenance, cleaning, roads and grounds expense and other expenses.. Because we engage independent managers to manage the properties in our SHOP segment in exchange for a management fee, we are not directly exposed to their credit risk in the same manner or to the same extent as the tenants in our NNN and OM&R segments.

Our consolidated properties were located in 48 states, the District of Columbia, seven Canadian provinces and the United Kingdom as of December 31, 2024, with properties in one state (California) accounting for more than 10% of our total revenues and NOI for each of the years ended December 31, 2024, 2023 and 2022.

The following table summarizes certain information about our credit risk concentration for our NNN and OM&R segments for the years presented:


	For the Years Ended December 31,
	2024		2023		2022
Contribution as a Percentage of Total Revenues (1):
Brookdale Senior Living (“Brookdale”) (2) (3)	3.1	%	3.3	%	3.6	%
Ardent Health Partners, LLC (together with its subsidiaries, “Ardent”) (4)	2.8		3.0		3.2
Kindred Healthcare, LLC (together with its subsidiaries, “Kindred”)	2.8		2.9		3.2
All others	22.8		25.0		25.7
Contribution as a Percentage of Total NOI:
Brookdale (2) (3)	7.2	%	7.7	%	8.1	%
Kindred	6.7		6.9		7.3
Ardent (4)	6.6		6.9		7.1
All others	37.6		41.5		42.4

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(1)Represents percentage of total revenues which include third-party capital management revenues, income from loans and investments and interest and other income.

(2)The 2024, 2023 and 2022 results include $42.0 million, $42.6 million and $42.6 million, respectively, of amortization of up-front consideration received in 2020 from a revised master lease agreement with Brookdale.

(3)Results exclude nine senior housing communities which are included in our SHOP segment.

(4)Results exclude 19 outpatient medical buildings included in “All others.”

Each of our Brookdale, Ardent and Kindred leases is guaranteed by a corporate parent.

Lease Income

Rental income from our NNN and OM&R operating leases consists of fixed and variable lease payments. The variable payments primarily represent reimbursements of various property-level operating expenses that we pay on behalf of our tenants. The following table summarizes rental income from our NNN and OM&R operating leases (in thousands):


	For the Years Ended December 31,
	2024		2023		2022
Fixed income from operating leases	$	1,251,042	$	1,241,075	$	1,192,607
Variable income from operating leases	245,898		245,326		206,706

Future Contractual Rents

The following table sets forth the minimum lease payments under the existing lease for all of our consolidated triple-net and outpatient medical and research building leases as of December 31, 2024 (excluding properties classified as held for sale as of December 31, 2024, dollars in thousands):


	Brookdale Senior Living (1)		Ardent		Kindred		Other		Total
2025	$	158,858	$	152,913	$	137,178	$	739,668	$	1,188,617
2026	72,350		152,354		133,747		684,967		1,043,418
2027	72,350		151,237		133,747		584,104		941,438
2028	72,350		151,237		116,007		483,548		823,142
2029	72,350		151,237		107,137		381,595		712,319
Thereafter	434,102		839,613		116,863		1,296,791		2,687,369
Total	$	882,360	$	1,598,591	$	744,679	$	4,170,673	$	7,396,303

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(1)2025 minimum lease payments include all assets covered by the Brookdale lease as of December 31, 2024, of which $86.5 million is associated with 56 senior housing properties for which the lease will expire on December 31, 2025.