CONCENTRATION OF CREDIT RISK

3 Months Ended

Mar. 31, 2025

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 Quarterly Report on Form 10-Q 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.

The following table summarizes certain information about our credit risk concentration for our NNN and OM&R segments for the three months ended March 31, 2025 and 2024:


	For the Three Months Ended March 31,
	2025		2024
Contribution as a Percentage of Total Revenues:
Brookdale (1)(2)	3.0	%	3.1	%
Kindred	2.7		2.8
Ardent (3)	2.6		2.8
All others	20.4		23.5
Contribution as a Percentage of Total NOI:
Brookdale (1)(2)	7.0	%	7.4	%
Kindred	6.3		6.6
Ardent (3)	6.1		6.7
All others	34.1		38.9

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(1)Excludes nine senior housing communities which are included in our SHOP segment.

(2)2025 and 2024 include $6.6 million and $10.7 million, respectively, of amortization of up-front consideration received in 2020 from a revised master lease agreement with Brookdale.

(3)Excludes 19 outpatient medical buildings leased in whole or in part to Ardent, which are 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 (dollars in thousands):


	For the Three Months Ended March 31,
	2025		2024
Fixed income from operating leases	$	316,109	$	317,853
Variable income from operating leases	61,323		56,392