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Loans Receivable
 3 Months Ended
Mar. 31, 2025
Receivables [Abstract]  
Loans Receivable Loans Receivable
The following table summarizes the Company’s loans receivable (in thousands):
 March 31,
2025		December 31,
2024
Secured loans(1)
$616,706 $638,482 
CCRC resident loans60,638 61,273 
Mezzanine loans48,580 50,314 
Unamortized discounts and fees(19,845)(22,380)
Reserve for loan losses(7,554)(10,499)
Loans receivable, net$698,525 $717,190 
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(1)At March 31, 2025, the Company had $135 million of remaining commitments to fund additional loans for outpatient medical and lab capital expenditure projects. At December 31, 2024, the Company had $85 million of remaining commitments to fund additional loans for outpatient medical capital expenditure projects.
The Merger
On March 1, 2024, upon the consummation of the Merger, the Company acquired 9 secured loans with an aggregate outstanding principal balance of $89 million and 10 mezzanine loans with an aggregate outstanding principal balance of $36 million, for a total of $124 million. Typically, each secured loan is secured by a mortgage on a related outpatient medical building, each construction loan (included in secured loans above) is secured by a mortgage on the land and improvements as constructed, generally with guarantees from the borrowers, and each mezzanine loan is collateralized by an ownership interest in the respective borrower. As of the Closing Date, the secured loans had maturities ranging from June 2024 to July 2027 and stated fixed interest rates ranging from 7.00% to 10.00%. The mezzanine loans had maturities ranging from June 2024 to June 2027 and stated fixed interest rates ranging from 8.00% to 10.00%.
As of March 31, 2025, unamortized net discounts on the secured loans and mezzanine loans acquired were $0.6 million and $2 million, respectively. As of December 31, 2024, unamortized net discounts on the secured loans and mezzanine loans acquired were $1 million and $2 million, respectively. These discounts are recognized in interest income and other on the Consolidated Statements of Operations using the effective interest rate method over the remaining term of the loans.
Sunrise Senior Housing Portfolio Seller Financing
In conjunction with the sale of 32 senior housing operating properties (“SHOP”) facilities for $664 million in January 2021, the Company provided the buyer with initial financing of $410 million. The remainder of the sales price was received in cash at the time of sale. Additionally, the Company agreed to provide up to $92 million of additional financing for capital expenditures (up to 65% of the estimated cost of capital expenditures). The initial and additional financing is secured by the buyer’s equity ownership in each property.
Subsequent to the initial financing, the Company received partial principal repayments of $291 million and in February 2024, the remaining balance of $131 million reached its maturity and was refinanced with the Company. In connection with the refinance, the Company received a partial principal repayment of $69 million and the maturity date was extended to August 2027. The interest rate on the loan is Term Secured Overnight Financing Rate (“SOFR”) (plus a 10 basis point adjustment related to SOFR transition) plus 4.0% for the first two years of the extended term, and 5.0% for the last 18 months of the extended term, and is subject to a fixed floor of 9%. In May 2024, the Company received a partial principal repayment of $5 million in conjunction with the disposition of underlying collateral. At each of March 31, 2025 and December 31, 2024, this secured loan had an outstanding principal balance of $58 million and the Company had no commitment to provide the borrower with additional financing for capital expenditures.
Other SHOP Seller Financing
In conjunction with the sale of 16 additional SHOP facilities for $230 million in January 2021, the Company provided the buyer with financing of $150 million. The remainder of the sales price was received in cash at the time of sale. The financing was secured by the buyer’s equity ownership in each property.
During the term of the loan, the Company received partial principal repayments of $102 million, and the remaining $48 million was most recently refinanced with the Company in January 2024 at which time the maturity date was extended to January 2025. The interest rate on the loan was Term SOFR (plus an 11 basis point adjustment related to SOFR transition) plus 7.0%, and was subject to a fixed floor of 12%. The Company also received a $1 million extension fee in connection with the refinance, which was recognized in interest income over the remaining term of the loan. In January 2025, the Company received full repayment of the outstanding balance of this seller financing.
Outpatient Medical Seller Financing
In conjunction with the sale of 59 outpatient medical buildings for $674 million in July 2024 and the 2 outpatient medical buildings for $23 million in November 2024 (see Note 5), the Company provided the buyer with a mortgage loan secured by the real estate sold for $405 million and $14 million, respectively. The remainder of the sales price was received in cash at the time of sales. The seller financing has an initial term that matures in July 2026 and includes two 12-month extension options. The interest rate on the seller financing is fixed at 6.0% for the initial term and increases to 6.5% during the optional extension periods. The Company also received a $1 million loan origination fee in connection with the loan, which is being recognized in interest income over the remaining term of the loan. In connection with this seller financing, the Company reduced the gain on sales of real estate and recognized a mark-to-market discount of $21 million during the year ended December 31, 2024. This discount is based on the difference between the stated interest rate and the corresponding prevailing market rate as of the transaction date. The discount is recognized as interest income over the term of the discounted loan using the effective interest rate method. During the three months ended March 31, 2025, the Company recognized $2 million of non-cash interest income related to the amortization of this mark-to-market discount. As of March 31, 2025 and December 31, 2024, the unamortized mark-to-market discount was $17 million and $18 million, respectively.
2025 Other Loans Receivable Transactions
In January 2025, the Company entered into a secured loan to provide up to $75 million to fund a portion of the acquisition and redevelopment of a lab building on a campus in San Diego, California. The initial term of this secured loan matures in January 2029 and includes one 12-month extension option. The stated fixed interest rate of this secured loan is 8%. During the three months ended March 31, 2025, the Company provided initial funding of $28 million under this agreement.
In January 2025, the Company received full repayment of the outstanding balance of one $15 million secured loan with an original maturity of July 2027.
In January 2025, the Company received full repayment of the outstanding balance of one $1 million mezzanine loan with a maturity of June 2025.
In March 2025, the Company entered into an agreement to provide aggregate financing of $41 million to fund the development of an outpatient medical building in Dallas, Texas. The initial term of this financing matures in March 2028 and includes two 12-month extension options. The aggregate interest rate of this financing is 8.3%. During the three months ended March 31, 2025, the Company provided initial funding of $4 million under this agreement.
2024 Other Loans Receivable Transactions
During the year ended December 31, 2024, the Company entered into and funded a $15 million mezzanine loan with a fixed interest rate of 11.00%.
Additionally, during the year ended December 31, 2024, the Company entered into a construction loan agreement to provide up to $36 million to fund a portion of the construction of an outpatient medical building. This secured loan matures in December 2028 and has a stated fixed interest rate of 8.00%. At each of March 31, 2025 and December 31, 2024, there were no fundings under this agreement.
CCRC Resident Loans
For certain residents that qualify, CCRCs may offer to lend residents the necessary funds to satisfy the entrance fee requirements so that they are able to move into a community while still continuing the process of selling their previous home. The loans are due upon sale of the resident’s previous home. At each of March 31, 2025 and December 31, 2024, the Company held $61 million of such notes receivable.
Loans Receivable Internal Ratings
In connection with the Company’s quarterly review process or upon the occurrence of a significant event, loans receivable are reviewed and assigned an internal rating of Performing, Watch List, or Workout. Loans that are deemed Performing meet all present contractual obligations, and collection and timing of all amounts owed is reasonably assured. Watch List Loans are defined as loans that do not meet the definition of Performing or Workout. Workout Loans are defined as loans in which the Company has determined, based on current information and events, that: (i) it is probable it will be unable to collect all amounts due according to the contractual terms of the agreement, (ii) the borrower is delinquent on making payments under the contractual terms of the agreement, and (iii) the Company has commenced action or anticipates pursuing action in the near term to seek recovery of its investment.
The following table summarizes, by year of origination, the Company’s internal ratings for loans receivable, net of unamortized discounts, fees, and reserves for loan losses, as of March 31, 2025 (in thousands):
Investment Type
Year of Origination(1)
Total
2025
2024202320222021Prior
Secured loans
Risk rating:
Performing loans$31,575 $436,138 $43,839 $25,789 $57,576 $— $594,917 
Watch list loans— — — — — — — 
Workout loans— — — — — — — 
Total secured loans$31,575 $436,138 $43,839 $25,789 $57,576 $— $594,917 
Current period gross write-offs$— $— $— $— $— $— $— 
Current period recoveries— — — — — — — 
Current period net write-offs$— $— $— $— $— $— $— 
Mezzanine loans
Risk rating:
Performing loans$— $13,566 $5,411 $4,557 $6,753 $12,683 $42,970 
Watch list loans— — — — — — — 
Workout loans— — — — — — — 
Total mezzanine loans$— $13,566 $5,411 $4,557 $6,753 $12,683 $42,970 
Current period gross write-offs$— $— $— $— $— $— $— 
Current period recoveries— — — — — — — 
Current period net write-offs$— $— $— $— $— $— $— 
CCRC resident loans
Risk rating:
Performing loans$19,325 $40,974 $179 $160 $— $— $60,638 
Watch list loans— — — — — — — 
Workout loans— — — — — — — 
Total CCRC resident loans$19,325 $40,974 $179 $160 $— $— $60,638 
Current period gross write-offs$— $— $— $— $— $— $— 
Current period recoveries— — — — — — — 
Current period net write-offs$— $— $— $— $— $— $— 
_______________________________________
(1)Additional fundings under existing loans are included in the year of origination of the initial loan.
Reserve for Loan Losses
The Company evaluates the liquidity and creditworthiness of its borrowers on a quarterly basis to determine whether any updates to the future expected losses recognized upon inception are necessary. The Company’s evaluation considers payment history and current credit status, industry conditions, current economic conditions, forecasted economic conditions, individual and portfolio property performance, credit enhancements, liquidity, and other factors. Future economic conditions are based primarily on near-term economic forecasts from the Federal Reserve and reasonable assumptions for long-term economic trends. The determination of loan losses also considers concentration of credit risk associated with the senior housing, outpatient medical, and lab industries to which its loans receivable relate. The Company’s borrowers furnish property, portfolio, and guarantor/operator-level financial statements, among other information, on a monthly or quarterly basis; the Company utilizes this financial information to calculate the debt service coverages in its assessment of internal ratings that it uses as a primary credit quality indicator. Debt service coverage information is evaluated together with other property, portfolio, and operator performance information, including revenue, expense, net operating income, occupancy, rental rates, capital expenditures, and EBITDA (defined as earnings before interest, tax, and depreciation and amortization), along with other liquidity measures. The Company evaluates, on a monthly basis or immediately upon a significant change in circumstance, its borrowers’ ability to service their obligations with the Company.
The following table summarizes the Company’s reserve for loan losses (in thousands):
 March 31, 2025December 31, 2024
 Secured Loans
Mezzanine Loans and Other(1)
TotalSecured Loans
Mezzanine Loans and Other(1)
Total
Reserve for loan losses, beginning of period$5,574 $4,925 $10,499 $2,830 $— $2,830 
Provision for expected loan losses (recoveries) on funded loans receivable(1,077)(914)(1,991)2,744 4,925 7,669 
Expected loan losses (recoveries) related to loans sold or repaid(783)(171)(954)— — — 
Reserve for loan losses, end of period$3,714 $3,840 $7,554 $5,574 $4,925 $10,499 
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(1)Includes CCRC resident loans.
Additionally, at March 31, 2025 and December 31, 2024, a liability of $2.2 million and $2.9 million, respectively, related to expected credit losses for unfunded loan commitments was included in accounts payable, accrued liabilities, and other liabilities.
The change in the reserve for expected loan losses during the three months ended March 31, 2025 is primarily due to: (i) changes in operating performance and fair values of the underlying collateral of the Company’s loans receivable and (ii) recoveries related to loans repaid during the three months ended March 31, 2025, partially offset by reserves recognized on new secured loans executed during the three months ended March 31, 2025.