Loans Receivable

12 Months Ended

Dec. 31, 2020

Loans ReceivableLoans receivable are recorded on our Consolidated Balance Sheets in real estate loans receivable, net of allowance for credit losses, or for non-real estate loans receivable, in receivables and other assets, net of allowance for credit losses. Real estate loans receivable consists of mortgage loans and other real estate loans which are primarily collateralized by a first, second or third mortgage lien, a leasehold mortgage on, or an assignment of the partnership interest in, the related properties, corporate guarantees and/or personal guarantees. Non-real estate loans are generally corporate loans with no real estate backing. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of the risk of credit loss. Accrued interest receivable was $15,615,000 and $6,897,000 as of December 31, 2020 and December 31, 2019, respectively, and is included in receivables and other assets on the Consolidated Balance Sheets. The following is a summary of our loans receivable (in thousands):


	Year Ended December 31,
	2020		2019
Mortgage loans	$	299,430	$	188,062
Other real estate loans	152,739		124,696
Allowance for credit losses on real estate loans receivable	(8,797)		(42,376)
Real estate loans receivable, net of credit allowance	443,372		270,382
Non-real estate loans	455,508		362,850
Allowance for credit losses on non-real estate loans receivable	(215,239)		(25,996)
Non-real estate loans receivable, net of credit allowance(1)	240,269		336,854
Total loans receivable, net of credit allowance	$	683,641	$	607,236

(1) Included in receivables and other assets on the Consolidated Balance Sheets.

During the year ended December 31, 2020, the real estate collateral associated with one loan was released, therefore, the principal balance of $86,411,000 and related allowance for credit losses of $42,376,000 was reclassified to non-real estate loans.

The following is a summary of our loan activity for the periods presented (in thousands):


	Year Ended
	December 31, 2020		December 31, 2019		December 31, 2018
Advances on loans receivable:
Investments in new loans	$	224,078	$	46,824	$	77,289
Draws on existing loans	23,465		72,875		34,759
Net cash advances on loans receivable	247,543		119,699		112,048





Receipts on loans receivable:
Loan payoffs	15,677		118,703		144,700
Principal payments on loans	15,871		9,003		59,235


Net cash receipts on loans receivable	31,548		127,706		203,935
Net cash advances (receipts) on loans receivable	$	215,995	$	(8,007)	$	(91,887)

The following is a summary of our loans by credit loss category (in thousands):


	December 31, 2020
Loan category	Years of Origination	Loan Carrying Value		Allowance for Credit Loss		Net Loan Balance		No. of Loans
Deteriorated loans (1)	2007 - 2018	$	242,319	$	(212,514)	$	29,805	6
Collective loan pool	2007 - 2015	130,436		(2,452)		127,984		14
Collective loan pool	2016	126,465		(2,381)		124,084		4
Collective loan pool	2017	126,792		(1,429)		125,363		7
Collective loan pool	2018	19,923		(374)		19,549		1
Collective loan pool	2019	48,819		(886)		47,933		7
Collective loan pool	2020	212,923		(4,000)		208,923		9
Total loans		$	907,677	$	(224,036)	$	683,641	48

In 2019, we recognized a provision for loan losses of $18,690,000 to fully reserve for and eventually wrote off certain Triple-net real estate loans receivable that were no longer deemed collectible. During the year ended December 31, 2020, we recognized additional provision for loan losses of $88,201,000 as a result of the current collateral estimates for loans with deteriorated credit, primarily relating to our outstanding Genesis Healthcare loans. As of December 31, 2020, the total allowance for credit losses balance of $224,036,000 is deemed to be sufficient to absorb expected losses relating to our loan portfolio. The following is a summary of the allowance for credit losses on loans receivable for the periods presented (in thousands):


	Year Ended December 31,
	2020		2019		2018
Balance at beginning of year	$	68,372	$	68,372	$	68,372
Adoption of ASU 2016-13	5,212		—		—
Provision for loan losses	94,436		18,690		—
Loan write-offs	(7,000)		(18,690)		—
Foreign currency translation	197		—		—
Reclassification of deferred gain as credit loss(1)	62,819		—		—
Balance at end of year	$	224,036	$	68,372	$	68,372

(1) During the year ended December 31, 2020, two loans receivable originated in 2016 to Genesis Healthcare with an aggregate carrying value of $62,753,000 were transferred to the deteriorated loan pool. In addition, deferred gains of $62,819,000 previously recorded in accrued expenses and other liabilities were reclassified to the allowance for credit losses.

The following is a summary of our deteriorated loans (in thousands):


	Year Ended December 31,
	2020		2019		2018
Balance of deteriorated loans at end of year(1)	$	242,319	$	188,018	$	189,272
Allowance for credit losses	(212,514)		(68,372)		(68,372)
Balance of deteriorated loans not reserved	$	29,805	$	119,646	$	120,900
Interest recognized on deteriorated loans(2)	18,937		16,235		17,241

(1) Balances include $3,623,000, $2,534,000 and 2567000 of loans on non-accrual as of December 31, 2020, 2019 and 2018, respectively.

(2) Represents cash interest recognized in the period.