Loans Receivable

12 Months Ended

Dec. 31, 2021

Loans 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.

Accrued interest receivable was $26,659,000 and $15,615,000 as of December 31, 2021 and December 31, 2020, 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,
	2021		2020
Mortgage loans	$	889,556	$	299,430
Other real estate loans	194,477		152,739
Allowance for credit losses on real estate loans receivable	(15,352)		(8,797)
Real estate loans receivable, net of credit allowance	1,068,681		443,372
Non-real estate loans	375,060		455,508
Allowance for credit losses on non-real estate loans receivable	(151,433)		(215,239)
Non-real estate loans receivable, net of credit allowance(1)	223,627		240,269
Total loans receivable, net of credit allowance	$	1,292,308	$	683,641

(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, 2021		December 31, 2020		December 31, 2019
Advances on loans receivable:
Investments in new loans	$	975,018	$	224,078	$	46,824
Draws on existing loans	22,431		23,465		72,875
Net cash advances on loans receivable	997,449		247,543		119,699





Receipts on loans receivable:
Loan payoffs	266,822		15,677		118,703
Principal payments on loans	76,438		15,871		9,003


Net cash receipts on loans receivable	343,260		31,548		127,706
Net cash advances (receipts) on loans receivable	$	654,189	$	215,995	$	(8,007)

During the year ended December 31, 2021, we provided £540 million (approximately $750,330,000 based on the Sterling/ U.S. Dollar exchange rate as of the date of funding) of senior loan financing and a £30 million delayed facility for working capital and capital expenditures to affiliates of Safanad, a global real estate and private equity firm, as part of the recapitalization of its investment in HC-One Group. The loan has a five-year term and is fully collateralized by the shares and assets of the HC-One Group, including its underlying portfolio of owned assets across the U.K. As part of the transaction, we received equity warrants which provide us the right to participate in the capital appreciation of HC-One Group above a designated price upon liquidation. See Note 12 for additional details.

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


	December 31, 2021
Loan category	Years of Origination	Loan Carrying Value		Allowance for Credit Loss		Net Loan Balance		No. of Loans
Deteriorated loans	2007 - 2018	$	178,369	$	(148,438)	$	29,931	3
Collective loan pool	2007 - 2016	205,380		(3,097)		202,283		17
Collective loan pool	2017	34,397		(519)		33,878		7
Collective loan pool	2018	23,322		(351)		22,971		2
Collective loan pool	2019	22,083		(333)		21,750		4
Collective loan pool	2020	48,712		(734)		47,978		6
Collective loan pool	2021	946,830		(13,313)		933,517		22
Total loans		$	1,459,093	$	(166,785)	$	1,292,308	61

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 loans. As of December 31, 2021, the total allowance for credit losses balance of $166,785,000 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,
	2021		2020		2019
Balance at beginning of year	$	224,036	$	68,372	$	68,372
Adoption of ASU 2016-13	—		5,212		—
Provision for loan losses	7,270		94,436		18,690
Loan write-offs(1)	(64,075)		(7,000)		(18,690)
Foreign currency translation	(446)		197		—
Reclassification of deferred gain as credit loss(2)	—		62,819		—
Balance at end of year	$	166,785	$	224,036	$	68,372

(1) Includes $64,075,000 related to the Genesis lease terminations for the twelve months ended December 31, 2021. See Note 9 for further details.
(2) During the year ended December 31, 2020, two loans receivable originated in 2016 to Genesis 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,
	2021		2020		2019
Balance of deteriorated loans at end of year(1)	$	178,369	$	242,319	$	188,018
Allowance for credit losses	(148,438)		(212,514)		(68,372)
Balance of deteriorated loans not reserved	$	29,931	$	29,805	$	119,646

Interest recognized on deteriorated loans(2)	$	3,185	$	18,937	$	16,235

(1) Balances include $2,157,000, $3,623,000 and $2,534,000 of loans on non-accrual as of December 31, 2021, 2020 and 2019, respectively.

(2) Represents cash interest recognized in the period.