Leases

3 Months Ended

Mar. 31, 2026

Lessee

We lease land, buildings, office space and certain equipment. Many of our leases include a renewal option to extend the term from one to 25 years or more. Renewal options that we are reasonably certain to exercise are recognized in our right-of-use assets and lease liabilities.

The components of lease expense were as follows for the periods presented (in thousands):


		Three Months Ended
	Classification	March 31, 2026		March 31, 2025
Operating lease cost:(1)
Real estate lease expense	Property operating expenses	$	33,425	$	23,406
Non-real estate investment lease expense	General and administrative expenses	1,630		1,484
Financing lease cost:
Amortization of leased assets	Property operating expenses	4,610		1,229
Interest on lease liabilities	Interest expense	6,472		1,232

Total		$	46,137	$	27,351

(1) Includes short-term leases which are immaterial.

Supplemental balance sheet information related to leases in which we are the lessee is as follows (in thousands):


	Classification	March 31, 2026		December 31, 2025
Right of use assets:
Operating leases - real estate	Right of use assets, net	$	1,422,203	$	1,537,490
Financing leases - real estate	Right of use assets, net	600,963		620,555
Real estate right of use assets, net		2,023,166		2,158,045
Operating leases - non-real estate investments	Receivables and other assets	24,105		25,073
Total right of use assets, net		$	2,047,271	$	2,183,118

Lease liabilities:
Operating leases		$	1,528,863	$	1,642,849
Financing leases		522,410		540,144
Total		$	2,051,273	$	2,182,993

Leases

Lessee

The components of lease expense were as follows for the periods presented (in thousands):


		Three Months Ended
	Classification	March 31, 2026		March 31, 2025
Operating lease cost:(1)
Real estate lease expense	Property operating expenses	$	33,425	$	23,406
Non-real estate investment lease expense	General and administrative expenses	1,630		1,484
Financing lease cost:
Amortization of leased assets	Property operating expenses	4,610		1,229
Interest on lease liabilities	Interest expense	6,472		1,232

Total		$	46,137	$	27,351

(1) Includes short-term leases which are immaterial.

Supplemental balance sheet information related to leases in which we are the lessee is as follows (in thousands):


	Classification	March 31, 2026		December 31, 2025
Right of use assets:
Operating leases - real estate	Right of use assets, net	$	1,422,203	$	1,537,490
Financing leases - real estate	Right of use assets, net	600,963		620,555
Real estate right of use assets, net		2,023,166		2,158,045
Operating leases - non-real estate investments	Receivables and other assets	24,105		25,073
Total right of use assets, net		$	2,047,271	$	2,183,118

Lease liabilities:
Operating leases		$	1,528,863	$	1,642,849
Financing leases		522,410		540,144
Total		$	2,051,273	$	2,182,993

Leases

Lessor

Operating Leases

Substantially all of our operating leases in which we are the lessor contain escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period.

Leases in our Triple-net and Outpatient Medical portfolios recognized under ASC 842, typically include some form of operating expense reimbursement by the tenant. For the three months ended March 31, 2026, we recognized $453,842,000 of rental income related to operating leases, of which $19,568,000 was for variable lease payments that primarily represents the reimbursement of operating costs such as common area maintenance expenses, utilities, insurance and real estate taxes. For the three months ended March 31, 2025, we recognized $461,567,000 of rental income related to operating leases, of which $57,560,000 was for variable lease payments.

For the majority of our Seniors Housing Operating segment, revenue from resident fees and services is predominantly service-based, and as such, resident agreements are accounted for under ASC 606. Within that reportable segment, we also recognize revenue from residential wellness housing leases in accordance with ASC 842. The amount of revenue related to these leases was $231,571,000 and $185,225,000 for the three months ended March 31, 2026 and 2025, respectively.

Sales-Type Leases

At December 31, 2025, 30 properties leased to Integra Healthcare Properties (“Integra”) under a long-term master lease were classified as sales-type leases due to the expected exercise by the respective subtenants of purchase options related to these properties.

During the three months ended March 31, 2026, an additional six properties leased to Integra were reclassified from operating to sales-type leases. In conjunction with this reclassification, a loss of $25,424,000 was recognized in gain (loss) on real estate dispositions and acquisitions of controlling interests, net in the Consolidated Statements of Comprehensive Income. Additionally, we completed the sale of 28 properties for net proceeds of $454,620,000, which was recognized in proceeds from sales of real property in the Consolidated Statements of Cash Flows and reclassified two properties from sales-type lease back to operating lease as a result of the exercise of the purchase option by the subtenant no longer being reasonably assured. As of March 31, 2026, there were six properties that remained classified as sales-type leases, all of which were sold in April 2026.

At December 31, 2024, four properties were classified as sales-type leases. During the three months ended March 31, 2025, these properties were sold and we recognized net proceeds of $174,824,000, which was included in proceeds from sales of real property in the Consolidated Statements of Cash Flows.

We recognized $8,077,000 and $2,111,000 of interest income related to investments in sales-type leases during the three months ended March 31, 2026 and March 31, 2025, respectively.