10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition period from ____ to ____

Commission file number 1-11314

LTC PROPERTIES, INC.

(Exact name of Registrant as specified in its charter)

Maryland	71-0720518
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

2829 Townsgate Road, Suite 350

Westlake Village, California 91361

(Address of principal executive offices, including zip code)

(805) 981-8655

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, $.01 par value	LTC	New York Stock Exchange

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

The number of shares of common stock outstanding on October 19, 2023 was 41,411,693.

LTC PROPERTIES, INC.

FORM 10-Q

September 30, 2023

INDEX

PART I -- Financial Information		Page
Item 1.	Financial Statements
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	52
Item 4.	Controls and Procedures	52
PART II -- Other Information
Item 1.	Legal Proceedings	53
Item 1A.	Risk Factors	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 5.	Other Information	53
Item 6.	Exhibits	54

LTC PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except per share)

	September 30, 2023		December 31, 2022
	(unaudited)		(audited)
ASSETS
Investments:
Land	$	123,919	$	124,665
Buildings and improvements		1,260,891		1,273,025
Accumulated depreciation and amortization		(386,483)		(389,182)
Operating real estate property, net		998,327		1,008,508
Properties held-for-sale, net of accumulated depreciation: 2023—$11,590; 2022—$2,305		9,448		10,710
Real property investments, net		1,007,775		1,019,218
Financing receivables, net of credit loss reserve: 2023—$1,981; 2022—$768		196,053		75,999
Mortgage loans receivable, net of credit loss reserve: 2023—$4,777; 2022—$3,930		473,567		389,728
Real estate investments, net		1,677,395		1,484,945
Notes receivable, net of credit loss reserve: 2023—$637; 2022—$589		63,056		58,383
Investments in unconsolidated joint ventures		19,340		19,340
Investments, net		1,759,791		1,562,668
Other assets:
Cash and cash equivalents		11,302		10,379
Debt issue costs related to revolving line of credit		1,719		2,321
Interest receivable		54,605		46,000
Straight-line rent receivable		20,068		21,847
Lease incentives		2,193		1,789
Prepaid expenses and other assets		18,185		11,099
Total assets	$	1,867,863	$	1,656,103
LIABILITIES
Revolving line of credit	$	362,250	$	130,000
Term loans, net of debt issue costs: 2023—$380; 2022—$489		99,620		99,511
Senior unsecured notes, net of debt issue costs: 2023—$1,307; 2022—$1,477		494,353		538,343
Accrued interest		3,893		5,234
Accrued expenses and other liabilities		47,364		32,708
Total liabilities		1,007,480		805,796
EQUITY
Stockholders’ equity:
Common stock: $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2023—41,412; 2022—41,262		413		412
Capital in excess of par value		937,550		931,124
Cumulative net income		1,606,165		1,544,660
Accumulated other comprehensive income		8,596		8,719
Cumulative distributions		(1,727,315)		(1,656,548)
Total LTC Properties, Inc. stockholders’ equity		825,409		828,367
Non-controlling interests		34,974		21,940
Total equity		860,383		850,307
Total liabilities and equity	$	1,867,863	$	1,656,103

See accompanying notes.

3

LTC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(amounts in thousands, except per share, unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Revenues:
Rental income	$	31,589	$	31,585	$	94,861	$	93,537
Interest income from financing receivables		3,832		357		11,413		357
Interest income from mortgage loans		12,247		10,379		35,417		30,112
Interest and other income		1,635		1,182		5,358		3,308
Total revenues		49,303		43,503		147,049		127,314
Expenses:
Interest expense		12,674		7,941		34,595		22,607
Depreciation and amortization		9,499		9,385		28,085		28,202
Impairment loss		—		1,286		12,510		1,286
Provision for credit losses		189		795		2,107		1,454
Transaction costs		329		629		537		728
Property tax expense		3,271		4,179		9,751		12,180
General and administrative expenses		5,959		5,888		18,344		17,407
Total expenses		31,921		30,103		105,929		83,864
Other operating income:
Gain (loss) on sale of real estate, net		4,870		(387)		20,545		37,809
Operating income		22,252		13,013		61,665		81,259
Income from unconsolidated joint ventures		375		376		1,127		1,127
Net income		22,627		13,389		62,792		82,386
Income allocated to non-controlling interests		(430)		(99)		(1,287)		(301)
Net income attributable to LTC Properties, Inc.		22,197		13,290		61,505		82,085
Income allocated to participating securities		(147)		(131)		(440)		(481)
Net income available to common stockholders	$	22,050	$	13,159	$	61,065	$	81,604
Earnings per common share:
Basic	$	0.54	$	0.33	$	1.48	$	2.06
Diluted	$	0.54	$	0.32	$	1.48	$	2.04
Weighted average shares used to calculate earnings per common share:
Basic		41,153		40,270		41,127		39,658
Diluted		41,211		40,552		41,185		39,939
Dividends declared and paid per common share	$	0.57	$	0.57	$	1.71	$	1.71

See accompanying notes.

4

LTC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(amounts in thousands, unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income	$	22,627	$	13,389	$	62,792	$	82,386
Unrealized gain on cash flow hedges before reclassification		1,034		3,501		2,629		9,361
(Gains) losses reclassified from accumulated other comprehensive income to interest expense		(1,006)		(195)		(2,752)		256
Comprehensive income		22,655		16,695		62,669		92,003
Less: Comprehensive income allocated to non-controlling interests		(430)		(99)		(1,287)		(301)
Comprehensive income attributable to LTC Properties, Inc.	$	22,225	$	16,596	$	61,382	$	91,702

5

LTC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

					Capital in		Cumulative						Total		Non-
	Common Stock				Excess of		Net		Accumulated		Cumulative		Stockholder's		Controlling		Total
	Shares		Amount		Par Value		Income		OCI		Distributions		Equity		Interests		Equity
Balance—December 31, 2021	39,374	$	394	$	856,895	$	1,444,636	$	(172)	$	(1,565,039)	$	736,714	$	8,413	$	745,127
Common Stock cash distributions ($0.57 per share)	—		—		—		—		—		(22,480)		(22,480)		—		(22,480)
Stock-based compensation expense	—		—		1,925		—		—		—		1,925		—		1,925
Net income	—		—		—		14,412		—		—		14,412		95		14,507
Cash paid for taxes in lieu of common shares	(37)		—		(1,255)		—		—		—		(1,255)		—		(1,255)
Non-controlling interest distributions	—		—		—		—		—		—		—		(95)		(95)
Fair market valuation adjustment for interest rate swap	—		—		—		—		4,876		—		4,876		—		4,876
Other	123		1		(7)		—		—		—		(6)		—		(6)
Balance—March 31, 2022	39,460	$	395	$	857,558	$	1,459,048	$	4,704	$	(1,587,519)	$	734,186	$	8,413	$	742,599
Issuance of common stock	910		9		33,684		—		—		-		33,693		—		33,693
Common Stock cash distributions ($0.57 per share)	—		—		—		—		—		(22,635)		(22,635)		—		(22,635)
Stock-based compensation expense	—		—		2,012		—		—		—		2,012		—		2,012
Net income	—		—		—		54,383		—		—		54,383		107		54,490
Cash paid for taxes in lieu of common shares	(2)		—		(100)		—		—		—		(100)		—		(100)
Non-controlling interest distributions	—		—		—		—		—		—		—		(998)		(998)
Fair market valuation adjustment for interest rate swap	—		—		—		—		1,435		—		1,435		—		1,435
Other	12		—		—		—		—		—		—		—		—
Balance—June 30, 2022	40,380	$	404	$	893,154	$	1,513,431	$	6,139	$	(1,610,154)	$	802,974	$	7,522	$	810,496
Issuance of common stock	125		—		4,753		—		—		-		4,753		—		4,753
Common Stock cash distributions ($0.57 per share)	—		—		—		—		—		(23,087)		(23,087)		—		(23,087)
Stock-based compensation expense	—		—		2,014		—		—		—		2,014		—		2,014
Net income	—		—		—		13,290		—		—		13,290		99		13,389
Cash paid for taxes in lieu of common shares	—		—		-		—		—		—		-		—		-
Non-controlling interest contributions	—		—		-		—		—		—		-		14,375		14,375
Non-controlling interest distributions	—		—		—		—		—		—		—		(77)		(77)
Fair market valuation adjustment for interest rate swap	—		—		—		—		3,306		—		3,306		—		3,306
Balance—September 30, 2022	40,505	$	404	$	899,921	$	1,526,721	$	9,445	$	(1,633,241)	$	803,250	$	21,919	$	825,169
Balance—December 31, 2022	41,262	$	412	$	931,124	$	1,544,660	$	8,719	$	(1,656,548)	$	828,367	$	21,940	$	850,307
Issuance of common stock	48		—		1,697		—		—		—		1,697		—		1,697
Issuance of restricted stock	128		1		(1)		—		—		—		—		—		—
Common Stock cash distributions ($0.57 per share)	—		—		—		—		—		(23,563)		(23,563)		—		(23,563)
Stock-based compensation expense	—		—		2,088		—		—		—		2,088		—		2,088
Net income	—		—		—		33,134		—		—		33,134		427		33,561
Cash paid for taxes in lieu of common shares	(41)		—		(1,538)		—		—		—		(1,538)		—		(1,538)
Non-controlling interest contributions	—		—		—		—		—		—		—		3,831		3,831
Non-controlling interest distributions	—		—		—		—		—		—		—		(406)		(406)
Fair market valuation adjustment for interest rate swap	—		—		—		—		(1,362)		—		(1,362)		—		(1,362)
Other	(1)		—		—		—		—		—		—		—		—
Balance—March 31, 2023	41,396	$	413	$	933,370	$	1,577,794	$	7,357	$	(1,680,111)	$	838,823	$	25,792	$	864,615
Issuance of restricted stock	15		—		—		—		—		—		—		—		—
Common Stock cash distributions ($0.57 per share)	—		—		—		—		—		(23,599)		(23,599)		—		(23,599)
Stock-based compensation expense	—		—		2,138		—		—		—		2,138		—		2,138
Net income	—		—		—		6,174		—		—		6,174		430		6,604
Cash paid for taxes in lieu of common shares	(2)		—		(81)		—		—		—		(81)		—		(81)
Non-controlling interest contributions	—		—		—		—		—		—		—		9,133		9,133
Non-controlling interest distributions	—		—		—		—		—		—		—		(406)		(406)
Fair market valuation adjustment for interest rate swap	—		—		—		—		1,211		—		1,211		—		1,211
Balance—June 30, 2023	41,409	$	413	$	935,427	$	1,583,968	$	8,568	$	(1,703,710)	$	824,666	$	34,949	$	859,615
Issuance of restricted stock	3		—		—		—		—		—		—		—		—
Common Stock cash distributions ($0.57 per share)	—		—		—		—		—		(23,605)		(23,605)		—		(23,605)
Stock-based compensation expense	—		—		2,123		—		—		—		2,123		—		2,123
Net income	—		—		—		22,197		—		—		22,197		430		22,627
Non-controlling interest distributions	—		—		—		—		—		—		—		(405)		(405)
Fair market valuation adjustment for interest rate swap	—		—		—		—		28		—		28		—		28
Balance—September 30, 2023	41,412	$	413	$	937,550	$	1,606,165	$	8,596	$	(1,727,315)	$	825,409	$	34,974	$	860,383

6

LTC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands, unaudited)

	Nine Months Ended September 30,
	2023		2022
OPERATING ACTIVITIES:
Net income	$	62,792	$	82,386
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		28,085		28,202
Stock-based compensation expense		6,349		5,951
Impairment loss		12,510		1,286
Gain on sale of real estate, net		(20,545)		(37,809)
Income from unconsolidated joint ventures		(1,127)		(1,127)
Income distributions from unconsolidated joint ventures		—		351
Straight-line rental adjustment		1,635		963
Exchange of prepayment fee for participating interest in mortgage loan		(1,380)		—
Adjustment for collectability of lease incentives and rental income		26		256
Amortization of lease incentives		584		665
Provision for credit losses		2,107		1,454
Application of interest reserve		(1,788)		(4,348)
Amortization of debt issue costs		900		841
Other non-cash items, net		71		(170)
Change in operating assets and liabilities
Lease incentives funded		(1,023)		(418)
Increase in interest receivable		(8,605)		(4,768)
Decrease in accrued interest payable		(1,341)		(625)
Net change in other assets and liabilities		(318)		(318)
Net cash provided by operating activities		78,932		72,772
INVESTING ACTIVITIES:
Investment in real estate properties		(43,759)		(51,815)
Investment in real estate developments		—		(105)
Investment in real estate capital improvements		(5,053)		(4,555)
Proceeds from sale of real estate, net		51,410		72,628
Investment in financing receivable		(112,712)		(61,661)
Investment in real estate mortgage loans receivable		(72,260)		(35,234)
Principal payments received on mortgage loans receivable		301		625
Advances and originations under notes receivable		(19,258)		(37,008)
Principal payments received on notes receivable		7,077		6,618
Net cash used in investing activities		(194,254)		(110,507)
FINANCING ACTIVITIES:
Borrowings from revolving line of credit		274,450		194,000
Repayment of revolving line of credit		(42,200)		(153,900)
Proceeds from issuance of senior unsecured notes		—		75,000
Principal payments on senior unsecured notes		(44,160)		(43,160)
Proceeds from common stock issued		1,777		38,957
Distributions paid to stockholders		(70,767)		(68,202)
Contribution from non-controlling interests		—		50
Distributions paid to non-controlling interests		(1,217)		(1,170)
Financing costs paid		(19)		(1,162)
Cash paid for taxes in lieu of shares upon vesting of restricted stock		(1,619)		(1,355)
Other		—		(6)
Net cash provided by financing activities		116,245		39,052
Increase in cash and cash equivalents		923		1,317
Cash and cash equivalents, beginning of period		10,379		5,161
Cash and cash equivalents, end of period	$	11,302	$	6,478
Supplemental disclosure of cash flow information:
Interest paid	$	35,036	$	22,391
Non-cash investing and financing transactions:
Contribution from non-controlling interest	$	12,965	$	14,325
Exchange of mezzanine loan and related prepayment fee for participating interest in mortgage loan	$	(8,841)	$	—
Reserves withheld at financing and mortgage loan receivable origination	$	(5,147)	$	—
Accretion of interest reserve recorded as mortgage loan receivable	$	1,788	$	4,348
(Decrease) increase in fair value of interest rate swap agreements	$	(123)	$	9,617
Mortgage loan receivable reserve withheld at origination	$	1,506	$	102

See accompanying notes.

7

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. General

LTC Properties, Inc., a health care real estate investment trust (“REIT”), was incorporated on May 12, 1992 in the State of Maryland and commenced operations on August 25, 1992. We invest primarily in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. We conduct and manage our business as one operating segment, rather than multiple operating segments, for internal reporting and internal decision-making purposes. Our primary objectives are to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), assisted living communities (“ALF”), independent living communities (“ILF”), memory care communities (“MC”) and combinations thereof. We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals. To meet these objectives, we attempt to invest in properties that provide opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment.

We have prepared consolidated financial statements included herein without audit and in the opinion of management have included all adjustments necessary for a fair presentation of the consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to rules and regulations governing the presentation of interim financial statements. The accompanying consolidated financial statements include the accounts of our company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results for a full year.

No provision has been made for federal or state income taxes. Our company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As such, we generally are not taxed on income that is distributed to our stockholders.

2. Real Estate Investments

Assisted living communities, independent living communities, memory care communities and combinations thereof are included in the assisted living property classification (collectively “ALF”).

Any reference to the number of properties or facilities, number of units, number of beds, number of operators and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s review of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board.

Owned Properties. Our owned properties are leased pursuant to non-cancelable operating leases. Each lease is a triple net lease which requires the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities. Many of the leases contain renewal options. The majority of our leases contain provisions for specified annual increases over the rents of the prior year.

8

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

The following table summarizes our investments in owned properties at September 30, 2023 (dollar amounts in thousands):

								Average
			Percentage		Number	Number of		Investment
	Gross		of		of	SNF	ALF	per
Type of Property	Investment		Investment		Properties (1)	Beds	Units	Bed/Unit
Assisted Living	$	800,963	57.0	%	92	—	5,323	$	150.47
Skilled Nursing		592,880	42.1	%	50	6,113	236	$	93.38
Other (2)		12,005	0.9	%	1	118	—		—
Total	$	1,405,848	100.0	%	143	6,231	5,559

(1) We own properties in 24 states that are leased to 22 different operators.

(2) Includes three parcels of land held-for-use, and one behavioral health care hospital.

Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent payable upon renewal being greater or less than that currently being paid.

During 2023, Brookdale Senior Living Communities, Inc. (“Brookdale”) elected not to exercise its renewal option under a master lease that matures on December 31, 2023. We re-leased 10 of the 35 properties in the existing Brookdale portfolio to Brookdale under a new master lease. This new master lease includes six properties in Colorado and four in Kansas. The six-year master lease will commence on January 1, 2024. Rent in the first lease year is set at $8,000,000 escalating by approximately 2.0% annually. The lease includes a purchase option that can be exercised in 2029. We also agreed to fund $4,500,000 for capital expenditures for the first two years of the lease at an initial rate of 8.0%, escalating by approximately 2.0% annually thereafter. Subsequent to September 30, 2023, we added seven additional properties to the new Brookdale master lease commencing on January 1, 2024. One property is located in Ohio with 42 assisted living units and six are located in Texas with 235 assisted living units. These properties are currently included in the original Brookdale master lease. As a result of this amendment, Brookdale will operate 17 properties under the new master lease with the initial annual rent of $9,325,000 and the capital expenditure commitment will be $7,150,000. Additionally, the new master lease provides Brookdale with a purchase option on these seven properties. Also, subsequent to September 30, 2023, we leased six assisted living communities located in Oklahoma, with a total of 219 units, to a current LTC operator under a new master lease, expected to commence on November 1, subject to the issuance of licensure to the new operator. These properties are currently included in the original Brookdale master lease. The lease term is for three years, with one four-year extension period. Rent in the first year is set at $960,000, increasing to $984,000 in the second year and $1,150,000 in the third year. This master lease includes a purchase option that can be exercised starting in November 2027 through October 2029 if the lessee exercises its four-year extension option. Also, we entered into agreements to sell seven assisted living communities in the existing Brookdale portfolio. These properties were classified as held-for-sale as of September 30, 2023.

Additionally, during 2023, a master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed at the contractual rate for another five years extending the maturity to November 2028. The centers have a total of 216 beds and are located in Florida. Also, during 2023, a master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed for another two years extending the maturity to December 2025. The master lease was renewed at the contractual annual cash rent of $1,005,000 increasing 2.5% per year. As amended, this master lease

9

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

provides the lessee with a purchase option available through December 31, 2024. The centers have a total of 141 beds and are located in Tennessee.

During 2023, we transitioned a portfolio of eight assisted living communities with 500 units in Illinois, Ohio and Michigan to Encore Senior Living (“Encore”). We agreed to provide assistance in the second quarter of 2023 to the former operator of this portfolio and as part of the transition, we received repayment of $1,250,000 of deferred rent which represents $934,000 of April and May 2023 deferred rent and $316,000 of unrecorded deferred rent provided in 2022. Cash rent under the new two-year lease with Encore is based on mutually agreed upon fair market rent beginning in September 2023.

We monitor the collectability of our receivable balances, including deferred rent receivable balances, on an ongoing basis. We write-off uncollectible operator receivable balances, including straight- line rent receivable and lease incentives balances, as a reduction to rental income in the period such balances are no longer probable of being collected. Therefore, recognition of rental income is limited to the lesser of the amount of cash collected or rental income reflected on a “straight-line” basis for those customer receivable balances deemed uncollectible. We wrote-off straight-line rent receivable and lease incentives balances of $26,000 and $256,000 for the nine months ended September 30, 2023 and 2022, respectively, as a result of property sales and lease terminations.

We continue to take into account the current financial condition of our operators, including consideration of the pace of recovery from the impact of COVID-19, and inflation on the financial performance of our operators in our estimation of uncollectible accounts and deferred rents receivable at September 30, 2023. We are closely monitoring the collectability of such rents and will adjust future estimations as appropriate as further information becomes known.

The following table summarizes components of our rental income for the nine months ended September 30, 2023 and 2022 (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Rental Income		2023			2022			2023			2022
Contractual cash rental income	$	29,121	(1)	$	28,180		$	87,260	(1)	$	83,203
Variable cash rental income		3,386	(2)		4,160	(2)		9,846	(2)		12,218	(2)
Straight-line rent		(747)	(3)		(436)			(1,635)	(3)		(963)
Adjustment for collectability of lease incentives and rental income		—			(83)	(4)		(26)			(256)	(5)
Amortization of lease incentives		(171)			(236)			(584)			(665)
Total	$	31,589		$	31,585		$	94,861		$	93,537

(1) Increased primarily due to rental income from acquisitions and transitioned portfolios, repayment of deferred rent and annual rent escalations, partially offset by sold properties.

(2) The variable rental income for the three and nine months ended September 30, 2023 and the three and nine months ended September 30, 2022, primarily includes reimbursement of real estate taxes of our lessees. Decreased primarily due to property tax reassessment and sold properties partially offset by acquisitions.

(3) Decreased primarily due to deferred rent repayment and normal amortization.

(4) Represents lease incentive balances write-off related to two properties that were transitioned to another operator in our portfolio.

(5) Represents a lease incentive balance write-off related to a closed property and subsequent lease termination and (4) above.

10

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

Some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. The following table summarizes information about purchase options included in our lease agreements (dollar amounts in thousands):

	Type	Number
	of	of		Gross		Net Book	Option
State	Property	Properties		Investments		Value	Window
California	ALF/MC	2	$	38,895	$	33,013	2023-2029
Florida	MC	1		7,680		4,681	2029	(1)
Florida	SNF	3		76,712		76,712	2025-2027	(2)
North Carolina	ALF/MC	11		121,321		121,321	2025-2028	(3)
Ohio	MC	1		16,161		13,598	2024-2025
Ohio	ILF/ALF/MC	1		54,714		53,990	2025-2027
South Carolina	ALF/MC	1		11,680		8,619	2029
Tennessee	SNF	2		5,275		2,298	2023-2024
Texas	SNF	4		52,426		50,438	2027-2029	(4)
Total			$	384,864	$	364,670

(1) During 2023, we recorded an impairment loss of $7,522. See Impairment Loss below for more information.

(2) During 2022, we entered into a joint venture (“JV”) to purchase three skilled nursing centers with a total of 299 beds. The JV leased the properties under a 10-year master lease. For more information regarding this transaction see Financing Receivables below.

(3) During 2023, we entered into a JV that purchased 11 ALFs and MCs with a total of 523 units and leased the communities under a 10-year master lease. The master lease provides the operator with the option to buy up to 50% of the properties at the beginning of the third lease year, and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit IRR of 9.0% on any portion of the properties being purchased. For more information regarding this transaction see Financing Receivables below.

(4) During 2022, we purchased four skilled nursing centers and leased these properties under a 10-year lease with an existing operator. The lease allows the operator to elect either an earn-out payment or purchase option. If neither option is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the earn-out see Note 8. Commitments and Contingencies.

Impairment Loss. In conjunction with the planned sale of a 70-unit assisted living community located in Florida, we recorded a $434,000 impairment loss during the three months ended March 31, 2023 and a $1,222,000 impairment loss during the fourth quarter of 2022. During the second quarter of 2023, the community was sold for $4,850,000. Additionally, during 2023, we performed a recoverability analysis on the carrying value of two assisted living communities that we are negotiating to sell and concluded that their carrying value may not be recoverable through future undiscounted cash flows. Accordingly, we recorded an aggregate impairment loss of $12,076,000 during the second quarter of 2023. As of September 30, 2023, we do not believe these communities meet the criteria to be classified as held-for-sale.

11

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

Properties Held -for-Sale. The following summarizes our held-for-sale properties as of September 30, 2023 (dollar amounts in thousands):

	Type	Number	Number
	of	of	of		Gross		Accumulated
State	Property	Properties	Beds/units		Investment		Depreciation
FL	ALF	4	176	$	12,215	$	7,213
SC	ALF	3	128		8,823		4,377
		7	304	$	21,038	$	11,590

Acquisitions. The following table summarizes our acquisitions for the nine months ended September 30, 2023 and 2022 (dollar amounts in thousands):

		Cash					Non-						Number	Number
		Paid at		Assumed			Controlling	Transaction			Assets		of	of
Year	Type of Property	Acquisition		Liabilities			Interest	Costs			Acquired		Properties	Beds/Units
2023	ALF (1)	$	43,759	$	9,767	$	9,133	$	363	$	63,022	(2)	1	242
2022	SNF (3)	$	51,815	$	—	$	—	$	—	$	51,815		4	339

(1) We entered into a $54,134 Joint Venture (“JV”) and contributed $45,000 into the JV that purchased an ILF/ALF/MC in Ohio. Under the JV agreement, the seller, our JV partner, has the option to purchase the campus between the third and fourth lease years for LTC’s allocation of the JV investment plus an IRR of 9.75%. The campus was leased to Encore Senior Living (“Encore”) under a 10-year term with an initial yield of 8.25% on LTC’s allocation of the JV investment. LTC committed to fund $2,100 of lease incentives under the Encore lease of which $1,004 has been funded.

(2) Includes $8,309 tax abatement intangible included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets.

(3) The properties are located in Texas and are leased to an affiliate of an existing operator under a 10-year lease with two 5-year renewal options. Additionally, the lease provides either an earn-out payment or purchase option but not both. If neither option is elected within the timeframe defined in the lease, both elections are terminated. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. The purchase option is available beginning in the sixth lease year through the end of the seventh lease year. The initial cash yield is 8% for the first year, increasing to 8.25% for the second year, then increases annually by 2.0% to 4.0% based on the change in the Medicare Market Basket Rate. In connection with the transaction, we provided the lessee a 10-year working capital loan for up to $2,000 at 8% for first year, increasing to 8.25% for the second year, then increasing annually with the lease rate. During 2023, the working capital loan was fully repaid. Accordingly, the working capital commitment has been terminated.

12

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

Intangible Assets. We make estimates as part of our allocation of the purchase price of acquisitions to various components of acquisition based upon the fair value of each component. In determining fair value, we use current appraisals or other third-party opinions of value. The most significant components of our allocations are typically the allocation of fair value to land and buildings, and for certain of our acquisitions, in-place leases and other intangible assets. In the case of the value of in-place leases, we make the best estimates based on the evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during the hypothetical expected lease-up periods, market conditions and costs to execute similar leases. The following is a summary of the carrying amount of intangible assets as of September 30, 2023 (in thousands):

	September 30, 2023								December 31,2022
					Accumulated								Accumulated
Assets		Cost			Amortization			Net		Cost			Amortization			Net
In-place leases	$	11,348	(1)	$	(5,886)	(2)	$	5,462	$	9,474	(1)	$	(5,362)	(2)	$	4,112
Tax abatement intangible		8,309	(3)		(231)	(3)		8,078		—	(3)		—	(3)		—

(1) Included in the Buildings and improvements line item in our Consolidated Balance Sheets.

(2) Included in the Accumulated depreciation and amortization line item in our Consolidated Balance Sheets.

(3) Included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets.

Improvements and Developments. During the nine months ended September 30, 2023 and 2022, we invested in the following (in thousands):

		Nine Months Ended September 30,
Type of Property		2023				2022
	Developments		Improvements		Developments		Improvements
Assisted Living Communities	$	—	$	2,418	$	105	$	3,015
Skilled Nursing Centers		—		2,548		—		981
Other		—		87		—		559
Total	$	—	$	5,053	$	105	$	4,555

13

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

Properties Sold. During the three and nine months ended September 30, 2023, we recorded a gain on sale of $4,870,000 and $20,545,000, respectively. During the three and nine months ended September 30, 2022, we recorded a loss on sale of $387,000 and a gain on sale of $37,809,000, respectively. The following table summarizes property sales during the nine months ended September 30, 2023 and 2022 (dollar amounts in thousands):

		Type	Number	Number
		of	of	of		Sales		Carrying		Net
Year	State	Properties	Properties	Beds/Units		Price		Value		Gain (Loss) (1)
2023	Florida	ALF	1	70	$	4,850	$	4,082	$	65
	Kentucky	ALF	1	60		11,000		10,720		57
	New Jersey	ALF	1	39		2,000		1,552		266
	New Mexico	SNF	2	235		21,250		5,523		15,287
	Nebraska	ALF	3	117		2,984		2,934		—
	Pennsylvania	ALF	2	130		11,128		6,054		4,870
Total 2023			10	651	$	53,212	$	30,865	$	20,545
2022	California	ALF	2	232	$	43,715	$	17,832	$	25,867
	California	SNF	1	121		13,250		1,846		10,846
	Texas	SNF	1	—		485		697		(434)
	Virginia	ALF	1	74		16,895		15,549		1,344	(2)
	n/a	n/a	—	—		—		—		186	(3)
Total 2022			5	427	$	74,345	$	35,924	$	37,809

(

(1) Calculation of net gain includes cost of sales and write-off of straight-line receivable and lease incentives, when applicable.

(2) In connection with this sale, the former operator paid us a lease termination fee of $1,181 which is not included in the gain on sale.

(3) We recognized additional gain due to the reassessment adjustment of the holdbacks related to properties sold during 2019 and 2020, under the expected value model per ASC Topic 606, Contracts with Customers (“ASC 606”).

Financing Receivables. As part of our acquisitions, we may from time to time, invest in sale and leaseback transactions. In accordance with ASC Topic 842, Leases (“ACS 842”), we are required to determine whether the sale and leaseback transaction qualifies as a sale. ASC 842 clarifies that an option for the seller-lessee to repurchase a real estate asset would generally preclude accounting for the transfer of the asset as a sale. Therefore, a sale and leaseback transaction of real estate that includes a seller-lessee repurchase option is accounted for as a failed sale and leaseback transaction. As a result, the purchased assets of a failed sale and leaseback transaction would be presented as Financing receivables on our Consolidated Balance Sheets and the rental revenue from these properties is recorded as Interest income from financing receivables on our Consolidated Statements of Income. Furthermore, upon expiration of the purchase option if the purchase option remains unexercised by the seller-lessee, the purchased assets will be reclassified from Financing receivables to Real property investments on our Consolidated Balance Sheets.

During 2023, we entered into a $121,321,000 JV with an affiliate of an existing operator and contributed $117,490,000 into the JV that purchased 11 assisted living and memory care communities from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit Internal Rate of Return (“IRR”) of 9.0%. During the three and nine months ended September 30, 2023, we recognized $2,427,000 and $7,198,000, respectively of Interest income from financing receivables and upon origination we recorded

14

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

$1,213,000 Provision for credit losses equal to 1% of the financing receivable balance related to this investment.

During 2022, we entered into a JV and contributed $61,661,000 into the JV that purchased three skilled nursing centers located in Florida for $75,825,000. The JV leased the centers back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year. During the three and nine months ended September 30, 2023, we recognized $1,405,000 and $4,215,000, respectively of Interest income from financing receivables related to this investment.

Mortgage Loans. The following table sets forth information regarding our investments in mortgage loans secured by first mortgages at September 30, 2023 (dollar amounts in thousands):

						Type	Percentage		Number of					Investment
			Gross			of	of					SNF	ALF	per
Interest Rate	Maturity	State	Investment			Property	Investment		Loans (1)	Properties (2)		Beds	Units	Bed/Unit
7.5%	2024	MO	$	1,961		OTH	0.4	%	1	—	(3)	—	—	$	n/a
7.5%	2024	LA		29,346		SNF	6.1	%	1	1		189	—	$	155.27
7.5%	2024	GA		51,111	(4)	ALF	10.7	%	1	1		—	203	$	251.78
7.8%	2025	FL		16,706		ALF	3.5	%	1	1		—	68	$	245.68
7.3%	2025	NC		10,750	(4)	ALF	2.2	%	1	1		—	45	$	238.89
7.3% (5)	2025	NC/SC		58,331		ALF	12.2	%	1	13		—	523	$	111.53
7.3% (5)	2026	NC		34,043		ALF	7.1	%	1	4		—	217	$	156.88
7.3% (5)	2026	NC		826		OTH	0.2	%	1	—	(6)	—	—	$	—
8.8%	2028	IL		16,500	(7)	SNF	3.5	%	1	1		150	—	$	110.00
10.6% (8)	2043	MI		184,220		SNF	38.5	%	1	15		1,875	—	$	98.25
9.7% (8)	2045	MI		40,000		SNF	8.4	%	1	4		480	—	$	83.33
10.1%	2045	MI		19,700		SNF	4.1	%	1	2		201	—	$	98.01
10.3% (8)	2045	MI		14,850		SNF	3.1	%	1	1		146	—	$	101.71
Total			$	478,344	(9)		100.0	%	13	44		3,041	1,056	$	116.75

(1) Some loans contain certain guarantees and provide for certain facility fees.

(2) Our mortgage loans are secured by properties located in eight states with seven borrowers.

(3) Represents a mortgage loan secured by a parcel of land for the future development of a 91-bed post-acute SNF.

(4) During the first quarter of 2023, we originated a $10,750 mortgage loan secured by a 45-unit MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%. Additionally, we invested $51,111 in an existing mortgage loan secured by a 203-unit ILF, ALF and MC located in Georgia by acquiring a participating interest owned by existing lenders for $42,251 in addition to converting our $7,461 mezzanine loan in the property into a participating interest in the mortgage loan. The mortgage loan matures in October 2024 and our investment is at an initial rate of 7.5% with an IRR of 7.75%. We recorded $1,380 of additional interest income in connection with the effective prepayment of the mezzanine loan in the first quarter of 2023.

(5) Represents the initial rate with an IRR of 8%.

(6) Represents a mortgage loan secured by a parcel of land in North Carolina held for future development of a seniors housing community.

(7) During the second quarter of 2023, we originated a $16,500 senior loan for the purchase of a 150-bed SNF in Illinois. The mortgage loan matures in June 2028 and our investment is at an interest rate of 8.75%.

(8) Mortgage loans provide for 2.25% annual increases in the interest rate.

(9) During the third quarter of 2023, we committed to fund a $19,500 mortgage loan for the construction of an 85-unit ALF and MC in Michigan. The borrower contributed $12,100 of equity which will initially fund the construction. Once all of the borrower’s equity has been drawn, we will begin funding the commitment. The loan term is approximately three years at a rate of 8.75%, and includes two, one-year extensions, each of which is contingent on certain coverage thresholds.

15

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

The following table summarizes our mortgage loan activity for the nine months ended September 30, 2023 and 2022 (in thousands):

	Nine Months Ended September 30,
	2023			2022
Originations and funding under mortgage loans receivable	$	83,383	(1)	$	35,234	(2)
Application of interest reserve		1,609			4,348
Scheduled principal payments received		(301)			(625)
Mortgage loan premium amortization		(5)			(4)
Provision for loan loss reserve		(847)			(389)
Net increase in mortgage loans receivable	$	83,839		$	38,564

(1) We originated the following:

(a) $10,750 mortgage loan secured by a 45-unit MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%;

(b) $51,111 mortgage loan investment secured by a 203-unit ILF, ALF and MC located in Georgia. We acquired a participating interest owned by existing lenders for $42,251 in addition to converting our $7,461 mezzanine loan in the property into a participating interest in the mortgage loan. The mortgage loan matures in October 2024 and our investment is at an initial rate of 7.5% with an IRR of 7.75%. We recorded $1,380 of additional interest income in connection with the effective prepayment of the mezzanine loan in the first quarter of 2023;

(c) $16,500 senior loan for the purchase of a 150-bed SNF in Illinois. The mortgage loan matures in June 2028 and our investment is at an interest rate of 8.75%;

(d) 5,022 of additional funding under other mortgage loans receivable; and

(e) $19,500 mortgage loan commitment for the construction of an 85-unit ALF and MC in Michigan. The borrower contributed $12,100 of equity which will initially fund the construction. Once all of the borrower’s equity has been drawn, we will begin funding the commitment. The loan term is approximately three years at a rate of 8.75%, and includes two, one-year extensions, each of which is contingent on certain coverage thresholds.

(2) We originated two senior mortgage loans, secured by four ALFs operated by an existing operator, as well as a land parcel in North Carolina. The communities have a combined total of 217 units, with an average age of less than four years. The land parcel is approximately 7.6 acres adjacent to one of the ALFs and is being held for the future development of a seniors housing community. The mortgage loans have a four-year term, an interest rate of 7.25% and an IRR of 8%.

We apply ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) and the “expected loss” model to estimate our loan losses on our mortgage loans and notes receivable. In determining the expected losses on these receivables, we utilize the probability of default and discounted cash flow methods. Further, we stress-test the results to reflect the impact of unknown adverse future events including recessions.

As of September 30, 2023, the accrued interest receivable of $54,605,000 was not included in the measurement of expected credit losses on the financing receivables, mortgage loans receivable and notes receivable (see Note 4. Notes Receivable). We elected not to measure an allowance for expected credit losses on the related accrued interest receivable using the expected credit loss standard. Rather, we have elected to write-off accrued interest receivable by reversing interest income and/or recognizing credit loss expense as incurred. We review the collectability of the accrued interest receivable quarterly as part of our review of the financing receivables, mortgage loans receivable or notes receivables including the performance of the underlying collateral and net worth of the borrower. For the nine months ended September 30, 2023 and 2022, we did not write-off any accrued interest receivable.

16

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

3. Investment in Unconsolidated Joint Ventures

We have preferred equity investments in two joint ventures. We determined that each of these JVs meets the accounting criteria to be considered a variable interest entity (“VIE”). We are not the primary beneficiary of the JVs as we do not have both: 1) the power to direct the activities that most significantly affect the JVs’ economic performance, and 2) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. However, we do have significant influence over the JVs. Therefore, we have accounted for the JVs using the equity method of accounting. The following table provides information regarding these preferred equity investments (dollar amounts in thousands):

	Type	Type		Total		Contractual		Number
	of	of		Preferred		Cash		of		Carrying
State	Properties	Investment		Return		Portion		Beds/ Units		Value
Washington	ALF/MC	Preferred Equity	(1)	12	%	7	%	95	$	6,340	(1)
Washington	UDP	Preferred Equity	(2)	14	%	8	%	—		13,000	(2)
Total								95	$	19,340

(1) Represents a preferred equity interest in an entity that developed and owns a 95-unit ALF and MC in Washington. Our investment represents 15.5% of the total investment. The preferred equity investment earns an initial cash rate of 7% increasing to 9% in year four until the internal rate of return (“IRR”) is 8%. After achieving an 8% IRR, the cash rate drops to 8% with an IRR ranging between 12% to 14%, depending upon timing of redemption. During the fourth quarter of 2021, the entity completed the development project and received its certificate of occupancy. We have the option to require the JV partner to purchase our preferred equity interest at any time between August 17, 2031 and December 31, 2036.

(2) Represents a preferred equity interest in an entity that will develop and own a 267-unit ILF and ALF in Washington. Our investment represents 11.0% of the estimated total investment. The preferred equity investment earns an initial cash rate of 8% with an IRR of 14%. The JV partner has the option to buy out our investment at any time after August 31, 2023 at the IRR rate. Also, we have the option to require the JV partner to purchase our preferred equity interest at any time between August 31, 2027 and, upon project completion and leasing the property, prior to the end of the first renewal term of the lease.

During the three and nine months ended September 30, 2023, we recognized $375,000 and $1,127,000, respectively, in income from unconsolidated joint ventures. During the three and nine months ended September 30, 2022, we recognized $376,000 and $1,127,000, respectively, in income from unconsolidated joint ventures. The following table summarizes our income recognized, and application of interest reserves related to our investments in unconsolidated joint ventures for the nine months ended September 30, 2023 and 2022 (in thousands):

	Type
	of		Income		Cash Interest		Application of
Year	Properties		Recognized		Earned		Interest Reserve
2023	ALF/MC	$	337	$	—	$	337
	UDP		790		—		790
Total		$	1,127	$	—	$	1,127
2022	ALF/MC	$	337	$	—	$	337
	UDP		790		351		439
Total		$	1,127	$	351	$	776

17

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

4. Notes Receivable

Notes receivable consist of a mezzanine loan and working capital loans. The following table sets forth information regarding our investment in notes receivable at September 30, 2023 (dollar amounts in thousands):

Interest				Type of	Gross				Type of
Rate	IRR		Maturity	Loan	Investment			# of loans	Property
5.0%	—		2024	Working capital	$	2,442		1	ALF
4.0%	—		2024	Working capital		13,531		1	SNF
5.0%	—		2025	Working capital		732		1	ALF
7.5%	—		2027	Working capital		550		1	ALF
8.0%	11.0	%	2027	Mezzanine		25,000		1	ALF
8.8%	12.0	%	2028	Mezzanine		17,000	(1)	1	ALF
6.5%	—		2030	Working capital		138		1	SNF
7.3%	—		2030	Working capital		500		1	ALF
7.3%	—		2030	Working capital		1,107		1	ALF
7.0%	—		2031	Working capital		2,693		1	ALF
					$	63,693	(2)	10

(1) During the third quarter of 2023, we originated a mezzanine loan to recapitalize an existing 130-unit ILF/ALF/MC in Georgia and construction of 89 additional units. The loan term is five years at an initial yield of 8.75% and an IRR of 12.0%.

(2) Excludes the impact of credit loss reserve.

The following table is a summary of our notes receivable components as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023		December 31, 2022
Mezzanine loans	$	42,000	$	36,815
Working capital loans		21,693		22,157
Notes receivable credit loss reserve		(637)		(589)
Total	$	63,056	$	58,383

The following table summarizes our notes receivable activity for the nine months ended September 30, 2023 and 2022 (in thousands):

	Nine Months Ended September 30,
		2023			2022
Advances under notes receivable	$	19,258	(1)	$	37,008	(3)
Principal payments received under notes receivable		(14,537)	(2)		(6,618)
Provision for credit losses		(48)			(303)
Net increase in notes receivable	$	4,673		$	30,087

(1) During the third quarter of 2023, we originated a mezzanine loan to recapitalize an existing 130-unit ILF/ALF/MC in Georgia and construction of 89 additional units. The loan term is five years at an initial yield of 8.75% and an IRR of 12.0%.

(2) During 2023, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190 from a mezzanine loan prepayment. The mezzanine loan was on a 136-unit ILF in Oregon. Additionally, another $7,461 mezzanine loan was effectively prepaid through converting it as part of our $51,111 investment in a participating interest in an existing mortgage loan that is secured by a 203-unit ALF, ILF and MC located in Georgia. We recorded $1,380 of interest income in connection with the effective prepayment of the mezzanine loan.

(3) During 2022, we originated a $25,000 mezzanine loan for the recapitalization of a five-property seniors housing portfolio. The mezzanine loan has a term of approximately five years, with two one-year extension options and bears interest at 8% with an IRR of 11%. The five communities are located in Oregon and Montana, have a total of 621 units, and include independent living, assisted living and memory care.

18

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

5. Lease Incentives

Our non-contingent lease incentive balances at September 30, 2023 and December 31, 2022 were $2,193,000 and $1,789,000, respectively. The following table summarizes our lease incentives activity for the nine months ended September 30, 2023 and 2022 (in thousands):

	Nine Months Ended September 30,
		2023			2022
Lease incentives funded	$	1,023	(1)	$	418
Amortization of lease incentives		(584)			(665)
Adjustment for collectability of lease incentives		—			(256)	(3)
Other adjustments (2)		(35)			(174)
Net increase (decrease) in non-contingent lease incentives	$	404		$	(677)

(1) As part of our investment in a $54,134 JV, we committed to fund $2,100 of lease incentive, of which $1,004 was funded during the nine months ended September 30, 2023.

(2) Primarily relates to lease incentive balance write-off related to property sales.

(3) Represents the lease incentive balance write-off related to a closed property and subsequent lease termination and lease incentive balance write-off related to 12 assisted living communities transitioned to an existing operator.

Non-contingent lease incentives represent payments made to our lessees for various reasons including entering into a new lease or lease amendments and extensions. Contingent lease incentives represent potential contingent earn-out payments that may be made to our lessees in the future, as part of our lease agreements. From time to time, we may commit to provide contingent payments to our lessees, upon our properties achieving certain rent coverage ratios. Once the contingent payment becomes probable and estimable, the contingent payment is recorded as a lease incentive. Lease incentives are amortized as a yield adjustment to rental income over the remaining life of the lease.

6. Debt Obligations

Unsecured Credit Facility. We have an unsecured credit agreement (the “Credit Agreement”) that provides for an aggregate commitment of the lenders of up to $500,000,000 comprising of a $400,000,000 revolving credit facility (the “Revolving Line of Credit”) and two $50,000,000 term loans (the “Term Loans”). The Credit Agreement permits us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1,000,000,000. The Revolving Line of Credit matures November 19, 2025 and provides for a one-year extension option at our discretion, subject to customary conditions. The Term Loans mature on November 19, 2025 and November 19, 2026. During the fourth quarter of 2022, we entered into the First Amendment (the “Amended Credit Agreement”) to replace LIBOR with SOFR, plus a credit spread adjustment of 10 basis points (“Adjusted SOFR”), as the reference rate for purpose of calculating interest under the Amended Credit Agreement. Other material terms of the Credit Agreement remain unchanged. Based on our leverage at September 30, 2023, the facility provides for interest annually at Adjusted SOFR plus 120 basis points and a facility fee of 20 basis points and the Term Loans provide for interest annually at Adjusted SOFR plus 140 basis points.

Interest Rate Swap Agreements. In connection with entering into the Term Loans described above, we entered into two receive variable/pay fixed interest rate swap agreements (the “Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that will effectively lock-in the forecasted interest payments on the Term Loans’ borrowings over their four and five year terms of the loans. The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value in Prepaid expenses and other assets, with cumulative changes

19

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. In connection with entering into the Amended Credit Agreement discussed above, we entered into amendments to our Interest Rate Swaps to account for SOFR as the updated reference rate in the Amended Credit Agreement. During the three and nine months ended September 30, 2023, we recorded a $28,000 increase and $123,000 decrease in fair value of Interest Rate Swaps, respectively. During the three and nine months ended September 30, 2022, we recorded increase of $3,306,000 and $9,617,000 in fair value of Interest Rate Swaps, respectively.

As of September 30, 2023 and December 31, 2022, the terms of the Interest Rate Swaps are as follows (dollar amounts in thousands):

						Notional	Fair Value at
Date Entered	Maturity Date	Swap Rate		Rate Index		Amount		September 30, 2023		December 31, 2022
November 2021	November 19, 2025	2.62	%	1-month SOFR	$	50,000	$	3,776	$	4,003
November 2021	November 19, 2026	2.76	%	1-month SOFR		50,000		4,820		4,716
					$	100,000	$	8,596	$	8,719

Senior Unsecured Notes. We have senior unsecured notes held by institutional investors with interest rates ranging from 3.66% to 5.03%. The senior unsecured notes mature between 2024 and 2033.

The senior unsecured notes and the Credit Agreement, including the Revolving Line of Credit and the Term Loans, contain financial covenants, which are measured quarterly, that require us to maintain, among other things:

● a ratio of total indebtedness to total asset value not greater than 0.6 to 1.0;

● a ratio of secured debt to total asset value not greater than 0.35 to 1.0;

● a ratio of unsecured debt to the value of the unencumbered asset value not greater than 0.6 to 1.0; and

● a ratio of EBITDA, as calculated in the debt obligation, to fixed charges not less than 1.50 to 1.0.

At September 30, 2023, we were in compliance with all applicable financial covenants. These debt obligations also contain additional customary covenants and events of default that are subject to a number of important and significant limitations, qualifications and exceptions.

The following table sets forth information regarding debt obligations by component as of September 30, 2023 and December 31, 2022 (dollar amounts in thousands):

		At September 30, 2023				At December 31, 2022
	Applicable			Available				Available
	Interest	Outstanding		for		Outstanding		for
Debt Obligations	Rate (1)	Balance		Borrowing		Balance		Borrowing
Revolving line of credit	6.63%	$	362,250	$	37,750	$	130,000	$	270,000
Term loans, net of debt issue costs	2.74%		99,620		—		99,511		—
Senior unsecured notes, net of debt issue costs	4.20%		494,353		—		538,343		—
Total	4.97%	$	956,223	$	37,750	$	767,854	$	270,000

(1) Represents weighted average of interest rate as of September 30, 2023.

20

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

During the nine months ended September 30, 2023 and 2022, our debt borrowings and repayments were as follows (in thousands):

	Nine Months Ended September 30,
	2023				2022
Debt Obligations		Borrowings		Repayments	Borrowings		Repayments
Revolving line of credit	$	274,450	$	(42,200)	$	194,000	$	(153,900)
Senior unsecured notes		—		(44,160)		75,000		(43,160)
Total	$	274,450	$	(86,360)	$	269,000	$	(197,060)

7. Equity

Non-controlling Interests. We have entered into partnerships to develop and/or own real estate. Given that our limited members do not have the substantive kick-out rights, liquidation rights, or participation rights, we have concluded that the partnerships are VIEs. As we exercise power over and receive benefits from the VIEs, we are considered the primary beneficiary. Accordingly, we consolidate the VIEs and record the non-controlling interests on the consolidated financial statements.

As of September 30, 2023, we have the following consolidated VIEs (in thousands):

						Gross
Investment			Property			Consolidated		Non-Controlling
Year	Purpose		Type	State		Assets (1)		Interests
2023	Owned real estate	(2)	ILF/ALF/MC	OH	$	54,714	$	9,134
2023	Owned real estate	(3)	ALF/MC	NC		121,321		3,831
2022	Owned real estate	(4)	SNF	FL		76,712		14,325
2018	Owned real estate		ILF	OR		14,650		2,907
2018	Owned real estate and development		ALF/MC	OR		18,452		1,231
2017	Owned real estate and development		ILF/ALF/MC	WI		22,007		2,305
2017	Owned real estate		ALF/MC	SC		11,680		1,240
Total					$	319,536	$	34,973

(1) Includes the total real estate investments and excludes intangible assets.

(2) During the second quarter of 2023, we entered into a JV that purchased an ILF/ALF/MC in Ohio with a total of 242 units. For more information see Acquisitions above in Note 2.

(3) During the first quarter of 2023, we entered into a JV that purchased 11 ALF and MC with a total of 523 units. For more information regarding this transaction see Financing Receivable above in Note 2.

(4) During 2022, we entered into a JV that purchased three SNFs with a total of 299 beds. For more information regarding this transaction see Financing Receivable above in Note 2.

Common Stock. We have separate equity distribution agreements (collectively, “Equity Distribution Agreements”) to offer and sell, from time to time, up to $200,000,000 in aggregate offering price of shares of our common stock. During the nine months ended September 30, 2023, we sold 48,500 shares of common stock for $1,777,000 in net proceeds under our Equity Distribution Agreements. In conjunction with the sale of common stock, we incurred $80,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received. At September 30, 2023, we had $128,822,000 available under the Equity Distribution Agreements.

During the nine months ended September 30, 2023 and 2022, we acquired 43,933 shares and 39,463 shares, respectively, of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

21

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

Available Shelf Registration. We have an automatic shelf registration statement on file with the SEC, and currently have the ability to file additional automatic shelf registration statements, to provide us with capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units. We may from time to time raise capital under our automatic shelf registration statement in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering. Our shelf registration statement expires on February 17, 2025.

Distributions. We declared and paid the following cash dividends (in thousands):

	Nine Months Ended September 30,
	2023				2022
	Declared		Paid		Declared		Paid
Common Stock (1)	$	70,767	$	70,767	$	68,202	$	68,202

(1) Represents $0.19 per share per month for the nine months ended September 30, 2023 and 2022.

In October 2023, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2023, payable on October 31, November 30, and December 29, 2023, respectively, to stockholders of record on October 23, November 22, and December 21, 2023, respectively.

Stock-Based Compensation. During the second quarter of 2021, we adopted and our shareholders approved the 2021 Equity Participation Plan (“the 2021 Plan”) which replaces the 2015 Equity Participation Plan (“the 2015 Plan”). Under the 2021 Plan, 1,900,000 shares of common stock have been authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 Plan after December 31, 2020 and prior to adoption. In addition, any shares that are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan. Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2021 Plan and the 2015 Plan are set by our compensation committee at its discretion.

At September 30, 2023, we had 5,000 stock options outstanding and exercisable. During each of the nine months ended September 30, 2023 and 2022, 5,000 stock options expired and were cancelled. During the nine months ended September 30, 2023 and 2022, no stock options were granted or exercised.

The following table summarizes our restricted stock activity for the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
	2023		2022
Outstanding, January 1		229,236		197,422
Granted		146,020		135,210
Vested		(115,551)		(103,396)
Cancelled		(1,085)		—
Outstanding, September 30		258,620		229,236

No performance-based stock units vested during the nine months ended September 30, 2023, and 2022.

22

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

During the nine months ended September 30, 2023 and 2022, we granted restricted stock and performance-based stock units under the 2021 Plan as follows:

	No. of	Price per
Year	Shares/Units	Share		Reward Type	Vesting Period
2023	127,960	$	37.16	Restricted stock	ratably over 3 years
	86,867	$	37.16	Performance-based stock units	TSR targets (1)
	15,060	$	31.54	Restricted stock	May 24,2024
	3,000	$	35.45	Restricted stock	July 25, 2024
	232,887
2022	122,865	$	33.94	Restricted stock	ratably over 3 years
	86,332	$	33.94	Performance-based stock units	TSR targets (1)
	12,345	$	38.48	Restricted stock	May 25, 2023
	221,542

(1) Vesting is based on achieving certain total shareholder return (“TSR”) targets in 4 years with acceleration opportunity in 3 years.

Compensation expense recognized related to the vesting of restricted common stock and performance-based stock units for the nine months ended September 30, 2023 and 2022 were $6,349,000 and $5,951,000, respectively. At September 30, 2023, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (in thousands):

	Remaining
	Compensation
Vesting Date	Expense
October - December 2023	$	2,132
2024		6,026
2025		3,238
2026		356
Total	$	11,752

23

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

8. Commitments and Contingencies

At September 30, 2023, we had commitments as follows (in thousands):

						Total
	Investment			2023		Commitment		Remaining
	Commitment			Funding		Funded		Commitment
Real estate properties (Note 2. Real Estate Investments)	$	10,242	(1)	$	1,932	$	2,650	$	7,592
Accrued incentives and earn-out liabilities (Note 5. Lease Incentives)		21,100	(2)		1,004		1,004		20,096
Mortgage loans (Note 2. Real Estate Investments)		43,598	(3)		1,476		7,178		36,420
Notes receivable (Note 4. Notes Receivable)		28,950	(4)		2,258		15,973		12,977
Total	$	103,890		$	6,670	$	26,805	$	77,085

(1) Represents commitments to purchase land and improvements, if applicable, and to develop, re-develop, renovate or expand seniors housing and skilled nursing properties.

(2) Includes an earn-out payment of up to $3,000 to an operator under a master lease on four SNFs in Texas which were acquired during 2022. The master lease allows either an earn-out payment up to $3,000 or a purchase option. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. If neither option is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the purchase option see Note 2. Real Estate Investments.

(3) Represents $19,500 related to a construction loan, $6,098 of commitments for the expansion, renovation and working capital related to seniors housing and skilled nursing properties securing the mortgage loans and $18,000 of commitments which are contingent upon the borrower achieving certain coverage ratios.

(4) Represents working capital loan commitments.

Additionally, some of our lease agreements provide purchase options allowing the lessee to purchase the properties they currently lease from us. See Note 2. Real Estate Investments for a table summarizing information about our purchase options.

We are a party from time to time to various general and professional liability claims and lawsuits asserted against the lessees or borrowers of our properties, which in our opinion are not singularly or in the aggregate material to our results of operations or financial condition. These types of claims and lawsuits may include matters involving general or professional liability, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder. We believe that these matters are the responsibility of our lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable leases or mortgages. We intend to continue to vigorously defend such claims.

24

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

9. Major Operators

We have one operator that represents 10% or more of our combined rental revenue and interest income from mortgage loans. The following table sets forth information regarding our major operator as of September 30, 2023:

	Number of		Number of		Percentage of
			SNF	ALF	Total		Total
Operator	SNF	ALF	Beds	Units	Revenues (1)		Assets (2)
Prestige Healthcare (3)	24	—	2,820	93	16.6	%	14.2	%

(1) During 2023, we agreed to defer up to $1,500, or up to $300 per month for May through September 2023, in interest payments due on one of Prestige Healthcare’s mortgage loans secured by 15 skilled nursing centers in Michigan. We deferred $600 in interest payments during the second quarter of 2023 and $900 in interest payments during the third quarter of 2023.

(2) Represents the net carrying value of the mortgage loans and properties we own divided by the Total assets on the Consolidated Balance Sheets.

(3) The majority of the revenue derived from this operator relates to interest income from mortgage loans.

Subsequent to September 30, 2023, we amended the loan with Prestige which was subject to a previously agreed interest deferral and is secured by 15 skilled nursing centers in Michigan. As part of the amendment, LTC has drawn down $2,767,000 of the approximate $4,945,000 letter of credit from Prestige to repay all deferred interest outstanding through October 2023. We will further draw down approximately $334,000 in each of November and December 2023 to be applied toward interest due on the loan at that point. As a result, we expect to receive all contractual interest of $19,539,000 due from Prestige in 2023. Beginning on January 1, 2024, the monthly minimum interest payment due to LTC will be set based on an annual current pay rate of 8.5% on the outstanding loan balance. The contractual interest rate of the loan remains unchanged.

Our financial position and ability to make distributions may be adversely affected if Prestige Healthcare or any of our lessees and borrowers face financial difficulties, including any bankruptcies, inability to emerge from bankruptcy, insolvency or general downturn in business of any such operator, continuing impact upon services or occupancy levels due to COVID-19, or in the event any such operator does not renew and/or extend its relationship with us.

25

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

10. Earnings per Share

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income	$	22,627	$	13,389	$	62,792	$	82,386
Less income allocated to non-controlling interests		(430)		(99)		(1,287)		(301)
Less income allocated to participating securities:
Non-forfeitable dividends on participating securities		(147)		(131)		(440)		(401)
Income allocated to participating securities		—		—		—		(80)
Total net income allocated to participating securities		(147)		(131)		(440)		(481)
Net income available to common stockholders		22,050		13,159		61,065		81,604
Effect of dilutive securities:
Participating securities (1)		—		—		—		—
Net income for diluted net income per share	$	22,050	$	13,159	$	61,065	$	81,604
Shares for basic net income per share		41,153		40,270		41,127		39,658
Effect of dilutive securities:
Stock options (2)		—		1		—		—
Performance-based stock units		58		281		58		281
Participating securities (1)		—		—		—		—
Total effect of dilutive securities		58		282		58		281
Shares for diluted net income per share		41,211		40,552		41,185		39,939
Basic net income per share	$	0.54	$	0.33	$	1.48	$	2.06
Diluted net income per share	$	0.54	$	0.32	$	1.48	$	2.04

(1) For the three and nine months ended September 30, 2023 and 2022, the participating securities have been excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

(2) For the three and nine months ended September 30, 2023 and the nine months ended September 30, 2022, the stock options have been excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

11. Fair Value Measurements

In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses reported in earnings. We did not elect the fair value option for any of our financial assets and financial liabilities.

26

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

The carrying amount of cash and cash equivalents approximates their fair value because of the short-term maturity of these instruments. We do not invest our cash in auction rate securities. The carrying value and estimated fair value of our financial instruments as of September 30, 2023 and December 31, 2022 were as follows (in thousands):

	At September 30, 2023					At December 31, 2022
	Carrying		Fair			Carrying		Fair
	Value		Value			Value		Value
Financing receivable, net of credit loss reserve	$	196,053	$	199,050	(1)	$	75,999	$	76,033	(1)
Mortgage loans receivable, net of credit loss reserve		473,567		560,808	(2)		389,728		461,276	(2)
Notes receivable, net of credit loss reserve		63,056		70,482	(3)		58,383		61,858	(3)
Revolving line of credit		362,250		362,250	(4)		130,000		130,000	(4)
Term loans, net of debt issue costs		99,620		100,000	(4)		99,511		100,000	(4)
Senior unsecured notes, net of debt issue costs		494,353		429,534	(5)		538,343		477,653	(5)

(1) Our investment in financing receivables is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate used to value our future cash inflows of the financing receivables at September 30, 2023 and December 31, 2022 was 7.6%.

(2) Our investment in mortgage loans receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash inflows of the mortgage loans receivable at September 30, 2023 and December 31, 2022 was 9.1% and 9.3%, respectively.

(3) Our investments in notes receivable are classified as Level 3. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash flows of the notes receivable at September 30, 2023 and December 31, 2022, were 6.8% and 7.1%, respectively.

(4) Our revolving line of credit and term loans bear interest at a variable interest rate. The estimated fair value of our revolving line of credit and term loans approximated their carrying values at September 30, 2023 and December 31, 2022 based upon prevailing market interest rates for similar debt arrangements.

(5) Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is measured based upon management’s estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities. At September 30, 2023, the discount rate used to value our future cash outflow of our senior unsecured notes was 7.25% for those maturing before year 2030 and 7.50% for those maturing at or beyond year 2030. At December 31, 2022, the discount rate used to value our future cash outflow of our senior unsecured notes was 6.50% for those maturing before year 2030 and 7.00% for those maturing at or beyond year 2030.

12. Subsequent Events

Subsequent to September 30, 2023, the following events occurred:

Real Estate: We added seven additional properties to the new Brookdale master lease commencing on January 1, 2024. One property is located in Ohio with 42 assisted living units and six are located in Texas with 235 assisted living units. These properties are currently included in the original Brookdale master lease. As a result of this amendment, Brookdale will operate 17 properties under the new master lease with the initial annual rent of $9,325,000 and the capital expenditure commitment will be $7,150,000. Additionally, the new master lease provides Brookdale with a purchase option on these seven properties. Also, we leased six assisted living communities located in Oklahoma, with a total of 219 units, to a current LTC operator under a new master lease, expected to commence on November 1, subject to the issuance of licensure to the new operator. These properties are currently included in the original Brookdale master lease. The lease term is for three years, with one four-year extension period. Rent in the first year is set at $960,000, increasing to $984,000 in the second year, and $1,150,000 in the third year. Additionally, the master lease includes a purchase option that can be exercised starting in November 2027

27

LTC PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(Unaudited)

through October 2029 if the lessee exercises its four-year extension option. Furthermore, we amended the loan with Prestige which was subject to a previously agreed interest deferral and is secured by 15 skilled nursing centers in Michigan. As part of the amendment, LTC has drawn down $2,767,000 of the approximate $4,945,000 letter of credit from Prestige to repay all deferred interest outstanding through October 2023. We will further draw down approximately $334,000 in each of November and December 2023 to be applied toward interest due on the loan at that point. As a result, we expect to receive all contractual interest of $19,539,000 due from Prestige in 2023. Beginning on January 1, 2024, the monthly minimum interest payment due to LTC will be set based on an annual current pay rate of 8.5% on the outstanding loan balance. The contractual interest rate of the loan remains unchanged.

Equity: We declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2023, payable on October 31, November 30, and December 29, 2023, respectively to stockholders of record on October 23, November 22, and December 21, 2023, respectively.

28

Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Statements

This quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, adopted pursuant to the Private Securities Litigation Reform Act of 1995. Statements that are not purely historical may be forward-looking. You can identify some of the forward-looking statements by their use of forward-looking words, such as “believes,” “expects,” “may,” “will,” “could,” “would,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates,” or the negative of those words or similar words. Forward-looking statements involve inherent risks and uncertainties regarding events, conditions and financial trends that may affect our future plans of operation, business strategy, results of operations and financial position. A number of important factors could cause actual results to differ materially from those included within or contemplated by such forward-looking statements, including, but not limited to, our dependence on our operators for revenue and cash flow; the duration and extent of the effects of the COVID-19 pandemic; government regulation of the health care industry; federal and state health care cost containment measures including reductions in reimbursement from third-party payors such as Medicare and Medicaid; required regulatory approvals for operation of health care facilities; a failure to comply with federal, state, or local regulations for the operation of health care facilities; the adequacy of insurance coverage maintained by our operators; our reliance on a few major operators; our ability to renew leases or enter into favorable terms of renewals or new leases; the impact of inflation, operator financial or legal difficulties; the sufficiency of collateral securing mortgage loans; an impairment of our real estate investments; the relative illiquidity of our real estate investments; our ability to develop and complete construction projects; our ability to invest cash proceeds for health care properties; a failure to qualify as a REIT; our ability to grow if access to capital is limited; and a failure to maintain or increase our dividend. For a discussion of these and other factors that could cause actual results to differ from those contemplated in the forward-looking statements, please see the discussion under “Risk Factors” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in our publicly available filings with the Securities and Exchange Commission. We do not undertake any responsibility to update or revise any of these factors or to announce publicly any revisions to forward-looking statements, whether as a result of new information, future events or otherwise.

Executive Overview

Business and Investment Strategy

We are a real estate investment trust (“REIT”) that invests in seniors housing and health care properties through sale-leaseback, financing receivables, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. Our primary objectives are to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators.

29

The following graph summarizes our gross investments as of September 30, 2023:

Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), assisted living communities (“ALF”), independent living communities (“ILF”), memory care communities (“MC”) and combinations thereof. We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals. To meet these objectives, we attempt to invest in properties that provide opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment.

We conduct and manage our business as one operating segment for internal reporting and internal decision-making purposes. For purposes of this quarterly report and other presentations, we generally include ALF, ILF, MC, and combinations thereof in the ALF classification. As of September 30, 2023, seniors housing and health care properties comprised approximately 99.3% of our gross investment portfolio. We have been operating since August 1992.

Substantially all of our revenues and sources of cash flows from operations are derived from operating lease rentals, interest earned on financing receivable, interest earned on outstanding loans receivable and income from investments in unconsolidated joint ventures. Income from our investments represent our primary source of liquidity to fund distributions and are dependent upon the performance of the operators on their lease and loan obligations and the rates earned thereon. To the extent that the operators experience operating difficulties and are unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. To mitigate this risk, we monitor our investments through a variety of methods determined by property type and operator. Our monitoring process includes periodic review of financial statements for each facility, periodic review of operator credit, scheduled property inspections and review of covenant compliance.

30

In addition to our monitoring and research efforts, we also structure our investments to help mitigate payment risk. Some operating leases and loans are credit enhanced by guaranties and/or letters of credit. In addition, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other loans, operating leases or agreements between us and the operator and its affiliates.

Depending upon the availability and cost of external capital, we anticipate making additional investments in health care related properties. New investments are generally funded from cash on hand, proceeds from periodic asset sales, temporary borrowings under our unsecured revolving line of credit and internally generated cash flows. Our investments generate internal cash from rent and interest receipts and principal payments on loan receivables and income from unconsolidated joint ventures. Permanent financing for future investments, which replaces funds drawn under our unsecured revolving line of credit, is expected to be provided through a combination of public and private offerings of debt and equity securities. We could also look to secured and unsecured debt financing. The timing, source and amount of cash flows provided by financing activities and used in investing activities are sensitive to the capital markets’ environment, especially to changes in interest rates. Changes in the capital markets’ environment may impact the availability of cost-effective capital.

We believe our business model has enabled and will continue to enable us to maintain the integrity of our property investments, including in response to financial difficulties that may be experienced by operators. Traditionally, we have taken a conservative approach to managing our business, choosing to maintain liquidity and exercise patience until favorable investment opportunities arise.

31

Real Estate Portfolio Overview

The following tables summarize our real estate investment portfolio by owned properties and mortgage loans and by property type, as of September 30, 2023 (dollar amounts in thousands):

								Nine Months Ended
								September 30, 2023
		Number of				Percentage					Percentage
	Number of	SNF	ALF	Gross		of		Rental			of Total
Owned Properties	Properties (1)	Beds	Units	Investments		Investments		Revenue			Revenues
Assisted Living	92	—	5,323	$	800,963	37.0	%	$	39,958		29.2	%
Skilled Nursing	50	6,113	236		592,880	27.4	%		43,344		31.7	%
Other (2)	1	118	—		12,005	0.6	%		750		0.5	%
Total Owned Properties	143	6,231	5,559		1,405,848	65.0	%		84,052	(4)​	61.4	%
		Number of				Percentage		Interest Income			Percentage
	Number of	SNF	ALF		Gross	of		from Financing			of Total
Financing Receivables	Properties (1)	Beds	Units		Investments	Investments		Receivable			Revenues
Assisted Living	11	—	523		121,321	5.6	%		7,198		5.3	%
Skilled Nursing	3	299	—		76,712	3.5	%		4,215		3.1	%
Total Financing Receivables	14	299	523		198,033	9.1	%		11,413		8.4	%
		Number of				Percentage		Interest Income			Percentage
	Number of	SNF	ALF		Gross	of		from Mortgage			of Total
Mortgage Loans	Properties (1)	Beds	Units		Investments	Investments		Loans			Revenues
Assisted Living	20	—	1,056		170,941	7.9	%		9,436		6.9	%
Skilled Nursing	24	3,041	—		304,616	14.1	%		25,824		18.9	%
Other (3)	—	—	—		2,787	0.1	%		157		0.1	%
Total Mortgage Loans	44	3,041	1,056		478,344	22.1	%		35,417		25.9	%
		Number of				Percentage		Interest			Percentage
	Number of	SNF	ALF		Gross	of		and other			of Total
Notes Receivable	Properties (1)	Beds	Units		Investments	Investments		Income			Revenues
Assisted Living	6	—	751		50,024	2.3	%		4,323		3.2	%
Skilled Nursing	—	—	—		13,669	0.6	%		475		0.3	%
Total Notes Receivable	6	—	751		63,693	2.9	%		4,798		3.5	%
		Number of				Percentage		Income from			Percentage
	Number of	SNF	ALF		Gross	of		Unconsolidated			of Total
Unconsolidated Joint Ventures	Properties (1)	Beds	Units		Investments	Investments		Joint Ventures			Revenues
Assisted Living	1	—	95		6,340	0.3	%		337		0.2	%
Under Development	—	—	—		13,000	0.6	%		790		0.6	%
Total Unconsolidated Joint Ventures	1	—	95		19,340	0.9	%		1,127		0.8	%
Total Portfolio	208	9,571	7,984	$	2,165,258	100.0	%	$	136,807		100.0	%

	Number	Number of				Percentage
	of	SNF	ALF	Gross		of
Summary of Properties by Type	Properties (1)	Beds	Units	Investments		Investments
Assisted Living	130	—	7,748	$	1,149,589	53.1	%
Skilled Nursing	77	9,453	236		987,877	45.6	%
Other (2) (3)	1	118	—		14,792	0.7	%
Under Development	—	—	—		13,000	0.6	%
Total Portfolio	208	9,571	7,984	$	2,165,258	100.0	%

(1) We have investments in owned properties, financing receivables, mortgage loans, notes receivable and unconsolidated joint ventures in 27 states to 29 operators.

(2) Includes three parcels of land held-for-use and one behavioral health care hospital.

(3) Includes one parcel of land in Missouri securing a first mortgage held for future development of a post-acute SNF and one parcel of land in North Carolina securing a first mortgage held for future development of a seniors housing community.

(4) Excludes variable rental income from lessee reimbursement of $9,846 and sold properties of $963.

32

As of September 30, 2023, we had $1.7 billion in net carrying value of investments, consisting of $1.0 billion or 57.3% invested in owned and leased properties, $0.2 billion or 11.1% invested in financing receivables, $0.5 billion or 26.9% invested in mortgage loans secured by first mortgages, $63.1 million or 3.6% in notes receivable and $19.3 million or 1.1% in unconsolidated joint ventures.

Rental income, income from financing receivables and interest income from mortgage loans represented 64.5%, 7.8% and 24.1%, respectively, of Total revenues on the Consolidated Statements of Income for the nine months ended September 30, 2023. In most instances, our lease structure contains fixed annual rental escalations and/or annual rental escalations that are contingent upon changes in the Consumer Price Index. Certain leases have annual rental escalations that are contingent upon changes in the gross operating revenues of the property. This revenue is not recognized until the appropriate contingencies have been resolved.

Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent payable upon renewal being greater or less than that currently being paid. During 2023, Brookdale Senior Living Communities, Inc. (“Brookdale”) elected not to exercise its renewal option under a master lease that matures on December 31, 2023. See below under Update on Certain Operators for further discussion.

Additionally, during 2023, a master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed at the contractual rate for another five years extending the maturity to November 2028. The centers have a total of 216 beds and are located in Florida. Also, another master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed for another two years extending the maturity to December 2025. The master lease was renewed at the contractual annual cash rent of $1.0 million increasing 2.5% per year. As amended, this master lease provides the lessee with a purchase option available through December 31, 2024. The centers have a total of 141 beds and are located in Tennessee.

For the nine months ended September 30, 2023, we recorded $1.6 million in straight-line rental adjustment and amortization of lease incentive cost of $0.6 million. During the nine months ended September 30, 2023, we received $97.1 million of cash rental income, which includes $9.8 million of operator reimbursements for real estate taxes. At September 30, 2023, the straight-line rent receivable balance on the consolidated balance sheet was $20.1 million.

For the nine months ended September 30, 2023, we recorded $35.4 million in Interest income from mortgage loans which includes $28.0 million of interest received in cash, $1.8 million of income from interest reserves and $5.6 million in mortgage loans effective interest. At September 30, 2023, the mortgage loans effective interest receivable which is included in the Interest receivable line item in our Consolidated Balance Sheets was $49.8 million.

Update on Certain Operators

Anthem Memory Care

Anthem Memory Care (“Anthem”) operates 11 memory care communities under a master lease and was placed in default in 2017 resulting from Anthem’s partial payment of its minimum rent. However, we did not enforce our rights and remedies pertaining to the event of default, under the stipulation that Anthem achieves sufficient performance and pays agreed upon rent. Anthem increased their rent payment every year between 2017 and 2021. During the second and third quarter of 2022, we agreed to a certain temporary rent reduction totaling $1.5 million. During the fourth quarter of 2022, we received payment of Anthem’s $1.5 million temporary rent reduction and a return to Anthem’s previously

33

agreed upon rent of $0.9 million per month. Accordingly, Anthem paid us the agreed upon annual cash rent of $10.8 million in 2022 and we anticipate receiving $10.8 million in 2023 and 2024. During the first quarter of 2023, we transitioned a 60-unit memory care community located in Ohio to Anthem under a new two-year lease. Under the new two-year lease, no rent was paid through May 2023 after which cash rent is based on mutually agreed upon fair market rent. The first quarterly mutually agreed upon rent for June through August 2023 was set at $45,000 and paid in August 2023. The second quarterly mutually agreed upon rent for the period of September through November was set at $60,000 and is payable in November 2023, at which time rent will be reset for the following three months. Anthem is current on agreed upon rent payments through October 2023. We receive regular financial performance updates from Anthem and continue to monitor their performance obligations under the master lease agreement.

Brookdale Senior Living Communities, Inc

Brookdale Senior Living Communities, Inc’s (“Brookdale”) master lease matures on December 31, 2023 and provides Brookdale a $4.0 million capital commitment, which expired on February 28, 2023, at a yield of 7% with a reduced rate for qualified ESG projects. During 2023, we funded $0.9 million under Brookdale’s capital commitment. The master lease provides three renewal options consisting of a two-year renewal option, a five-year renewal option and a 10-year renewal option. During the first quarter of 2023, Brookdale elected not to exercise its renewal option. Brookdale is obligated to pay rent on the portfolio of 35 assisted living communities through maturity and is current on rent payments through October 2023. We are working on options for the portfolio as follows:

● We entered into agreements to sell seven assisted unit communities in the existing Brookdale portfolio. Four properties located in Florida will be sold for approximately $18.8 million, and three properties in South Carolina will be sold for approximately $8.4 million. We expect these sales to close during the fourth quarter of 2023 and expect to receive $20.0-$21.0 million of proceeds, net of transaction costs and seller financing, as a result of these sales. These properties were classified as held-for-sale as of September 30, 2023.

● We re-leased 10 properties in the existing Brookdale portfolio to Brookdale under a new master lease. This new master lease includes six properties in Colorado and four in Kansas. The six-year master lease will commence on January 1, 2024. Rent in the first year is set at $8.0 million escalating by approximately 2.0% annually. The lease includes a purchase option that can be exercised in 2029. We also agreed to fund $4.5 million for capital expenditures for the first two years of the lease at an initial rate of 8.0%, escalating by approximately 2.0% thereafter.

● Subsequent to September 30, 2023, we added seven additional properties to the new Brookdale master lease commencing on January 1, 2024. One property is located in Ohio with 42 assisted living units and six are located in Texas with 235 assisted living units. These properties are currently included in the original Brookdale master lease. As a result of this amendment, Brookdale will operate 17 properties under the new master lease with the initial annual rent of $9.3 million and the capital expenditure commitment will be $7.2 million. Additionally, the new master lease provides Brookdale with a purchase option on these seven properties.

● Subsequent to September 30, 2023, we leased six assisted living communities located in Oklahoma, with a total of 219 units, to a current LTC operator under a new master lease, expected to commence on November 1, subject to the issuance of licensure to the new operator. These properties are currently included in the original Brookdale master lease. The lease term is for three years, with one four-year extension period. Rent in the first year is set at $960,000, increasing to $984,000 in the second year and $1.2 million in the third year. Additionally, the

34

master lease includes a purchase option that can be exercised starting in November 2027 through October 2029 if the lessee exercises its four-year extension option.

● For the remaining five properties located in North Carolina with a total of 210 assisted living units, we are currently working on finalizing a new lease for these properties.

Prestige Healthcare

Prestige Healthcare (“Prestige”) operates 22 skilled nursing centers located in Michigan secured under four mortgage loans and two skilled nursing centers located in South Carolina under a master lease. Prestige is our largest operator based upon revenues and assets representing 16.6% of our total revenues and 14.2% of our total assets as of September 30, 2023. During the second quarter of 2023, we agreed to defer up to $1.5 million, or up to $0.3 million per month for May through September 2023, in interest payments due on one of Prestige’s mortgage loans secured by 15 skilled nursing centers. We deferred $0.6 million and $0.9 million in interest payments during the second and third quarter of 2023, respectively. Subsequent to September 30, 2023, we amended the loan. As part of the amendment, LTC has drawn down $2.8 million of the approximate $5.0 million letter of credit from Prestige to repay all deferred interest outstanding through October 2023. We will further draw down approximately $334,000 in each of November and December 2023 to be applied toward interest due on the loan at that point. As a result, we expect to receive all contractual interest of $19.5 million due from Prestige in 2023. Beginning on January 1, 2024, the minimum mortgage interest payment due to LTC will be set based on an annual current pay rate of 8.5% on the outstanding loan balance. The contractual interest rate of the loan remains unchanged. From retro-active Medicaid funds due to Prestige, we expect our letter of credit will be replenished in 2024 and Prestige will be able to pay all contractual interest during 2024 and 2025.

Other Operators

During the nine months ended September 30, 2023, we provided $1.9 million of abated rent to the same operator for which we have been providing assistance. Also, we provided the same operator $0.2 million of abated rent in October 2023 and we agreed to provide up to $0.2 million per month from November through December 2023 pursuant to a master lease covering two assisted living communities. We anticipate receiving $0.3 million in rent during 2023 from this operator.

Additionally, during 2023, we transitioned a portfolio of eight assisted living communities with a total of 500 units in Illinois, Ohio and Michigan to Encore Senior Living (“Encore”). We agreed to provide assistance in the second quarter of 2023 to the former operator of this portfolio and as part of the transition, we received repayment of $1.25 million of deferred rent which represents $0.93 million of April and May 2023 deferred rent and $0.32 million of unrecorded deferred rent provided in 2022. Cash rent under the new two-year lease with Encore is based on mutually agreed upon fair market rent beginning in month four of the lease.

2023 Activities Overview

The following tables summarize our transactions during the nine months ended September 30, 2023 (dollar amounts in thousands):

Acquisitions

During 2023, we entered into a $54.1 million Joint Venture (“JV”) and contributed $45.0 million into the JV that purchased an independent living, assisted living and memory care campus in Ohio. Under the JV agreement, the seller, our JV partner, has the option to purchase the campus between the third and fourth lease years for LTC’s allocation of the JV investment plus an IRR of 9.75%. The campus was leased to

35

Encore Senior Living (“Encore”) under a 10-year term with an initial yield of 8.25% on LTC’s allocation of the JV investment. LTC committed to fund $2.1 million of lease incentives under the Encore lease of which $1.0 million was funded during 2023. Rent is expected to be approximately $3.9 million per year.

Investment in Improvement projects

	Amount
Assisted Living Communities	$	2,418
Skilled Nursing Centers		2,548
Other		87
Total	$	5,053

Impairment Loss

In conjunction with the planned sale of a 70-unit assisted living community located in Florida, we recorded a $0.4 million impairment loss during the three months ended March 31, 2023 and a $1.2 million impairment loss during the fourth quarter of 2022. During the second quarter of 2023, the community was sold for $4.9 million. Additionally, during 2023, we performed a recoverability analysis on the carrying value of two assisted living communities that we are negotiating to sell and concluded that their carrying value may not be recoverable through future undiscounted cash flows. Accordingly, we recorded an aggregate impairment loss of $12.1 million. As of September 30, 2023, we do not believe these communities meet the criteria to be classified as held-for-sale.

Properties Held -for-Sale

	Type	Number	Number
	of	of	of		Gross		Accumulated
State	Property	Properties	Beds/units		Investment		Depreciation
FL	ALF	4	176	$	12,215	$	7,213
SC	ALF	3	128		8,823		4,377
		7	304	$	21,038	$	11,590

Properties Sold

	Type	Number	Number
	of	of	of		Sales		Carrying		Net
State	Properties	Properties	Beds/Units		Price		Value		Gain (1)
Florida	ALF	1	70	$	4,850	$	4,082	$	65
Kentucky	ALF	1	60		11,000		10,720		57
New Jersey	ALF	1	39		2,000		1,552		266
New Mexico	SNF	2	235		21,250		5,523		15,287
Nebraska	ALF	3	117		2,984		2,934		—
Pennsylvania	ALF	2	130		11,128		6,054		4,870
		10	651	$	53,212	$	30,865	$	20,545

(1) Calculation of net gain includes cost of sales and write-off of straight-line receivable and lease incentives, when applicable.

Financing Receivables

During 2023, we entered into a $121.3 million JV with an affiliate of an existing operator and contributed $117.5 million into the JV that purchased 11 assisted living and memory care communities from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit Internal Rate of Return (“IRR”)

36

of 9.0%. In accordance with GAAP, the communities acquired by the JV are required to be presented as Financing receivables on our Consolidated Balance Sheets and the rental revenue from these properties is recorded as Interest income from financing receivables on our Consolidated Statements of Income. Furthermore, upon expiration of the purchase option if the purchase option remains unexercised by the seller-lessee, the purchased assets will be reclassified from Financing receivables to Real property investments on our Consolidated Balance Sheets. Upon origination, we recorded $1.2 million Provision for credit losses equal to 1% of the loan balance related to this investment. During the three and nine months ended September 30, 2023, we recognized $3.8 million and $11.4 million, respectively, of Interest income from financing receivables from our investments in financing receivables.

Investment in Mortgage Loans

	Amount
Originations and funding under mortgage loans receivable	$	83,383	(1)​
Application of interest reserve		1,609
Scheduled principal payments received		(301)
Mortgage loan premium amortization		(5)
Provision for loan loss reserve		(847)
Net increase in mortgage loans receivable	$	83,839

(1) We originated the following:

a. $10,750 mortgage loan secured by a 45-unit MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%;

b. $51,111 mortgage loan investment secured by a 203-unit ILF, ALF and MC located in Georgia. We acquired a participating interest owned by existing lenders for $42,251 in addition to converting our $7,461 mezzanine loan in the property into a participating interest in the mortgage loan. The initial rate is 7.5% with an IRR of 7.75%. The mortgage loan matures in October 2024. We recorded $1,380 of additional interest income in connection with the effective prepayment of the mezzanine loan in the first quarter of 2023;

c. $16,500 senior loan for the purchase of a 150-bed SNF in Illinois. The mortgage loan matures in June 2028 and our investment is at an interest rate of 8.75%;

d. $5,022 of additional funding under other mortgage loans receivable; and

e. $19,500 mortgage loan commitment for the construction of an 85-unit assisted living and memory care community in Michigan. The borrower contributed $12,100 of equity which will initially fund the construction. Once all of the borrower’s equity has been drawn, we will begin funding the commitment. The loan term is approximately three years at a rate of 8.75%, and includes two, one-year extensions, each of which is contingent on certain coverage thresholds.

Preferred Equity Investment in Unconsolidated Joint Ventures

	Type	Total		Contractual		Number						Cash		Application
	of	Preferred		Cash		of		Carrying		Income		Interest		of Interest
State	Properties	Return		Portion		Beds/ Units		Value		Recognized		Received		Reserve
Washington (1)	ALF/MC	12	%	7	%	95	$	6,340	$	337	$	—	$	337
Washington (2)	UDP	14	%	8	%	—		13,000		790		—		790
						95	$	19,340	$	1,127	$	—	$	1,127

(1) Represents a preferred equity interest in an entity that developed and owns a 95-unit ALF and MC in Washington. Our investment represents 15.5% of the total investment. The preferred equity investment earns an initial cash rate of 7% increasing to 9% in year four until the internal rate of return (“IRR”) is 8%. After achieving an 8% IRR, the cash rate drops to 8% with an IRR ranging between 12% to 14%, depending upon timing of redemption. During the fourth quarter of 2021, the entity completed the development project and received its certificate of occupancy. We have the option to require the JV partner to purchase our preferred equity interest at any time between August 17, 2031 and December 31, 2036.

(2) Represents a preferred equity interest in an entity that will develop and own a 267-unit ILF and ALF in Washington. Our investment represents 11.0 % of the estimated total investment. The preferred equity investment earns an initial cash rate of 8% with an IRR of 14%. The JV partner has the option to buy out our investment at any time after August 31, 2023 at the IRR rate. Also, we have the option to require the JV partner to purchase our preferred equity interest at any time between August 31, 2027 and, upon project completion and leasing the property, prior to the end of the first renewal term of the lease.

37

Notes Receivable

	Amount
Advances under notes receivable	$	19,258	(1)​
Principal payments received under notes receivable		(14,537)	(2)​
Provision for credit losses		(48)
Net decrease in notes receivable	$	4,673

(1) During the third quarter of 2023, we originated a mezzanine loan to recapitalize an existing 130-unit ILF, ALF and MC in Georgia and construction of 89 additional units. The loan term is five years at an initial yield of 8.75% and an IRR of 12.0%.

(2) During 2023, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190 related to the payoff of a mezzanine loan on a 136-unit ILF in Oregon. Additionally, another $7,461 mezzanine loan was effectively prepaid through converting it as part of our $51,111 investment in a participating interest in an existing mortgage loan that is secured by a 203-unit ALF, ILF and MC located in Georgia. We recorded $1,380 of interest income in connection with the effective prepayment of the mezzanine loan.

Health Care Regulatory

The Centers for Medicare & Medicaid Services (“CMS”) annually updates Medicare skilled nursing facility (“SNF”) prospective payment system rates and other policies. On April 8, 2021, CMS issued a proposed rule to update SNF rates and policies for fiscal year 2022, which started October 1, 2021, and issued the final rule on July 29, 2021. CMS estimated that the aggregate impact of the payment policies in the final rule would result in an increase of approximately $410 million in Medicare Part A payments to SNFs in fiscal year 2022. The final rule also includes several policies that update the SNF Quality Reporting Program and the SNF Value-Based Program for fiscal year 2022. On April 11, 2022, CMS issued a proposed rule to update SNF rates and policies for fiscal year 2023. CMS estimated that the aggregate impact of the payment policies in the proposed rule would result in a decrease of approximately $320 million in Medicare Part A payments to SNFs in fiscal year 2023 compared to fiscal year 2022. CMS also sought input on the effects of direct care staffing requirements to improve long-term care requirements for participation and promote thoughtful, informed staffing plans and decisions within facilities to meet residents’ needs, including maintaining or improving resident function and quality of life. Specifically, CMS sought input on establishing minimum staffing requirements for long-term care facilities. On June 29, 2022, CMS issued updates to guidance on minimum health and safety standards that long-term care facilities must meet to participate in Medicare and Medicaid and issued new guidance in the State Operations Manual to address issues that significantly affect residents of long-term care facilities. On July 29, 2022, CMS issued a final rule to update SNF rates and policies for fiscal year 2023. CMS estimated that the aggregate impact of the payment policies in the final rule would result in an increase of 2.7%, or approximately $904 million, in Medicare Part A payments to SNFs in fiscal year 2023 compared to fiscal year 2022. CMS also finalized a permanent 5% cap on annual wage index decreases to smooth year-to-year changes in providers’ wage index payments. In addition, CMS indicated that it would continue to review the comments it received in response to its request for information on establishing minimum staffing requirements for long-term care facilities, and that it intended to issue proposed rules on a minimum staffing level measure within one year. On April 4, 2023, CMS issued a proposed rule that would update SNF rates and policies for fiscal year 2024. CMS estimated that the aggregate impact of the payment policies in the proposed rule would result in a net increase of 3.7%, or approximately $1.2 billion, in Medicare Part A payments to SNFs in fiscal year 2024. CMS also indicated that it continued to review the feedback it received from its comment solicitation regarding minimum staffing requirements and that the feedback would be used, along with evidence from its mixed-methods study launched in August 2022 collecting quantitative and qualitative evidence on staffing levels within nursing homes, to inform proposals for minimum direct care staffing requirements in nursing homes in a future rulemaking. On July 21, 2023, CMS issued a final rule to update SNF rates and policies for fiscal year 2024. CMS estimated that the aggregate impact of the payment policies in the final rule would result in a net increase of 4.0%, or approximately $1.4 billion, in Medicare Part A payments to

38

SNFs in fiscal year 2024. In addition, the final rule includes updates to the SNF Quality Reporting Program and the SNF Value-Based Purchasing Program for fiscal year 2024 and future years, including the adoption of a measure intended to address staff turnover, as outlined in the President’s Executive Order 14070 Increasing Access to High-Quality Care and Supporting Caregivers. Finally, the rule finalizes a constructive waiver process to ease administrative burdens for CMS related to processing civil monetary penalty appeals.

On September 1, 2023, CMS issued the Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting proposed rule, which seeks to establish comprehensive nurse staffing requirements. The proposed rule consists of three core staffing proposals: (1) minimum nurse staffing standards of 0.55 hours per resident day (“HPRD”) for Registered Nurses (“RNs”) and 2.45 HPRD for Nurse Aids (“NAs”); (2) a requirement to have an RN onsite 24 hours a day, seven days a week; and (3) enhanced facility assessment requirements. The proposed rule also includes a staggered implementation approach and possible hardship exemptions for select facilities. Comments on the proposed rule must be submitted by November 6, 2023.

There can be no assurance that these rules or future regulations modifying Medicare skilled nursing facility payment rates or other requirements for Medicare and/or Medicaid participation will not have an adverse effect on the financial condition of our borrowers and lessees which could, in turn, adversely impact the timing or level of their payments to us.

On March 26, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), sweeping legislation intended to bolster the nation’s response to the COVID-19 pandemic. In addition to offering economic relief to individuals and impacted businesses, the law expanded coverage of COVID-19 testing and preventative services, addressed health care workforce needs, eased restrictions on telehealth services during the crisis, and increased Medicare regulatory flexibility, among many other provisions. Notably, the CARES Act temporarily suspended the 2% across-the-board “sequestration” from May 1, 2020 through December 31, 2020, and extended the Medicare sequester requirement through fiscal year 2030. In addition, the law provided $100 billion in grants to eligible health care providers for health care related expenses or lost revenues that are attributable to COVID-19. On April 10, 2020, CMS announced the distribution of $30 billion in funds to Medicare providers based upon their 2019 Medicare fee for service revenues. Eligible providers were required to agree to certain terms and conditions in receiving these grants. In addition, the Department of Health and Human Services (“HHS”) authorized $20 billion of additional funding for providers that have already received funds from the initial distribution of $30 billion. Unlike the first round of funds, which came automatically, providers were required to apply for these additional funds and submit the required supporting documentation, using the online portal provided by HHS. Providers were required to attest to and agree to specific terms and conditions for the use of such funds. HHS expressed a goal of allocating the whole $50 billion proportionally across all providers based on those providers’ proportional share of 2018 net Medicare fee-for-service revenue, so that some providers would not be eligible for additional funds. On May 22, 2020, HHS announced that it had begun distributing $4.9 billion in additional relief funds to SNFs to offset revenue losses and assist nursing homes with additional costs related to responding to the COVID-19 public health emergency and the shipments of personal protective equipment provided to nursing homes by the Federal Emergency Management Agency. On June 9, 2020, HHS announced that it expected to distribute approximately $15 billion to eligible providers that participate in state Medicaid and Children’s Health Insurance Program (“CHIP”) programs and have not received a payment from the Provider Relief Fund General Allocation. On July 22, 2020, HHS announced $5 billion in Provider Relief Funds to Medicare-certified long-term care facilities and state veterans’ homes to build nursing home skills and enhance nursing homes’ response to COVID-19, including enhanced infection control. Nursing homes were required to participate in the Nursing Home COVID-19 training to qualify for this funding. On August 27, 2020, HHS announced that it had distributed almost

39

$2.5 billion to nursing homes to support increased testing, staffing, and personal protective equipment needs. On September 3, 2020, HHS announced a $2 billion performance-based incentive payment distribution to nursing homes and SNFs. Finally, on October 1, 2020, HHS announced $20 billion in additional funding for several types of providers, including those who previously received, rejected, or accepted a general distribution provider relief fund payment. The application deadline for these Phase 3 funds was November 6, 2020.

The Consolidated Appropriations Act, 2021 included a $900 billion COVID-19 relief package. Of the $900 billion in COVID-19 relief, $73 billion was allocated to HHS. Notably, the legislation added an additional $3 billion to the Provider Relief Fund, includes language specific to reporting requirements, and allows providers to use any reasonable method to calculate lost revenue, including the difference between such provider’s budgeted and actual revenue budget if such budget had been established and approved prior to March 27, 2020, to demonstrate entitlement for these funds. This change reverts to HHS’ previous guidance from June 2020 on how to calculate lost revenues. The Consolidated Appropriations Act, 2021 also extended the CARES Act’s sequestration suspension to March 31, 2021. On January 15, 2021, HHS announced that it would be amending the reporting timeline for Provider Relief Funds and indicated that it was working to update the Provider Relief Fund requirements to be consistent with the passage of the Consolidated Appropriations Act, 2021.

On June 11, 2021, HHS issued revised reporting requirements for recipients of Provider Relief Fund payments. The announcement included expanding the amount of time providers would have to report information, aimed to reduce burdens on smaller providers, and extended key deadlines for expending Provider Relief Fund payments for recipients who received payments after June 30, 2020. The revised reporting requirements are applicable to providers who received one or more payments exceeding, in the aggregate, $10,000 during a single Payment Received Period from the PRF General Distributions, Targeted Distributions, and/or Skilled Nursing Facility and Nursing Home Infection Control Distributions. On July 1, 2021, HHS, through the Health Resources and Services Administration (“HRSA”), notified recipients of Provider Relief Fund payments by e-mail that the Provider Relief Fund Reporting Portal was open for recipients who were required to report on the use of funds in Reporting Period 1, as described by HHS’s June 11, 2021 update to the reporting requirements. On September 10, 2021, HHS announced a final 60-day grace period of the September 30, 2021 reporting deadline for Provider Relief Funds exceeding $10,000 in aggregate payments received from April 10, 2020 to June 30, 2020. Although the September 30, 2021 reporting deadline remained in place, HHS explained that recoupment or other enforcement actions would not be initiated during the 60-day grace period, which began on October 1, 2021 and ended on November 30, 2021.

Reporting Period 2, for providers who received one or more payments exceeding $10,000, in the aggregate, from July 1, 2020 to December 31, 2020, was from January 1, 2022 to March 31, 2022. Reporting Period 3, for providers who received one or more payments exceeding $10,000, in the aggregate, from January 1, 2021 to June 30, 2021, was from July 1, 2022 to September 30, 2022. Reporting Period 4, for providers who received one or more payments exceeding $10,000, in the aggregate, from July 1, 2021 to December 31, 2021, was from January 1, 2023 to March 31, 2023. Reporting Period 5, for providers who received one or more payments exceeding $10,000, in the aggregate, from January 1, 2022 to June 30, 2022, was from July 1, 2023 to September 30, 2023. Reporting Period 6, for providers who received one or more payments exceeding $10,000, in the aggregate, from July 1, 2022 to December 31, 2022, opens January 1, 2024.

On September 10, 2021, the Biden Administration announced $25.5 billion in new funding for health care providers affected by the COVID-19 pandemic, including $8.5 billion in American Rescue Plan (“ARP”) resources for providers who serve rural Medicaid, CHIP, or Medicare patients, and an additional $17 billion for Phase 4 Provider Relief Funds for a broad range of providers who can document

40

revenue loss and expenses associated with the pandemic, including assisted living facilities that were state-licensed/certified on or before December 31, 2020. Approximately 25% of the Phase 4 allocation was for bonus payments based on the amount and type of services provided to Medicaid, CHIP, and Medicare beneficiaries from January 1, 2019 through September 30, 2020. On December 14, 2021, HHS announced the distribution of approximately $9 billion in Provider Relief Fund Phase 4 payments to health care providers who have experienced revenue losses and expenses related to the COVID-19 pandemic. Further, on January 25, 2022, HHS announced that it would be making more than $2 billion in Provider Relief Fund Phase 4 General Distribution payments to more than 7,600 providers across the country that same week. On March 22, 2022, HHS announced an additional $413 million in Provider Relief Fund Phase 4 payments to more than 3,600 providers across the country. On April 13, 2022, HRSA announced the disbursement of more than $1.75 billion in Provider Relief Fund payments to 3,680 providers across the country. On April 10, 2023, President Biden signed into law H.J. Res. 7, which terminated the national emergency related to the COVID-19 pandemic. Separately, the declared public health emergency expired May 11, 2023.

Following prior legislation suspending sequestration, on December 10, 2021, President Biden signed the Protecting Medicare and American Farmers from Sequester Cuts Act, which extended the suspension of the Medicare 2% sequestration reduction through March 31, 2022, and then reduced the sequestration cuts to 1% from April through June 2022. As of July 1, 2022, cuts of 2% were re-imposed.

Congress periodically considers legislation revising Medicare and Medicaid policies, including legislation that could have the impact of reducing Medicare reimbursement for SNFs and other Medicare providers, limiting state Medicaid funding allotments, encouraging home and community-based long-term care services as an alternative to institutional settings, or otherwise reforming payment policy for post-acute care services. There can be no assurances that enacted or future legislation will not have an adverse impact on the financial condition of our lessees and borrowers, which subsequently could materially adversely impact our company.

Additional reforms affecting the payment for and availability of health care services have been proposed at the federal and state level and adopted by certain states. Increasingly, state Medicaid programs are providing coverage through managed care programs under contracts with private health plans, which is intended to decrease state Medicaid costs. Congress and state legislatures can be expected to continue to review and assess alternative health care delivery systems and payment methodologies. Changes in the law, new interpretations of existing laws, or changes in payment methodologies may have a dramatic effect on the definition of permissible or impermissible activities, the relative costs associated with doing business and the amount of reimbursement by the government and other third-party payors.

Key Performance Indicators, Trends and Uncertainties

We utilize several key performance indicators to evaluate the various aspects of our business. These indicators are discussed below and relate to concentration risk and credit strength. Management uses these key performance indicators to facilitate internal and external comparisons to our historical operating results in making operating decisions and for budget planning purposes.

Concentration Risk. We evaluate by gross investment our concentration risk in terms of asset mix, real estate investment mix, operator mix and geographic mix. Concentration risk is valuable to understand what portion of our real estate investments could be at risk if certain sectors were to experience downturns. Asset mix measures the portion of our investments that are real property or mortgage loans. The National Association of Real Estate Investment Trusts (“NAREIT”), an organization representing U.S. REITs and publicly traded real estate companies, classifies a company with 50% or more of assets directly or indirectly in the equity ownership of real estate as an equity REIT. Investment

41

mix measures the portion of our investments that relate to our various property classifications. Operator mix measures the portion of our investments that relate to our top five operators. Geographic mix measures the portion of our real estate investment that relate to our top five states.

The following table reflects our recent historical trends of concentration risk (gross investment, in thousands):

	9/30/23		6/30/23		3/31/23		12/31/22		9/30/22
Asset mix:
Real property	$	1,405,848	$	1,421,260	$	1,389,222	$	1,410,705	$	1,408,402
Financing receivables		198,033		198,056		198,077		76,767		76,267
Loans receivable		478,344		476,739		457,524		393,658		386,868
Notes receivable		63,693		46,412		46,936		58,973		59,014
Unconsolidated joint ventures		19,340		19,340		19,340		19,340		19,340
Real estate investment mix:
Assisted living communities	$	1,149,589	$	1,146,827	$	1,113,096	$	951,441	$	945,552
Skilled nursing centers		987,877		987,188		970,300		980,401		976,753
Other (1)		14,792		14,792		14,703		14,601		14,586
Under development		13,000		13,000		13,000		13,000		13,000
Operator mix:
ALG Senior	$	310,789	$	307,891	$	326,288	$	192,699	$	189,533
Prestige Healthcare (1)		272,767		272,818		271,904		271,476		271,851
Encore Senior Living		179,430		179,153		57,101		57,101		57,101
HMG Healthcare		176,644		176,285		176,285		175,835		174,107
Anthem Memory Care		156,054		155,867		155,629		139,176		139,176
Remaining operators		1,069,574		1,069,793		1,123,892		1,123,156		1,118,123
Geographic mix:
Texas	$	329,545	$	328,517	$	328,442	$	327,490	$	325,380
Michigan		281,159		281,210		280,294		280,389		280,932
North Carolina		234,665		233,301		232,841		99,646		95,456
Florida		146,178		146,019		159,461		158,892		158,175
Ohio		142,483		142,206		87,693		87,569		87,543
Remaining states		1,031,228		1,030,554		1,022,368		1,005,457		1,002,405

(1) Includes three parcels of land located adjacent to properties securing the Prestige Healthcare mortgage loan and are managed by Prestige.

Credit Strength. We measure our credit strength both in terms of leverage ratios and coverage ratios. Our leverage ratios include debt to gross asset value and debt to market capitalization. The leverage ratios indicate how much of our Consolidated Balance Sheets capitalization is related to long-term obligations. Our coverage ratios include interest coverage ratio and fixed charge coverage ratio. The coverage ratios indicate our ability to service interest and fixed charges (interest). The coverage ratios are based on earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) as defined by NAREIT. EBITDAre is calculated as net income available to common stockholders (computed in accordance with GAAP) excluding (i) interest expense, (ii) income tax expense, (iii) real estate depreciation and amortization, (iv) impairment write-downs of depreciable real estate, (v) gains or losses on the sale of depreciable real estate, and (vi) adjustments for unconsolidated partnerships and joint ventures. Leverage ratios and coverage ratios are widely used by investors, analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. The following table reflects the recent historical trends for our credit strength measures:

42

Balance Sheet Metrics

	Year to Date		Quarter Ended
	9/30/23		9/30/23			6/30/23			3/31/23			12/31/22			9/30/22
Debt to gross asset value	42.1	%	42.1	%		42.1	%	(3)​	41.0	%	(3)​	37.4	%	(6)​	38.9	%
Debt to market capitalization ratio	41.8	%	41.8	%	(1)​	41.1	%	(1)​	38.3	%	(4)​	34.4	%		34.4	%
Interest coverage ratio (8)	3.4	x	3.2	x	(2)​	3.5	x		3.6	x	(5)​	4.4	x	(7)​	4.2	x
Fixed charge coverage ratio (8)	3.4	x	3.2	x	(2)​	3.5	x		3.6	x	(5)​	4.4	x	(7)​	4.2	x

(1) Increased due to decrease in market capitalization and increase in outstanding debt.

(2) Decreased due to increase in interest expense partially offset by increase in interest income from mortgage loans and other notes receivable.

(3) Increased due to increase in outstanding debt partially offset by increase in gross asset value.

(4) Increased due to increase in outstanding debt.

(5) Decreased due to increase in interest expense.

(6) Decreased due to decrease in outstanding debt and increase in gross asset value.

(7) Increased due to increase in rental income and interest income from financing receivables partially offset by an increase in interest expense.

(8) In calculating our interest coverage and fixed charge coverage ratios above, we use EBITDAre, which is a financial measure not derived in accordance with GAAP (non-GAAP financial measure). EBITDAre is not an alternative to net income, operating income or cash flows from operating activities as calculated and presented in accordance with GAAP. You should not rely on EBITDAre as a substitute for any such GAAP financial measures or consider it in isolation, for the purpose of analyzing our financial performance, financial position or cash flows. Net income is the most directly comparable GAAP measure to EBITDAre.

	Year to Date			Quarter Ended
	9/30/23			9/30/23			6/30/23			3/31/23			12/31/22			9/30/22
Net income	$	62,792		$	22,627		$	6,604		$	33,561		$	18,198		$	13,389
Less/Add: (Gain)/loss on sale		(20,545)			(4,870)			(302)			(15,373)			(21)			387
Add: Impairment loss		12,510			—			12,076			434			2,136			1,286
Add: Interest expense		34,595			12,674			11,312			10,609			8,830			7,941
Add: Depreciation and amortization		28,085			9,499			9,376			9,210			9,294			9,385
EBITDAre	$	117,437		$	39,930		$	39,066		$	38,441		$	38,437		$	32,388
Add: Non-recurring one-time items		262	(1)​		—			—			262	(1)​		—			1,260	(2)​
Adjusted EBITDAre	$	117,699		$	39,930		$	39,066		$	38,703		$	38,437		$	33,648
Interest expense	$	34,595		$	12,674		$	11,312		$	10,609		$	8,830		$	7,941
Interest coverage ratio		3.4	x		3.2	x		3.5	x		3.6	x		4.4	x		4.2	x
Interest expense	$	34,595		$	12,674		$	11,312		$	10,609		$	8,830		$	7,941
Total fixed charges	$	34,595		$	12,674		$	11,312		$	10,609		$	8,830		$	7,941
Fixed charge coverage ratio		3.4	x		3.2	x		3.5	x		3.6	x		4.4	x		4.2	x

(1) Represents $1,832 provision for credit losses related to the $121,321 acquisition accounted for as a financing receivable and $61,900 of mortgage loan originations partially offset by $1,570 exit IRR income related to the payoff of two mezzanine loans.

(2) Represents $500 lease termination fee paid to a former operator in exchange for cooperation in facilitating an orderly transition and $760 provision for credit losses related to the $75,825 acquisition accounted for as a financing receivable during the third quarter of 2022.

43

We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results. Our expected results may not be achieved, and actual results may differ materially from our expectations. This may be a result of various factors, including, but not limited to

● The status of the economy;

● The status of capital markets, including prevailing interest rates;

● Compliance with and changes to regulations and payment policies within the health care industry;

● Changes in financing terms;

● Competition within the health care and seniors housing industries; and

● Changes in federal, state and local legislation.

Additionally, as described in the Executive Overview above, COVID-19 and the pace of recovery for COVID-19 on our operators adversely affected and is expected to continue to adversely affect our business, results of operations, cash flows and financial condition. Depending on the future developments regarding COVID-19 and the pace of recovery for its effects, historical trends reflected in our balance sheet metrics may not be achieved in the future.

Management regularly monitors the economic and other factors listed above. We develop strategic and tactical plans designed to improve performance and maximize our competitive position. Our ability to achieve our financial objectives is dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic and company-specific trends.

44

Operating Results (unaudited, in thousands)

	Three Months Ended
	September 30,
	2023			2022			Difference
Revenues:
Rental income	$	31,589		$	31,585		$	4
Interest income from financing receivables		3,832			357			3,475	(1)​
Interest income from mortgage loans		12,247			10,379			1,868	(2)​
Interest and other income		1,635			1,182			453	(3)​
Total revenues		49,303			43,503			5,800
Expenses:
Interest expense		12,674			7,941			(4,733)	(4)​
Depreciation and amortization		9,499			9,385			(114)
Impairment loss		—			1,286	(5)​		1,286
Provision for credit losses		189			795			606	(6)​
Transaction costs		329			629			300
Property tax expense		3,271			4,179			908	(7)​
General and administrative expenses		5,959			5,888			(71)
Total expenses		31,921			30,103			(1,818)
Other operating income:
Gain (loss) on sale of real estate, net		4,870	(8)​		(387)	(9)​		5,257
Operating income		22,252			13,013			9,239
Income from unconsolidated joint ventures		375			376			(1)
Net income		22,627			13,389			9,238
Income allocated to non-controlling interests		(430)			(99)			(331)
Net income attributable to LTC Properties, Inc.		22,197			13,290			8,907
Income allocated to participating securities		(147)			(131)			(16)
Net income available to common stockholders	$	22,050		$	13,159		$	8,891

(1) Represents the revenue from the acquisition of 11 ALFs and MCs located in North Carolina for $121,321 during the first quarter of 2023 and the acquisition of three SNFs located in Florida for $75,825 during the third quarter of 2022. In accordance with ASC 842, these transactions are accounted as financing receivables. See Note 2. Real Estate Investments within our consolidated financial statements for more information.

(2) Increased primarily due to mortgage loan originations during 2023.

(3) Increased primarily due to origination of a $17,000 mezzanine loan during the third quarter of 2023 and repayment of deferred interest due from a master lease partially offset by lower income from loan payoffs.

(4) Increased primarily due to higher outstanding balance and higher interest rates on our revolving line of credit.

(5) Represents the impairment loss related to an assisted living community in Kentucky.

(6) Decreased primarily due to the financing receivable origination during the third quarter of 2022.

(7) Decreased primarily due to property tax reassessment and properties sold partially offset by acquisitions.

(8) Represents the gain on sale related to two ALFs located in Pennsylvania during the third quarter of 2023.

(9) Represents the net loss on sale of $434 related to a closed skilled nursing center in Texas offset by additional gain due to quarterly reassessment of prior years’ sale holdbacks.

45

	Nine Months Ended
	September 30,
	2023			2022			Difference
Revenues:
Rental income	$	94,861		$	93,537		$	1,324	(1)​
Interest income from financing receivable		11,413			357			11,056	(2)​
Interest income from mortgage loans		35,417			30,112			5,305	(3)​
Interest and other income		5,358			3,308			2,050	(4)​
Total revenues		147,049			127,314			19,735
Expenses:
Interest expense		34,595			22,607			(11,988)	(5)​
Depreciation and amortization		28,085			28,202			117
Impairment loss		12,510	(6)​		1,286	(7)​		(11,224)
Provision for credit losses		2,107			1,454			(653)	(8)​
Transaction costs		537			728			191
Property tax expense		9,751			12,180			2,429	(9)​
General and administrative expenses		18,344			17,407			(937)	(10)​
Total expenses		105,929			83,864			(22,065)
Other operating income:
Gain on sale of real estate, net		20,545	(11)​		37,809	(12)​		(17,264)
Operating income		61,665			81,259			(19,594)
Income from unconsolidated joint ventures		1,127			1,127			—
Net income		62,792			82,386			(19,594)
Income allocated to non-controlling interests		(1,287)			(301)			(986)
Net income attributable to LTC Properties, Inc.		61,505			82,085			(20,580)
Income allocated to participating securities		(440)			(481)			41
Net income available to common stockholders	$	61,065		$	81,604		$	(20,539)

(1) Increased primarily due to rental income from acquisitions, rent received from transitioned portfolios, repayment of deferred rent and annual rent escalations partially offset by sold properties and decrease in property tax revenue.

(2) Represents the revenue from the acquisition of 11 ALFs and MCs located in North Carolina for $121,321 during the first quarter of 2023 and the acquisition of three SNFs located in Florida for $75,825 during the third quarter of 2022. In accordance with ASC 842, these transactions are accounted as financing receivables. See Note 2. Real Estate Investments within our consolidated financial statements for more information.

(3) Increased primarily due to mortgage loan originations during the second quarter of 2022 and the first and second quarter of 2023 and additional funding under mortgage loans.

(4) Increased primarily due to origination of a $17,000 mezzanine loan during the third quarter of 2023, prepayment fees received in connection with the payoff of two mezzanine loans during the first quarter of 2023 and repayment of deferred interest related to a master lease partially offset by lower income from loan payoffs.

(5) Increased primarily due to higher outstanding balance and higher interest rates on our revolving line of credit.

(6) Represents $434 impairment loss related to a 70-unit ALF located in Florida that was sold during 2023. Additionally, represents aggregate impairment loss of $12,076 related to two ALFs. See Note 2. Real Estate Investments within our consolidated financial statements for more information.

(7) Represents the impairment loss related to an assisted living community in Kentucky.

(8) Increased primarily due to more originations during the nine months ended September 30, 2023 compared to nine months ended September 30, 2022.

(9) Decreased primarily due to property tax reassessment and properties sold partially offset by acquisitions.

(10) Increased due to higher incentive compensation charges and increases in overall costs due to inflationary pressures and the timing of certain expenditures.

(11) Represents the net gain on sale related to five ALFs located in Florida, Kentucky, New Jersey and Pennsylvania and two SNFs in New Mexico during 2023.

(12) Represents the net gain on sale of $38,052 related to a SNF located in California and three ALFs located in Virginia and California during the second quarter of 2022 and quarterly reassessment of prior years’ sale holdbacks partially offset by the net loss on sale of $434 related to a closed skilled nursing center in Texas.

46

Funds From Operations Available to Common Stockholders

Funds from Operations (“FFO”) attributable to common stockholders, basic FFO attributable to common stockholders per share and diluted FFO attributable to common stockholders per share are supplemental measures of a REIT’s financial performance that are not defined by GAAP. Real estate values historically rise and fall with market conditions, but cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. We believe that by excluding the effect of historical cost depreciation, which may be of limited relevance in evaluating current performance, FFO facilitates comparisons of operating performance between periods.

We use FFO as a supplemental performance measurement of our cash flow generated by operations. FFO does not represent cash generated from operating activities in accordance with GAAP, and is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income available to common stockholders.

We calculate and report FFO in accordance with the definition and interpretive guidelines issued by NAREIT. FFO, as defined by NAREIT, means net income available to common stockholders (computed in accordance with GAAP) excluding gains or losses on the sale of real estate and impairment write-downs of depreciable real estate plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our calculation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that have a different interpretation of the current NAREIT definition from us; therefore, caution should be exercised when comparing our FFO to that of other REITs.

The following table reconciles GAAP net income available to common stockholders to NAREIT FFO available to common stockholders (unaudited, amounts in thousands, except per share amounts):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
GAAP net income available to common stockholders	$	22,050		$	13,159		$	61,065		$	81,604
Add: Depreciation and amortization		9,499			9,385			28,085			28,202
Add: Impairment loss		—			1,286			12,510			1,286
Less/add: (Gain)/loss on sale of real estate, net		(4,870)			387			(20,545)			(37,809)
NAREIT FFO attributable to common stockholders	$	26,679		$	24,217		$	81,115		$	73,283
NAREIT FFO attributable to common stockholders per share:
Basic	$	0.65		$	0.60		$	1.97		$	1.85
Diluted	$	0.65		$	0.60		$	1.97		$	1.83
Weighted average shares used to calculate NAREIT FFO per share:
Basic		41,153			40,270			41,127			39,658
Diluted		41,469	(1)​		40,781	(2)​		41,440	(1)​		39,939	(3)​

(1) Includes the effect of performance-based stock units and participating securities.

(2) Includes the effect of stock option equivalents, performance-based stock units and participating securities.

(3) Includes the effect of performance-based stock units.

47

Liquidity and Capital Resources

Sources and Uses of Cash

As of September 30, 2023, we had a total of $11.3 million of cash and cash equivalents, $37.8 million available under our unsecured revolving line of credit and the potential ability to access the capital markets through the issuance of $128.8 million of common stock under our Equity Distribution Agreements. Furthermore, we have the ability to access the capital markets through the issuance of debt and/or equity securities under an automatic shelf registration statement.

We believe that our current cash balance, cash flow from operations available for distribution or reinvestment, our borrowing capacity and our potential ability to access the capital markets are sufficient to provide for payment of our current operating costs, meet debt obligations and pay common dividends at least sufficient to maintain our REIT status and repay borrowings at, or prior to, their maturity. The timing, source and amount of cash flows used in financing and investing activities are sensitive to the capital markets environment, especially to changes in interest rates. In addition, COVID-19 has adversely affected our operators’ business, results of operations, cash flows and financial condition which could, in turn, adversely affect our financial position.

We maintain our cash deposits primarily in financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). We have not experienced any losses related to amounts in excess of FDIC limits.

The operating results of the facilities will be impacted by various factors over which the operators/owners may have no control. Those factors include, without limitation, the health of the economy, inflation pressures, employee availability and cost, changes in supply of or demand for competing seniors housing and health care facilities, competition from home health providers, ability to control other rising operating costs, the potential for significant reforms in the health care industry including state and federal reimbursement programs, and the ongoing recovery for the impact of COVID-19. Prestige is our largest operator based upon revenues and assets representing 16.6% of our total revenues and 14.2% of our total assets as of September 30, 2023. During the second quarter of 2023, we agreed to defer up to $1.5 million, or up to $0.3 million per month for May through September 2023, in interest payments due on one of Prestige’s mortgage loans secured by 15 skilled nursing centers. We deferred $0.6 million and $0.9 million in interest payments during the second quarter and third quarters of 2023. Subsequent to September 30, 2023, we amended the loan. As part of the amendment, LTC has drawn down $2.8 million of the approximate $5.0 million letter of credit from Prestige to repay all deferred interest outstanding through October 2023. We will further draw down approximately $334,000 in each of November and December 2023 to be applied toward interest due on the loan at that point. As a result, we expect to receive all contractual interest of $19.5 million due from Prestige in 2023. Beginning on January 1, 2024, the minimum mortgage interest payment due to LTC will be set based on an annual current pay rate of 8.5% on the outstanding loan balance. The contractual interest rate of the loan remains unchanged. From retro-active Medicaid funds due to Prestige, we expect our letter of credit will be replenished in 2024 and Prestige will be able to pay all contractual interest during 2024 and 2025.

Our financial position and ability to make distributions may be adversely affected if Prestige faces financial difficulties, including bankruptcy, inability to emerge from bankruptcy, insolvency or a general downturn in its business.

In addition, our future growth in net income and cash flow may be adversely impacted by various proposals for changes in the governmental regulations and financing of the health care industry, and the continuing impact of our operators recovery for the effects of COVID-19. We cannot presently predict what impact these proposals may have, if any. We believe that an adequate provision has been made for

48

the possibility of loans proving uncollectible but we will continually evaluate the financial status of the operations of the seniors housing and health care properties. In addition, we will monitor our borrowers and the underlying collateral for mortgage loans and will make future revisions to the provision, if considered necessary.

Depending on our borrowing capacity, compliance with financial covenants, ability to access the capital markets, and the payment of dividends may be negatively impacted. We continuously evaluate the availability of cost-effective capital and believe we have sufficient liquidity for our current dividend, corporate expenses and additional capital investments in 2023 and 2024.

Our investments, principally our investments in owned properties and mortgage loans, are subject to the possibility of loss of their carrying values as a result of changes in market prices, interest rates and inflationary expectations. The effects on interest rates may affect our costs of financing our operations and the fair market value of our financial assets. Generally, our leases have agreed upon annual increases and our loans have predetermined increases in interest rates. Inasmuch as we may initially fund some of our investments with variable interest rate debt, we would be at risk of net interest margin deterioration if medium and long-term rates were to increase.

Our primary sources of cash include rent and interest receipts, borrowings under our unsecured credit facility, public and private issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures and construction advances), loan advances and general and administrative expenses. These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows as summarized below (in thousands):

	Nine Months Ended September 30,					Change
Net Cash provided by (used in):	2023		2022			$
Operating activities	$	78,932	$	72,772	$	6,160
Investing activities		(194,254)		(110,507)		(83,747)
Financing activities		116,245		39,052		77,193
Increase in cash and cash equivalents		923		1,317		(394)
Cash and cash equivalents, beginning of period		10,379		5,161		5,218
Cash and cash equivalents, end of period	$	11,302	$	6,478	$	4,824

Debt Obligations

Unsecured Credit Facility. We have an unsecured credit agreement (the “Credit Agreement”) that provides for an aggregate commitment of the lenders of up to $500.0 million comprising of a $400.0 million revolving credit facility (the “Revolving Line of Credit”) and two $50.0 million term loans (the “Term Loans”). The Credit Agreement permits us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1.0 billion. The Revolving Line of Credit matures November 19, 2025 and provides for a one-year extension option at our discretion, subject to customary conditions. The Term Loans mature on November 19, 2025 and November 19, 2026. During 2022, we entered into the First Amendment to the Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”) to replace London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”), plus a credit spread adjustment of 10 basis points, (“Adjusted SOFR”) as the reference rate for purpose of calculating interest under the Amended Credit Agreement. Other material terms of the Credit Agreement remain unchanged. Based on our leverage at September 30, 2023, the facility provides for interest annually at Adjusted SOFR plus 120 basis points and a facility fee of 20 basis points and the Term Loans provide for interest annually at Adjusted SOFR plus 140 basis points.

49

Interest Rate Swap Agreements. In connection with entering into the Term Loans as described above, we entered into two receive variable/pay fixed interest rate swap agreements (the “Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that will effectively lock-in the forecasted interest payments on the Term Loans’ borrowings over their four and five year terms of the loans. The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value, with changes in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. In connection with entering into the Amended Credit Agreement discussed above, we entered into amendments to our Interest Rate Swaps to account for SOFR as the updated reference rate in the Amended Credit Agreement. During the nine months ended September 30, 2023, we recorded a $123,000 decrease in fair value of Interest Rate Swaps.

As of September 30, 2023, the terms of the Interest Rate Swaps are as follows (dollar amounts in thousands):

						Notional	Fair Value at
Date Entered	Maturity Date	Swap Rate		Rate Index		Amount		September 30, 2023
November 2021	November 19, 2025	2.62	%	1-month SOFR	$	50,000	$	3,776
November 2021	November 19, 2026	2.76	%	1-month SOFR		50,000		4,820
					$	100,000	$	8,596

Senior Unsecured Notes. We have senior unsecured notes held by institutional investors with interest rates ranging from 3.66% to 5.03%. The senior unsecured notes mature between 2024 and 2033.

The senior unsecured notes and the Credit Agreement, including the Revolving Line of Credit and the Term Loans, contain financial covenants, which are measured quarterly, that require us to maintain, among other things:

● a ratio of total indebtedness to total asset value not greater than 0.6 to 1.0;

● a ratio of secured debt to total asset value not greater than 0.35 to 1.0;

● a ratio of unsecured debt to the value of the unencumbered asset value not greater than 0.6 to 1.0; and

● a ratio of EBITDA, as calculated in the debt obligation, to fixed charges not less than 1.50 to 1.0.

At September 30, 2023, we were in compliance with all applicable financial covenants. These debt obligations also contain additional customary covenants and events of default that are subject to a number of important and significant limitations, qualifications and exceptions.

The debt obligations by component as of September 30, 2023 are as follows (dollar amounts in thousands):

	Applicable			Available
	Interest	Outstanding		for
Debt Obligations	Rate (1)	Balance		Borrowing
Revolving line of credit	6.63%	$	362,250	$	37,750
Term loans, net of debt issue costs	2.74%		99,620		—
Senior unsecured notes, net of debt issue costs	4.20%		494,353		—
Total	4.97%	$	956,223	$	37,750

(1) Represents weighted average of interest rate as of September 30, 2023.

50

During the nine months ended September 30, 2023, our debt borrowings and repayments were as follows (in thousands):

Debt Obligations		Borrowings		Repayments
Revolving line of credit	$	274,450	$	(42,200)
Senior unsecured notes		—		(44,160)
Total	$	274,450	$	(86,360)

Equity

At September 30, 2023, we had 41,411,693 shares of common stock outstanding, equity on our balance sheet totaled $860.4 million and our equity securities had a market value of $1.3 billion. During the nine months ended September 30, 2023, we declared and paid $70.8 million of cash dividends.

During the nine months ended September 30, 2023, we acquired 43,933 shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

Subsequent to September 30, 2023, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2023, payable on October 31, November 30, and December 29, 2023, respectively, to stockholders of record on October 23, November 22, and December 21, 2023, respectively.

At-The-Market Program. We have separate equity distribution agreements (collectively, “Equity Distribution Agreements”) to offer and sell, from time to time, up to $200.0 million in aggregate offering price of shares of our common stock. During the nine months ended September 30, 2023, we sold 48,500 shares of common stock for $1.8 million in net proceeds under our Equity Distribution Agreements. In conjunction with the sale of common stock, we incurred $80,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received. Accordingly, we have $128.8 million available under the Equity Distribution Agreements.

Available Shelf Registrations. We have an automatic shelf registration statement on file with the SEC and currently have the ability to file additional automatic shelf registration statements to provide us with capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units. We may from time to time raise capital under our automatic registration statement in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering. Our shelf registration statement expires on February 17, 2025.

Stock-Based Compensation. During the second quarter of 2021, we adopted and our shareholders approved the 2021 Equity Participation Plan (“the 2021 Plan”) which replaces the 2015 Equity Participation Plan (“the 2015 Plan”). Under the 2021 Plan, 1,900,000 shares of common stock have been authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 Plan after December 31, 2020 and prior to adoption. In addition, any shares that are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan. Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2021 Plan and the 2015 Plan are set by our compensation committee at its discretion.

51

During the nine months ended September 30, 2023, we awarded restricted stock and performance-based stock units as follows:

No. of	Price per
Shares	Share		Award Type	Vesting Period
127,960	$	37.16	Restricted stock	ratably over 3 years
86,867	$	37.16	Performance-based stock units	TSR targets (1)
15,060	$	31.54	Restricted stock	May 24,2024
3,000	$	35.45	Restricted stock	July 25, 2024
232,887

(1) Vesting is based on achieving certain total shareholder return (“TSR”) targets in 4 years with an acceleration opportunity in 3 years.

Critical Accounting Policies

Our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q are prepared in conformity with U.S. generally accepted accounting principles for interim financial information set forth in the Accounting Standards Codification as published by the Financial Accounting Standards Board, which require us to make estimates and assumptions regarding future events that affect the amounts reported in our financial statements and accompanying footnotes. We base these estimates on our experience and assumptions regarding future events we believe to be reasonable under the circumstances. Actual results could differ from those estimates and such differences may be material to the consolidated financial statements. We have described our most critical accounting policies in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to our critical accounting policies or estimates since December 31, 2022.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no material changes in our market risk during the nine months ended September 30, 2023. For additional information, refer to Item 7A as presented in our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 4. CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). As of the end of the period covered by this report based on such evaluation our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures were effective.

There has been no change in our internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

52

PART II

OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

We are and may become from time to time a party to various claims and lawsuits arising in the ordinary course of business, which in our opinion are not singularly or in the aggregate anticipated to be material to our results of operations or financial condition. Claims and lawsuits may include matters involving general or professional liability asserted against the lessees or borrowers related to our properties, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder. We believe that these matters are the responsibility of our lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable leases or mortgages. We intend to continue to vigorously defend such claims and lawsuits.

Item 1A. RISK FACTORS

There have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

Item 5. OTHER INFORMATION

Rule 10b5-1 Trading Arrangements

During the three months ended September 30, 2023, no director or officer of our company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as defined in Item 408(a) of Regulation S-K.

53

Item 6. EXHIBITS

3.1	LTC Properties, Inc. Articles of Restatement (incorporated by reference to Exhibit 3.1.2 to the registrant’s Current Report on Form 8-K filed June 6, 2016)
3.2	Bylaws of LTC Properties, Inc. (incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed May 26, 2023)
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definitions Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

54

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LTC PROPERTIES, INC.
	Registrant
Dated: October 26th, 2023	By:	/s/ Caroline Chikhale
		Caroline Chikhale
		Executive Vice President, Chief Accounting Officer and Treasurer
		(Principal Accounting Officer)

55

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Wendy L. Simpson, certify that:

1.I have reviewed this quarterly report on Form 10-Q of LTC Properties, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Wendy L. Simpson

Wendy L. Simpson

Chairman and Chief Executive Officer

(Principal Executive Officer)

October 26, 2023

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Pam Kessler, certify that:

1.I have reviewed this quarterly report on Form 10-Q of LTC Properties, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Pam Kessler

Pam Kessler

Co-President, Chief Financial Officer

and Corporate Secretary

(Principal Financial Officer)

October 26, 2023

EX-32

Exhibit 32

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of LTC Properties, Inc. (the “Company”) hereby certifies with respect to the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2023 as filed with the Securities and Exchange Commission (the “Report”) that to her knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 26, 2023	/s/ Wendy L. Simpson
	Wendy L. Simpson Chairman and Chief Executive Officer
Date: October 26, 2023	/s/ Pam Kessler
	Pam Kessler Co-President, Chief Financial Officer and Corporate Secretary

This certification is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Act of 1934 (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Oct. 19, 2023
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Entity File Number	1-11314
Entity Registrant Name	LTC PROPERTIES INC
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	71-0720518
Entity Address, Address Line One	2829 Townsgate Road, Suite 350
Entity Address, City or Town	Westlake Village
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	91361
City Area Code	805
Local Phone Number	981-8655
Title of 12(b) Security	Common stock, $.01 par value
Trading Symbol	LTC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		41,411,693
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000887905
Amendment Flag	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Investments:
Land	$ 123,919	$ 124,665
Buildings and improvements	1,260,891	1,273,025
Accumulated depreciation and amortization	(386,483)	(389,182)
Operating real estate property, net	998,327	1,008,508
Properties held-for-sale, net of accumulated depreciation: 2023-$11,590; 2022-$2,305	9,448	10,710
Real property investments, net	1,007,775	1,019,218
Financing receivables, net of credit loss reserve: 2023-$1,981; 2022-$768	196,053	75,999
Mortgage loans receivable, net of credit loss reserve: 2023-$4,777; 2022-$3,930	473,567	389,728
Real estate investments, net	1,677,395	1,484,945
Notes receivable, net of credit loss reserve: 2023-$637; 2022-$589	63,056	58,383
Investments in unconsolidated joint ventures	19,340	19,340
Investments, net	1,759,791	1,562,668
Other assets:
Cash and cash equivalents	11,302	10,379
Debt issue costs related to revolving line of credit	1,719	2,321
Interest receivable	54,605	46,000
Straight-line rent receivable	20,068	21,847
Lease incentives	2,193	1,789
Prepaid expenses and other assets	18,185	11,099
Total assets	1,867,863	1,656,103
LIABILITIES
Revolving line of credit	362,250	130,000
Term loans, net of debt issue costs: 2023-$380; 2022-$489	99,620	99,511
Senior unsecured notes, net of debt issue costs: 2023-$1,307; 2022-$1,477	494,353	538,343
Accrued interest	3,893	5,234
Accrued expenses and other liabilities	47,364	32,708
Total liabilities	1,007,480	805,796
Stockholders' equity:
Common stock: $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2023-41,412; 2022-41,262	413	412
Capital in excess of par value	937,550	931,124
Cumulative net income	1,606,165	1,544,660
Accumulated other comprehensive income	8,596	8,719
Cumulative distributions	(1,727,315)	(1,656,548)
Total LTC Properties, Inc. stockholders' equity	825,409	828,367
Non-controlling interests	34,974	21,940
Total equity	860,383	850,307
Total liabilities and equity	$ 1,867,863	$ 1,656,103

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Properties held-for-sale, accumulated depreciation	$ 11,590	$ 2,305
Financial receivable credit loss reserve	1,981	768
Mortgage loans receivable, loan loss reserve	4,777	3,930
Notes receivable, loan loss reserve	$ 637	$ 589
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	60,000	60,000
Common stock, shares issued	41,412	41,262
Common stock, shares outstanding	41,412	41,262
Term loans
Debt issue costs, net	$ 380	$ 489
Senior Unsecured Notes
Debt issue costs, net	$ 1,307	$ 1,477

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues:
Rental income	$ 31,589	$ 31,585	$ 94,861	$ 93,537
Interest income from financing receivables	3,832	357	11,413	357
Interest income from mortgage loans	12,247	10,379	35,417	30,112
Interest and other income	1,635	1,182	5,358	3,308
Total revenues	49,303	43,503	147,049	127,314
Expenses:
Interest expense	12,674	7,941	34,595	22,607
Depreciation and amortization	9,499	9,385	28,085	28,202
Impairment loss		1,286	12,510	1,286
Provision for credit losses	189	795	2,107	1,454
Transaction costs	329	629	537	728
Property tax expense	3,271	4,179	9,751	12,180
General and administrative expenses	5,959	5,888	18,344	17,407
Total expenses	31,921	30,103	105,929	83,864
Other operating income:
Gain (loss) on sale of real estate, net	4,870	(387)	20,545	37,809
Operating income	22,252	13,013	61,665	81,259
Income from unconsolidated joint ventures	375	376	1,127	1,127
Net income	22,627	13,389	62,792	82,386
Income allocated to non-controlling interests	(430)	(99)	(1,287)	(301)
Net income attributable to LTC Properties, Inc.	22,197	13,290	61,505	82,085
Income allocated to participating securities	(147)	(131)	(440)	(481)
Net income available to common stockholders	$ 22,050	$ 13,159	$ 61,065	$ 81,604
Earnings per common share:
Basic (in dollars per share)	$ 0.54	$ 0.33	$ 1.48	$ 2.06
Diluted (in dollars per share)	$ 0.54	$ 0.32	$ 1.48	$ 2.04
Weighted average shares used to calculate earnings per common share:
Basic (in shares)	41,153	40,270	41,127	39,658
Diluted (in shares)	41,211	40,552	41,185	39,939
Dividends declared and paid per common share (in dollars per share)	$ 0.57	$ 0.57	$ 1.71	$ 1.71

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 22,627	$ 13,389	$ 62,792	$ 82,386
Unrealized gain on cash flow hedges before reclassification	1,034	3,501	2,629	9,361
(Gains) losses reclassified from accumulated other comprehensive income to interest expense	(1,006)	(195)	(2,752)	256
Comprehensive income	22,655	16,695	62,669	92,003
Less: Comprehensive income allocated to non-controlling interests	(430)	(99)	(1,287)	(301)
Comprehensive income attributable to LTC Properties, Inc.	$ 22,225	$ 16,596	$ 61,382	$ 91,702

XML

CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands	Parent	Common Stock	Capital in Excess of Par Value	Cumulative Net Income	Accumulated OCI	Cumulative Distributions	Non-controlling Interests	Total
Balance at beginning of period at Dec. 31, 2021	$ 736,714	$ 394	$ 856,895	$ 1,444,636	$ (172)	$ (1,565,039)	$ 8,413	$ 745,127
Balance (in shares) at Dec. 31, 2021		39,374
Equity activity
Net income	14,412			14,412			95	14,507
Stock-based compensation expense	1,925		1,925					1,925
Non-controlling interest distributions							(95)	(95)
Common stock cash distributions	(22,480)					(22,480)		(22,480)
Cash paid for taxes in lieu of common shares	(1,255)		(1,255)					(1,255)
Cash paid for taxes in lieu of common shares (in shares)		(37)
Fair market valuation adjustment for interest rate swap	4,876				4,876			4,876
Other	(6)	$ 1	(7)					(6)
Other (in shares)		123
Balance at end of period at Mar. 31, 2022	734,186	$ 395	857,558	1,459,048	4,704	(1,587,519)	8,413	742,599
Balance (in shares) at Mar. 31, 2022		39,460
Balance at beginning of period at Dec. 31, 2021	736,714	$ 394	856,895	1,444,636	(172)	(1,565,039)	8,413	745,127
Balance (in shares) at Dec. 31, 2021		39,374
Equity activity
Net income								82,386
Balance at end of period at Sep. 30, 2022	803,250	$ 404	899,921	1,526,721	9,445	(1,633,241)	21,919	825,169
Balance (in shares) at Sep. 30, 2022		40,505
Balance at beginning of period at Mar. 31, 2022	734,186	$ 395	857,558	1,459,048	4,704	(1,587,519)	8,413	742,599
Balance (in shares) at Mar. 31, 2022		39,460
Equity activity
Issuance of common stock	33,693	$ 9	33,684					33,693
Issuance of common stock (in shares)		910
Net income	54,383			54,383			107	54,490
Stock-based compensation expense	2,012		2,012					2,012
Non-controlling interest distributions							(998)	(998)
Common stock cash distributions	(22,635)					(22,635)		(22,635)
Cash paid for taxes in lieu of common shares	(100)		(100)					(100)
Cash paid for taxes in lieu of common shares (in shares)		(2)
Fair market valuation adjustment for interest rate swap	1,435				1,435			1,435
Other (in shares)		12
Balance at end of period at Jun. 30, 2022	802,974	$ 404	893,154	1,513,431	6,139	(1,610,154)	7,522	810,496
Balance (in shares) at Jun. 30, 2022		40,380
Equity activity
Issuance of common stock	4,753		4,753					4,753
Issuance of common stock (in shares)		125
Net income	13,290			13,290			99	13,389
Stock-based compensation expense	2,014		2,014					2,014
Non-controlling interests contributions							14,375	14,375
Non-controlling interest distributions							(77)	(77)
Common stock cash distributions	(23,087)					(23,087)		(23,087)
Fair market valuation adjustment for interest rate swap	3,306				3,306			3,306
Balance at end of period at Sep. 30, 2022	803,250	$ 404	899,921	1,526,721	9,445	(1,633,241)	21,919	825,169
Balance (in shares) at Sep. 30, 2022		40,505
Balance at beginning of period at Dec. 31, 2022	828,367	$ 412	931,124	1,544,660	8,719	(1,656,548)	21,940	850,307
Balance (in shares) at Dec. 31, 2022		41,262
Equity activity
Issuance of common stock	1,697		1,697					1,697
Issuance of common stock (in shares)		48
Issuance of restricted stock		$ 1	(1)
Issuance of restricted stock (in shares)		128
Net income	33,134			33,134			427	33,561
Stock-based compensation expense	2,088		2,088					2,088
Non-controlling interests contributions							3,831	3,831
Non-controlling interest distributions							(406)	(406)
Common stock cash distributions	(23,563)					(23,563)		(23,563)
Cash paid for taxes in lieu of common shares	(1,538)		(1,538)					(1,538)
Cash paid for taxes in lieu of common shares (in shares)		(41)
Fair market valuation adjustment for interest rate swap	(1,362)				(1,362)			(1,362)
Other (in shares)		(1)
Balance at end of period at Mar. 31, 2023	838,823	$ 413	933,370	1,577,794	7,357	(1,680,111)	25,792	864,615
Balance (in shares) at Mar. 31, 2023		41,396
Balance at beginning of period at Dec. 31, 2022	828,367	$ 412	931,124	1,544,660	8,719	(1,656,548)	21,940	850,307
Balance (in shares) at Dec. 31, 2022		41,262
Equity activity
Net income								62,792
Balance at end of period at Sep. 30, 2023	825,409	$ 413	937,550	1,606,165	8,596	(1,727,315)	34,974	860,383
Balance (in shares) at Sep. 30, 2023		41,412
Balance at beginning of period at Mar. 31, 2023	838,823	$ 413	933,370	1,577,794	7,357	(1,680,111)	25,792	864,615
Balance (in shares) at Mar. 31, 2023		41,396
Equity activity
Issuance of restricted stock (in shares)		15
Net income	6,174			6,174			430	6,604
Stock-based compensation expense	2,138		2,138					2,138
Non-controlling interests contributions							9,133	9,133
Non-controlling interest distributions							(406)	(406)
Common stock cash distributions	(23,599)					(23,599)		(23,599)
Cash paid for taxes in lieu of common shares	(81)		(81)					(81)
Cash paid for taxes in lieu of common shares (in shares)		(2)
Fair market valuation adjustment for interest rate swap	1,211				1,211			1,211
Balance at end of period at Jun. 30, 2023	824,666	$ 413	935,427	1,583,968	8,568	(1,703,710)	34,949	859,615
Balance (in shares) at Jun. 30, 2023		41,409
Equity activity
Issuance of restricted stock (in shares)		3
Net income	22,197			22,197			430	22,627
Stock-based compensation expense	2,123		2,123					2,123
Non-controlling interest distributions							(405)	(405)
Common stock cash distributions	(23,605)					(23,605)		(23,605)
Fair market valuation adjustment for interest rate swap	28				28			28
Balance at end of period at Sep. 30, 2023	$ 825,409	$ 413	$ 937,550	$ 1,606,165	$ 8,596	$ (1,727,315)	$ 34,974	$ 860,383
Balance (in shares) at Sep. 30, 2023		41,412

XML

CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
CONSOLIDATED STATEMENTS OF EQUITY
Common Stock cash distributions	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 1.71	$ 1.71

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
OPERATING ACTIVITIES:
Net income	$ 62,792	$ 82,386
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	28,085	28,202
Stock-based compensation expense	6,349	5,951
Impairment loss	12,510	1,286
Gain on sale of real estate, net	(20,545)	(37,809)
Income from unconsolidated joint ventures	(1,127)	(1,127)
Income distributions from unconsolidated joint ventures		351
Straight-line rental adjustment	1,635	963
Exchange of prepayment fee for participating interest in mortgage loan	(1,380)
Adjustment for collectability of lease incentives and rental income	26	256
Amortization of lease incentives	584	665
Provision for credit losses	2,107	1,454
Application of interest reserve	(1,788)	(4,348)
Amortization of debt issue costs	900	841
Other non-cash items, net	71	(170)
Change in operating assets and liabilities
Lease incentives funded	(1,023)	(418)
Increase in interest receivable	(8,605)	(4,768)
Decrease in accrued interest payable	(1,341)	(625)
Net change in other assets and liabilities	(318)	(318)
Net cash provided by operating activities	78,932	72,772
INVESTING ACTIVITIES:
Investment in real estate properties	(43,759)	(51,815)
Investment in real estate developments		(105)
Investment in real estate capital improvements	(5,053)	(4,555)
Proceeds from sale of real estate, net	51,410	72,628
Investment in financing receivable	(112,712)	(61,661)
Investment in real estate mortgage loans receivable	(72,260)	(35,234)
Principal payments received on mortgage loans receivable	301	625
Advances and originations under notes receivable	(19,258)	(37,008)
Principal payments received on notes receivable	7,077	6,618
Net cash used in investing activities	(194,254)	(110,507)
FINANCING ACTIVITIES:
Borrowings from revolving line of credit	274,450	194,000
Repayment of revolving line of credit	(42,200)	(153,900)
Proceeds from issuance of senior unsecured notes		75,000
Principal payments on senior unsecured notes	(44,160)	(43,160)
Proceeds from common stock issued	1,777	38,957
Distributions paid to stockholders	(70,767)	(68,202)
Contribution from non-controlling interests		50
Distributions paid to non-controlling interests	(1,217)	(1,170)
Financing costs paid	(19)	(1,162)
Cash paid for taxes in lieu of shares upon vesting of restricted stock	(1,619)	(1,355)
Other		(6)
Net cash provided by financing activities	116,245	39,052
Increase in cash and cash equivalents	923	1,317
Cash and cash equivalents, beginning of period	10,379	5,161
Cash and cash equivalents, end of period	11,302	6,478
Supplemental disclosure of cash flow information:
Interest paid	35,036	22,391
Non-cash investing and financing transactions:
Contribution from non-controlling interest	12,965	14,325
Exchange of mezzanine loan and related prepayment fee for participating interest in mortgage loan	(8,841)
Reserves withheld at financing and mortgage loan receivable origination	(5,147)
Accretion of interest reserve recorded as mortgage loan receivable	1,788	4,348
(Decrease) increase in fair value of interest rate swap agreements	(123)	9,617
Mortgage loan receivable reserve withheld at origination	$ 1,506	$ 102

XML

General

9 Months Ended

Sep. 30, 2023

General

General

1. General

LTC Properties, Inc., a health care real estate investment trust (“REIT”), was incorporated on May 12, 1992 in the State of Maryland and commenced operations on August 25, 1992. We invest primarily in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. We conduct and manage our business as one operating segment, rather than multiple operating segments, for internal reporting and internal decision-making purposes. Our primary objectives are to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. Our primary seniors housing and health care property classifications include skilled nursing centers (“SNF”), assisted living communities (“ALF”), independent living communities (“ILF”), memory care communities (“MC”) and combinations thereof. We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals. To meet these objectives, we attempt to invest in properties that provide opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment.

We have prepared consolidated financial statements included herein without audit and in the opinion of management have included all adjustments necessary for a fair presentation of the consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to rules and regulations governing the presentation of interim financial statements. The accompanying consolidated financial statements include the accounts of our company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results for a full year.

No provision has been made for federal or state income taxes. Our company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As such, we generally are not taxed on income that is distributed to our stockholders.

XML

Real Estate Investments

9 Months Ended

Sep. 30, 2023

Real Estate Investments

Real Estate Investments

2. Real Estate Investments

Assisted living communities, independent living communities, memory care communities and combinations thereof are included in the assisted living property classification (collectively “ALF”).

Any reference to the number of properties or facilities, number of units, number of beds, number of operators and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s review of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board.

Owned Properties. Our owned properties are leased pursuant to non-cancelable operating leases. Each lease is a triple net lease which requires the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities. Many of the leases contain renewal options. The majority of our leases contain provisions for specified annual increases over the rents of the prior year.

The following table summarizes our investments in owned properties at September 30, 2023 (dollar amounts in thousands):

								Average
			Percentage		Number	Number of		Investment
	Gross		of		of	SNF	ALF	per
Type of Property	Investment		Investment		Properties (1)	Beds	Units	Bed/Unit
Assisted Living	$	800,963	57.0	%	92	—	5,323	$	150.47
Skilled Nursing		592,880	42.1	%	50	6,113	236	$	93.38
Other (2)		12,005	0.9	%	1	118	—		—
Total	$	1,405,848	100.0	%	143	6,231	5,559

(1) We own properties in 24 states that are leased to 22 different operators.

(2) Includes three parcels of land held-for-use, and one behavioral health care hospital.

Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent payable upon renewal being greater or less than that currently being paid.

During 2023, Brookdale Senior Living Communities, Inc. (“Brookdale”) elected not to exercise its renewal option under a master lease that matures on December 31, 2023. We re-leased 10 of the 35 properties in the existing Brookdale portfolio to Brookdale under a new master lease. This new master lease includes six properties in Colorado and four in Kansas. The six-year master lease will commence on January 1, 2024. Rent in the first lease year is set at $8,000,000 escalating by approximately 2.0% annually. The lease includes a purchase option that can be exercised in 2029. We also agreed to fund $4,500,000 for capital expenditures for the first two years of the lease at an initial rate of 8.0%, escalating by approximately 2.0% annually thereafter. Subsequent to September 30, 2023, we added seven additional properties to the new Brookdale master lease commencing on January 1, 2024. One property is located in Ohio with 42 assisted living units and six are located in Texas with 235 assisted living units. These properties are currently included in the original Brookdale master lease. As a result of this amendment, Brookdale will operate 17 properties under the new master lease with the initial annual rent of $9,325,000 and the capital expenditure commitment will be $7,150,000. Additionally, the new master lease provides Brookdale with a purchase option on these seven properties. Also, subsequent to September 30, 2023, we leased six assisted living communities located in Oklahoma, with a total of 219 units, to a current LTC operator under a new master lease, expected to commence on November 1, subject to the issuance of licensure to the new operator. These properties are currently included in the original Brookdale master lease. The lease term is for three years, with one four-year extension period. Rent in the first year is set at $960,000, increasing to $984,000 in the second year and $1,150,000 in the third year. This master lease includes a purchase option that can be exercised starting in November 2027 through October 2029 if the lessee exercises its four-year extension option. Also, we entered into agreements to sell seven assisted living communities in the existing Brookdale portfolio. These properties were classified as held-for-sale as of September 30, 2023.

Additionally, during 2023, a master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed at the contractual rate for another five years extending the maturity to November 2028. The centers have a total of 216 beds and are located in Florida. Also, during 2023, a master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed for another two years extending the maturity to December 2025. The master lease was renewed at the contractual annual cash rent of $1,005,000 increasing 2.5% per year. As amended, this master lease

provides the lessee with a purchase option available through December 31, 2024. The centers have a total of 141 beds and are located in Tennessee.

During 2023, we transitioned a portfolio of eight assisted living communities with 500 units in Illinois, Ohio and Michigan to Encore Senior Living (“Encore”). We agreed to provide assistance in the second quarter of 2023 to the former operator of this portfolio and as part of the transition, we received repayment of $1,250,000 of deferred rent which represents $934,000 of April and May 2023 deferred rent and $316,000 of unrecorded deferred rent provided in 2022. Cash rent under the new two-year lease with Encore is based on mutually agreed upon fair market rent beginning in September 2023.

We monitor the collectability of our receivable balances, including deferred rent receivable balances, on an ongoing basis. We write-off uncollectible operator receivable balances, including straight- line rent receivable and lease incentives balances, as a reduction to rental income in the period such balances are no longer probable of being collected. Therefore, recognition of rental income is limited to the lesser of the amount of cash collected or rental income reflected on a “straight-line” basis for those customer receivable balances deemed uncollectible. We wrote-off straight-line rent receivable and lease incentives balances of $26,000 and $256,000 for the nine months ended September 30, 2023 and 2022, respectively, as a result of property sales and lease terminations.

We continue to take into account the current financial condition of our operators, including consideration of the pace of recovery from the impact of COVID-19, and inflation on the financial performance of our operators in our estimation of uncollectible accounts and deferred rents receivable at September 30, 2023. We are closely monitoring the collectability of such rents and will adjust future estimations as appropriate as further information becomes known.

The following table summarizes components of our rental income for the nine months ended September 30, 2023 and 2022 (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Rental Income		2023			2022			2023			2022
Contractual cash rental income	$	29,121	(1)	$	28,180		$	87,260	(1)	$	83,203
Variable cash rental income		3,386	(2)		4,160	(2)		9,846	(2)		12,218	(2)
Straight-line rent		(747)	(3)		(436)			(1,635)	(3)		(963)
Adjustment for collectability of lease incentives and rental income		—			(83)	(4)		(26)			(256)	(5)
Amortization of lease incentives		(171)			(236)			(584)			(665)
Total	$	31,589		$	31,585		$	94,861		$	93,537

(1) Increased primarily due to rental income from acquisitions and transitioned portfolios, repayment of deferred rent and annual rent escalations, partially offset by sold properties.

(2) The variable rental income for the three and nine months ended September 30, 2023 and the three and nine months ended September 30, 2022, primarily includes reimbursement of real estate taxes of our lessees. Decreased primarily due to property tax reassessment and sold properties partially offset by acquisitions.

(3) Decreased primarily due to deferred rent repayment and normal amortization.

(4) Represents lease incentive balances write-off related to two properties that were transitioned to another operator in our portfolio.

(5) Represents a lease incentive balance write-off related to a closed property and subsequent lease termination and (4) above.

Some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. The following table summarizes information about purchase options included in our lease agreements (dollar amounts in thousands):

	Type	Number
	of	of		Gross		Net Book	Option
State	Property	Properties		Investments		Value	Window
California	ALF/MC	2	$	38,895	$	33,013	2023-2029
Florida	MC	1		7,680		4,681	2029	(1)
Florida	SNF	3		76,712		76,712	2025-2027	(2)
North Carolina	ALF/MC	11		121,321		121,321	2025-2028	(3)
Ohio	MC	1		16,161		13,598	2024-2025
Ohio	ILF/ALF/MC	1		54,714		53,990	2025-2027
South Carolina	ALF/MC	1		11,680		8,619	2029
Tennessee	SNF	2		5,275		2,298	2023-2024
Texas	SNF	4		52,426		50,438	2027-2029	(4)
Total			$	384,864	$	364,670

(1) During 2023, we recorded an impairment loss of $7,522. See Impairment Loss below for more information.

(2) During 2022, we entered into a joint venture (“JV”) to purchase three skilled nursing centers with a total of 299 beds. The JV leased the properties under a 10-year master lease. For more information regarding this transaction see Financing Receivables below.

(3) During 2023, we entered into a JV that purchased 11 ALFs and MCs with a total of 523 units and leased the communities under a 10-year master lease. The master lease provides the operator with the option to buy up to 50% of the properties at the beginning of the third lease year, and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit IRR of 9.0% on any portion of the properties being purchased. For more information regarding this transaction see Financing Receivables below.

(4) During 2022, we purchased four skilled nursing centers and leased these properties under a 10-year lease with an existing operator. The lease allows the operator to elect either an earn-out payment or purchase option. If neither option is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the earn-out see Note 8. Commitments and Contingencies.

Impairment Loss. In conjunction with the planned sale of a 70-unit assisted living community located in Florida, we recorded a $434,000 impairment loss during the three months ended March 31, 2023 and a $1,222,000 impairment loss during the fourth quarter of 2022. During the second quarter of 2023, the community was sold for $4,850,000. Additionally, during 2023, we performed a recoverability analysis on the carrying value of two assisted living communities that we are negotiating to sell and concluded that their carrying value may not be recoverable through future undiscounted cash flows. Accordingly, we recorded an aggregate impairment loss of $12,076,000 during the second quarter of 2023. As of September 30, 2023, we do not believe these communities meet the criteria to be classified as held-for-sale.

Properties Held -for-Sale. The following summarizes our held-for-sale properties as of September 30, 2023 (dollar amounts in thousands):

	Type	Number	Number
	of	of	of		Gross		Accumulated
State	Property	Properties	Beds/units		Investment		Depreciation
FL	ALF	4	176	$	12,215	$	7,213
SC	ALF	3	128		8,823		4,377
		7	304	$	21,038	$	11,590

Acquisitions. The following table summarizes our acquisitions for the nine months ended September 30, 2023 and 2022 (dollar amounts in thousands):

		Cash					Non-						Number	Number
		Paid at		Assumed			Controlling	Transaction			Assets		of	of
Year	Type of Property	Acquisition		Liabilities			Interest	Costs			Acquired		Properties	Beds/Units
2023	ALF (1)	$	43,759	$	9,767	$	9,133	$	363	$	63,022	(2)	1	242
2022	SNF (3)	$	51,815	$	—	$	—	$	—	$	51,815		4	339

(1) We entered into a $54,134 Joint Venture (“JV”) and contributed $45,000 into the JV that purchased an ILF/ALF/MC in Ohio. Under the JV agreement, the seller, our JV partner, has the option to purchase the campus between the third and fourth lease years for LTC’s allocation of the JV investment plus an IRR of 9.75%. The campus was leased to Encore Senior Living (“Encore”) under a 10-year term with an initial yield of 8.25% on LTC’s allocation of the JV investment. LTC committed to fund $2,100 of lease incentives under the Encore lease of which $1,004 has been funded.

(2) Includes $8,309 tax abatement intangible included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets.

(3) The properties are located in Texas and are leased to an affiliate of an existing operator under a 10-year lease with two 5-year renewal options. Additionally, the lease provides either an earn-out payment or purchase option but not both. If neither option is elected within the timeframe defined in the lease, both elections are terminated. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. The purchase option is available beginning in the sixth lease year through the end of the seventh lease year. The initial cash yield is 8% for the first year, increasing to 8.25% for the second year, then increases annually by 2.0% to 4.0% based on the change in the Medicare Market Basket Rate. In connection with the transaction, we provided the lessee a 10-year working capital loan for up to $2,000 at 8% for first year, increasing to 8.25% for the second year, then increasing annually with the lease rate. During 2023, the working capital loan was fully repaid. Accordingly, the working capital commitment has been terminated.

Intangible Assets. We make estimates as part of our allocation of the purchase price of acquisitions to various components of acquisition based upon the fair value of each component. In determining fair value, we use current appraisals or other third-party opinions of value. The most significant components of our allocations are typically the allocation of fair value to land and buildings, and for certain of our acquisitions, in-place leases and other intangible assets. In the case of the value of in-place leases, we make the best estimates based on the evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during the hypothetical expected lease-up periods, market conditions and costs to execute similar leases. The following is a summary of the carrying amount of intangible assets as of September 30, 2023 (in thousands):

	September 30, 2023								December 31,2022
					Accumulated								Accumulated
Assets		Cost			Amortization			Net		Cost			Amortization			Net
In-place leases	$	11,348	(1)	$	(5,886)	(2)	$	5,462	$	9,474	(1)	$	(5,362)	(2)	$	4,112
Tax abatement intangible		8,309	(3)		(231)	(3)		8,078		—	(3)		—	(3)		—

(1) Included in the Buildings and improvements line item in our Consolidated Balance Sheets.

(2) Included in the Accumulated depreciation and amortization line item in our Consolidated Balance Sheets.

(3) Included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets.

Improvements and Developments. During the nine months ended September 30, 2023 and 2022, we invested in the following (in thousands):

		Nine Months Ended September 30,
Type of Property		2023				2022
	Developments		Improvements		Developments		Improvements
Assisted Living Communities	$	—	$	2,418	$	105	$	3,015
Skilled Nursing Centers		—		2,548		—		981
Other		—		87		—		559
Total	$	—	$	5,053	$	105	$	4,555

Properties Sold. During the three and nine months ended September 30, 2023, we recorded a gain on sale of $4,870,000 and $20,545,000, respectively. During the three and nine months ended September 30, 2022, we recorded a loss on sale of $387,000 and a gain on sale of $37,809,000, respectively. The following table summarizes property sales during the nine months ended September 30, 2023 and 2022 (dollar amounts in thousands):

		Type	Number	Number
		of	of	of		Sales		Carrying		Net
Year	State	Properties	Properties	Beds/Units		Price		Value		Gain (Loss) (1)
2023	Florida	ALF	1	70	$	4,850	$	4,082	$	65
	Kentucky	ALF	1	60		11,000		10,720		57
	New Jersey	ALF	1	39		2,000		1,552		266
	New Mexico	SNF	2	235		21,250		5,523		15,287
	Nebraska	ALF	3	117		2,984		2,934		—
	Pennsylvania	ALF	2	130		11,128		6,054		4,870
Total 2023			10	651	$	53,212	$	30,865	$	20,545
2022	California	ALF	2	232	$	43,715	$	17,832	$	25,867
	California	SNF	1	121		13,250		1,846		10,846
	Texas	SNF	1	—		485		697		(434)
	Virginia	ALF	1	74		16,895		15,549		1,344	(2)
	n/a	n/a	—	—		—		—		186	(3)
Total 2022			5	427	$	74,345	$	35,924	$	37,809

(

(1) Calculation of net gain includes cost of sales and write-off of straight-line receivable and lease incentives, when applicable.

(2) In connection with this sale, the former operator paid us a lease termination fee of $1,181 which is not included in the gain on sale.

(3) We recognized additional gain due to the reassessment adjustment of the holdbacks related to properties sold during 2019 and 2020, under the expected value model per ASC Topic 606, Contracts with Customers (“ASC 606”).

Financing Receivables. As part of our acquisitions, we may from time to time, invest in sale and leaseback transactions. In accordance with ASC Topic 842, Leases (“ACS 842”), we are required to determine whether the sale and leaseback transaction qualifies as a sale. ASC 842 clarifies that an option for the seller-lessee to repurchase a real estate asset would generally preclude accounting for the transfer of the asset as a sale. Therefore, a sale and leaseback transaction of real estate that includes a seller-lessee repurchase option is accounted for as a failed sale and leaseback transaction. As a result, the purchased assets of a failed sale and leaseback transaction would be presented as Financing receivables on our Consolidated Balance Sheets and the rental revenue from these properties is recorded as Interest income from financing receivables on our Consolidated Statements of Income. Furthermore, upon expiration of the purchase option if the purchase option remains unexercised by the seller-lessee, the purchased assets will be reclassified from Financing receivables to Real property investments on our Consolidated Balance Sheets.

During 2023, we entered into a $121,321,000 JV with an affiliate of an existing operator and contributed $117,490,000 into the JV that purchased 11 assisted living and memory care communities from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit Internal Rate of Return (“IRR”) of 9.0%. During the three and nine months ended September 30, 2023, we recognized $2,427,000 and $7,198,000, respectively of Interest income from financing receivables and upon origination we recorded

$1,213,000 Provision for credit losses equal to 1% of the financing receivable balance related to this investment.

During 2022, we entered into a JV and contributed $61,661,000 into the JV that purchased three skilled nursing centers located in Florida for $75,825,000. The JV leased the centers back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year. During the three and nine months ended September 30, 2023, we recognized $1,405,000 and $4,215,000, respectively of Interest income from financing receivables related to this investment.

Mortgage Loans. The following table sets forth information regarding our investments in mortgage loans secured by first mortgages at September 30, 2023 (dollar amounts in thousands):

						Type	Percentage		Number of					Investment
			Gross			of	of					SNF	ALF	per
Interest Rate	Maturity	State	Investment			Property	Investment		Loans (1)	Properties (2)		Beds	Units	Bed/Unit
7.5%	2024	MO	$	1,961		OTH	0.4	%	1	—	(3)	—	—	$	n/a
7.5%	2024	LA		29,346		SNF	6.1	%	1	1		189	—	$	155.27
7.5%	2024	GA		51,111	(4)	ALF	10.7	%	1	1		—	203	$	251.78
7.8%	2025	FL		16,706		ALF	3.5	%	1	1		—	68	$	245.68
7.3%	2025	NC		10,750	(4)	ALF	2.2	%	1	1		—	45	$	238.89
7.3% (5)	2025	NC/SC		58,331		ALF	12.2	%	1	13		—	523	$	111.53
7.3% (5)	2026	NC		34,043		ALF	7.1	%	1	4		—	217	$	156.88
7.3% (5)	2026	NC		826		OTH	0.2	%	1	—	(6)	—	—	$	—
8.8%	2028	IL		16,500	(7)	SNF	3.5	%	1	1		150	—	$	110.00
10.6% (8)	2043	MI		184,220		SNF	38.5	%	1	15		1,875	—	$	98.25
9.7% (8)	2045	MI		40,000		SNF	8.4	%	1	4		480	—	$	83.33
10.1%	2045	MI		19,700		SNF	4.1	%	1	2		201	—	$	98.01
10.3% (8)	2045	MI		14,850		SNF	3.1	%	1	1		146	—	$	101.71
Total			$	478,344	(9)		100.0	%	13	44		3,041	1,056	$	116.75

(1) Some loans contain certain guarantees and provide for certain facility fees.

(2) Our mortgage loans are secured by properties located in eight states with seven borrowers.

(3) Represents a mortgage loan secured by a parcel of land for the future development of a 91-bed post-acute SNF.

(4) During the first quarter of 2023, we originated a $10,750 mortgage loan secured by a 45-unit MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%. Additionally, we invested $51,111 in an existing mortgage loan secured by a 203-unit ILF, ALF and MC located in Georgia by acquiring a participating interest owned by existing lenders for $42,251 in addition to converting our $7,461 mezzanine loan in the property into a participating interest in the mortgage loan. The mortgage loan matures in October 2024 and our investment is at an initial rate of 7.5% with an IRR of 7.75%. We recorded $1,380 of additional interest income in connection with the effective prepayment of the mezzanine loan in the first quarter of 2023.

(5) Represents the initial rate with an IRR of 8%.

(6) Represents a mortgage loan secured by a parcel of land in North Carolina held for future development of a seniors housing community.

(7) During the second quarter of 2023, we originated a $16,500 senior loan for the purchase of a 150-bed SNF in Illinois. The mortgage loan matures in June 2028 and our investment is at an interest rate of 8.75%.

(8) Mortgage loans provide for 2.25% annual increases in the interest rate.

(9) During the third quarter of 2023, we committed to fund a $19,500 mortgage loan for the construction of an 85-unit ALF and MC in Michigan. The borrower contributed $12,100 of equity which will initially fund the construction. Once all of the borrower’s equity has been drawn, we will begin funding the commitment. The loan term is approximately three years at a rate of 8.75%, and includes two, one-year extensions, each of which is contingent on certain coverage thresholds.

The following table summarizes our mortgage loan activity for the nine months ended September 30, 2023 and 2022 (in thousands):

	Nine Months Ended September 30,
	2023			2022
Originations and funding under mortgage loans receivable	$	83,383	(1)	$	35,234	(2)
Application of interest reserve		1,609			4,348
Scheduled principal payments received		(301)			(625)
Mortgage loan premium amortization		(5)			(4)
Provision for loan loss reserve		(847)			(389)
Net increase in mortgage loans receivable	$	83,839		$	38,564

(1) We originated the following:

(a) $10,750 mortgage loan secured by a 45-unit MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%;

(b) $51,111 mortgage loan investment secured by a 203-unit ILF, ALF and MC located in Georgia. We acquired a participating interest owned by existing lenders for $42,251 in addition to converting our $7,461 mezzanine loan in the property into a participating interest in the mortgage loan. The mortgage loan matures in October 2024 and our investment is at an initial rate of 7.5% with an IRR of 7.75%. We recorded $1,380 of additional interest income in connection with the effective prepayment of the mezzanine loan in the first quarter of 2023;

(c) $16,500 senior loan for the purchase of a 150-bed SNF in Illinois. The mortgage loan matures in June 2028 and our investment is at an interest rate of 8.75%;

(d) 5,022 of additional funding under other mortgage loans receivable; and

(e) $19,500 mortgage loan commitment for the construction of an 85-unit ALF and MC in Michigan. The borrower contributed $12,100 of equity which will initially fund the construction. Once all of the borrower’s equity has been drawn, we will begin funding the commitment. The loan term is approximately three years at a rate of 8.75%, and includes two, one-year extensions, each of which is contingent on certain coverage thresholds.

(2) We originated two senior mortgage loans, secured by four ALFs operated by an existing operator, as well as a land parcel in North Carolina. The communities have a combined total of 217 units, with an average age of less than four years. The land parcel is approximately 7.6 acres adjacent to one of the ALFs and is being held for the future development of a seniors housing community. The mortgage loans have a four-year term, an interest rate of 7.25% and an IRR of 8%.

We apply ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) and the “expected loss” model to estimate our loan losses on our mortgage loans and notes receivable. In determining the expected losses on these receivables, we utilize the probability of default and discounted cash flow methods. Further, we stress-test the results to reflect the impact of unknown adverse future events including recessions.

As of September 30, 2023, the accrued interest receivable of $54,605,000 was not included in the measurement of expected credit losses on the financing receivables, mortgage loans receivable and notes receivable (see Note 4. Notes Receivable). We elected not to measure an allowance for expected credit losses on the related accrued interest receivable using the expected credit loss standard. Rather, we have elected to write-off accrued interest receivable by reversing interest income and/or recognizing credit loss expense as incurred. We review the collectability of the accrued interest receivable quarterly as part of our review of the financing receivables, mortgage loans receivable or notes receivables including the performance of the underlying collateral and net worth of the borrower. For the nine months ended September 30, 2023 and 2022, we did not write-off any accrued interest receivable.

XML

Investment in Unconsolidated Joint Ventures

9 Months Ended

Sep. 30, 2023

Investment in Unconsolidated Joint Ventures

Investment in Unconsolidated Joint Ventures

3. Investment in Unconsolidated Joint Ventures

We have preferred equity investments in two joint ventures. We determined that each of these JVs meets the accounting criteria to be considered a variable interest entity (“VIE”). We are not the primary beneficiary of the JVs as we do not have both: 1) the power to direct the activities that most significantly affect the JVs’ economic performance, and 2) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. However, we do have significant influence over the JVs. Therefore, we have accounted for the JVs using the equity method of accounting. The following table provides information regarding these preferred equity investments (dollar amounts in thousands):

	Type	Type		Total		Contractual		Number
	of	of		Preferred		Cash		of		Carrying
State	Properties	Investment		Return		Portion		Beds/ Units		Value
Washington	ALF/MC	Preferred Equity	(1)	12	%	7	%	95	$	6,340	(1)
Washington	UDP	Preferred Equity	(2)	14	%	8	%	—		13,000	(2)
Total								95	$	19,340

(1) Represents a preferred equity interest in an entity that developed and owns a 95-unit ALF and MC in Washington. Our investment represents 15.5% of the total investment. The preferred equity investment earns an initial cash rate of 7% increasing to 9% in year four until the internal rate of return (“IRR”) is 8%. After achieving an 8% IRR, the cash rate drops to 8% with an IRR ranging between 12% to 14%, depending upon timing of redemption. During the fourth quarter of 2021, the entity completed the development project and received its certificate of occupancy. We have the option to require the JV partner to purchase our preferred equity interest at any time between August 17, 2031 and December 31, 2036.

(2) Represents a preferred equity interest in an entity that will develop and own a 267-unit ILF and ALF in Washington. Our investment represents 11.0% of the estimated total investment. The preferred equity investment earns an initial cash rate of 8% with an IRR of 14%. The JV partner has the option to buy out our investment at any time after August 31, 2023 at the IRR rate. Also, we have the option to require the JV partner to purchase our preferred equity interest at any time between August 31, 2027 and, upon project completion and leasing the property, prior to the end of the first renewal term of the lease.

During the three and nine months ended September 30, 2023, we recognized $375,000 and $1,127,000, respectively, in income from unconsolidated joint ventures. During the three and nine months ended September 30, 2022, we recognized $376,000 and $1,127,000, respectively, in income from unconsolidated joint ventures. The following table summarizes our income recognized, and application of interest reserves related to our investments in unconsolidated joint ventures for the nine months ended September 30, 2023 and 2022 (in thousands):

	Type
	of		Income		Cash Interest		Application of
Year	Properties		Recognized		Earned		Interest Reserve
2023	ALF/MC	$	337	$	—	$	337
	UDP		790		—		790
Total		$	1,127	$	—	$	1,127
2022	ALF/MC	$	337	$	—	$	337
	UDP		790		351		439
Total		$	1,127	$	351	$	776

XML

Notes Receivable

9 Months Ended

Sep. 30, 2023

Notes Receivable.

Notes Receivable

4. Notes Receivable

Notes receivable consist of a mezzanine loan and working capital loans. The following table sets forth information regarding our investment in notes receivable at September 30, 2023 (dollar amounts in thousands):

Interest				Type of	Gross				Type of
Rate	IRR		Maturity	Loan	Investment			# of loans	Property
5.0%	—		2024	Working capital	$	2,442		1	ALF
4.0%	—		2024	Working capital		13,531		1	SNF
5.0%	—		2025	Working capital		732		1	ALF
7.5%	—		2027	Working capital		550		1	ALF
8.0%	11.0	%	2027	Mezzanine		25,000		1	ALF
8.8%	12.0	%	2028	Mezzanine		17,000	(1)	1	ALF
6.5%	—		2030	Working capital		138		1	SNF
7.3%	—		2030	Working capital		500		1	ALF
7.3%	—		2030	Working capital		1,107		1	ALF
7.0%	—		2031	Working capital		2,693		1	ALF
					$	63,693	(2)	10

(1) During the third quarter of 2023, we originated a mezzanine loan to recapitalize an existing 130-unit ILF/ALF/MC in Georgia and construction of 89 additional units. The loan term is five years at an initial yield of 8.75% and an IRR of 12.0%.

(2) Excludes the impact of credit loss reserve.

The following table is a summary of our notes receivable components as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023		December 31, 2022
Mezzanine loans	$	42,000	$	36,815
Working capital loans		21,693		22,157
Notes receivable credit loss reserve		(637)		(589)
Total	$	63,056	$	58,383

The following table summarizes our notes receivable activity for the nine months ended September 30, 2023 and 2022 (in thousands):

	Nine Months Ended September 30,
		2023			2022
Advances under notes receivable	$	19,258	(1)	$	37,008	(3)
Principal payments received under notes receivable		(14,537)	(2)		(6,618)
Provision for credit losses		(48)			(303)
Net increase in notes receivable	$	4,673		$	30,087

(1) During the third quarter of 2023, we originated a mezzanine loan to recapitalize an existing 130-unit ILF/ALF/MC in Georgia and construction of 89 additional units. The loan term is five years at an initial yield of 8.75% and an IRR of 12.0%.

(2) During 2023, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190 from a mezzanine loan prepayment. The mezzanine loan was on a 136-unit ILF in Oregon. Additionally, another $7,461 mezzanine loan was effectively prepaid through converting it as part of our $51,111 investment in a participating interest in an existing mortgage loan that is secured by a 203-unit ALF, ILF and MC located in Georgia. We recorded $1,380 of interest income in connection with the effective prepayment of the mezzanine loan.

(3) During 2022, we originated a $25,000 mezzanine loan for the recapitalization of a five-property seniors housing portfolio. The mezzanine loan has a term of approximately five years, with two one-year extension options and bears interest at 8% with an IRR of 11%. The five communities are located in Oregon and Montana, have a total of 621 units, and include independent living, assisted living and memory care.

XML

Lease Incentives

9 Months Ended

Sep. 30, 2023

Lease Incentives

Lease Incentives

5. Lease Incentives

Our non-contingent lease incentive balances at September 30, 2023 and December 31, 2022 were $2,193,000 and $1,789,000, respectively. The following table summarizes our lease incentives activity for the nine months ended September 30, 2023 and 2022 (in thousands):

	Nine Months Ended September 30,
		2023			2022
Lease incentives funded	$	1,023	(1)	$	418
Amortization of lease incentives		(584)			(665)
Adjustment for collectability of lease incentives		—			(256)	(3)
Other adjustments (2)		(35)			(174)
Net increase (decrease) in non-contingent lease incentives	$	404		$	(677)

(1) As part of our investment in a $54,134 JV, we committed to fund $2,100 of lease incentive, of which $1,004 was funded during the nine months ended September 30, 2023.

(2) Primarily relates to lease incentive balance write-off related to property sales.

(3) Represents the lease incentive balance write-off related to a closed property and subsequent lease termination and lease incentive balance write-off related to 12 assisted living communities transitioned to an existing operator.

Non-contingent lease incentives represent payments made to our lessees for various reasons including entering into a new lease or lease amendments and extensions. Contingent lease incentives represent potential contingent earn-out payments that may be made to our lessees in the future, as part of our lease agreements. From time to time, we may commit to provide contingent payments to our lessees, upon our properties achieving certain rent coverage ratios. Once the contingent payment becomes probable and estimable, the contingent payment is recorded as a lease incentive. Lease incentives are amortized as a yield adjustment to rental income over the remaining life of the lease.

XML

Debt Obligations

9 Months Ended

Sep. 30, 2023

Debt Obligations

Debt Obligations

6. Debt Obligations

Unsecured Credit Facility. We have an unsecured credit agreement (the “Credit Agreement”) that provides for an aggregate commitment of the lenders of up to $500,000,000 comprising of a $400,000,000 revolving credit facility (the “Revolving Line of Credit”) and two $50,000,000 term loans (the “Term Loans”). The Credit Agreement permits us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1,000,000,000. The Revolving Line of Credit matures November 19, 2025 and provides for a one-year extension option at our discretion, subject to customary conditions. The Term Loans mature on November 19, 2025 and November 19, 2026. During the fourth quarter of 2022, we entered into the First Amendment (the “Amended Credit Agreement”) to replace LIBOR with SOFR, plus a credit spread adjustment of 10 basis points (“Adjusted SOFR”), as the reference rate for purpose of calculating interest under the Amended Credit Agreement. Other material terms of the Credit Agreement remain unchanged. Based on our leverage at September 30, 2023, the facility provides for interest annually at Adjusted SOFR plus 120 basis points and a facility fee of 20 basis points and the Term Loans provide for interest annually at Adjusted SOFR plus 140 basis points.

Interest Rate Swap Agreements. In connection with entering into the Term Loans described above, we entered into two receive variable/pay fixed interest rate swap agreements (the “Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that will effectively lock-in the forecasted interest payments on the Term Loans’ borrowings over their four and five year terms of the loans. The Interest Rate Swaps are considered cash flow hedges and are recorded on our Consolidated Balance Sheets at fair value in Prepaid expenses and other assets, with cumulative changes

in the fair value of these instruments recognized in Accumulated other comprehensive income (loss) on our Consolidated Balance Sheets. In connection with entering into the Amended Credit Agreement discussed above, we entered into amendments to our Interest Rate Swaps to account for SOFR as the updated reference rate in the Amended Credit Agreement. During the three and nine months ended September 30, 2023, we recorded a $28,000 increase and $123,000 decrease in fair value of Interest Rate Swaps, respectively. During the three and nine months ended September 30, 2022, we recorded increase of $3,306,000 and $9,617,000 in fair value of Interest Rate Swaps, respectively.

As of September 30, 2023 and December 31, 2022, the terms of the Interest Rate Swaps are as follows (dollar amounts in thousands):

						Notional	Fair Value at
Date Entered	Maturity Date	Swap Rate		Rate Index		Amount		September 30, 2023		December 31, 2022
November 2021	November 19, 2025	2.62	%	1-month SOFR	$	50,000	$	3,776	$	4,003
November 2021	November 19, 2026	2.76	%	1-month SOFR		50,000		4,820		4,716
					$	100,000	$	8,596	$	8,719

Senior Unsecured Notes. We have senior unsecured notes held by institutional investors with interest rates ranging from 3.66% to 5.03%. The senior unsecured notes mature between 2024 and 2033.

The senior unsecured notes and the Credit Agreement, including the Revolving Line of Credit and the Term Loans, contain financial covenants, which are measured quarterly, that require us to maintain, among other things:

● a ratio of total indebtedness to total asset value not greater than 0.6 to 1.0;

● a ratio of secured debt to total asset value not greater than 0.35 to 1.0;

● a ratio of unsecured debt to the value of the unencumbered asset value not greater than 0.6 to 1.0; and

● a ratio of EBITDA, as calculated in the debt obligation, to fixed charges not less than 1.50 to 1.0.

At September 30, 2023, we were in compliance with all applicable financial covenants. These debt obligations also contain additional customary covenants and events of default that are subject to a number of important and significant limitations, qualifications and exceptions.

The following table sets forth information regarding debt obligations by component as of September 30, 2023 and December 31, 2022 (dollar amounts in thousands):

		At September 30, 2023				At December 31, 2022
	Applicable			Available				Available
	Interest	Outstanding		for		Outstanding		for
Debt Obligations	Rate (1)	Balance		Borrowing		Balance		Borrowing
Revolving line of credit	6.63%	$	362,250	$	37,750	$	130,000	$	270,000
Term loans, net of debt issue costs	2.74%		99,620		—		99,511		—
Senior unsecured notes, net of debt issue costs	4.20%		494,353		—		538,343		—
Total	4.97%	$	956,223	$	37,750	$	767,854	$	270,000

(1) Represents weighted average of interest rate as of September 30, 2023.

During the nine months ended September 30, 2023 and 2022, our debt borrowings and repayments were as follows (in thousands):

	Nine Months Ended September 30,
	2023				2022
Debt Obligations		Borrowings		Repayments	Borrowings		Repayments
Revolving line of credit	$	274,450	$	(42,200)	$	194,000	$	(153,900)
Senior unsecured notes		—		(44,160)		75,000		(43,160)
Total	$	274,450	$	(86,360)	$	269,000	$	(197,060)

XML

Equity

9 Months Ended

Sep. 30, 2023

Equity

Equity

7. Equity

Non-controlling Interests. We have entered into partnerships to develop and/or own real estate. Given that our limited members do not have the substantive kick-out rights, liquidation rights, or participation rights, we have concluded that the partnerships are VIEs. As we exercise power over and receive benefits from the VIEs, we are considered the primary beneficiary. Accordingly, we consolidate the VIEs and record the non-controlling interests on the consolidated financial statements.

As of September 30, 2023, we have the following consolidated VIEs (in thousands):

						Gross
Investment			Property			Consolidated		Non-Controlling
Year	Purpose		Type	State		Assets (1)		Interests
2023	Owned real estate	(2)	ILF/ALF/MC	OH	$	54,714	$	9,134
2023	Owned real estate	(3)	ALF/MC	NC		121,321		3,831
2022	Owned real estate	(4)	SNF	FL		76,712		14,325
2018	Owned real estate		ILF	OR		14,650		2,907
2018	Owned real estate and development		ALF/MC	OR		18,452		1,231
2017	Owned real estate and development		ILF/ALF/MC	WI		22,007		2,305
2017	Owned real estate		ALF/MC	SC		11,680		1,240
Total					$	319,536	$	34,973

(1) Includes the total real estate investments and excludes intangible assets.

(2) During the second quarter of 2023, we entered into a JV that purchased an ILF/ALF/MC in Ohio with a total of 242 units. For more information see Acquisitions above in Note 2.

(3) During the first quarter of 2023, we entered into a JV that purchased 11 ALF and MC with a total of 523 units. For more information regarding this transaction see Financing Receivable above in Note 2.

(4) During 2022, we entered into a JV that purchased three SNFs with a total of 299 beds. For more information regarding this transaction see Financing Receivable above in Note 2.

Common Stock. We have separate equity distribution agreements (collectively, “Equity Distribution Agreements”) to offer and sell, from time to time, up to $200,000,000 in aggregate offering price of shares of our common stock. During the nine months ended September 30, 2023, we sold 48,500 shares of common stock for $1,777,000 in net proceeds under our Equity Distribution Agreements. In conjunction with the sale of common stock, we incurred $80,000 of costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received. At September 30, 2023, we had $128,822,000 available under the Equity Distribution Agreements.

During the nine months ended September 30, 2023 and 2022, we acquired 43,933 shares and 39,463 shares, respectively, of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.

Available Shelf Registration. We have an automatic shelf registration statement on file with the SEC, and currently have the ability to file additional automatic shelf registration statements, to provide us with capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units. We may from time to time raise capital under our automatic shelf registration statement in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering. Our shelf registration statement expires on February 17, 2025.

Distributions. We declared and paid the following cash dividends (in thousands):

	Nine Months Ended September 30,
	2023				2022
	Declared		Paid		Declared		Paid
Common Stock (1)	$	70,767	$	70,767	$	68,202	$	68,202

(1) Represents $0.19 per share per month for the nine months ended September 30, 2023 and 2022.

In October 2023, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2023, payable on October 31, November 30, and December 29, 2023, respectively, to stockholders of record on October 23, November 22, and December 21, 2023, respectively.

Stock-Based Compensation. During the second quarter of 2021, we adopted and our shareholders approved the 2021 Equity Participation Plan (“the 2021 Plan”) which replaces the 2015 Equity Participation Plan (“the 2015 Plan”). Under the 2021 Plan, 1,900,000 shares of common stock have been authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 Plan after December 31, 2020 and prior to adoption. In addition, any shares that are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan. Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2021 Plan and the 2015 Plan are set by our compensation committee at its discretion.

At September 30, 2023, we had 5,000 stock options outstanding and exercisable. During each of the nine months ended September 30, 2023 and 2022, 5,000 stock options expired and were cancelled. During the nine months ended September 30, 2023 and 2022, no stock options were granted or exercised.

The following table summarizes our restricted stock activity for the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
	2023		2022
Outstanding, January 1		229,236		197,422
Granted		146,020		135,210
Vested		(115,551)		(103,396)
Cancelled		(1,085)		—
Outstanding, September 30		258,620		229,236

No performance-based stock units vested during the nine months ended September 30, 2023, and 2022.

During the nine months ended September 30, 2023 and 2022, we granted restricted stock and performance-based stock units under the 2021 Plan as follows:

	No. of	Price per
Year	Shares/Units	Share		Reward Type	Vesting Period
2023	127,960	$	37.16	Restricted stock	ratably over 3 years
	86,867	$	37.16	Performance-based stock units	TSR targets (1)
	15,060	$	31.54	Restricted stock	May 24,2024
	3,000	$	35.45	Restricted stock	July 25, 2024
	232,887
2022	122,865	$	33.94	Restricted stock	ratably over 3 years
	86,332	$	33.94	Performance-based stock units	TSR targets (1)
	12,345	$	38.48	Restricted stock	May 25, 2023
	221,542

(1) Vesting is based on achieving certain total shareholder return (“TSR”) targets in 4 years with acceleration opportunity in 3 years.

Compensation expense recognized related to the vesting of restricted common stock and performance-based stock units for the nine months ended September 30, 2023 and 2022 were $6,349,000 and $5,951,000, respectively. At September 30, 2023, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (in thousands):

	Remaining
	Compensation
Vesting Date	Expense
October - December 2023	$	2,132
2024		6,026
2025		3,238
2026		356
Total	$	11,752

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies

Commitments and Contingencies

8. Commitments and Contingencies

At September 30, 2023, we had commitments as follows (in thousands):

						Total
	Investment			2023		Commitment		Remaining
	Commitment			Funding		Funded		Commitment
Real estate properties (Note 2. Real Estate Investments)	$	10,242	(1)	$	1,932	$	2,650	$	7,592
Accrued incentives and earn-out liabilities (Note 5. Lease Incentives)		21,100	(2)		1,004		1,004		20,096
Mortgage loans (Note 2. Real Estate Investments)		43,598	(3)		1,476		7,178		36,420
Notes receivable (Note 4. Notes Receivable)		28,950	(4)		2,258		15,973		12,977
Total	$	103,890		$	6,670	$	26,805	$	77,085

(1) Represents commitments to purchase land and improvements, if applicable, and to develop, re-develop, renovate or expand seniors housing and skilled nursing properties.

(2) Includes an earn-out payment of up to $3,000 to an operator under a master lease on four SNFs in Texas which were acquired during 2022. The master lease allows either an earn-out payment up to $3,000 or a purchase option. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. If neither option is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the purchase option see Note 2. Real Estate Investments.

(3) Represents $19,500 related to a construction loan, $6,098 of commitments for the expansion, renovation and working capital related to seniors housing and skilled nursing properties securing the mortgage loans and $18,000 of commitments which are contingent upon the borrower achieving certain coverage ratios.

(4) Represents working capital loan commitments.

Additionally, some of our lease agreements provide purchase options allowing the lessee to purchase the properties they currently lease from us. See Note 2. Real Estate Investments for a table summarizing information about our purchase options.

We are a party from time to time to various general and professional liability claims and lawsuits asserted against the lessees or borrowers of our properties, which in our opinion are not singularly or in the aggregate material to our results of operations or financial condition. These types of claims and lawsuits may include matters involving general or professional liability, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder. We believe that these matters are the responsibility of our lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable leases or mortgages. We intend to continue to vigorously defend such claims.

XML

Major Operators

9 Months Ended

Sep. 30, 2023

Major Operators

Major Operators

9. Major Operators

We have one operator that represents 10% or more of our combined rental revenue and interest income from mortgage loans. The following table sets forth information regarding our major operator as of September 30, 2023:

	Number of		Number of		Percentage of
			SNF	ALF	Total		Total
Operator	SNF	ALF	Beds	Units	Revenues (1)		Assets (2)
Prestige Healthcare (3)	24	—	2,820	93	16.6	%	14.2	%

(1) During 2023, we agreed to defer up to $1,500, or up to $300 per month for May through September 2023, in interest payments due on one of Prestige Healthcare’s mortgage loans secured by 15 skilled nursing centers in Michigan. We deferred $600 in interest payments during the second quarter of 2023 and $900 in interest payments during the third quarter of 2023.

(2) Represents the net carrying value of the mortgage loans and properties we own divided by the Total assets on the Consolidated Balance Sheets.

(3) The majority of the revenue derived from this operator relates to interest income from mortgage loans.

Subsequent to September 30, 2023, we amended the loan with Prestige which was subject to a previously agreed interest deferral and is secured by 15 skilled nursing centers in Michigan. As part of the amendment, LTC has drawn down $2,767,000 of the approximate $4,945,000 letter of credit from Prestige to repay all deferred interest outstanding through October 2023. We will further draw down approximately $334,000 in each of November and December 2023 to be applied toward interest due on the loan at that point. As a result, we expect to receive all contractual interest of $19,539,000 due from Prestige in 2023. Beginning on January 1, 2024, the monthly minimum interest payment due to LTC will be set based on an annual current pay rate of 8.5% on the outstanding loan balance. The contractual interest rate of the loan remains unchanged.

Our financial position and ability to make distributions may be adversely affected if Prestige Healthcare or any of our lessees and borrowers face financial difficulties, including any bankruptcies, inability to emerge from bankruptcy, insolvency or general downturn in business of any such operator, continuing impact upon services or occupancy levels due to COVID-19, or in the event any such operator does not renew and/or extend its relationship with us.

XML

Earnings per Share

9 Months Ended

Sep. 30, 2023

Earnings per Share

Earnings per Share

10. Earnings per Share

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income	$	22,627	$	13,389	$	62,792	$	82,386
Less income allocated to non-controlling interests		(430)		(99)		(1,287)		(301)
Less income allocated to participating securities:
Non-forfeitable dividends on participating securities		(147)		(131)		(440)		(401)
Income allocated to participating securities		—		—		—		(80)
Total net income allocated to participating securities		(147)		(131)		(440)		(481)
Net income available to common stockholders		22,050		13,159		61,065		81,604
Effect of dilutive securities:
Participating securities (1)		—		—		—		—
Net income for diluted net income per share	$	22,050	$	13,159	$	61,065	$	81,604
Shares for basic net income per share		41,153		40,270		41,127		39,658
Effect of dilutive securities:
Stock options (2)		—		1		—		—
Performance-based stock units		58		281		58		281
Participating securities (1)		—		—		—		—
Total effect of dilutive securities		58		282		58		281
Shares for diluted net income per share		41,211		40,552		41,185		39,939
Basic net income per share	$	0.54	$	0.33	$	1.48	$	2.06
Diluted net income per share	$	0.54	$	0.32	$	1.48	$	2.04

(1) For the three and nine months ended September 30, 2023 and 2022, the participating securities have been excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

(2) For the three and nine months ended September 30, 2023 and the nine months ended September 30, 2022, the stock options have been excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Measurements

Fair Value Measurements

11. Fair Value Measurements

In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses reported in earnings. We did not elect the fair value option for any of our financial assets and financial liabilities.

The carrying amount of cash and cash equivalents approximates their fair value because of the short-term maturity of these instruments. We do not invest our cash in auction rate securities. The carrying value and estimated fair value of our financial instruments as of September 30, 2023 and December 31, 2022 were as follows (in thousands):

	At September 30, 2023					At December 31, 2022
	Carrying		Fair			Carrying		Fair
	Value		Value			Value		Value
Financing receivable, net of credit loss reserve	$	196,053	$	199,050	(1)	$	75,999	$	76,033	(1)
Mortgage loans receivable, net of credit loss reserve		473,567		560,808	(2)		389,728		461,276	(2)
Notes receivable, net of credit loss reserve		63,056		70,482	(3)		58,383		61,858	(3)
Revolving line of credit		362,250		362,250	(4)		130,000		130,000	(4)
Term loans, net of debt issue costs		99,620		100,000	(4)		99,511		100,000	(4)
Senior unsecured notes, net of debt issue costs		494,353		429,534	(5)		538,343		477,653	(5)

(1) Our investment in financing receivables is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate used to value our future cash inflows of the financing receivables at September 30, 2023 and December 31, 2022 was 7.6%.

(2) Our investment in mortgage loans receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash inflows of the mortgage loans receivable at September 30, 2023 and December 31, 2022 was 9.1% and 9.3%, respectively.

(3) Our investments in notes receivable are classified as Level 3. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash flows of the notes receivable at September 30, 2023 and December 31, 2022, were 6.8% and 7.1%, respectively.

(4) Our revolving line of credit and term loans bear interest at a variable interest rate. The estimated fair value of our revolving line of credit and term loans approximated their carrying values at September 30, 2023 and December 31, 2022 based upon prevailing market interest rates for similar debt arrangements.

(5) Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is measured based upon management’s estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities. At September 30, 2023, the discount rate used to value our future cash outflow of our senior unsecured notes was 7.25% for those maturing before year 2030 and 7.50% for those maturing at or beyond year 2030. At December 31, 2022, the discount rate used to value our future cash outflow of our senior unsecured notes was 6.50% for those maturing before year 2030 and 7.00% for those maturing at or beyond year 2030.

XML

Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events

Subsequent Events

12. Subsequent Events

Subsequent to September 30, 2023, the following events occurred:

Real Estate: We added seven additional properties to the new Brookdale master lease commencing on January 1, 2024. One property is located in Ohio with 42 assisted living units and six are located in Texas with 235 assisted living units. These properties are currently included in the original Brookdale master lease. As a result of this amendment, Brookdale will operate 17 properties under the new master lease with the initial annual rent of $9,325,000 and the capital expenditure commitment will be $7,150,000. Additionally, the new master lease provides Brookdale with a purchase option on these seven properties. Also, we leased six assisted living communities located in Oklahoma, with a total of 219 units, to a current LTC operator under a new master lease, expected to commence on November 1, subject to the issuance of licensure to the new operator. These properties are currently included in the original Brookdale master lease. The lease term is for three years, with one four-year extension period. Rent in the first year is set at $960,000, increasing to $984,000 in the second year, and $1,150,000 in the third year. Additionally, the master lease includes a purchase option that can be exercised starting in November 2027

through October 2029 if the lessee exercises its four-year extension option. Furthermore, we amended the loan with Prestige which was subject to a previously agreed interest deferral and is secured by 15 skilled nursing centers in Michigan. As part of the amendment, LTC has drawn down $2,767,000 of the approximate $4,945,000 letter of credit from Prestige to repay all deferred interest outstanding through October 2023. We will further draw down approximately $334,000 in each of November and December 2023 to be applied toward interest due on the loan at that point. As a result, we expect to receive all contractual interest of $19,539,000 due from Prestige in 2023. Beginning on January 1, 2024, the monthly minimum interest payment due to LTC will be set based on an annual current pay rate of 8.5% on the outstanding loan balance. The contractual interest rate of the loan remains unchanged.

Equity: We declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2023, payable on October 31, November 30, and December 29, 2023, respectively to stockholders of record on October 23, November 22, and December 21, 2023, respectively.

XML

General (Policies)	9 Months Ended
	Sep. 30, 2023
General
Basis of Presentation	We have prepared consolidated financial statements included herein without audit and in the opinion of management have included all adjustments necessary for a fair presentation of the consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to rules and regulations governing the presentation of interim financial statements. The accompanying consolidated financial statements include the accounts of our company and its wholly-owned subsidiaries.
Reclassifications	All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results for a full year.
Income taxes	No provision has been made for federal or state income taxes. Our company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As such, we generally are not taxed on income that is distributed to our stockholders.

XML

Real Estate Investments (Tables)

9 Months Ended

Sep. 30, 2023

Real Estate Investments

Summary of investments in owned properties

The following table summarizes our investments in owned properties at September 30, 2023 (dollar amounts in thousands):

								Average
			Percentage		Number	Number of		Investment
	Gross		of		of	SNF	ALF	per
Type of Property	Investment		Investment		Properties (1)	Beds	Units	Bed/Unit
Assisted Living	$	800,963	57.0	%	92	—	5,323	$	150.47
Skilled Nursing		592,880	42.1	%	50	6,113	236	$	93.38
Other (2)		12,005	0.9	%	1	118	—		—
Total	$	1,405,848	100.0	%	143	6,231	5,559

(1) We own properties in 24 states that are leased to 22 different operators.

(2) Includes three parcels of land held-for-use, and one behavioral health care hospital.

Summary of components of our rental income

The following table summarizes components of our rental income for the nine months ended September 30, 2023 and 2022 (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
Rental Income		2023			2022			2023			2022
Contractual cash rental income	$	29,121	(1)	$	28,180		$	87,260	(1)	$	83,203
Variable cash rental income		3,386	(2)		4,160	(2)		9,846	(2)		12,218	(2)
Straight-line rent		(747)	(3)		(436)			(1,635)	(3)		(963)
Adjustment for collectability of lease incentives and rental income		—			(83)	(4)		(26)			(256)	(5)
Amortization of lease incentives		(171)			(236)			(584)			(665)
Total	$	31,589		$	31,585		$	94,861		$	93,537

(1) Increased primarily due to rental income from acquisitions and transitioned portfolios, repayment of deferred rent and annual rent escalations, partially offset by sold properties.

(2) The variable rental income for the three and nine months ended September 30, 2023 and the three and nine months ended September 30, 2022, primarily includes reimbursement of real estate taxes of our lessees. Decreased primarily due to property tax reassessment and sold properties partially offset by acquisitions.

(3) Decreased primarily due to deferred rent repayment and normal amortization.

(4) Represents lease incentive balances write-off related to two properties that were transitioned to another operator in our portfolio.

(5) Represents a lease incentive balance write-off related to a closed property and subsequent lease termination and (4) above.

Summary of information about purchase options included in our lease agreements

The following table summarizes information about purchase options included in our lease agreements (dollar amounts in thousands):

	Type	Number
	of	of		Gross		Net Book	Option
State	Property	Properties		Investments		Value	Window
California	ALF/MC	2	$	38,895	$	33,013	2023-2029
Florida	MC	1		7,680		4,681	2029	(1)
Florida	SNF	3		76,712		76,712	2025-2027	(2)
North Carolina	ALF/MC	11		121,321		121,321	2025-2028	(3)
Ohio	MC	1		16,161		13,598	2024-2025
Ohio	ILF/ALF/MC	1		54,714		53,990	2025-2027
South Carolina	ALF/MC	1		11,680		8,619	2029
Tennessee	SNF	2		5,275		2,298	2023-2024
Texas	SNF	4		52,426		50,438	2027-2029	(4)
Total			$	384,864	$	364,670

(1) During 2023, we recorded an impairment loss of $7,522. See Impairment Loss below for more information.

(2) During 2022, we entered into a joint venture (“JV”) to purchase three skilled nursing centers with a total of 299 beds. The JV leased the properties under a 10-year master lease. For more information regarding this transaction see Financing Receivables below.

(3) During 2023, we entered into a JV that purchased 11 ALFs and MCs with a total of 523 units and leased the communities under a 10-year master lease. The master lease provides the operator with the option to buy up to 50% of the properties at the beginning of the third lease year, and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit IRR of 9.0% on any portion of the properties being purchased. For more information regarding this transaction see Financing Receivables below.

(4) During 2022, we purchased four skilled nursing centers and leased these properties under a 10-year lease with an existing operator. The lease allows the operator to elect either an earn-out payment or purchase option. If neither option is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the earn-out see Note 8. Commitments and Contingencies.

Schedule of properties held-for-sale

Properties Held -for-Sale. The following summarizes our held-for-sale properties as of September 30, 2023 (dollar amounts in thousands):

	Type	Number	Number
	of	of	of		Gross		Accumulated
State	Property	Properties	Beds/units		Investment		Depreciation
FL	ALF	4	176	$	12,215	$	7,213
SC	ALF	3	128		8,823		4,377
		7	304	$	21,038	$	11,590

Summary of acquisitions

Acquisitions. The following table summarizes our acquisitions for the nine months ended September 30, 2023 and 2022 (dollar amounts in thousands):

		Cash					Non-						Number	Number
		Paid at		Assumed			Controlling	Transaction			Assets		of	of
Year	Type of Property	Acquisition		Liabilities			Interest	Costs			Acquired		Properties	Beds/Units
2023	ALF (1)	$	43,759	$	9,767	$	9,133	$	363	$	63,022	(2)	1	242
2022	SNF (3)	$	51,815	$	—	$	—	$	—	$	51,815		4	339

(1) We entered into a $54,134 Joint Venture (“JV”) and contributed $45,000 into the JV that purchased an ILF/ALF/MC in Ohio. Under the JV agreement, the seller, our JV partner, has the option to purchase the campus between the third and fourth lease years for LTC’s allocation of the JV investment plus an IRR of 9.75%. The campus was leased to Encore Senior Living (“Encore”) under a 10-year term with an initial yield of 8.25% on LTC’s allocation of the JV investment. LTC committed to fund $2,100 of lease incentives under the Encore lease of which $1,004 has been funded.

(2) Includes $8,309 tax abatement intangible included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets.

(3) The properties are located in Texas and are leased to an affiliate of an existing operator under a 10-year lease with two 5-year renewal options. Additionally, the lease provides either an earn-out payment or purchase option but not both. If neither option is elected within the timeframe defined in the lease, both elections are terminated. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. The purchase option is available beginning in the sixth lease year through the end of the seventh lease year. The initial cash yield is 8% for the first year, increasing to 8.25% for the second year, then increases annually by 2.0% to 4.0% based on the change in the Medicare Market Basket Rate. In connection with the transaction, we provided the lessee a 10-year working capital loan for up to $2,000 at 8% for first year, increasing to 8.25% for the second year, then increasing annually with the lease rate. During 2023, the working capital loan was fully repaid. Accordingly, the working capital commitment has been terminated.

Schedule of improvement projects

Improvements and Developments. During the nine months ended September 30, 2023 and 2022, we invested in the following (in thousands):

		Nine Months Ended September 30,
Type of Property		2023				2022
	Developments		Improvements		Developments		Improvements
Assisted Living Communities	$	—	$	2,418	$	105	$	3,015
Skilled Nursing Centers		—		2,548		—		981
Other		—		87		—		559
Total	$	—	$	5,053	$	105	$	4,555

Schedule of property sold

The following table summarizes property sales during the nine months ended September 30, 2023 and 2022 (dollar amounts in thousands):

		Type	Number	Number
		of	of	of		Sales		Carrying		Net
Year	State	Properties	Properties	Beds/Units		Price		Value		Gain (Loss) (1)
2023	Florida	ALF	1	70	$	4,850	$	4,082	$	65
	Kentucky	ALF	1	60		11,000		10,720		57
	New Jersey	ALF	1	39		2,000		1,552		266
	New Mexico	SNF	2	235		21,250		5,523		15,287
	Nebraska	ALF	3	117		2,984		2,934		—
	Pennsylvania	ALF	2	130		11,128		6,054		4,870
Total 2023			10	651	$	53,212	$	30,865	$	20,545
2022	California	ALF	2	232	$	43,715	$	17,832	$	25,867
	California	SNF	1	121		13,250		1,846		10,846
	Texas	SNF	1	—		485		697		(434)
	Virginia	ALF	1	74		16,895		15,549		1,344	(2)
	n/a	n/a	—	—		—		—		186	(3)
Total 2022			5	427	$	74,345	$	35,924	$	37,809

(

(1) Calculation of net gain includes cost of sales and write-off of straight-line receivable and lease incentives, when applicable.

(2) In connection with this sale, the former operator paid us a lease termination fee of $1,181 which is not included in the gain on sale.

(3) We recognized additional gain due to the reassessment adjustment of the holdbacks related to properties sold during 2019 and 2020, under the expected value model per ASC Topic 606, Contracts with Customers (“ASC 606”).

Summary of investments in mortgage loans secured by first mortgages

Mortgage Loans. The following table sets forth information regarding our investments in mortgage loans secured by first mortgages at September 30, 2023 (dollar amounts in thousands):

						Type	Percentage		Number of					Investment
			Gross			of	of					SNF	ALF	per
Interest Rate	Maturity	State	Investment			Property	Investment		Loans (1)	Properties (2)		Beds	Units	Bed/Unit
7.5%	2024	MO	$	1,961		OTH	0.4	%	1	—	(3)	—	—	$	n/a
7.5%	2024	LA		29,346		SNF	6.1	%	1	1		189	—	$	155.27
7.5%	2024	GA		51,111	(4)	ALF	10.7	%	1	1		—	203	$	251.78
7.8%	2025	FL		16,706		ALF	3.5	%	1	1		—	68	$	245.68
7.3%	2025	NC		10,750	(4)	ALF	2.2	%	1	1		—	45	$	238.89
7.3% (5)	2025	NC/SC		58,331		ALF	12.2	%	1	13		—	523	$	111.53
7.3% (5)	2026	NC		34,043		ALF	7.1	%	1	4		—	217	$	156.88
7.3% (5)	2026	NC		826		OTH	0.2	%	1	—	(6)	—	—	$	—
8.8%	2028	IL		16,500	(7)	SNF	3.5	%	1	1		150	—	$	110.00
10.6% (8)	2043	MI		184,220		SNF	38.5	%	1	15		1,875	—	$	98.25
9.7% (8)	2045	MI		40,000		SNF	8.4	%	1	4		480	—	$	83.33
10.1%	2045	MI		19,700		SNF	4.1	%	1	2		201	—	$	98.01
10.3% (8)	2045	MI		14,850		SNF	3.1	%	1	1		146	—	$	101.71
Total			$	478,344	(9)		100.0	%	13	44		3,041	1,056	$	116.75

(1) Some loans contain certain guarantees and provide for certain facility fees.

(2) Our mortgage loans are secured by properties located in eight states with seven borrowers.

(3) Represents a mortgage loan secured by a parcel of land for the future development of a 91-bed post-acute SNF.

(4) During the first quarter of 2023, we originated a $10,750 mortgage loan secured by a 45-unit MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%. Additionally, we invested $51,111 in an existing mortgage loan secured by a 203-unit ILF, ALF and MC located in Georgia by acquiring a participating interest owned by existing lenders for $42,251 in addition to converting our $7,461 mezzanine loan in the property into a participating interest in the mortgage loan. The mortgage loan matures in October 2024 and our investment is at an initial rate of 7.5% with an IRR of 7.75%. We recorded $1,380 of additional interest income in connection with the effective prepayment of the mezzanine loan in the first quarter of 2023.

(5) Represents the initial rate with an IRR of 8%.

(6) Represents a mortgage loan secured by a parcel of land in North Carolina held for future development of a seniors housing community.

(7) During the second quarter of 2023, we originated a $16,500 senior loan for the purchase of a 150-bed SNF in Illinois. The mortgage loan matures in June 2028 and our investment is at an interest rate of 8.75%.

(8) Mortgage loans provide for 2.25% annual increases in the interest rate.

(9) During the third quarter of 2023, we committed to fund a $19,500 mortgage loan for the construction of an 85-unit ALF and MC in Michigan. The borrower contributed $12,100 of equity which will initially fund the construction. Once all of the borrower’s equity has been drawn, we will begin funding the commitment. The loan term is approximately three years at a rate of 8.75%, and includes two, one-year extensions, each of which is contingent on certain coverage thresholds.

Summary of the carrying amount of intangible assets

	September 30, 2023								December 31,2022
					Accumulated								Accumulated
Assets		Cost			Amortization			Net		Cost			Amortization			Net
In-place leases	$	11,348	(1)	$	(5,886)	(2)	$	5,462	$	9,474	(1)	$	(5,362)	(2)	$	4,112
Tax abatement intangible		8,309	(3)		(231)	(3)		8,078		—	(3)		—	(3)		—

(1) Included in the Buildings and improvements line item in our Consolidated Balance Sheets.

(2) Included in the Accumulated depreciation and amortization line item in our Consolidated Balance Sheets.

(3) Included in the Prepaid expenses and other assets line item in our Consolidated Balance Sheets.

Schedule of mortgage loan activity

The following table summarizes our mortgage loan activity for the nine months ended September 30, 2023 and 2022 (in thousands):

	Nine Months Ended September 30,
	2023			2022
Originations and funding under mortgage loans receivable	$	83,383	(1)	$	35,234	(2)
Application of interest reserve		1,609			4,348
Scheduled principal payments received		(301)			(625)
Mortgage loan premium amortization		(5)			(4)
Provision for loan loss reserve		(847)			(389)
Net increase in mortgage loans receivable	$	83,839		$	38,564

(1) We originated the following:

(a) $10,750 mortgage loan secured by a 45-unit MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%;

(b) $51,111 mortgage loan investment secured by a 203-unit ILF, ALF and MC located in Georgia. We acquired a participating interest owned by existing lenders for $42,251 in addition to converting our $7,461 mezzanine loan in the property into a participating interest in the mortgage loan. The mortgage loan matures in October 2024 and our investment is at an initial rate of 7.5% with an IRR of 7.75%. We recorded $1,380 of additional interest income in connection with the effective prepayment of the mezzanine loan in the first quarter of 2023;

(c) $16,500 senior loan for the purchase of a 150-bed SNF in Illinois. The mortgage loan matures in June 2028 and our investment is at an interest rate of 8.75%;

(d) 5,022 of additional funding under other mortgage loans receivable; and

(e) $19,500 mortgage loan commitment for the construction of an 85-unit ALF and MC in Michigan. The borrower contributed $12,100 of equity which will initially fund the construction. Once all of the borrower’s equity has been drawn, we will begin funding the commitment. The loan term is approximately three years at a rate of 8.75%, and includes two, one-year extensions, each of which is contingent on certain coverage thresholds.

(2) We originated two senior mortgage loans, secured by four ALFs operated by an existing operator, as well as a land parcel in North Carolina. The communities have a combined total of 217 units, with an average age of less than four years. The land parcel is approximately 7.6 acres adjacent to one of the ALFs and is being held for the future development of a seniors housing community. The mortgage loans have a four-year term, an interest rate of 7.25% and an IRR of 8%.

XML

Investment in Unconsolidated Joint Ventures (Tables)

9 Months Ended

Sep. 30, 2023

Investment in Unconsolidated Joint Ventures

Summary of the preferred equity investments

The following table provides information regarding these preferred equity investments (dollar amounts in thousands):

	Type	Type		Total		Contractual		Number
	of	of		Preferred		Cash		of		Carrying
State	Properties	Investment		Return		Portion		Beds/ Units		Value
Washington	ALF/MC	Preferred Equity	(1)	12	%	7	%	95	$	6,340	(1)
Washington	UDP	Preferred Equity	(2)	14	%	8	%	—		13,000	(2)
Total								95	$	19,340

(1) Represents a preferred equity interest in an entity that developed and owns a 95-unit ALF and MC in Washington. Our investment represents 15.5% of the total investment. The preferred equity investment earns an initial cash rate of 7% increasing to 9% in year four until the internal rate of return (“IRR”) is 8%. After achieving an 8% IRR, the cash rate drops to 8% with an IRR ranging between 12% to 14%, depending upon timing of redemption. During the fourth quarter of 2021, the entity completed the development project and received its certificate of occupancy. We have the option to require the JV partner to purchase our preferred equity interest at any time between August 17, 2031 and December 31, 2036.

(2) Represents a preferred equity interest in an entity that will develop and own a 267-unit ILF and ALF in Washington. Our investment represents 11.0% of the estimated total investment. The preferred equity investment earns an initial cash rate of 8% with an IRR of 14%. The JV partner has the option to buy out our investment at any time after August 31, 2023 at the IRR rate. Also, we have the option to require the JV partner to purchase our preferred equity interest at any time between August 31, 2027 and, upon project completion and leasing the property, prior to the end of the first renewal term of the lease.

Summary of capital contributions, income recognized and cash interest received from investments in unconsolidated joint ventures

During the three and nine months ended September 30, 2023, we recognized $375,000 and $1,127,000, respectively, in income from unconsolidated joint ventures. During the three and nine months ended September 30, 2022, we recognized $376,000 and $1,127,000, respectively, in income from unconsolidated joint ventures. The following table summarizes our income recognized, and application of interest reserves related to our investments in unconsolidated joint ventures for the nine months ended September 30, 2023 and 2022 (in thousands):

	Type
	of		Income		Cash Interest		Application of
Year	Properties		Recognized		Earned		Interest Reserve
2023	ALF/MC	$	337	$	—	$	337
	UDP		790		—		790
Total		$	1,127	$	—	$	1,127
2022	ALF/MC	$	337	$	—	$	337
	UDP		790		351		439
Total		$	1,127	$	351	$	776

XML

Notes Receivable (Tables)

9 Months Ended

Sep. 30, 2023

Notes Receivable.

Summary of investments in notes receivable

Interest				Type of	Gross				Type of
Rate	IRR		Maturity	Loan	Investment			# of loans	Property
5.0%	—		2024	Working capital	$	2,442		1	ALF
4.0%	—		2024	Working capital		13,531		1	SNF
5.0%	—		2025	Working capital		732		1	ALF
7.5%	—		2027	Working capital		550		1	ALF
8.0%	11.0	%	2027	Mezzanine		25,000		1	ALF
8.8%	12.0	%	2028	Mezzanine		17,000	(1)	1	ALF
6.5%	—		2030	Working capital		138		1	SNF
7.3%	—		2030	Working capital		500		1	ALF
7.3%	—		2030	Working capital		1,107		1	ALF
7.0%	—		2031	Working capital		2,693		1	ALF
					$	63,693	(2)	10

(1) During the third quarter of 2023, we originated a mezzanine loan to recapitalize an existing 130-unit ILF/ALF/MC in Georgia and construction of 89 additional units. The loan term is five years at an initial yield of 8.75% and an IRR of 12.0%.

(2) Excludes the impact of credit loss reserve.

Summary of mezzanine loans and other loan arrangements

The following table is a summary of our notes receivable components as of September 30, 2023 and December 31, 2022 (in thousands):

	September 30, 2023		December 31, 2022
Mezzanine loans	$	42,000	$	36,815
Working capital loans		21,693		22,157
Notes receivable credit loss reserve		(637)		(589)
Total	$	63,056	$	58,383

Summary of notes receivable activity

The following table summarizes our notes receivable activity for the nine months ended September 30, 2023 and 2022 (in thousands):

	Nine Months Ended September 30,
		2023			2022
Advances under notes receivable	$	19,258	(1)	$	37,008	(3)
Principal payments received under notes receivable		(14,537)	(2)		(6,618)
Provision for credit losses		(48)			(303)
Net increase in notes receivable	$	4,673		$	30,087

(1) During the third quarter of 2023, we originated a mezzanine loan to recapitalize an existing 130-unit ILF/ALF/MC in Georgia and construction of 89 additional units. The loan term is five years at an initial yield of 8.75% and an IRR of 12.0%.

(2) During 2023, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190 from a mezzanine loan prepayment. The mezzanine loan was on a 136-unit ILF in Oregon. Additionally, another $7,461 mezzanine loan was effectively prepaid through converting it as part of our $51,111 investment in a participating interest in an existing mortgage loan that is secured by a 203-unit ALF, ILF and MC located in Georgia. We recorded $1,380 of interest income in connection with the effective prepayment of the mezzanine loan.

(3) During 2022, we originated a $25,000 mezzanine loan for the recapitalization of a five-property seniors housing portfolio. The mezzanine loan has a term of approximately five years, with two one-year extension options and bears interest at 8% with an IRR of 11%. The five communities are located in Oregon and Montana, have a total of 621 units, and include independent living, assisted living and memory care.

XML

Lease Incentives (Tables)

9 Months Ended

Sep. 30, 2023

Lease Incentives

Summary of lease incentive activity

at September 30, 2023 and December 31, 2022 were $2,193,000 and $1,789,000, respectively. The following table summarizes our lease incentives activity for the nine months ended September 30, 2023 and 2022 (in thousands):

	Nine Months Ended September 30,
		2023			2022
Lease incentives funded	$	1,023	(1)	$	418
Amortization of lease incentives		(584)			(665)
Adjustment for collectability of lease incentives		—			(256)	(3)
Other adjustments (2)		(35)			(174)
Net increase (decrease) in non-contingent lease incentives	$	404		$	(677)

(1) As part of our investment in a $54,134 JV, we committed to fund $2,100 of lease incentive, of which $1,004 was funded during the nine months ended September 30, 2023.

(2) Primarily relates to lease incentive balance write-off related to property sales.

(3) Represents the lease incentive balance write-off related to a closed property and subsequent lease termination and lease incentive balance write-off related to 12 assisted living communities transitioned to an existing operator.

XML

Debt Obligations (Tables)

9 Months Ended

Sep. 30, 2023

Debt Obligations

Schedule of interest rate swaps

As of September 30, 2023 and December 31, 2022, the terms of the Interest Rate Swaps are as follows (dollar amounts in thousands):

						Notional	Fair Value at
Date Entered	Maturity Date	Swap Rate		Rate Index		Amount		September 30, 2023		December 31, 2022
November 2021	November 19, 2025	2.62	%	1-month SOFR	$	50,000	$	3,776	$	4,003
November 2021	November 19, 2026	2.76	%	1-month SOFR		50,000		4,820		4,716
					$	100,000	$	8,596	$	8,719

Schedule of Debt Obligations

The following table sets forth information regarding debt obligations by component as of September 30, 2023 and December 31, 2022 (dollar amounts in thousands):

		At September 30, 2023				At December 31, 2022
	Applicable			Available				Available
	Interest	Outstanding		for		Outstanding		for
Debt Obligations	Rate (1)	Balance		Borrowing		Balance		Borrowing
Revolving line of credit	6.63%	$	362,250	$	37,750	$	130,000	$	270,000
Term loans, net of debt issue costs	2.74%		99,620		—		99,511		—
Senior unsecured notes, net of debt issue costs	4.20%		494,353		—		538,343		—
Total	4.97%	$	956,223	$	37,750	$	767,854	$	270,000

(1) Represents weighted average of interest rate as of September 30, 2023.

Schedule of borrowings and repayments

During the nine months ended September 30, 2023 and 2022, our debt borrowings and repayments were as follows (in thousands):

	Nine Months Ended September 30,
	2023				2022
Debt Obligations		Borrowings		Repayments	Borrowings		Repayments
Revolving line of credit	$	274,450	$	(42,200)	$	194,000	$	(153,900)
Senior unsecured notes		—		(44,160)		75,000		(43,160)
Total	$	274,450	$	(86,360)	$	269,000	$	(197,060)

XML

Equity (Tables)

9 Months Ended

Sep. 30, 2023

Equity

Schedule of consolidated VIEs

As of September 30, 2023, we have the following consolidated VIEs (in thousands):

						Gross
Investment			Property			Consolidated		Non-Controlling
Year	Purpose		Type	State		Assets (1)		Interests
2023	Owned real estate	(2)	ILF/ALF/MC	OH	$	54,714	$	9,134
2023	Owned real estate	(3)	ALF/MC	NC		121,321		3,831
2022	Owned real estate	(4)	SNF	FL		76,712		14,325
2018	Owned real estate		ILF	OR		14,650		2,907
2018	Owned real estate and development		ALF/MC	OR		18,452		1,231
2017	Owned real estate and development		ILF/ALF/MC	WI		22,007		2,305
2017	Owned real estate		ALF/MC	SC		11,680		1,240
Total					$	319,536	$	34,973

(1) Includes the total real estate investments and excludes intangible assets.

(2) During the second quarter of 2023, we entered into a JV that purchased an ILF/ALF/MC in Ohio with a total of 242 units. For more information see Acquisitions above in Note 2.

(3) During the first quarter of 2023, we entered into a JV that purchased 11 ALF and MC with a total of 523 units. For more information regarding this transaction see Financing Receivable above in Note 2.

(4) During 2022, we entered into a JV that purchased three SNFs with a total of 299 beds. For more information regarding this transaction see Financing Receivable above in Note 2.

Schedule of cash dividends declared and paid

Distributions. We declared and paid the following cash dividends (in thousands):

	Nine Months Ended September 30,
	2023				2022
	Declared		Paid		Declared		Paid
Common Stock (1)	$	70,767	$	70,767	$	68,202	$	68,202

(1) Represents $0.19 per share per month for the nine months ended September 30, 2023 and 2022.

Schedule of restricted stock activity

The following table summarizes our restricted stock activity for the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
	2023		2022
Outstanding, January 1		229,236		197,422
Granted		146,020		135,210
Vested		(115,551)		(103,396)
Cancelled		(1,085)		—
Outstanding, September 30		258,620		229,236

Schedule of restricted stock granted

	No. of	Price per
Year	Shares/Units	Share		Reward Type	Vesting Period
2023	127,960	$	37.16	Restricted stock	ratably over 3 years
	86,867	$	37.16	Performance-based stock units	TSR targets (1)
	15,060	$	31.54	Restricted stock	May 24,2024
	3,000	$	35.45	Restricted stock	July 25, 2024
	232,887
2022	122,865	$	33.94	Restricted stock	ratably over 3 years
	86,332	$	33.94	Performance-based stock units	TSR targets (1)
	12,345	$	38.48	Restricted stock	May 25, 2023
	221,542

(1) Vesting is based on achieving certain total shareholder return (“TSR”) targets in 4 years with acceleration opportunity in 3 years.

Schedule of restricted common stock and performance-based stock unit scheduled to vest and remaining compensation expense

At September 30, 2023, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows (in thousands):

	Remaining
	Compensation
Vesting Date	Expense
October - December 2023	$	2,132
2024		6,026
2025		3,238
2026		356
Total	$	11,752

XML

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies

Schedule of commitments

At September 30, 2023, we had commitments as follows (in thousands):

						Total
	Investment			2023		Commitment		Remaining
	Commitment			Funding		Funded		Commitment
Real estate properties (Note 2. Real Estate Investments)	$	10,242	(1)	$	1,932	$	2,650	$	7,592
Accrued incentives and earn-out liabilities (Note 5. Lease Incentives)		21,100	(2)		1,004		1,004		20,096
Mortgage loans (Note 2. Real Estate Investments)		43,598	(3)		1,476		7,178		36,420
Notes receivable (Note 4. Notes Receivable)		28,950	(4)		2,258		15,973		12,977
Total	$	103,890		$	6,670	$	26,805	$	77,085

(1) Represents commitments to purchase land and improvements, if applicable, and to develop, re-develop, renovate or expand seniors housing and skilled nursing properties.

(2) Includes an earn-out payment of up to $3,000 to an operator under a master lease on four SNFs in Texas which were acquired during 2022. The master lease allows either an earn-out payment up to $3,000 or a purchase option. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. If neither option is elected within the timeframe defined in the lease, both elections are terminated. For more information regarding the purchase option see Note 2. Real Estate Investments.

(3) Represents $19,500 related to a construction loan, $6,098 of commitments for the expansion, renovation and working capital related to seniors housing and skilled nursing properties securing the mortgage loans and $18,000 of commitments which are contingent upon the borrower achieving certain coverage ratios.

(4) Represents working capital loan commitments.

XML

Major Operators (Tables)

9 Months Ended

Sep. 30, 2023

Major Operators

Schedule of concentration of risk by major operators

	Number of		Number of		Percentage of
			SNF	ALF	Total		Total
Operator	SNF	ALF	Beds	Units	Revenues (1)		Assets (2)
Prestige Healthcare (3)	24	—	2,820	93	16.6	%	14.2	%

(1) During 2023, we agreed to defer up to $1,500, or up to $300 per month for May through September 2023, in interest payments due on one of Prestige Healthcare’s mortgage loans secured by 15 skilled nursing centers in Michigan. We deferred $600 in interest payments during the second quarter of 2023 and $900 in interest payments during the third quarter of 2023.

(2) Represents the net carrying value of the mortgage loans and properties we own divided by the Total assets on the Consolidated Balance Sheets.

(3) The majority of the revenue derived from this operator relates to interest income from mortgage loans.

XML

Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings per Share

Schedule of basic and diluted net income per share

The following table sets forth the computation of basic and diluted net income per share (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income	$	22,627	$	13,389	$	62,792	$	82,386
Less income allocated to non-controlling interests		(430)		(99)		(1,287)		(301)
Less income allocated to participating securities:
Non-forfeitable dividends on participating securities		(147)		(131)		(440)		(401)
Income allocated to participating securities		—		—		—		(80)
Total net income allocated to participating securities		(147)		(131)		(440)		(481)
Net income available to common stockholders		22,050		13,159		61,065		81,604
Effect of dilutive securities:
Participating securities (1)		—		—		—		—
Net income for diluted net income per share	$	22,050	$	13,159	$	61,065	$	81,604
Shares for basic net income per share		41,153		40,270		41,127		39,658
Effect of dilutive securities:
Stock options (2)		—		1		—		—
Performance-based stock units		58		281		58		281
Participating securities (1)		—		—		—		—
Total effect of dilutive securities		58		282		58		281
Shares for diluted net income per share		41,211		40,552		41,185		39,939
Basic net income per share	$	0.54	$	0.33	$	1.48	$	2.06
Diluted net income per share	$	0.54	$	0.32	$	1.48	$	2.04

(1) For the three and nine months ended September 30, 2023 and 2022, the participating securities have been excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

(2) For the three and nine months ended September 30, 2023 and the nine months ended September 30, 2022, the stock options have been excluded from the computation of diluted net income per share as such inclusion would be anti-dilutive.

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Measurements

Schedule of carrying value and fair value of the entity's financial instruments

The carrying value and estimated fair value of our financial instruments as of September 30, 2023 and December 31, 2022 were as follows (in thousands):

	At September 30, 2023					At December 31, 2022
	Carrying		Fair			Carrying		Fair
	Value		Value			Value		Value
Financing receivable, net of credit loss reserve	$	196,053	$	199,050	(1)	$	75,999	$	76,033	(1)
Mortgage loans receivable, net of credit loss reserve		473,567		560,808	(2)		389,728		461,276	(2)
Notes receivable, net of credit loss reserve		63,056		70,482	(3)		58,383		61,858	(3)
Revolving line of credit		362,250		362,250	(4)		130,000		130,000	(4)
Term loans, net of debt issue costs		99,620		100,000	(4)		99,511		100,000	(4)
Senior unsecured notes, net of debt issue costs		494,353		429,534	(5)		538,343		477,653	(5)

(1) Our investment in financing receivables is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate used to value our future cash inflows of the financing receivables at September 30, 2023 and December 31, 2022 was 7.6%.

(2) Our investment in mortgage loans receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash inflows of the mortgage loans receivable at September 30, 2023 and December 31, 2022 was 9.1% and 9.3%, respectively.

(3) Our investments in notes receivable are classified as Level 3. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash flows of the notes receivable at September 30, 2023 and December 31, 2022, were 6.8% and 7.1%, respectively.

(4) Our revolving line of credit and term loans bear interest at a variable interest rate. The estimated fair value of our revolving line of credit and term loans approximated their carrying values at September 30, 2023 and December 31, 2022 based upon prevailing market interest rates for similar debt arrangements.

(5) Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is measured based upon management’s estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities. At September 30, 2023, the discount rate used to value our future cash outflow of our senior unsecured notes was 7.25% for those maturing before year 2030 and 7.50% for those maturing at or beyond year 2030. At December 31, 2022, the discount rate used to value our future cash outflow of our senior unsecured notes was 6.50% for those maturing before year 2030 and 7.00% for those maturing at or beyond year 2030.

XML

General (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) segment
General
Number of operating segments | segment	1
Provision for federal or state income taxes | $	$ 0

XML

Real Estate Investments - Owned Properties (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) item property state $ / item	Sep. 30, 2022 item
Real Estate [Line Items]
Gross Investment | $	$ 1,405,848
Percentage of Investment	100.00%
Number of properties | property	143
Number of beds/units		217
Number of states | state	24
Number of operators	22
SNF Beds
Real Estate [Line Items]
Number of beds/units	6,231
ALF Units
Real Estate [Line Items]
Number of beds/units	5,559
ALF
Real Estate [Line Items]
Gross Investment | $	$ 800,963
Percentage of Investment	57.00%
Number of properties | property	92
Average Investment per Bed/Unit | $ / item	150.47
ALF | ALF Units
Real Estate [Line Items]
Number of beds/units	5,323
SNF
Real Estate [Line Items]
Gross Investment | $	$ 592,880
Percentage of Investment	42.10%
Number of properties | property	50
Average Investment per Bed/Unit | $ / item	93.38
SNF | SNF Beds
Real Estate [Line Items]
Number of beds/units	6,113
SNF | ALF Units
Real Estate [Line Items]
Number of beds/units	236
Other
Real Estate [Line Items]
Gross Investment | $	$ 12,005
Percentage of Investment	0.90%
Number of properties | property	1
Number of parcels of land	3
Other | SNF Beds
Real Estate [Line Items]
Number of beds/units	118
Hospital
Real Estate [Line Items]
Number of properties | property	1

XML

Real Estate Investments - Lease (Details) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended					9 Months Ended		12 Months Ended
	Oct. 31, 2023 USD ($) property item	May 31, 2023 USD ($)	Sep. 30, 2023 USD ($) property item	Jun. 30, 2023 USD ($) item	Mar. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($) item	Sep. 30, 2022 USD ($) item property	Sep. 30, 2023 USD ($) Center property item lease	Sep. 30, 2022 USD ($) property item	Dec. 31, 2022 USD ($) lease item Center
Real estate investments
Number of properties | property			143					143
Write-off of straight-line rent and lease incentives balances								$ 26	$ 256
Gross Investment			$ 1,405,848					1,405,848
Net book value			1,007,775			$ 1,019,218		1,007,775		$ 1,019,218
Impairment loss					$ 434	$ 1,222	$ 1,286	$ 12,510	1,286
Number of properties with lease incentives write-offs | property								2
Income and Expenses, Lessor [Abstract]
Contractual cash rental income			29,121				28,180	$ 87,260	83,203
Variable cash rental income			3,386				4,160	9,846	12,218
Straight-line rent			(747)				(436)	(1,635)	(963)
Adjustment for collectability of lease incentives and rental income							(83)	(26)	(256)
Amortization of lease incentives			(171)				(236)	(584)	(665)
Total Rental Income			$ 31,589				$ 31,585	$ 94,861	$ 93,537
Number of units | item							217		217
Properties held-for-sale
Real estate investments
Number of properties held for sale | property			7					7
Purchase Option in Lease Arrangements
Real estate investments
Gross Investment			$ 384,864					$ 384,864
Net book value			$ 364,670					$ 364,670
Master lease agreement | Brookdale Senior Living
Real estate investments
Number of Re leased properties | property			10					10
Number of properties | property			35					35
Lease term			6 years					6 years
Rental income to be received in first year								$ 8,000
Specified annual increase over the prior year's rent (as a percent)								2.00%
Fund for capital expenditures			$ 4,500					$ 4,500
Tenure for funding capital expenditure								2 years
Initial rate for capital expenditure by lessor (as a percent)								8.00%
Annual increase in rate for capital expenditure by lessor (as a percent)								2.00%
Master lease agreement | Brookdale Senior Living | Subsequent Event
Real estate investments
Number of properties | property	7
Lease term	3 years
Rental income to be received in first year	$ 960
Rental income to be received in second year	984
Rental income to be received in third year	$ 1,150
Lease renewal term	4 years
Master lease agreement | Colorado | Brookdale Senior Living
Real estate investments
Number of properties | property			6					6
Master lease agreement | Kansas | Brookdale Senior Living
Real estate investments
Number of properties | property			4					4
Master lease agreement | Ohio | Brookdale Senior Living | Subsequent Event
Real estate investments
Number of properties | property	1
Master lease agreement | Texas | Brookdale Senior Living | Subsequent Event
Real estate investments
Number of properties | property	6
Master lease agreement | Oklahoma | Brookdale Senior Living | Subsequent Event
Real estate investments
Number of properties | property	6
Master lease agreement | Properties held-for-sale | Brookdale Senior Living
Real estate investments
Number of properties held for sale | property			7					7
New master lease agreement | Brookdale Senior Living | Subsequent Event
Real estate investments
Number of properties | property	17
Rental income to be received in first year	$ 9,325
Fund for capital expenditures	$ 7,150
ALF
Real estate investments
Number of properties | property			92					92
Gross Investment			$ 800,963					$ 800,963
Number of properties acquired | property								1
Number of properties with lease incentives write-offs | property								12
Income and Expenses, Lessor [Abstract]
Percentage of cash return								9.75%
ALF | Encore Senior Living
Real estate investments
Lease term			10 years					10 years
ALF | Florida
Real estate investments
Impairment loss				$ 12,076
ALF | North Carolina
Real estate investments
Number of properties | property							4		4
ALF | Illinois, Ohio and Michigan | Encore Senior Living
Real estate investments
Lease term				2 years
Number of assisted living communities transitioned to another operator | item				8
Repayments received from deferred rent		$ 934		$ 1,250
Unrecorded deferred rent				$ 316
Income and Expenses, Lessor [Abstract]
Number of units | item				500
ALF | Properties held-for-sale | Florida
Real estate investments
Number of properties held for sale | property			4					4
ALF | Master lease agreement | Ohio | Brookdale Senior Living | Subsequent Event
Income and Expenses, Lessor [Abstract]
Number of units | item	42
ALF | Master lease agreement | Texas | Brookdale Senior Living | Subsequent Event
Income and Expenses, Lessor [Abstract]
Number of units | item	235
ALF | Master lease agreement | Oklahoma | Brookdale Senior Living | Subsequent Event
Income and Expenses, Lessor [Abstract]
Number of units | item	219
MC | Purchase Option in Lease Arrangements | Florida
Real estate investments
Number of properties | property			1					1
Gross Investment			$ 7,680					$ 7,680
Net book value			$ 4,681					4,681
Impairment loss								$ 7,522
MC | Purchase Option in Lease Arrangements | Ohio
Real estate investments
Number of properties | property			1					1
Gross Investment			$ 16,161					$ 16,161
Net book value			$ 13,598					$ 13,598
ALF & MC
Real estate investments
Lease term			10 years					10 years
Lease renewal term			5 years					5 years
Number of operating lease renewals | lease								2
Income and Expenses, Lessor [Abstract]
Number of assisted living and memory care communities | item			11					11
Maximum percentage of purchase option to buy properties								50.00%
Percentage of cash return								9.00%
ALF & MC | North Carolina
Income and Expenses, Lessor [Abstract]
Number of assisted living and memory care communities | item					11
Number of units | item					523
ALF & MC | Purchase Option in Lease Arrangements | California
Real estate investments
Number of properties | property			2					2
Gross Investment			$ 38,895					$ 38,895
Net book value			$ 33,013					$ 33,013
ALF & MC | Purchase Option in Lease Arrangements | North Carolina
Real estate investments
Number of properties | property			11					11
Lease term			10 years					10 years
Gross Investment			$ 121,321					$ 121,321
Net book value			$ 121,321					$ 121,321
Income and Expenses, Lessor [Abstract]
Number of assisted living and memory care communities | item			11					11
Number of units | item			523					523
Maximum percentage of purchase option to buy properties								50.00%
Percentage of cash return								9.00%
ALF & MC | Purchase Option in Lease Arrangements | South Carolina
Real estate investments
Number of properties | property			1					1
Gross Investment			$ 11,680					$ 11,680
Net book value			$ 8,619					$ 8,619
SNF
Real estate investments
Number of properties | property			50					50
Lease term						10 years				10 years
Lease renewal term						5 years				5 years
Number of operating lease renewals | lease										2
Skilled nursing center purchased | Center										3
Gross Investment			$ 592,880					$ 592,880
Number of properties acquired | property									4
SNF | Brookdale Senior Living
Real estate investments
Skilled nursing center purchased | Center								2
Additional term of lessor's operating lease renewal								5 years
SNF | Florida
Real estate investments
Skilled nursing center purchased | item										3
Income and Expenses, Lessor [Abstract]
Number of units | item						299				299
SNF | Florida | Brookdale Senior Living
Income and Expenses, Lessor [Abstract]
Number of units | item			216					216
SNF | Texas
Real estate investments
Lease term							10 years		10 years
SNF | Tennessee | Brookdale Senior Living
Real estate investments
Skilled nursing center purchased | Center								2
Additional term of lessor's operating lease renewal								2 years
Contractual annual cash rent								$ 1,005
Percentage of increase in contractual annual cash rent								2.50%
Income and Expenses, Lessor [Abstract]
Number of units | item			141					141
SNF | Purchase Option in Lease Arrangements | Florida
Real estate investments
Number of properties | property			3					3
Lease term						10 years				10 years
Gross Investment			$ 76,712					$ 76,712
Net book value			$ 76,712					$ 76,712
Number of properties acquired | item										3
Income and Expenses, Lessor [Abstract]
Number of units | item						299				299
SNF | Purchase Option in Lease Arrangements | Texas
Real estate investments
Number of properties | property			4					4
Lease term						10 years				10 years
Gross Investment			$ 52,426					$ 52,426
Net book value			$ 50,438					$ 50,438
Number of properties acquired | item										4
SNF | Purchase Option in Lease Arrangements | Tennessee
Real estate investments
Number of properties | property			2					2
Gross Investment			$ 5,275					$ 5,275
Net book value			$ 2,298					$ 2,298
ILF/ALF/MC | Ohio
Income and Expenses, Lessor [Abstract]
Number of units | item				242
ILF/ALF/MC | Purchase Option in Lease Arrangements | Ohio
Real estate investments
Number of properties | property			1					1
Gross Investment			$ 54,714					$ 54,714
Net book value			$ 53,990					$ 53,990

XML

Real Estate Investments - Held-For-Sale Properties (Details)	3 Months Ended				9 Months Ended
	Jun. 30, 2023 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) item property	Sep. 30, 2022 USD ($) item
Real Estate Properties [Line Items]
Impairment loss		$ 434,000	$ 1,222,000	$ 1,286,000	$ 12,510,000	$ 1,286,000
Accumulated depreciation			$ 389,182,000		$ 386,483,000
Properties held-for-sale
Real Estate Properties [Line Items]
Number of Properties | property					7
Number of Beds/units | item					304
Gross Investment					$ 21,038,000
Accumulated depreciation					11,590,000
Properties sold
Real Estate Properties [Line Items]
Sales price					$ 53,212,000	$ 74,345,000
Number of beds or units in property sold | item					651	427
ALF | Florida
Real Estate Properties [Line Items]
Impairment loss	$ 12,076,000
Number of properties recoverability analysis performed	2
Number of Beds/units | item					70
ALF | Properties held-for-sale | Florida
Real Estate Properties [Line Items]
Number of Properties | property					4
Number of Beds/units | item					176
Gross Investment					$ 12,215,000
Accumulated depreciation					$ 7,213,000
ALF | Properties held-for-sale | Pennsylvania
Real Estate Properties [Line Items]
Number of Properties | property					3
Number of Beds/units | item					128
Gross Investment					$ 8,823,000
Accumulated depreciation					4,377,000
ALF | Properties sold | Kentucky
Real Estate Properties [Line Items]
Sales price					$ 11,000,000
Number of beds or units in property sold | item					60
ALF | Properties sold | Florida
Real Estate Properties [Line Items]
Sales price	$ 4,850,000				$ 4,850,000
Number of beds or units in property sold | item					70
ALF | Properties sold | Pennsylvania
Real Estate Properties [Line Items]
Sales price					$ 11,128,000
Number of beds or units in property sold | item					130
SNF | Properties sold | New Mexico
Real Estate Properties [Line Items]
Sales price					$ 21,250,000
Number of beds or units in property sold | item					235

XML

Real Estate Investments - Acquisitions (Details) $ in Thousands	3 Months Ended			9 Months Ended		12 Months Ended
	Jun. 30, 2023 USD ($)	Mar. 31, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) property item	Sep. 30, 2022 USD ($) property item	Dec. 31, 2022 USD ($)
Real estate investments
Non-Controlling Interest	$ 9,133	$ 3,831	$ 14,375
SNF
Real estate investments
Cash Paid at Acquisition					$ 51,815
Assets Acquired			$ 51,815		$ 51,815
Number of properties acquired | property					4
Number of beds/units acquired | item					339
Lease term						10 years
Contribution to JV						$ 61,661
SNF | Texas
Real estate investments
Lease term			10 years		10 years
Renewal term			5 years		5 years
Number of options available for renewal | item					2
Cash yield percentage					8.00%
Cash yield percentage year two					8.25%
SNF | Texas | Minimum
Real estate investments
Annual increase in cash yield percentage					2.00%
SNF | Texas | Maximum
Real estate investments
Working capital loan funded					$ 2,000
Annual increase in cash yield percentage					4.00%
ALF
Real estate investments
Cash Paid at Acquisition				$ 43,759
Assumed Liabilities				9,767
Non-Controlling Interest				9,133
Transaction Costs				363
Assets Acquired				$ 63,022
Number of properties acquired | property				1
Number of beds/units acquired | item				242
Amount of joint venture investment				$ 54,134
Contribution to JV				$ 45
Percentage of cash return				9.75%
Amount committed to fund				$ 2,100
Amount funded under lease incentives				1,004
Tax abatement intangible				$ 8,309
ALF | Encore Senior Living
Real estate investments
Lease term				10 years
Percentage of contractual initial cash yield				8.25%
Amount committed to fund				$ 2,100
Amount funded under lease incentives				$ 1,004

XML

Real Estate Investments - Carrying amount of intangible assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
In-place leases
Real estate investments
Cost	$ 11,348	$ 9,474
Accumulated Amortization	(5,886)	(5,362)
Net	5,462	$ 4,112
Tax abatement intangible
Real estate investments
Cost	8,309
Accumulated Amortization	(231)
Net	$ 8,078

XML

Real Estate Investments - Improvements (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Real estate investments
Invested in projects	$ 6,670
Development | Development and Improvement Commitments
Real estate investments
Invested in projects		$ 105
Improvements | Development and Improvement Commitments
Real estate investments
Invested in projects	5,053	4,555
ALF | Development | Development and Improvement Commitments
Real estate investments
Invested in projects		105
ALF | Improvements | Development and Improvement Commitments
Real estate investments
Invested in projects	2,418	3,015
SNF | Improvements | Development and Improvement Commitments
Real estate investments
Invested in projects	2,548	981
Other | Improvements | Development and Improvement Commitments
Real estate investments
Invested in projects	$ 87	$ 559

XML

Real Estate Investments - Properties Sold (Details) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2023 USD ($)	Jun. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) item property	Sep. 30, 2022 USD ($) property item	Dec. 31, 2022 USD ($)
Disposals and other
Carrying value	$ 1,007,775			$ 1,007,775		$ 1,019,218
Net gain (loss)	4,870		$ (387)	$ 20,545	$ 37,809
Virginia
Disposals and other
Lease termination fee payable			1,181		$ 1,181
Properties sold
Disposals and other
Number of properties sold | property				10	5
Number of beds or units in property sold | item				651	427
Sales price				$ 53,212	$ 74,345
Carrying value	30,865		35,924	30,865	35,924
Net gain (loss)	4,870		(387)	$ 20,545	37,809
Net Gain (Loss)					$ 186
Properties sold | ALF | Florida
Disposals and other
Number of properties sold | property				1
Number of beds or units in property sold | item				70
Sales price		$ 4,850		$ 4,850
Carrying value	4,082			4,082
Net Gain (Loss)				$ 65
Properties sold | ALF | Kentucky
Disposals and other
Number of properties sold | property				1
Number of beds or units in property sold | item				60
Sales price				$ 11,000
Carrying value	10,720			10,720
Net Gain (Loss)				$ 57
Properties sold | ALF | New Jersey
Disposals and other
Number of properties sold | property				1
Number of beds or units in property sold | item				39
Sales price				$ 2,000
Carrying value	1,552			1,552
Net Gain (Loss)				$ 266
Properties sold | ALF | Nebraska
Disposals and other
Number of properties sold | property				3
Number of beds or units in property sold | item				117
Sales price				$ 2,984
Carrying value	2,934			$ 2,934
Properties sold | ALF | Pennsylvania
Disposals and other
Number of properties sold | property				2
Number of beds or units in property sold | item				130
Sales price				$ 11,128
Carrying value	6,054			6,054
Net Gain (Loss)				$ 4,870
Properties sold | ALF | California
Disposals and other
Number of properties sold | property					2
Number of beds or units in property sold | item					232
Sales price					$ 43,715
Carrying value			17,832		17,832
Net Gain (Loss)					$ 25,867
Properties sold | ALF | Virginia
Disposals and other
Number of properties sold | property					1
Number of beds or units in property sold | item					74
Sales price					$ 16,895
Carrying value			15,549		15,549
Net Gain (Loss)					$ 1,344
Properties sold | SNF | New Mexico
Disposals and other
Number of properties sold | property				2
Number of beds or units in property sold | item				235
Sales price				$ 21,250
Carrying value	$ 5,523			5,523
Net Gain (Loss)				$ 15,287
Properties sold | SNF | California
Disposals and other
Number of properties sold | property					1
Number of beds or units in property sold | item					121
Sales price					$ 13,250
Carrying value			1,846		1,846
Net Gain (Loss)					$ 10,846
Properties sold | SNF | Texas
Disposals and other
Number of properties sold | property					1
Sales price					$ 485
Carrying value			$ 697		697
Net Gain (Loss)					$ (434)

XML

Real Estate Investments - Financing Receivable (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023 USD ($) item	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) lease item	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) lease Center
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Interest income from financing receivables	$ 3,832	$ 357	$ 11,413	$ 357
Provision for credit losses	189	$ 795	2,107	$ 1,454
ALF & MC
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amount of joint venture investment	$ 121,321		121,321
Contribution to JV			$ 117,490
Number of assisted living and memory care communities | item	11		11
Lease term	10 years		10 years
Number of operating lease renewals | lease			2
Lease renewal term	5 years		5 years
Interest income from financing receivables	$ 2,427		$ 7,198
Provision for credit losses			$ 1,213
Percentage of contractual initial cash yield			7.25%
Percentage of contractual initial cash yield in year three			7.50%
Percentage of floor on initial cash yield			2.00%
Percentage of ceiling on initial cash yield			4.00%
Maximum percentage of purchase option to buy properties			50.00%
Percentage of cash return			9.00%
SNF
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Contribution to JV					$ 61,661
Skilled nursing center purchased | Center					3
Real estate property acquired					$ 75,825
Lease term					10 years
Number of operating lease renewals | lease					2
Lease renewal term					5 years
Interest income from financing receivables	$ 1,405		$ 4,215

XML

Real Estate Investments - Mortgage Loan (Details) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2023 USD ($) item property state period	Jun. 30, 2023 USD ($) item	Mar. 31, 2023 USD ($) item	Sep. 30, 2023 USD ($) item loan property state period $ / item	Sep. 30, 2022 item property	Dec. 31, 2022 USD ($)
Real Estate [Line Items]
Interest rate (as a percent)					7.25%
Gross Investment | $	$ 1,405,848			$ 1,405,848
Percentage of Investment	100.00%			100.00%
Number of properties | property	143			143
Number of beds/units					217
Notes receivable, net of credit loss reserve | $	$ 63,056			$ 63,056		$ 58,383
Loan Term					4 years
Internal Rate of Return					8.00%
Additional interest income related to the exit IRR | $				$ 1,380
SNF Beds
Real Estate [Line Items]
Number of beds/units	6,231			6,231
ALF Units
Real Estate [Line Items]
Number of beds/units	5,559			5,559
SNF
Real Estate [Line Items]
Gross Investment | $	$ 592,880			$ 592,880
Percentage of Investment	42.10%			42.10%
Number of properties | property	50			50
Average Investment per Bed/Unit | $ / item				93.38
SNF | SNF Beds
Real Estate [Line Items]
Number of beds/units	6,113			6,113
SNF | ALF Units
Real Estate [Line Items]
Number of beds/units	236			236
ALF
Real Estate [Line Items]
Gross Investment | $	$ 800,963			$ 800,963
Percentage of Investment	57.00%			57.00%
Number of properties | property	92			92
Average Investment per Bed/Unit | $ / item				150.47
ALF | North Carolina
Real Estate [Line Items]
Number of properties | property					4
ALF | ALF Units
Real Estate [Line Items]
Number of beds/units	5,323			5,323
ILF/ALF/MC | Georgia
Real Estate [Line Items]
Payments to Acquire Real Estate | $				$ 51,111
ALF & MC | North Carolina
Real Estate [Line Items]
Number of beds/units			523
Mezzanine loan
Real Estate [Line Items]
Interest rate (as a percent)					8.00%
Number of beds/units	136			136	621
Loan Term					5 years
Extension term number of options					2
Additional interest income related to the exit IRR | $			$ 1,380
Mezzanine loan | Georgia
Real Estate [Line Items]
Interest rate (as a percent)	8.75%
Number of beds/units	130			130
Loan Term	5 years
Mezzanine loan | ILF/ALF/MC | Georgia
Real Estate [Line Items]
Gross Investment | $	$ 42,251			$ 42,251
Mortgage loans with 7.5% Interest Maturing 2024 | Mezzanine loan
Real Estate [Line Items]
Notes receivable, net of credit loss reserve | $	7,461			$ 7,461
Mortgage loans with 8.8% Interest Maturing 2028 | SNF
Real Estate [Line Items]
Interest rate (as a percent)				8.75%
Mortgage loans with 8.8% Interest Maturing 2028 | SNF | Illinois
Real Estate [Line Items]
Interest rate (as a percent)		8.75%
Gross Investment | $	$ 16,500	$ 16,500		$ 16,500
Number of beds/units	150	150		150
Mortgage loans with 9.8% Interest Maturing 2045 | SNF
Real Estate [Line Items]
Interest rate (as a percent)				10.10%
Mortgage Loans
Real Estate [Line Items]
Gross Investment | $	$ 478,344			$ 478,344
Percentage of Investment	100.00%			100.00%
Number of Loans | loan				13
Number of properties | property	44			44
Average Investment per Bed/Unit | $ / item				116.75
Number of borrowers	7			7
Number of states in which properties are located | state	8			8
Mortgage Loans | SNF Beds
Real Estate [Line Items]
Number of beds/units	3,041			3,041
Mortgage Loans | ALF Units
Real Estate [Line Items]
Number of beds/units	1,056			1,056
Mortgage Loans | SNF
Real Estate [Line Items]
Interest rate (as a percent)				2.25%
Mortgage Loans | ALF
Real Estate [Line Items]
Internal Rate of Return				8.00%
Mortgage Loans | ILF/ALF/MC | Georgia
Real Estate [Line Items]
Interest rate (as a percent)				7.50%
Gross Investment | $	$ 51,111			$ 51,111
Number of beds/units	203			203
Internal Rate of Return				7.75%
Payments to Acquire Real Estate | $				$ 51,111
Mortgage Loans | Mortgage loans with 7.5% Interest Maturing 2023 | SNF
Real Estate [Line Items]
Number of beds/units	91			91
Mortgage Loans | Mortgage loans with 7.5% Interest Maturing 2024 | SNF
Real Estate [Line Items]
Interest rate (as a percent)				7.50%
Gross Investment | $	$ 29,346			$ 29,346
Percentage of Investment	6.10%			6.10%
Number of Loans | loan				1
Number of properties | property	1			1
Average Investment per Bed/Unit | $ / item				155.27
Mortgage Loans | Mortgage loans with 7.5% Interest Maturing 2024 | SNF | SNF Beds
Real Estate [Line Items]
Number of beds/units	189			189
Mortgage Loans | Mortgage loans with 7.5% Interest Maturing 2024 | OTH
Real Estate [Line Items]
Interest rate (as a percent)				7.50%
Gross Investment | $	$ 1,961			$ 1,961
Percentage of Investment	0.40%			0.40%
Number of Loans | loan				1
Mortgage Loans | Mortgage loans with 7.5% Interest Maturing 2024 | ALF
Real Estate [Line Items]
Interest rate (as a percent)				7.50%
Gross Investment | $	$ 51,111			$ 51,111
Percentage of Investment	10.70%			10.70%
Number of Loans | loan				1
Number of properties | property	1			1
Average Investment per Bed/Unit | $ / item				251.78
Mortgage Loans | Mortgage loans with 7.5% Interest Maturing 2024 | ALF | ALF Units
Real Estate [Line Items]
Number of beds/units	203			203
Mortgage Loans | Mortgage loans with 7.8% Interest Maturing 2025 | ALF
Real Estate [Line Items]
Interest rate (as a percent)				7.80%
Gross Investment | $	$ 16,706			$ 16,706
Percentage of Investment	3.50%			3.50%
Number of Loans | loan				1
Number of properties | property	1			1
Average Investment per Bed/Unit | $ / item				245.68
Mortgage Loans | Mortgage loans with 7.8% Interest Maturing 2025 | ALF | ALF Units
Real Estate [Line Items]
Number of beds/units	68			68
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2025, NC | ALF
Real Estate [Line Items]
Interest rate (as a percent)				7.30%
Gross Investment | $	$ 10,750			$ 10,750
Percentage of Investment	2.20%			2.20%
Number of Loans | loan				1
Number of properties | property	1			1
Average Investment per Bed/Unit | $ / item				238.89
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2025, NC | ALF | ALF Units
Real Estate [Line Items]
Number of beds/units	45			45
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2025, NC | ALF | ALF Units | North Carolina
Real Estate [Line Items]
Interest rate (as a percent)				7.25%
Number of beds/units	45			45
Loan Term				2 years
Internal Rate of Return				9.00%
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2025, NC/SC | ALF
Real Estate [Line Items]
Interest rate (as a percent)				7.30%
Gross Investment | $	$ 58,331			$ 58,331
Percentage of Investment	12.20%			12.20%
Number of Loans | loan				1
Number of properties | property	13			13
Average Investment per Bed/Unit | $ / item				111.53
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2025, NC/SC | ALF | ALF Units
Real Estate [Line Items]
Number of beds/units	523			523
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2026 | OTH
Real Estate [Line Items]
Interest rate (as a percent)				7.30%
Gross Investment | $	$ 826			$ 826
Percentage of Investment	0.20%			0.20%
Number of Loans | loan				1
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2026 | ALF
Real Estate [Line Items]
Interest rate (as a percent)				7.30%
Gross Investment | $	$ 34,043			$ 34,043
Percentage of Investment	7.10%			7.10%
Number of Loans | loan				1
Number of properties | property	4			4
Average Investment per Bed/Unit | $ / item				156.88
Mortgage Loans | Mortgage loans with 7.3% Interest Maturing 2026 | ALF | ALF Units
Real Estate [Line Items]
Number of beds/units	217			217
Mortgage Loans | Mortgage loans with 8.8% Interest Maturing 2028 | SNF
Real Estate [Line Items]
Interest rate (as a percent)				8.80%
Gross Investment | $	$ 16,500			$ 16,500
Percentage of Investment	3.50%			3.50%
Number of Loans | loan				1
Number of properties | property	1			1
Average Investment per Bed/Unit | $ / item				110.00
Mortgage Loans | Mortgage loans with 8.8% Interest Maturing 2028 | SNF | SNF Beds
Real Estate [Line Items]
Number of beds/units	150			150
Mortgage Loans | Mortgage loans with 10.6% Interest Maturing 2043 | SNF
Real Estate [Line Items]
Interest rate (as a percent)				10.60%
Gross Investment | $	$ 184,220			$ 184,220
Percentage of Investment	38.50%			38.50%
Number of Loans | loan				1
Number of properties | property	15			15
Average Investment per Bed/Unit | $ / item				98.25
Mortgage Loans | Mortgage loans with 10.6% Interest Maturing 2043 | SNF | SNF Beds
Real Estate [Line Items]
Number of beds/units	1,875			1,875
Mortgage Loans | Mortgage loans with 9.6% Interest Maturing 2045 [Member] | SNF
Real Estate [Line Items]
Interest rate (as a percent)				9.70%
Gross Investment | $	$ 40,000			$ 40,000
Percentage of Investment	8.40%			8.40%
Number of Loans | loan				1
Number of properties | property	4			4
Average Investment per Bed/Unit | $ / item				83.33
Mortgage Loans | Mortgage loans with 9.6% Interest Maturing 2045 [Member] | SNF | SNF Beds
Real Estate [Line Items]
Number of beds/units	480			480
Mortgage Loans | Mortgage loans with 9.8% Interest Maturing 2045 | SNF
Real Estate [Line Items]
Interest rate (as a percent)				10.10%
Mortgage Loans | Mortgage Loans with 10.1% Interest Maturing 2045 | SNF
Real Estate [Line Items]
Gross Investment | $	$ 19,700			$ 19,700
Percentage of Investment	4.10%			4.10%
Number of Loans | loan				1
Number of properties | property	2			2
Average Investment per Bed/Unit | $ / item				98.01
Mortgage Loans | Mortgage Loans with 10.1% Interest Maturing 2045 | SNF | SNF Beds
Real Estate [Line Items]
Number of beds/units	201			201
Mortgage Loans | Mortgage loans with 10.3% Interest Maturing 2045 | SNF
Real Estate [Line Items]
Interest rate (as a percent)				10.30%
Gross Investment | $	$ 14,850			$ 14,850
Percentage of Investment	3.10%			3.10%
Number of Loans | loan				1
Number of properties | property	1			1
Average Investment per Bed/Unit | $ / item				101.71
Mortgage Loans | Mortgage loans with 10.3% Interest Maturing 2045 | SNF | SNF Beds
Real Estate [Line Items]
Number of beds/units	146			146
Mortgage Loans | Mortgage Loans With 8.75 Interest | ALF
Real Estate [Line Items]
Interest rate (as a percent)	8.75%			8.75%
Gross Investment | $	$ 19,500			$ 19,500
Number of properties	85			85
Number of beds/units	85			85
Borrower contribution | $	$ 12,100			$ 12,100
Loan Term	3 years			3 years
Extension term number of options | period	2			2
Extension period of mortgage loan on real estate properties	1 year			1 year

XML

Real Estate Investments - Mortgage Loans Activity (Details) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2023 USD ($) item property	Jun. 30, 2023 USD ($) item	Mar. 31, 2023 USD ($)	Sep. 30, 2023 USD ($) item property	Sep. 30, 2022 USD ($) a item property loan	Dec. 31, 2022 USD ($) item
Mortgage Loans
Originations and funding under mortgage loans receivable				$ 83,383	$ 35,234
Application of interest reserve				1,609	4,348
Scheduled principal payments received				(301)	(625)
Mortgage loan premium amortization				(5)	(4)
Provision for loan loss reserve				(847)	(389)
Net increase in mortgage loans receivable				83,839	$ 38,564
Number of senior mortgage loans | loan					2
Area of land | a					7.6
Loan Term					4 years
Gross Investment	$ 1,405,848			$ 1,405,848
Interest rate (as a percent)					7.25%
Internal Rate of Return					8.00%
Number of properties | property	143			143
Number of beds/units | item					217
Percentage of Investment	100.00%			100.00%
Notes receivable, net of credit loss reserve	$ 63,056			$ 63,056		$ 58,383
Additional interest income related to the exit IRR				1,380
Maximum
Mortgage Loans
Loan Term					4 years
Mortgage Loans
Mortgage Loans
Gross Investment	$ 478,344			$ 478,344
Number of properties | property	44			44
Percentage of Investment	100.00%			100.00%
Other Mortgage Loans
Mortgage Loans
Additions to mortgage loans				$ 5,022
Mezzanine loan
Mortgage Loans
Loan Term					5 years
Interest rate (as a percent)					8.00%
Number of beds/units | item	136			136	621
Additional interest income related to the exit IRR			$ 1,380
Extension term number of options | item					2
Extension term					1 year
Mortgage loans with 7.5% Interest Maturing 2024 | Mezzanine loan
Mortgage Loans
Notes receivable, net of credit loss reserve	$ 7,461			$ 7,461
SNF
Mortgage Loans
Gross Investment	$ 592,880			$ 592,880
Number of properties | property	50			50
Percentage of Investment	42.10%			42.10%
SNF | Mortgage Loans
Mortgage Loans
Interest rate (as a percent)				2.25%
SNF | Mortgage loans with 7.5% Interest Maturing 2024 | Mortgage Loans
Mortgage Loans
Gross Investment	$ 29,346			$ 29,346
Interest rate (as a percent)				7.50%
Number of properties | property	1			1
Percentage of Investment	6.10%			6.10%
SNF | Mortgage loans with 8.8% Interest Maturing 2028
Mortgage Loans
Interest rate (as a percent)				8.75%
SNF | Mortgage loans with 8.8% Interest Maturing 2028 | Mortgage Loans
Mortgage Loans
Gross Investment	$ 16,500			$ 16,500
Interest rate (as a percent)				8.80%
Number of properties | property	1			1
Percentage of Investment	3.50%			3.50%
ALF
Mortgage Loans
Gross Investment	$ 800,963			$ 800,963
Number of properties | property	92			92
Percentage of Investment	57.00%			57.00%
ALF | Mortgage Loans
Mortgage Loans
Internal Rate of Return				8.00%
ALF | Mortgage loans with 7.3% Interest Maturing 2025, NC | Mortgage Loans
Mortgage Loans
Gross Investment	$ 10,750			$ 10,750
Interest rate (as a percent)				7.30%
Number of properties | property	1			1
Percentage of Investment	2.20%			2.20%
ALF | Mortgage loans with 7.5% Interest Maturing 2024 | Mortgage Loans
Mortgage Loans
Gross Investment	$ 51,111			$ 51,111
Interest rate (as a percent)				7.50%
Number of properties | property	1			1
Percentage of Investment	10.70%			10.70%
Florida | SNF
Mortgage Loans
Number of beds/units | item						299
North Carolina | ALF
Mortgage Loans
Number of properties | property					4
Georgia | Mezzanine loan
Mortgage Loans
Loan Term	5 years
Interest rate (as a percent)	8.75%
Number of beds/units | item	130			130
Georgia | ILF/ALF/MC
Mortgage Loans
Payments to Acquire Real Estate				$ 51,111
Georgia | ILF/ALF/MC | Mortgage Loans
Mortgage Loans
Payments to Acquire Real Estate				51,111
Gross Investment	$ 51,111			$ 51,111
Interest rate (as a percent)				7.50%
Internal Rate of Return				7.75%
Number of beds/units | item	203			203
Georgia | ILF/ALF/MC | Mezzanine loan
Mortgage Loans
Gross Investment	$ 42,251			$ 42,251
Illinois | SNF | Mortgage loans with 8.8% Interest Maturing 2028
Mortgage Loans
Gross Investment	$ 16,500	$ 16,500		$ 16,500
Interest rate (as a percent)		8.75%
Number of beds/units | item	150	150		150
SNF Beds
Mortgage Loans
Number of beds/units | item	6,231			6,231
SNF Beds | Mortgage Loans
Mortgage Loans
Number of beds/units | item	3,041			3,041
SNF Beds | SNF
Mortgage Loans
Number of beds/units | item	6,113			6,113
SNF Beds | SNF | Mortgage loans with 7.5% Interest Maturing 2024 | Mortgage Loans
Mortgage Loans
Number of beds/units | item	189			189
SNF Beds | SNF | Mortgage loans with 8.8% Interest Maturing 2028 | Mortgage Loans
Mortgage Loans
Number of beds/units | item	150			150
ALF Units
Mortgage Loans
Number of beds/units | item	5,559			5,559
ALF Units | Mortgage Loans
Mortgage Loans
Number of beds/units | item	1,056			1,056
ALF Units | SNF
Mortgage Loans
Number of beds/units | item	236			236
ALF Units | ALF
Mortgage Loans
Number of beds/units | item	5,323			5,323
ALF Units | ALF | Mortgage loans with 7.3% Interest Maturing 2025, NC | Mortgage Loans
Mortgage Loans
Number of beds/units | item	45			45
ALF Units | ALF | Mortgage loans with 7.5% Interest Maturing 2024 | Mortgage Loans
Mortgage Loans
Number of beds/units | item	203			203
ALF Units | North Carolina | ALF | Mortgage loans with 7.3% Interest Maturing 2025, NC | Mortgage Loans
Mortgage Loans
Loan Term				2 years
Interest rate (as a percent)				7.25%
Internal Rate of Return				9.00%
Number of beds/units | item	45			45

XML

Real Estate Investments - Accrued Interest Receivable (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Real Estate Investments
Interest Receivable	$ 54,605		$ 46,000
Write-off of accrued interest receivable	$ 0	$ 0

XML

Investment in Unconsolidated Joint Ventures - Investment (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($) item	Sep. 30, 2022 USD ($) item	Sep. 30, 2023 USD ($) item	Sep. 30, 2022 USD ($) item	Dec. 31, 2022 USD ($)
Investment in Unconsolidated Joint Ventures
Number of beds/units | item		217		217
Carrying Value	$ 19,340		$ 19,340		$ 19,340
Percentage of Investment	100.00%		100.00%
Application of Interest Reserve			$ 1,788	$ 4,348
Income from unconsolidated joint ventures	$ 375	$ 376	$ 1,127	1,127
Joint Venture | Not primary beneficiary
Investment in Unconsolidated Joint Ventures
Number of beds/units | item	95		95
Carrying Value	$ 19,340		$ 19,340
Income Recognized			1,127	1,127
Cash Interest Earned				351
Application of Interest Reserve			1,127	776
UDP | Joint Venture | Not primary beneficiary
Investment in Unconsolidated Joint Ventures
Income Recognized			790	790
Cash Interest Earned				351
Application of Interest Reserve			$ 790	439
UDP | Joint Venture | Not primary beneficiary | Washington
Investment in Unconsolidated Joint Ventures
Preferred return percentage			14.00%
Contractual cash portion			8.00%
Number of beds/units | item	267		267
Carrying Value	$ 13,000		$ 13,000
Percentage of Investment	11.00%		11.00%
Percentage of cash return			8.00%
Percentage of internal rate of return			14.00%
Combination ALF/MC | Joint Venture | Not primary beneficiary
Investment in Unconsolidated Joint Ventures
Income Recognized			$ 337	337
Application of Interest Reserve			$ 337	$ 337
Combination ALF/MC | Joint Venture | Not primary beneficiary | Internal Rate of Return is Until Eight Percent
Investment in Unconsolidated Joint Ventures
Percentage of internal rate of return			8.00%
Combination ALF/MC | Joint Venture | Not primary beneficiary | The Internal Rate of Return is Between Twelve and Fourteen Percent | Minimum
Investment in Unconsolidated Joint Ventures
Percentage of internal rate of return			12.00%
Combination ALF/MC | Joint Venture | Not primary beneficiary | The Internal Rate of Return is Between Twelve and Fourteen Percent | Maximum
Investment in Unconsolidated Joint Ventures
Percentage of internal rate of return			14.00%
Combination ALF/MC | Joint Venture | Not primary beneficiary | Washington
Investment in Unconsolidated Joint Ventures
Preferred return percentage			12.00%
Contractual cash portion			7.00%
Number of beds/units | item	95		95
Carrying Value	$ 6,340		$ 6,340
Percentage of Investment	15.50%		15.50%
Combination ALF/MC | Joint Venture | Not primary beneficiary | Washington | Internal Rate of Return is Until Eight Percent | Minimum
Investment in Unconsolidated Joint Ventures
Percentage of cash return			7.00%
Combination ALF/MC | Joint Venture | Not primary beneficiary | Washington | Internal Rate of Return is Until Eight Percent | Maximum
Investment in Unconsolidated Joint Ventures
Percentage of cash return			9.00%

XML

Notes Receivable - Investment in Notes Receivable (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($) item	Sep. 30, 2023 USD ($) item loan	Sep. 30, 2022 item
Notes Receivable
Internal Rate of Return			8.00%
Gross Investment	$ 1,405,848	$ 1,405,848
Number of units | item			217
Loan Term			4 years
Interest rate (as a percent)			7.25%
ALF
Notes Receivable
Gross Investment	800,963	800,963
SNF
Notes Receivable
Gross Investment	592,880	592,880
Notes Receivable
Notes Receivable
Gross Investment	63,693	$ 63,693
Number of Loans | loan		10
Working capital loans | Working capital loan 5% interest rate, 2024 maturity | ALF
Notes Receivable
Gross Investment	2,442	$ 2,442
Number of Loans | loan		1
Interest rate (as a percent)		5.00%
Working capital loans | Working capital loan 4% interest rate, 2024 maturity | SNF
Notes Receivable
Gross Investment	13,531	$ 13,531
Number of Loans | loan		1
Interest rate (as a percent)		4.00%
Working capital loans | Working capital loan 5% interest rate, 2025 maturity | ALF
Notes Receivable
Gross Investment	732	$ 732
Number of Loans | loan		1
Interest rate (as a percent)		5.00%
Working capital loans | Working capital loan 7.5% interest rate, 2027 maturity | ALF
Notes Receivable
Gross Investment	550	$ 550
Number of Loans | loan		1
Interest rate (as a percent)		7.50%
Working capital loans | Working capital loan 6.5% interest rate, 2030 maturity | SNF
Notes Receivable
Gross Investment	138	$ 138
Number of Loans | loan		1
Interest rate (as a percent)		6.50%
Working capital loans | Working capital loan 7.1% interest rate, 2030 maturity | ALF
Notes Receivable
Gross Investment	500	$ 500
Number of Loans | loan		1
Interest rate (as a percent)		7.30%
Working capital loans | Working capital loan 7.3% interest rate, 2030 maturity | ALF
Notes Receivable
Gross Investment	1,107	$ 1,107
Number of Loans | loan		1
Interest rate (as a percent)		7.30%
Working capital loans | Working capital loan 7% interest rate, 2031 maturity | ALF
Notes Receivable
Gross Investment	$ 2,693	$ 2,693
Number of Loans | loan		1
Interest rate (as a percent)		7.00%
Mezzanine loan
Notes Receivable
Number of units | item	136	136	621
Loan Term			5 years
IRR on mortgage loan on real estate property			11.00%
Interest rate (as a percent)			8.00%
Mezzanine loan | Georgia
Notes Receivable
Number of units | item	130	130
Loan Term	5 years
IRR on mortgage loan on real estate property	12.00%
Number of additional units under construction | item	89	89
Interest rate (as a percent)	8.75%
Mezzanine loan | Mezzanine loan loan 8% interest rate, 2027 maturity | ALF
Notes Receivable
Internal Rate of Return		11.00%
Gross Investment	$ 25,000	$ 25,000
Number of Loans | loan		1
Interest rate (as a percent)		8.00%
Mezzanine loan | Mezzanine loan loan 8.8% interest rate, 2028 maturity | ALF
Notes Receivable
Internal Rate of Return		12.00%
Gross Investment	$ 17,000	$ 17,000
Number of Loans | loan		1
Interest rate (as a percent)		8.80%

XML

Notes Receivable - Components (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Notes receivable activities
Notes receivable loan loss reserve	$ (637)	$ (589)
Total	63,056	58,383
Mezzanine loan
Notes receivable activities
Mezzanine loan	42,000	36,815
Working capital loans
Notes receivable activities
Mezzanine loan	$ 21,693	$ 22,157

XML

Notes Receivable - Notes Receivable Activity (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Notes receivable activities
Advances under notes receivable	$ 19,258	$ 37,008
Principal payments received under notes receivable	(14,537)
Principal payments received under notes receivable	(7,077)	(6,618)
Provision for credit losses	(48)	(303)
Net increase in notes receivable	$ 4,673	$ 30,087

XML

Notes Receivable - New Loan Commitment (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($) item	Mar. 31, 2023 USD ($)	Sep. 30, 2023 USD ($) item	Sep. 30, 2022 USD ($) item property
Notes receivable activities
Gross Investment	$ 1,405,848		$ 1,405,848
Principal payments received on notes receivable			7,077	$ 6,618
Additional interest income related to the exit IRR			1,380
Amounts funded			19,258	$ 37,008
Loan Term				4 years
Interest rate (as a percent)				7.25%
Number of units | item				217
Mortgage Loans
Notes receivable activities
Gross Investment	478,344		478,344
Mortgage Loans | ILF/ALF/MC | Georgia
Notes receivable activities
Gross Investment	$ 51,111		$ 51,111
Interest rate (as a percent)			7.50%
Number of units | item	203		203
Loan principal amount	$ 7,461		$ 7,461
Maximum
Notes receivable activities
Loan Term				4 years
Mezzanine loan
Notes receivable activities
Principal payments received on notes receivable			4,545
Additional interest income related to the exit IRR		$ 1,380
Exit IRR			$ 190
Amounts funded				$ 25,000
Number of property | property				5
Loan Term				5 years
Extension term number of options | item				2
Extension term				1 year
Interest rate (as a percent)				8.00%
IRR on mortgage loan on real estate property				11.00%
Number of real estate property communities | property				5
Number of units | item	136		136	621
Mezzanine loan | Georgia
Notes receivable activities
Number of additional units under construction | item	89		89
Loan Term	5 years
Interest rate (as a percent)	8.75%
IRR on mortgage loan on real estate property	12.00%
Number of units | item	130		130
Mezzanine loan | ILF/ALF/MC | Georgia
Notes receivable activities
Gross Investment	$ 42,251		$ 42,251
Notes Receivable
Notes receivable activities
Gross Investment	$ 63,693		$ 63,693

XML

Lease Incentives - Activity (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) property	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Non-contingent lease incentives	$ 2,193		$ 1,789
Lease incentives funded	1,023	$ 418
Amortization of lease incentives	(584)	(665)
Adjustment for collectability of lease incentives		(256)
Other adjustments	(35)	(174)
Net decrease in non-contingent lease incentives	$ 404	$ (677)
Number of properties with lease incentives write-offs | property	2
ALF
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amount of joint venture investment	$ 54,134
Amount committed to fund	2,100
Amount funded under lease incentives	$ 1,004
Number of properties with lease incentives write-offs | property	12

XML

Debt Obligations - Bank Borrowings (Details)	3 Months Ended	9 Months Ended
	Dec. 31, 2022	Sep. 30, 2023 USD ($) loan
Debt Obligations
Basis spread over base rate (as a percent)	0.10%
Number of term loans | loan		2
Revolving line of credit
Debt Obligations
Unused commitment fee (as a percent)		0.20%
Revolving line of credit | SOFR
Debt Obligations
Basis spread over base rate (as a percent)		1.20%
Credit Agreement
Debt Obligations
Maximum available under facility		$ 500,000,000
Contingent increase in maximum borrowing capacity		$ 1,000,000,000
Additional extension period option		1 year
Revolving Credit Facility
Debt Obligations
Maximum available under facility		$ 400,000,000
Term loans
Debt Obligations
Maximum available under facility		$ 50,000,000
Term loans | SOFR
Debt Obligations
Basis spread over base rate (as a percent)		1.40%

XML

Debt Obligations - Interest Rate Swap Agreement (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($) item	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) item	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Debt Obligations
Notional Amount	$ 100,000		$ 100,000
Fair Value	$ 8,596		$ 8,596		$ 8,719
Interest Rate Swap
Debt Obligations
Number of interest rate swaps | item	2		2
Interest Rate Swap | Minimum
Debt Obligations
Debt instrument term			4 years
Interest Rate Swap | Maximum
Debt Obligations
Debt instrument term			5 years
Interest Rate Swap | Cash Flow Hedging
Debt Obligations
Increase (decrease) in fair value	$ 28,000	$ 3,306,000	$ (123,000)	$ 9,617,000
Interest Rate Swap | Cash Flow Hedging | Maturing on November 19, 2025
Debt Obligations
Notional Amount	50,000		50,000
Fair Value	3,776		3,776		4,003
Interest Rate Swap | Cash Flow Hedging | Maturing on November 19, 2026
Debt Obligations
Notional Amount	50,000		50,000
Fair Value	$ 4,820		$ 4,820		$ 4,716
Interest Rate Swap | Cash Flow Hedging | SOFR | Maturing on November 19, 2025
Debt Obligations
Swap rate (in percentage)	2.62%		2.62%
Interest Rate Swap | Cash Flow Hedging | SOFR | Maturing on November 19, 2026
Debt Obligations
Swap rate (in percentage)	2.76%		2.76%

XML

Debt Obligations - Senior Unsecured Notes (Details)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Debt Obligations
Interest rate (as a percent)		7.25%
Senior Unsecured Notes | Minimum
Debt Obligations
Interest rate (as a percent)	3.66%
Senior Unsecured Notes | Maximum
Debt Obligations
Interest rate (as a percent)	5.03%
Revolving line of credit
Financial covenants
Maximum ratio of total indebtedness to total asset value	0.6
Maximum ratio of secured debt to total asset value	0.35
Maximum ratio of unsecured debt to the value of the unencumbered asset pool	0.6
Minimum ratio of EBITDA to fixed charges	1.50

XML

Debt Obligations - Component (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Obligations
Applicable Interest Rate (as a percent)	4.97%
Outstanding Balance	$ 956,223	$ 767,854
Available for borrowing	$ 37,750	270,000
Revolving line of credit
Debt Obligations
Applicable Interest Rate (as a percent)	6.63%
Outstanding Balance	$ 362,250	130,000
Available for borrowing	$ 37,750	270,000
Term loans
Debt Obligations
Applicable Interest Rate (as a percent)	2.74%
Outstanding Balance	$ 99,620	99,511
Senior Unsecured Notes
Debt Obligations
Applicable Interest Rate (as a percent)	4.20%
Outstanding Balance	$ 494,353	$ 538,343

XML

Debt Obligations - Borrowings and Repayments (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Borrowings
Borrowings from revolving line of credit	$ 274,450	$ 194,000
Total	274,450	269,000
Repayments
Revolving line of credit	(42,200)	(153,900)
Senior unsecured notes	(44,160)	(43,160)
Total	(86,360)	(197,060)
Revolving line of credit
Borrowings
Borrowings from revolving line of credit	274,450	194,000
Repayments
Revolving line of credit	(42,200)	(153,900)
Senior Unsecured Notes
Borrowings
Senior unsecured notes		75,000
Repayments
Senior unsecured notes	$ (44,160)	$ (43,160)

XML

Equity - Noncontrolling Interest (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) Center item	Sep. 30, 2023 USD ($) item	Jun. 30, 2023 item	Mar. 31, 2023 item	Sep. 30, 2022 item
Noncontrolling interest
Gross Consolidated Assets	$ 1,656,103	$ 1,867,863
Non-controlling interests	$ 21,940	$ 34,974
Number of units | item					217
ALF & MC
Noncontrolling interest
Number of Assisted Living and Memory Care Communities | item		11
SNF
Noncontrolling interest
Skilled nursing center purchased | Center	3
Partnership
Noncontrolling interest
Gross Consolidated Assets		$ 319,536
Non-controlling interests		34,973
Ohio | ILF/ALF/MC
Noncontrolling interest
Number of units | item			242
Ohio | 2023 Acquisitions | Partnership | ILF/ALF/MC
Noncontrolling interest
Gross Consolidated Assets		54,714
Non-controlling interests		9,134
North Carolina | ALF & MC
Noncontrolling interest
Number of Assisted Living and Memory Care Communities | item				11
Number of units | item				523
North Carolina | 2023 Acquisitions | Partnership | ALF & MC
Noncontrolling interest
Gross Consolidated Assets		121,321
Non-controlling interests		3,831
Florida | SNF
Noncontrolling interest
Skilled nursing center purchased | item	3
Number of units | item	299
Florida | 2022 Acquisitions | Partnership | SNF
Noncontrolling interest
Gross Consolidated Assets		76,712
Non-controlling interests		14,325
Oregon | 2018 Acquisitions | Partnership | ALF & MC
Noncontrolling interest
Gross Consolidated Assets		18,452
Non-controlling interests		1,231
Oregon | 2018 Acquisitions | Partnership | ILF
Noncontrolling interest
Gross Consolidated Assets		14,650
Non-controlling interests		2,907
Wisconsin | 2017 Acquisitions | Partnership | ILF/ALF/MC
Noncontrolling interest
Gross Consolidated Assets		22,007
Non-controlling interests		2,305
South Carolina | 2017 Acquisitions | Partnership | ALF & MC
Noncontrolling interest
Gross Consolidated Assets		11,680
Non-controlling interests		$ 1,240

XML

Equity - Common Stock (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Equity
Proceeds from common stock issued, net of issuance costs	$ 1,777,000	$ 38,957,000
Equity Distribution Agreements
Equity
Amount available under effective shelf registration statement	$ 128,822,000
Common Stock
Equity
Number of shares repurchased	43,933	39,463
Common Stock | Equity Distribution Agreements
Equity
Maximum offering capacity under shelf registration statement	$ 200,000,000
Shares common stock sold	48,500
Proceeds from common stock issued, net of issuance costs	$ 1,777,000
Reclassification of accumulated costs to additional paid in capital	$ 80,000

XML

Equity - Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended			3 Months Ended						9 Months Ended
	Dec. 31, 2023	Nov. 30, 2023	Oct. 31, 2023	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Dividend Distributions
Paid										$ 70,767	$ 68,202
Common Stock cash distributions				$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 0.57	$ 1.71	$ 1.71
Subsequent Event | Dividend Payable, October 31, 2023
Dividend Distributions
Dividends declared and paid per common share			$ 0.19
Subsequent Event | Dividend Payable, November 30, 2023
Dividend Distributions
Dividends declared and paid per common share		$ 0.19
Subsequent Event | Dividend Payable, December 29, 2023
Dividend Distributions
Dividends declared and paid per common share	$ 0.19
Common Stock
Dividend Distributions
Declared				$ 70,767			$ 68,202			$ 70,767	$ 68,202
Paid										$ 70,767	$ 68,202
Common Stock cash distributions										$ 0.19	$ 0.19
Common Stock | Subsequent Event | Dividend Payable, October 31, 2023
Dividend Distributions
Dividends declared and paid per common share			$ 0.19
Common Stock | Subsequent Event | Dividend Payable, November 30, 2023
Dividend Distributions
Dividends declared and paid per common share		$ 0.19
Common Stock | Subsequent Event | Dividend Payable, December 29, 2023
Dividend Distributions
Dividends declared and paid per common share	$ 0.19

XML

Equity - Stock-Based Compensation plans (Details)	9 Months Ended
	Sep. 30, 2023 shares	Sep. 30, 2022 shares
Stock Based Compensation Plans
Options outstanding (in shares)	5,000
Options exercisable (in shares)	5,000
Options expired and cancelled (in shares)	5,000	5,000
Stock options granted (in shares)	0	0
2015 Plan
Stock Based Compensation Plans
Ratio of shares subject to award granted	1
2021 Plan
Stock Based Compensation Plans
Total shares reserved for issuance of common stock related to the conversion of preferred stock	1,900,000

XML

Equity - Restricted Stock and Performance-based Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Stock Based Compensation Plans
Stock options granted (in shares)	0	0
Restricted stock and performance-based stock units
Restricted stock and performance based stock units activity
Granted (in shares)	232,887	221,542
Compensation expense
Compensation expense related to share-based award	$ 6,349	$ 5,951
Remaining compensation expense	11,752
Restricted stock and performance-based stock units | October - December 2023
Compensation expense
Remaining compensation expense	2,132
Restricted stock and performance-based stock units | 2024
Compensation expense
Remaining compensation expense	6,026
Restricted stock and performance-based stock units | 2025
Compensation expense
Remaining compensation expense	3,238
Restricted stock and performance-based stock units | 2026
Compensation expense
Remaining compensation expense	$ 356
Restricted stock and performance-based stock units | Grant Date Price $37.16 | Three year vesting
Restricted stock and performance based stock units activity
Granted (in shares)	127,960
Granted (in dollars per share)	$ 37.16
Vesting period	3 years
Restricted stock and performance-based stock units | Grant Date Price $37.16 | TSR Targets
Restricted stock and performance based stock units activity
Granted (in shares)	86,867
Granted (in dollars per share)	$ 37.16
Vesting period	4 years
Restricted stock and performance-based stock units | Grant Date Price $37.16 | Accelerated TSR Targets
Restricted stock and performance based stock units activity
Vesting period	3 years
Restricted stock and performance-based stock units | Grant Date Price $31.54 | Vesting Date May 24,2024
Restricted stock and performance based stock units activity
Granted (in shares)	15,060
Granted (in dollars per share)	$ 31.54
Restricted stock and performance-based stock units | Grant Date Price 35.45 | Vesting Date July 25, 2024
Restricted stock and performance based stock units activity
Granted (in shares)	3,000
Granted (in dollars per share)	$ 35.45
Restricted stock and performance-based stock units | Grant Date Price $33.94 | Three year vesting
Restricted stock and performance based stock units activity
Granted (in shares)		122,865
Granted (in dollars per share)		$ 33.94
Vesting period		3 years
Restricted stock and performance-based stock units | Grant Date Price $33.94 | TSR Targets
Restricted stock and performance based stock units activity
Granted (in shares)		86,332
Granted (in dollars per share)		$ 33.94
Restricted stock and performance-based stock units | Grant Date Price $38.48 | Vesting Date, May 25, 2023
Restricted stock and performance based stock units activity
Granted (in shares)		12,345
Granted (in dollars per share)		$ 38.48
Restricted stock
Restricted stock and performance based stock units activity
Outstanding at the beginning of the period (in shares)	229,236	197,422
Granted (in shares)	146,020	135,210
Vested (in shares)	(115,551)	(103,396)
Canceled (in shares)	(1,085)
Outstanding at the end of the period (in shares)	258,620	229,236

XML

Commitments and Contingencies - Summary of Commitments (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) property
Commitments and Contingencies
Investment Commitment	$ 103,890
2023 Funding	6,670
Total Commitment funded	26,805
Remaining commitment	77,085
Skilled Nursing Centers
Commitments and Contingencies
Fair value of earn-out liability	3,000
Earn-out liability, Write off	$ 3,000
Number of properties acquired | property	4
Real estate properties
Commitments and Contingencies
Investment Commitment	$ 10,242
2023 Funding	1,932
Total Commitment funded	2,650
Remaining commitment	7,592
Accrued incentives and earn-out liabilities
Commitments and Contingencies
Investment Commitment	21,100
2023 Funding	1,004
Total Commitment funded	1,004
Remaining commitment	20,096
Mortgage loans
Commitments and Contingencies
Investment Commitment	43,598
2023 Funding	1,476
Total Commitment funded	7,178
Remaining commitment	36,420
Commitments To Expand and Renovate Properties
Commitments and Contingencies
Investment Commitment	6,098
Contingent Funding Commitments
Commitments and Contingencies
Investment Commitment	18,000
Notes receivable
Commitments and Contingencies
Investment Commitment	28,950
2023 Funding	2,258
Total Commitment funded	15,973
Remaining commitment	12,977
Construction loans
Commitments and Contingencies
Investment Commitment	$ 19,500

XML

Major Operators (Details) $ in Thousands	1 Months Ended			9 Months Ended
	Dec. 31, 2023 USD ($)	Nov. 30, 2023 USD ($)	Oct. 31, 2023 USD ($)	Sep. 30, 2023 USD ($) property item	Sep. 30, 2022 item	Jun. 30, 2023 USD ($)
Major Operators
Number of major operators | item				1
Number of beds/units | item					217
Interest payment receivable on mortgage loan deferred				$ 900		$ 600
Interest rate (as a percent)					7.25%
Prestige Healthcare Mortgage Loan [Member]
Major Operators
Interest receivable on mortgage loan deferral monthly cap amount				300
Prestige Healthcare Mortgage Loan [Member] | Subsequent Event
Major Operators
Amount of letter of credit drawn down for the repayment of deferred interest outstanding	$ 334	$ 334	$ 2,767
Amount of letter of credit owned as collateral for mortgage loans			4,945
Amount of interest payment receivable on mortgage loan			$ 19,539
Interest rate (as a percent)			8.50%
Prestige Healthcare Mortgage Loan [Member] | Maximum
Major Operators
Interest payment receivable on mortgage loan deferred				$ 1,500
SNF | Prestige Healthcare Mortgage Loan [Member]
Major Operators
Number of beds/units | item				15
Prestige Healthcare | SNF
Major Operators
Number of beds | property				24
Number of beds/units | item				2,820
Prestige Healthcare | ALF
Major Operators
Number of beds/units | item				93
Total Revenues | Operator Concentration Risk | Prestige Healthcare
Major Operators
Concentration risk (as a percent)				16.60%
Total Assets | Credit Concentration Risk | Prestige Healthcare
Major Operators
Concentration risk (as a percent)				14.20%

XML

Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Net income	$ 22,627	$ 6,604	$ 33,561	$ 13,389	$ 54,490	$ 14,507	$ 62,792	$ 82,386
Less income allocated to non-controlling interests	(430)			(99)			(1,287)	(301)
Less income allocated to participating securities:
Non-forfeitable dividends on participating securities	(147)			(131)			(440)	(401)
Income allocated to participating securities								(80)
Total net income allocated to participating securities	(147)			(131)			(440)	(481)
Net income available to common stockholders	22,050			13,159			61,065	81,604
Net income for diluted net income per share	$ 22,050			$ 13,159			$ 61,065	$ 81,604
Reconciliation of shares
Shares for basic net income per share	41,153			40,270			41,127	39,658
Effect of dilutive securities:
Total effect of dilutive securities (in shares)	58			282			58	281
Shares for diluted net income per share	41,211			40,552			41,185	39,939
Basic net income per share (in dollars per share)	$ 0.54			$ 0.33			$ 1.48	$ 2.06
Diluted net income per share (in dollars per share)	$ 0.54			$ 0.32			$ 1.48	$ 2.04
Employee Stock Option [Member]
Effect of dilutive securities:
Stock options and performance-based stock units (in shares)				1
Performance-based stock units
Effect of dilutive securities:
Stock options and performance-based stock units (in shares)	58			281			58	281

XML

Fair Value Measurements (Details) $ in Thousands	Sep. 30, 2023 USD ($) item	Dec. 31, 2022 USD ($) item
Fair value measurements
Mortgage loans receivable, net of credit loss reserve	$ 473,567	$ 389,728
Notes receivable, net of credit loss reserve	63,056	58,383
Outstanding Balance	956,223	767,854
Senior unsecured notes, net of debt issue costs	$ 494,353	$ 538,343
Level 3 | Senior Unsecured Notes maturing before 2030 | Discount Rate
Fair value measurements
Future cash outflows discount rate (as a percent) | item	0.0725	0.0650
Level 3 | Senior Unsecured Notes maturing 2030 and after | Discount Rate
Fair value measurements
Future cash outflows discount rate (as a percent) | item	0.0750	0.0700
Level 3 | Financing Receivable | Discount Rate
Fair value measurements
Future cash inflows discount rate (as a percent)	0.076	0.076
Level 3 | Mortgage Loans Receivable | Discount Rate
Fair value measurements
Future cash inflows discount rate (as a percent)	0.091	0.093
Level 3 | Notes Receivable | Discount Rate
Fair value measurements
Future cash inflows discount rate (as a percent) | item	0.068	0.071
Carrying Value
Fair value measurements
Mortgage loans receivable, net of credit loss reserve	$ 473,567	$ 389,728
Revolving line of credit	362,250	130,000
Outstanding Balance	99,620	99,511
Senior unsecured notes, net of debt issue costs	494,353	538,343
Carrying Value | Financing Receivable
Fair value measurements
Notes receivable, net of credit loss reserve	196,053	75,999
Carrying Value | Notes Receivable
Fair value measurements
Notes receivable, net of credit loss reserve	63,056	58,383
Fair Value
Fair value measurements
Revolving line of credit	362,250	130,000
Outstanding Balance	100,000	100,000
Fair Value | Financing Receivable
Fair value measurements
Notes receivable, net of credit loss reserve	199,050	76,033
Fair Value | Level 3
Fair value measurements
Mortgage loans receivable, net of credit loss reserve	560,808	461,276
Senior unsecured notes, net of debt issue costs	429,534	477,653
Fair Value | Level 3 | Notes Receivable
Fair value measurements
Notes receivable, net of credit loss reserve	$ 70,482	$ 61,858

XML

Subsequent Events (Details) $ / shares in Units, $ in Thousands	1 Months Ended			9 Months Ended
	Dec. 31, 2023 USD ($) $ / shares	Nov. 30, 2023 USD ($) $ / shares	Oct. 31, 2023 USD ($) property item $ / shares	Sep. 30, 2023 USD ($) property	Sep. 30, 2022 item
Equity
Number of properties | property				143
Number of beds/units | item					217
Interest rate (as a percent)					7.25%
Brookdale Senior Living | Master lease agreement
Equity
Number of properties | property				35
Lease term				6 years
Rental income to be received in first year				$ 8,000
Fund for capital expenditures				$ 4,500
ALF
Equity
Number of properties | property				92
Subsequent Event | Prestige Healthcare Mortgage Loan [Member]
Equity
Amount of letter of credit drawn down for the repayment of deferred interest outstanding	$ 334	$ 334	$ 2,767
Amount of letter of credit owned as collateral for mortgage loans			4,945
Amount of interest payment receivable on mortgage loan			$ 19,539
Interest rate (as a percent)			8.50%
Subsequent Event | Brookdale Senior Living | Master lease agreement
Equity
Number of properties | property			7
Lease term			3 years
Lease renewal term			4 years
Rental income to be received in first year			$ 960
Rental income to be received in second year			984
Rental income to be received in third year			$ 1,150
Subsequent Event | Brookdale Senior Living | New master lease agreement
Equity
Number of properties | property			17
Rental income to be received in first year			$ 9,325
Fund for capital expenditures			$ 7,150
Subsequent Event | Dividend Payable, October 31, 2023
Equity
Dividends declared and paid per common share | $ / shares			$ 0.19
Subsequent Event | Dividend Payable, November 30, 2023
Equity
Dividends declared and paid per common share | $ / shares		$ 0.19
Subsequent Event | Dividend Payable, December 29, 2023
Equity
Dividends declared and paid per common share | $ / shares	$ 0.19
Subsequent Event | Common Stock | Dividend Payable, October 31, 2023
Equity
Dividends declared and paid per common share | $ / shares			$ 0.19
Subsequent Event | Common Stock | Dividend Payable, November 30, 2023
Equity
Dividends declared and paid per common share | $ / shares		$ 0.19
Subsequent Event | Common Stock | Dividend Payable, December 29, 2023
Equity
Dividends declared and paid per common share | $ / shares	$ 0.19
Subsequent Event | Ohio | Brookdale Senior Living | Master lease agreement
Equity
Number of properties | property			1
Subsequent Event | Texas | Brookdale Senior Living | Master lease agreement
Equity
Number of properties | property			6
Subsequent Event | Oklahoma | Brookdale Senior Living | Master lease agreement
Equity
Number of properties | property			6
Subsequent Event | ALF | Ohio | Brookdale Senior Living | Master lease agreement
Equity
Number of beds/units | item			42
Subsequent Event | ALF | Texas | Brookdale Senior Living | Master lease agreement
Equity
Number of beds/units | item			235
Subsequent Event | ALF | Oklahoma | Brookdale Senior Living | Master lease agreement
Equity
Number of beds/units | item			219

XML

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ 22,197	$ 13,290	$ 61,505	$ 82,085

XML

Insider Trading Arrangements	3 Months Ended
	Sep. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false