FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2021

Financial Instruments [Abstract]

FINANCIAL INSTRUMENTS

NOTE 16 - FINANCIAL INSTRUMENTS

The net carrying amount of cash and cash equivalents, restricted cash, contractual receivables, other assets and accrued expenses and other liabilities reported in the Consolidated Balance Sheets approximates fair value because of the short maturity of these instruments (Level 1).

At December 31, 2021 and 2020, the net carrying amounts and fair values of other financial instruments were as follows:

	December 31, 2021				December 31, 2020
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(in thousands)
Assets:
Investments in direct financing leases – net	$	10,873	$	10,873	$	10,764	$	10,764
Mortgage notes receivable – net		835,086		869,715		885,313		924,353
Other investments – net		469,884		476,664		467,442		474,552
Total	$	1,315,843	$	1,357,252	$	1,363,519	$	1,409,669
Liabilities:
2017 Revolving credit facility	$	—	$	—	$	101,158	$	101,158
Revolving credit facility		—		—		—		—
Term loan		2,275		2,275		2,275		2,275
Sterling term loan		—		—		136,453		136,700
2017 OP term loan		—		—		49,896		50,000
OP Term loan		49,661		50,000		—		—
4.375% notes due 2023 – net		349,100		365,243		696,981		770,635
4.95% notes due 2024 – net		397,725		427,184		396,714		441,194
4.50% notes due 2025 – net		397,685		427,440		396,924		444,652
5.25% notes due 2026 – net		597,142		667,524		596,437		697,993
4.50% notes due 2027 – net		692,374		766,003		690,909		794,294
4.75% notes due 2028 – net		543,908		607,249		542,899		633,950
3.625% notes due 2029 – net		490,681		519,430		489,472		532,248
3.375% notes due 2031 – net		683,592		705,810		681,802		731,541
3.25% notes due 2033 – net		689,587		683,151		—		—
HUD mortgages – net		359,806		394,284		367,249		409,004
Subordinated debt – net		—		—		20,083		21,599
Total	$	5,253,536	$	5,615,593	$	5,169,252	$	5,767,243

Fair value estimates are subjective in nature and are dependent on a number of important assumptions, including estimates of future cash flows, risks, discount rates and relevant comparable market information associated with each financial instrument (see Note 2 – Summary of Significant Accounting Policies). The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts.

The following methods and assumptions were used in estimating fair value disclosures for financial instruments.

● Mortgage notes receivable: The fair value of the mortgage notes receivables are estimated using a discounted cash flow analysis, using interest rates being offered for similar loans to borrowers with similar credit ratings (Level 3).

● Other investments: Other investments are primarily comprised of notes receivable. The fair values of notes receivable are estimated using a discounted cash flow analysis, using interest rates being offered for similar loans to borrowers with similar credit ratings (Level 3).

● Revolving credit facility and OP term loan: The carrying amount of these approximate fair value because the borrowings are interest rate adjusted. Differences between carrying value and the fair value in the table above are due to the inclusion of deferred financing costs in the carrying value.

● Senior notes: The fair value of the senior unsecured notes payable was estimated based on (Level 1) publicly available trading prices.

● Subordinated debt: The fair value of our borrowings under fixed rate agreements are estimated using a present value technique based on inputs from trading activity provided by a third party (Level 2).

● HUD mortgages: The fair value of our borrowings under HUD debt agreements are estimated using an expected present value technique based on quotes obtained by HUD debt brokers (Level 2).