NATIONAL HEALTH INVESTORS INC [NHI] Filings

10-Q 1 nhi-20220331.htm 10-Q nhi-20220331

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

March 31, 2022

☐

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

For the transition period from

_____________

Commission File Number 001-10822

National Health Investors Inc

(Exact name of registrant as specified in its charter)


Maryland		62-1470956
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

222 Robert Rose Drive
Murfreesboro	Tennessee	37129
(Address of principal executive offices)		(Zip Code)


(615)			890-9100
(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, $0.01 par value	NHI	New York Stock Exchange

Indicate by check mark whether the 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 definition 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 ☒

There were 45,851,044 shares of common stock outstanding of the registrant as of May 2, 2022.

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			Page
Part I. Financial Information

Item 1. Financial Statements			3

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.			26

Item 3. Quantitative and Qualitative Disclosures About Market Risk.			50

Item 4. Controls and Procedures.			51

Part II. Other Information

Item 1. Legal Proceedings			52

Item 1A. Risk Factors			52



Item 5. Other Infor mation			52

Item 6. Exhibits			53

Signatures			54

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NATIONAL HEALTH INVESTORS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)


	March 31, 2022		December 31, 2021
	(unaudited)
Assets:
Real estate properties:
Land	$	180,503	$	186,658
Buildings and improvements	2,601,905		2,707,422
Construction in progress	851		468
	2,783,259		2,894,548
Less accumulated depreciation	(582,175)		(576,668)
Real estate properties, net	2,201,084		2,317,880
Mortgage and other notes receivable, net of reserve of $5,134 and $5,210, respectively	316,390		299,952
Cash and cash equivalents	36,121		37,412
Straight-line rent receivable	94,739		96,198
Assets held for sale, net	131,988		66,398
Other assets	22,181		21,036
Total Assets	$	2,802,503	$	2,838,876

Liabilities and Stockholders’ Equity:
Debt	$	1,249,044	$	1,242,883
Accounts payable and accrued expenses	19,112		23,181
Dividends payable	41,265		41,266
Lease deposit liabilities	—		8,838
Deferred income	4,285		5,725
Total Liabilities	1,313,706		1,321,893

Commitments and contingencies

National Health Investors, Inc. Stockholders’ Equity:
Common stock, $0.01 par value, 100,000,000 shares authorized
45,850,868 and 45,850,599 shares issued and outstanding, respectively	459		459
Capital in excess of par value	1,596,258		1,591,182
Cumulative dividends in excess of net income	(117,424)		(84,558)

Total National Health Investors, Inc. Stockholders’ Equity	1,479,293		1,507,083
Noncontrolling interests	9,504		9,900
Total Equity	1,488,797		1,516,983
Total Liabilities and Stockholders’ Equity	$	2,802,503	$	2,838,876

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements. The Condensed Consolidated Balance Sheet at December 31, 2021 was derived from the audited consolidated financial statements at that date.

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NATIONAL HEALTH INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share amounts)


	Three Months Ended
	March 31,
	2022		2021
	(unaudited)
Revenues:
Rental income	$	64,559	$	74,749
Interest income and other	6,768		6,136
	71,327		80,885
Expenses:
Depreciation	18,272		20,806
Interest	10,198		12,973
Legal	1,827		130
Franchise, excise and other taxes	244		233
General and administrative	8,101		7,989
Taxes and insurance on leased properties	3,038		2,161
Loan and realty losses (gains)	24,528		(50)
	66,208		44,242
Gains (losses) from equity method investment	297		(808)
Gains on sales of real estate, net	2,981		—
Loss on early retirement of debt	(151)		(451)
Net income	8,246		35,384
Less: net loss (income) attributable to noncontrolling interests	153		(52)
Net income attributable to common stockholders	$	8,399	$	35,332

Weighted average common shares outstanding:
Basic	45,850,686		45,305,087
Diluted	45,851,061		45,357,773

Earnings per common share:
Net income attributable to common stockholders - basic	$	0.18	$	0.78
Net income attributable to common stockholders - diluted	$	0.18	$	0.78

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements.

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NATIONAL HEALTH INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


	Three Months Ended
	March 31,
	2022		2021
	(unaudited)

Net income	$	8,246	$	35,384
Other comprehensive income:
Increase in fair value of cash flow hedges	—		(6)
Reclassification for amounts recognized as interest expense	—		1,778
Total other comprehensive income	—		1,772
Comprehensive income	8,246		37,156
Comprehensive loss (income) attributable to noncontrolling interests	153		(52)
Comprehensive income attributable to common stockholders	$	8,399	$	37,104

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements.

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NATIONAL HEALTH INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Three Months Ended
	March 31,
	2022		2021
	(unaudited)
Cash flows from operating activities:
Net income	$	8,246	$	35,384
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	18,272		20,806
Amortization of debt issuance costs, debt discounts and prepaids	1,087		1,192
Amortization of commitment fees and note receivable discounts	(120)		(131)
Amortization of lease incentives	252		260
Straight-line rent income	(1,079)		(4,241)
Non-cash interest income on mortgage and other notes receivable	(880)		(700)
Non-cash lease deposit liability recognized as lease income	(8,838)		—
Gains on sales of real estate, net	(2,981)		—
Gains (losses) from equity method investment	(297)		808
Loss on early retirement of debt	151		451
Loan and realty losses	24,528		(50)
Payment of lease incentives	—		(1,042)
Non-cash share-based compensation	5,083		5,446
Changes in operating assets and liabilities:
Other assets	(107)		(484)
Accounts payable and accrued expenses	(4,252)		(735)
Deferred income	(385)		(52)
Net cash provided by operating activities	38,680		56,912

Cash flows from investing activities:
Investments in mortgage and other notes receivable	(16,350)		(8,412)
Collections of mortgage and other notes receivable	988		442

Proceeds from sales of real estate	13,170		—
Investments in renovations of existing real estate	(165)		(1,443)
Investments in equipment	—		(8)

Distribution from equity method investment	297		288
Net cash used in investing activities	(2,060)		(9,133)

Cash flows from financing activities:
Proceeds from revolving credit facility	85,000		30,000
Payments on revolving credit facility	—		(298,000)

Payments on term loans	(75,098)		(100,094)
Proceeds from issuance of senior notes	—		396,784
Debt issuance costs	(4,535)		(4,459)
Proceeds from issuance of common shares, net	—		47,951
Distributions to noncontrolling interests	(271)		(258)

Dividends paid to stockholders	(41,266)		(49,818)
Taxes remitted on employee stock awards	(7)		—


Net cash (used in) provided by financing activities	(36,177)		22,106

Increase in cash and cash equivalents and restricted cash	443		69,885
Cash and cash equivalents and restricted cash, beginning of period	39,485		46,343
Cash and cash equivalents and restricted cash, end of period	$	39,928	$	116,228

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements.

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NATIONAL HEALTH INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands)


	Three Months Ended
	March 31,
	2022		2021
	(unaudited)
Supplemental disclosure of cash flow information:
Interest paid, net of amounts capitalized	$	12,920	$	9,674
Supplemental disclosure of non-cash investing and financing activities:





Change in other assets related to sales of real estate	$	(33)	$	—
Change in accounts payable related to investments in real estate construction	$	—	$	(112)

Change in accounts payable related to renovations of existing real estate	$	(219)	$	—
Change in accounts payable related to distributions to noncontrolling interests	$	(28)	$	(25)

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements.

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NATIONAL HEALTH INVESTORS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited, in thousands, except share and per share amounts)


	Common Stock			Capital in Excess of Par Value		Cumulative Dividends in Excess of Net Income		Accumulated Other Comprehensive Loss		Total National Health Investors, Inc. Stockholders’ Equity		Noncontrolling Interests		Total Equity
	Shares	Amount
Balances at December 31, 2021	45,850,599	$	459	$	1,591,182	$	(84,558)	$	—	$	1,507,083	$	9,900	$	1,516,983


Noncontrolling interests distribution	—	—		—		—		—		—		(243)		(243)
Total comprehensive income (loss)	—	—		—		8,399		—		8,399		(153)		8,246



Taxes remitted on employee stock awards	—	—		(7)		—		—		(7)		—		(7)
Shares issued on stock options exercised	269	—		—		—		—		—		—		—
Share-based compensation	—	—		5,083		—		—		5,083		—		5,083
Dividends declared, $0.90 per common share	—	—		—		(41,265)		—		(41,265)		—		(41,265)












Balances at March 31, 2022	45,850,868	$	459	$	1,596,258	$	(117,424)	$	—	$	1,479,293	$	9,504	$	1,488,797


	Common Stock			Capital in Excess of Par Value		Cumulative Dividends in Excess of Net Income		Accumulated Other Comprehensive Loss		Total National Health Investors Stockholders’ Equity		Noncontrolling Interests		Total Equity
	Shares	Amount
Balances at December 31, 2020	45,185,992	$	452	$	1,540,946	$	(22,015)	$	(7,149)	$	1,512,234	$	10,711	$	1,522,945


Noncontrolling interests distribution	—	—		—		—		—		—		(233)		(233)
Total comprehensive income	—	—		—		35,332		1,772		37,104		52		37,156

Issuance of common stock, net	661,951	7		47,944		—		—		47,951		—		47,951


Shares issued on stock options exercised	2,656	—		—		—		—		—		—		—
Share-based compensation	—	—		5,446		—		—		5,446		—		5,446
Dividends declared, $1.025 per common share	—	—		—		(50,550)		—		(50,550)		—		(50,550)










Balances at March 31, 2021	45,850,599	$	459	$	1,594,336	$	(37,233)	$	(5,377)	$	1,552,185	$	10,530	$	1,562,715

The accompanying notes to condensed consolidated financial statements are an integral part of these condensed consolidated financial statements.

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NATIONAL HEALTH INVESTORS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

(unaudited)

Note 1. Organization and Nature of Business

National Health Investors, Inc. (“NHI,” “the Company,” “we,” “us,” or “our”), established in 1991 as a Maryland corporation, is a self-managed real estate investment trust (“REIT”) specializing in sale-leaseback, joint venture, mortgage and mezzanine financing of need-driven and discretionary senior housing and medical facility investments. Our portfolio consists of lease, mortgage and other note investments in independent living facilities, assisted living facilities, entrance-fee communities, senior living campuses, skilled nursing facilities and a hospital. As of March 31, 2022, we had investments of approximately $2.8 billion in 186 health care real estate properties located in 32 states and leased pursuant primarily to triple-net leases to 27 lessees consisting of 120 senior housing communities (“SHO”), 65 skilled nursing facilities and one hospital, excluding 20 properties classified as assets held for sale. Our portfolio of 15 mortgages along with other notes receivable totaled $321.5 million, excluding an allowance for expected credit losses of $5.1 million, as of March 31, 2022.

Note 2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements. In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation. Interim results of operations are not necessarily indicative of the results that may be achieved for a full year. The condensed consolidated financial statements and related notes do not include all information and footnotes required by GAAP for annual reports. These interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2021, included in our 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”).

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries and subsidiaries in which we have a controlling interest. We also consolidate certain entities when control of such entities can be achieved through means other than voting rights (“variable interest entities” or “VIEs”) if the Company is deemed to be the primary beneficiary of such entities. All material intercompany transactions and balances are eliminated in consolidation.

At March 31, 2022, we held interests in ten unconsolidated VIEs, and, because we lack either directly or through related parties the power to direct the activities that most significantly impact their economic performance, we have concluded that the Company is not the primary beneficiary. Accordingly, we account for our transactions with these entities and their subsidiaries at either amortized cost or net realizable value for straight-line rent receivables, excluding our investment accounted for under the equity method discussed in Note 5.

The Company’s unconsolidated VIEs are summarized below by date of initial involvement. For further discussion of the nature of the relationships, including the sources of exposure to these VIEs, see the notes to our condensed consolidated financial statements cross-referenced below ($ in thousands).

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Date	Name	Source of Exposure	Carrying Amount		Maximum Exposure to Loss		Note Reference
2012	Bickford Senior Living	Various1	$	68,446	$	85,434	Notes 3, 4
2014	Senior Living Communities	Notes and straight-line receivable	$	88,448	$	94,107	Notes 3, 4
2016	Senior Living Management	Notes and straight-line receivable	$	26,480	$	26,480	—
2018	Sagewood, LCS affiliate	Notes	$	110,762	$	110,762	—
2019	Encore Senior Living	Notes and straight-line receivable	$	34,245	$	62,735	Note 4
2020	Timber Ridge OpCo, LLC	Various2	$	(5,000)	$	5,000	Note 5
2020	Watermark Retirement	Notes and straight-line receivable	$	8,528	$	10,306	—
2021	Montecito Medical Real Estate	Notes and funding commitment	$	15,754	$	50,000	Note 4
2021	Vizion Health	Notes and straight-line receivable	$	20,231	$	22,564	—
2021	Navion Senior Solutions	Notes and straight-line receivable	$	6,834	$	13,834	—

1 Notes, loan commitments, straight-line rent receivables, and unamortized lease incentives

2 Loan commitment, equity method investment and straight-line rent receivables

We are not obligated to provide support beyond our stated commitments to these tenants and borrowers whom we classify as VIEs, and accordingly, our maximum exposure to loss as a result of these relationships is limited to the amount of our commitments, as shown above and discussed in the notes. Economic loss on a lease, in excess of what is presented in the table above, if any, would be limited to that resulting from any period of arrearage and non-payment of monthly rent before we are able to take effective remedial action, as well as costs incurred in transitioning the lease to a new tenant. The potential extent of such loss would be dependent upon individual facts and circumstances, and is therefore not included in the table above.

In the future, NHI may be deemed the primary beneficiary of the operations if the tenants do not have adequate liquidity to accept the risks and rewards as the tenant and operator of the properties and might be required to consolidate the financial position and results of operations of the tenants into our consolidated financial statements.

We consolidate two real estate partnerships formed with our partners, Discovery Senior Housing Investor XXIV, LLC (“Discovery”) and LCS Timber Ridge LLC (“LCS”), to invest in senior housing facilities. As of and for the three months ended March 31, 2022 and 2021, our noncontrolling interests relate to these partnerships with Discovery and LCS.

We use the equity method of accounting when we own an interest in an entity whereby we can exert significant influence over but cannot control the entity’s operations. We discontinue equity method accounting if our investment in an entity (and net advances) is reduced to zero unless we have guaranteed obligations of the entity or are otherwise committed to provide further financial support for the entity.

Cash and Cash Equivalents and Restricted Cash

Cash equivalents consist of all highly liquid investments with an original maturity of three months or less. Restricted cash includes amounts required to be held on deposit or subject to an agreement (e.g., with a qualified intermediary subject to an Internal Revenue Code §1031 exchange agreement or in accordance with agency agreements governing our mortgages).

The following table sets forth our “Cash and cash equivalents and restricted cash” reported within the Company’s Condensed Consolidated Statements of Cash Flows ($ in thousands):


	March 31, 2022		March 31, 2021
Cash and cash equivalents	$	36,121	$	113,375
Restricted cash (included in Other assets)	3,807		2,853
	$	39,928	$	116,228

Assets Held for Sale

We consider properties to be assets held for sale when (1) management commits to a plan to sell the property; (2) it is unlikely that the disposal plan will be significantly modified or discontinued; (3) the property is available for immediate sale in its present condition; (4) actions required to complete the sale of the property have been initiated; (5) sale of the property is probable and we anticipate the completed sale will occur within one year; and (6) the property is actively being marketed for sale at a price that is

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reasonable given our estimate of current market value. Upon designation of a property as an asset held for sale, we record the property’s value at the lower of its carrying value or its estimated fair value, less estimated transaction costs. Depreciation and amortization of the property are discontinued.

Real Estate Investment Impairment

We evaluate the recoverability of the carrying amount of our real estate properties on a property-by-property basis. We review our properties for recoverability when events or circumstances, including significant physical changes in the property, significant adverse changes in general economic conditions and significant deterioration of the underlying cash flows of the property, indicate that the carrying amount of the property may not be recoverable. The need to recognize an impairment charge is based on estimated undiscounted future cash flows from a property compared to the carrying amount of that property. If recognition of an impairment charge is necessary, it is measured as the amount by which the carrying amount of the property exceeds the estimated fair value of the property.

During the three months ended March 31, 2022, we recognized impairment charges of approximately $24.6 million included in “Loan and realty losses (gains)” in our Condensed Consolidated Statement of Income. Reference Note 3 for more discussion.

Rental Income

Our leases generally provide for rent escalators throughout the term of the lease. Base rental income is recognized using the straight-line method over the term of the lease to the extent that lease payments are considered collectible and the lease provides for specific contractual escalators. The Company reviews its operating lease receivables for collectibility on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in which the tenant operates and economic conditions in the area where the property is located. In the event that collectibility with respect to any tenant is not probable, a direct write-off of the receivable is made as an adjustment to rental income and any future rental revenue is recognized only when the tenant makes a rental payment.

Accounting for Lease Modifications related to the Coronavirus Pandemic

In April 2020, the FASB issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the coronavirus (“COVID-19”) pandemic. The Lease Modification Q&A clarifies that entities may elect not to evaluate whether lease-related relief provided to mitigate the economic effects of the COVID-19 pandemic is a lease modification under Accounting Standard Codification (“ASC”) 842, Leases (“ASC 842”). Instead, an entity that elects not to evaluate whether a concession directly related to the COVID-19 pandemic, which does not substantially increase either its rights as lessor or the obligations of the tenant, is a lease modification can decide whether or not to apply the modification guidance. An entity should apply the election consistently to leases with similar characteristics and similar circumstances. We have elected not to apply the modification guidance under ASC 842 and have accounted for qualified rent concessions as variable lease payments when applicable, and recorded as rental income when received. During the three months ended March 31, 2022, we provided $7.8 million lease concessions directly related to the COVID-19 pandemic, as discussed in more detail in Note 7.

Note 3. Real Estate Properties and Investments

Asset Dispositions

During the three months ended March 31, 2022, we completed the following real estate dispositions as described below ($ in thousands):


Operator	Date	Properties	Asset Class	Net Proceeds		Net Real Estate Investment		Gain
Hospital Corporation of America	Q1 2022	1	MOB	$	4,868	$	1,904	$	2,964
Vitality Senior Living1	Q1 2022	1	SLC	8,302		8,285		17
				$	13,170	$	10,189	$	2,981

1 Prior impairment charges recognized on this property of $10.9 million.

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Hospital Corporation of America

In January 2022, we sold a medical office building located in Texas for approximately $5.1 million in cash consideration, and incurred $0.3 million of transaction costs, resulting in a gain of approximately $3.0 million. The property was classified as assets held for sale on the Condensed Consolidated Balance Sheet as of December 31, 2021. Revenue for the property was insignificant for both the three months ended March 31, 2022 and 2021.

Vitality Senior Living

In March 2022, we sold a senior living community located in Tennessee for approximately $8.6 million in cash consideration, and incurred $0.3 million of transaction costs, resulting in a minimal gain. The property was classified as assets held for sale on the Condensed Consolidated Balance Sheet as of December 31, 2021. Prior impairment charges recognized on this property totaled $10.9 million. Revenue for the property was insignificant for both the three months ended March 31, 2022 and 2021.

Assets Held for Sale and Impairment of Real Estate

At March 31, 2022, 20 properties, with an aggregate net real estate balance of $132.0 million, were classified as assets held for sale on our Condensed Consolidated Balance Sheet, including twelve properties that were classified as assets held for sale during the first quarter of 2022. Rental income associated with the 20 properties was $3.1 million and $3.7 million for the three months ended March 31, 2022 and 2021, respectively.

During the first quarter of 2022, we recorded impairment charges of $24.6 million, including $15.3 million on one property held in use. The impairment charges are included in “Loan and realty losses (gains)” in the Consolidated Statement of Income.

We reduced the carrying value of the impaired property to its estimated fair value or, with respect to the properties classified as held for sale, to estimated fair value less costs to sell. To estimate the fair values of the properties, we utilized a market approach which considered binding agreements for sales (Level 1 inputs), non-binding offers to purchase from unrelated third parties and/or broker quotes of estimated values (Level 3 inputs), and/or independent third-party valuations (Level 1 and 3 inputs).

Second Quarter 2022 Dispositions

Holiday Retirement

In April 2022, we sold an independent living facility located in Washington for approximately $3.2 million in cash consideration, and incurred $0.3 million of transaction costs, resulting in a minimal loss. The property was classified as assets held for sale on the Condensed Consolidated Balance Sheet as of March 31, 2022. Prior impairment charges recognized on this property totaled $0.9 million.

Chancellor Senior Living

In April 2022, we sold two assisted living facilities located in Texas for approximately $7.8 million in cash consideration, and incurred $0.5 million of transaction costs, resulting in a minimal gain. The properties were classified as assets held for sale on the Condensed Consolidated Balance Sheet as of March 31, 2022. Prior impairment charges recognized on these properties totaled $7.6 million.

Tenant Concentration

The following table contains information regarding tenant concentration in our portfolio, excluding $2.6 million for our corporate office and a credit loss reserve balance of $5.1 million, based on the percentage of revenues for the three months ended March 31, 2022 and 2021, related to tenants or affiliates of tenants, that exceed 10% of total revenue ($ in thousands):

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	as of March 31, 2022					Revenues1
	Asset	Real		Notes		Three Months Ended March 31,
	Class	Estate2		Receivable		2022			2021

Senior Living Communities	EFC	$	573,631	$	47,041	$	12,751	18%	$	12,723	16%
Holiday Retirement (“Holiday”)3	ILF	377,735		—		9,797		14%	10,185		13%
National HealthCare Corporation (“NHC”)	SNF	171,530		—		9,189		13%	9,452		12%
Bickford Senior Living	ALF	476,372		42,912		7,038		10%	10,207		13%
All others, net	Various	1,386,865		231,571		29,514		41%	36,157		44%
Escrow funds received from tenants
for property operating expenses	Various	—		—		3,038		4%	2,161		2%
		$	2,986,133	$	321,524	$	71,327		$	80,885

1 Includes interest income on notes receivable and rental income from properties classified as held for sale.

2 Amounts include any properties classified as held for sale.

3 Revenues include an $8.8 million lease deposit recognized as rental income in the three months ended March 31, 2022.

At March 31, 2022, the two states in which we had an investment concentration of 10% or more were South Carolina (12.1%) and Texas (10.7%).

Senior Living Communities

As of March 31, 2022, we leased ten retirement communities to Senior Living Communities, LLC (“Senior Living”). We recognized straight-line rent revenue of $0.1 million and $0.5 million from Senior Living for the three months ended March 31, 2022 and 2021, respectively.

Holiday

As of March 31, 2022, we leased 15 independent living facilities and one assisted living facility, excluding one property classified as assets held for sale, to a Welltower-controlled subsidiary. We received no rent due under the master lease for these facilities since the Welltower-controlled subsidiary became the tenant on July 30, 2021. Accordingly, we placed the tenant on cash basis in the third quarter of 2021 and filed suit against Welltower, Inc. and certain subsidiaries for default under the master lease. During the first quarter of 2022, we recognized the remaining $8.8 million lease deposit that was applied to outstanding, past-due rent and approximately $1.0 million of deferred income as rental income. Reference Note 7 for more discussion of the litigation and its subsequent settlement.

Holiday Transition

On April 1, 2022, we disposed of one property classified in assets held for sale as discussed above and transitioned to an existing operator one assisted living community in Florida that was added to the in-place master lease. In addition, we transitioned the remaining 15 independent living facilities into two separate joint ventures that own the underlying independent living operations and in which NHI has majority interests. These joint ventures are structured to comply with REIT requirements and to utilize the Taxable REIT Subsidiary (“TRS”) for activities that would otherwise be non-qualifying for REIT purposes. These communities are operated by two third-party property managers in exchange for the receipt of a management fee. The third-party managers, or related affiliates of the managers, own equity interests in the respective ventures.

NHC Percentage Rent

Under the terms of our two leases with NHC, rent escalates by 4% of the increase, if any, in each of the facility’s revenue over a base year and is referred to as percentage rent. The following table summarizes the percentage rent income from NHC ($ in thousands):

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	Three Months Ended March 31,
		2022		2021
Current year		$	843	$	920
Prior year final certification1		(206)		(5)
Total percentage rent income		$	637	$	915

1 For purposes of the percentage rent calculation described in the master lease agreement, NHC’s annual revenue by facility for a given year is certified to NHI by March 31st of the following year.

Two of our board members, including our chairman, are also members of NHC’s board of directors.

Bickford Senior Living

As of March 31, 2022, we leased 37 facilities, excluding four facilities classified as assets held for sale, under four leases to Bickford Senior Living (“Bickford”). Bickford’s revenues reflect the impact of rent concessions of approximately $5.5 million and $3.8 million for the three months ended March 31, 2022 and 2021, respectively.

In March 2022, we transferred one assisted living facility located in Pennsylvania from the Bickford portfolio to a new operator that is leased pursuant to a four-year triple net lease and wrote off approximately $0.7 million in a straight-line rent receivable, reducing rental income. We recognized straight-line rent revenue of $0.5 million, excluding the write off associated with the transferred property, and $0.6 million from Bickford for the three months ended March 31, 2022 and 2021, respectively.

Lease Restructure

Effective April 1, 2022, Bickford’s four master lease agreements were restructured and amended. Rent for the portfolio, excluding properties classified as held for sale, will be approximately $28.0 million per year through April 1, 2024, at which time the rent will be reset to a fair market value, not less than 8.0% of our initial gross investment.

One of the master lease agreements covering 12 properties with an original maturity in 2023 has been extended to 2028. The remaining leases with maturity dates in 2031 and 2033 have been extended for two years to 2033 and 2035, respectively.

Tenant Purchase Options

Certain of our leases contain purchase options allowing tenants to acquire the leased properties. At March 31, 2022, we had tenant purchase options on 10 properties with an aggregate net investment of $89.5 million that will become exercisable between 2025 and 2028. Rental income from these properties with tenant purchase options was $2.6 million and $2.7 million for three months ended March 31, 2022 and 2021, respectively.

In June 2021, we received notification of a tenant’s intention to acquire, pursuant to a purchase option, a hospital located in California that has been included in assets held for sale. The purchase option calls for a minimum purchase price of $15.0 million with any appreciation above $15.0 million to be split evenly between the parties. The net investment at March 31, 2022 was $10.5 million. Rental income was $0.5 million for both the three months ended March 31, 2022 and 2021. The transaction will close no earlier than one year after the receipt of the notice of exercise.

We cannot reasonably estimate at this time the probability that any other purchase options will be exercised in the future. Consideration to be received from the exercise of any tenant purchase option is expected to exceed our net investment in the leased property or properties.

Future Minimum Base Rent

Future minimum lease payments to be received by us under our operating leases at March 31, 2022, are as follows ($ in thousands):

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Remainder of 2022	$	202,424
2023	264,680
2024	262,476
2025	264,729
2026	268,834
2027	232,226
Thereafter	988,105
	$	2,483,474

Variable Lease Payments

Most of our existing leases contain annual escalators in rent payments. For financial statement purposes, rental income is recognized on a straight-line basis over the term of the lease where the lease contains fixed escalators. Some of our leases contain escalators that are determined annually based on a variable index or other factor that is indeterminable at the inception of the lease. The table below indicates the revenue recognized as a result of fixed and variable lease escalators ($ in thousands):


	Three Months Ended
	March 31,
	2022		2021
Lease payments based on fixed escalators, net of deferrals	$	59,508	$	67,281
Lease payments based on variable escalators	1,186		1,326
Straight-line rent income	1,079		4,241
Escrow funds received from tenants for property operating expenses	3,038		2,161
Amortization of lease incentives	(252)		(260)
Rental income	$	64,559	$	74,749

Note 4. Mortgage and Other Notes Receivable

At March 31, 2022, our investments in mortgage notes receivable totaled $239.7 million secured by real estate and other assets of the borrower (e.g., UCC liens on personal property) related to 15 facilities and other notes receivable totaled $81.8 million substantially all of which are guaranteed by significant parties to the notes or by cross-collateralization of properties with the same owner. These balances exclude a credit loss reserve of $5.1 million at March 31, 2022. All our notes were on full accrual basis at March 31, 2022.

Mortgage and Other Notes Receivable

Encore Senior Living

In January 2022, we entered into an agreement to fund a $28.5 million development loan with Encore Senior Living to construct a 108-unit assisted living and memory care community in Fitchburg, Wisconsin. The four-year loan agreement has an annual interest rate of 8.5% and two one-year extensions. We have a purchase option on the property once it has stabilized. The total amount funded on the note was $4.2 million as of March 31, 2022.

Montecito Medical Real Estate

At March 31, 2022, we had an outstanding $50.0 million mezzanine loan and security agreement with Montecito Medical Real Estate for a fund that invests in medical real estate, including medical office buildings, throughout the United States. During the first quarter of 2022, we funded $3.7 million on one real estate investment. Borrowings under the loan agreement bear interest at an annual rate of 9.5% and accrue an additional 2.5% in interest to be paid upon certain future events including repayments, sales of fund investments, and refinancings. Funds drawn in accordance with this agreement are required to be repaid on a per-investment basis five years from deployment of the funds for the applicable investment and includes two one-year extensions. As of March 31, 2022, we have funded $15.8 million of our commitment that was used to acquire seven medical office buildings for

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a combined purchase price of approximately $73.6 million. In the first quarter of 2022, we received principal and interest of $0.3 million and $0.4 million, respectively.

Bickford construction and mortgage loans

As part of the June 2021 sale of six properties to Bickford, we executed a $13.0 million second mortgage as a component of the purchase price consideration. This second mortgage note receivable bears interest at a 10% annual rate and matures in April 2026. Interest income was $0.3 million for the three months ended March 31, 2022.

Given the size of the Company financing provided relative to the purchase price, its subordination to the first mortgage outstanding and the ongoing negative impact of the COVID-19 pandemic on Bickford’s operating results, we did not include this note receivable in the determination of the gain to be recognized upon sale of the portfolio. Therefore, this note receivable is not reflected in “Mortgage and other notes receivable, net” in the Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021.

As of March 31, 2022, we had two fully funded construction loans of $28.7 million and one $14.2 million construction loan with $10.3 million funded to Bickford. The construction loans are secured by first mortgage liens on substantially all real and personal property as well as a pledge of any and all leases or agreements which may grant a right of use to the property. Usual and customary covenants extend to the agreements, including the borrower’s obligation for payment of insurance and taxes. NHI has a fair market value purchase option on the properties at stabilization of the underlying operations. On certain development projects, Bickford, as borrower, is entitled to up to $2.0 million per project in incentives based on the achievement of predetermined operational milestones and, if funded, will increase NHI's future purchase price and eventual NHI lease payment.

We also have a mortgage loan of $4.0 million to Bickford due February 2025, bearing interest at 7%, that amortizes on a twenty-five-year basis.

Senior Living Communities

We provided a $20.0 million revolving line of credit to Senior Living Communities (“Senior Living”) whose borrowings under the revolver are to be used for working capital needs and to finance construction projects within its portfolio, including building additional units. Beginning January 1, 2023, availability under the revolver reduces to $15.0 million. The revolver matures in December 2029 at the time of lease maturity. At March 31, 2022, the $14.3 million outstanding under the facility bears interest at 8.32% per annum, the prevailing 10-year U.S. Treasury rate plus 6%.

The Company also has a mortgage loan of $32.7 million with Senior Living originated in July 2019 for the acquisition of a 248-unit continuing care retirement community (“CCRC”) in Columbia, South Carolina. The mortgage loan is for a term of five years with two one year extensions and carries an interest rate of 7.25%. Additionally, the loan conveys to NHI a purchase option at a stated minimum price of $38.3 million, subject to adjustment for market conditions.

Credit Loss Reserve

Our principal measures of credit quality, except for construction mortgages, are debt service coverage for amortizing loans and interest or fixed charge coverage for non-amortizing loans collectively (“Coverage”). A Coverage ratio provides a measure of the borrower’s ability to make scheduled principal and interest payments. The Coverage ratios presented in the following table have been calculated utilizing the most recent date for which data is available, December 31, 2021, using EBITDARM (earnings before interest, taxes, depreciation, amortization, rent and management fees) and the requisite debt service, interest service or fixed charges, as defined in the applicable loan agreement. We categorize Coverage into three levels: (i) more than 1.5x, (ii) between 1.0x and 1.5x, and (iii) less than 1.0x. We update the calculation of coverage on a quarterly basis. Coverage is not a meaningful credit quality indicator for construction mortgages as either these developments are not generating any operating income, or they have insufficient operating income as occupancy levels necessary to stabilize the properties have not yet been achieved. We measure credit quality for these mortgages by considering the construction and stabilization timeline and the financial condition of the borrower as well as economic and market conditions. As of March 31, 2022, we did not have any construction loans that we considered underperforming. The tables below present outstanding note balances as of March 31, 2022 at amortized cost.

We consider the guidance in ASC 310-20 when determining whether a modification, extension or renewal constitutes a current period origination. The credit quality indicator as of March 31, 2022, is presented below for the amortized cost, net by year of origination of ($ in thousands):

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	2022		2021		2020		2019		2018		Prior		Total
Mortgages
more than 1.5x	$	3,991	$	—	$	29,929	$	9,024	$	139,462	$	4,257	$	186,663
between 1.0x and 1.5x	—		—		—		32,700		—		—		32,700
less than 1.0x	—		—		3,927		6,423		—		10,000		20,350

	3,991		—		33,856		48,147		139,462		14,257		239,713
Mezzanine
more than 1.5x	—		23,237		—		—		—		9,836		33,073
between 1.0x and 1.5x	—		15,925		—		—		—		—		15,925
less than 1.0x	—		—		—		—		—		14,500		14,500
No coverage available	—		—		—		750		—		—		750
	—		39,162		—		750		—		24,336		64,248
Revolver
more than 1.5x													—
between 1.0x and 1.5x													17,563
less than 1.0x													—
													17,563
									Credit loss reserve				(5,134)
													$	316,390

Due to the economic uncertainty created by the COVID-19 pandemic and the potential impact on the collectability of our mortgages and other notes receivable, we forecasted at the beginning of the pandemic a 20% increase in the probability of a default and a 20% increase in the amount of loss from a default resulting in an effective adjustment of 44%.

The allowance for expected credit losses is presented in the following table for the three months ended March 31, 2022 ($ in thousands):


Beginning balance January 1, 2022	$	5,210
Provision for expected credit losses	(76)


Balance March 31, 2022	$	5,134

Note 5. Equity Method Investment

Our initial $0.9 million investment in the operating company, Timber Ridge OpCo, held by our TRS arose in conjunction with the acquisition of a CCRC from LCS-Westminster Partnership III, LLP in January 2020. We structured our arrangement with our JV partner, LCS Timber Ridge LLC, to be compliant with the provisions of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”). Accordingly, the TRS holds our 25% equity interest in Timber Ridge OpCo, which permits the TRS to engage in activities and share in cash flows that would otherwise be non-qualifying income under the REIT gross income test. As part of our investment, we provided Timber Ridge OpCo a revolving credit facility of up to $5.0 million of which no funds have been drawn.

We account for our investment in Timber Ridge OpCo under the equity method since we are not the primary beneficiary of Timber Ridge OpCo as our participating rights do not give us the power to direct the activities that most significantly impact Timber Ridge OpCo’s economic performance. Under the equity method, we decrease the carrying value of our investment for losses in the entity and distributions to NHI for cumulative amounts up to and including our basis plus any commitments to fund operations. Our commitments are currently limited to the additional $5.0 million under the revolving credit facility. As of March 31, 2022, we have recognized our share of Timber Ridge OpCo’s operating losses in excess of our initial investment. These cumulative losses of $5.0 million in excess of our original basis are included in “Accounts payable and accrued expenses” in our Condensed Consolidated Balance Sheet as of March 31, 2022. Excess unrecognized equity method losses for the three months ended March 31, 2022 were $0.7 million. Cumulative unrecognized losses were $1.7 million through March 31, 2022. We recognized a gain of approximately $0.3 million, representing cash distributions received, and a loss of approximately $0.8 million related to our investment in Timber Ridge OpCo for the three months ended March 31, 2022 and 2021, respectively.

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The Timber Ridge property is subject to early resident mortgages secured by a Deed of Trust and Indenture of Trust (the “Deed and Indenture”). As part of our acquisition, Timber Ridge PropCo acquired the Timber Ridge property and a subordination agreement was entered into pursuant to which the Trustee acknowledged and confirmed that the security interests created under the Deed and Indenture were subordinate to any security interests granted in connection with the loan made by NHI to Timber Ridge PropCo. In addition, by terms of the resident loan assumption agreement, during the term of the lease (seven years with two renewal options), Timber Ridge OpCo is to indemnify Timber Ridge PropCo for any repayment by Timber Ridge PropCo of these liabilities under the guarantee. As a result of the subordination and resident loan assumption agreements, a liability was not recorded for the resident loan obligation upon acquisition and as of March 31, 2022. The balance secured by the Deed and Indenture was $15.2 million at March 31, 2022.

Note 6. Debt

Debt consists of the following ($ in thousands):


	March 31, 2022		December 31, 2021
Revolving credit facility - unsecured	$	85,000	$	—
Bank term loans - unsecured	300,000		375,000
Senior notes - unsecured, net of discount of $2,841 and $2,921	397,159		397,079
Private placement term loans - unsecured	400,000		400,000
Fannie Mae term loans - secured, non-recourse	76,940		77,038

Unamortized loan costs	(10,055)		(6,234)
	$	1,249,044	$	1,242,883

Aggregate principal maturities of debt as of March 31, 2022 are as follows ($ in thousands):


Remainder of 2022	$	291
2023	475,408
2024	75,425
2025	125,816
2026	85,000
2027	100,000
Thereafter	400,000
	1,261,940
Less: discount	(2,841)
Less: unamortized loan costs	(10,055)
	$	1,249,044

Unsecured revolving credit facility and bank term loans

On March 31, 2022, we entered into a new unsecured revolving credit agreement (the “2022 Credit Agreement”) providing us with a $700.0 million unsecured revolving credit facility, replacing our previous $550.0 million unsecured revolver. The 2022 Credit Agreement matures in March 2026, but may be extended at our option, subject to the satisfaction of certain conditions, for two additional six-month periods. Borrowings under the 2022 Credit Agreement bear interest, at our election, at either (i) Term Secured Overnight Financing Rate (“SOFR”) (plus a credit spread adjustment) plus a margin ranging from 0.725% to 1.40%, (ii) Daily SOFR (plus a credit spread adjustment) plus a margin ranging from 0.725% to 1.40% or (iii) the base rate plus a margin ranging from —% to 0.40%. In each election, the actual margin is determined according to our credit ratings. The base rate means, for any day, a fluctuating rate per annum equal to the highest of (i) the Agent’s prime rate, (ii) the federal funds rate on such day plus 0.50% or (iii) the adjusted Term SOFR for a one-month tenor in effect on such day plus 1.0%.

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In addition, the 2022 Credit Agreement requires a facility fee equal to 0.125% to 0.30%, based on our rating. We incurred $4.5 million of deferred costs in connection with the 2022 Credit Agreement which are included as a component of “Debt” on the Condensed Consolidated Balance Sheet as of March 31, 2022.

Concurrently with the execution of the 2022 Credit Agreement, we amended our $300.0 million term loan (“2018 Term Loan”) maturing in September 2023. The amendment modifies the existing covenants to align with provisions in the 2022 Credit Agreement and to accrue interest on borrowing based on SOFR (plus a credit spread adjustment) that were previously based on LIBOR, with no change to the existing applicable interest rate margins. We may also elect for the 2018 Term Loan to accrue interest at a base rate plus the applicable margin.

In March 2022, we repaid a $75.0 million term loan maturing August 2022 with proceeds from the revolving credit facility. The term loan bore interest at a rate of 30-day LIBOR (with a 50 basis point floor) plus 185 basis points (“bps”), based on our current leverage ratios. Upon repayment, we expensed approximately $0.2 million of unamortized loan costs associated with this loan which is included in “Loss on early retirement of debt” in our Condensed Consolidated Statement of Income for the three months ended March 31, 2022.

The revolving facility fee was 25 bps per annum during the first quarter of 2022 and based on our current credit ratings, the facility provided for floating interest on the revolver and the term loans at SOFR CME Term Option 1 Month Loan plus 105 bps. At March 31, 2022, the SOFR CME Term Option one month was 41 bps.

At March 31, 2022, we had $615.0 million available to draw on the revolving portion of our credit facility, subject to usual and customary covenants. Among other stipulations, the unsecured credit facility agreement requires that we maintain certain financial ratios within limits set by our creditors. At March 31, 2022, we were in compliance with these ratios.

Pinnacle Bank is a participating member of our banking group. A member of NHI’s Board of Directors and chairman of our audit committee is also the chairman of Pinnacle Financial Partners, Inc., the holding company for Pinnacle Bank. NHI’s local banking transactions are conducted primarily through Pinnacle Bank.

Senior Notes 2031

In January 2021, we issued $400.0 million aggregate principal amount of 3.00% senior notes that mature on February 1, 2031 and pay interest semi-annually (the “2031 Senior Notes”). We used a portion of the net proceeds from the 2031 Senior Notes offering to repay a $100.0 million term loan and recognized a loss on early retirement of debt of $0.5 million for the three months ended March 31, 2021, representing the unamortized loan costs expensed upon early repayment of the term loan.

The 2031 Senior Notes are subject to affirmative and negative covenants, including financial covenants. As of March 31, 2022, we were in compliance with all affirmative and negative covenants, including financial covenants for our 2031 Senior Notes borrowings.

Private placement term loans

Our unsecured private placement term loans, payable interest-only, are summarized below ($ in thousands):


Amount		Inception	Maturity	Fixed Rate
$	125,000	January 2015	January 2023	3.99%
50,000		November 2015	November 2023	3.99%
75,000		September 2016	September 2024	3.93%
50,000		November 2015	November 2025	4.33%
100,000		January 2015	January 2027	4.51%
$	400,000

Covenants pertaining to the private placement term loans are generally conformed with those governing our credit facility, except for specific debt-coverage ratios and net worth minimums that are more restrictive. Our unsecured private placement term loan agreements include a rate increase provision that is effective if any rating agency lowers our credit rating on our senior unsecured debt below investment grade and our compliance leverage increases to 50% or more.

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Fannie Mae term loans

As of March 31, 2022, we had $60.1 million Fannie Mae term-debt financing, originating March 2015, consisting of interest-only payments at an annual rate of 3.79% and a 10-year maturity. The mortgages are non-recourse and secured by eleven properties leased to Bickford. In a December 2017 acquisition, we assumed additional Fannie Mae debt that amortizes through 2025 when a balloon payment will be due, is subject to prepayment penalties until 2024, bears interest at a nominal rate of 4.6%, and has a remaining balance of $16.8 million at March 31, 2022. Collectively, these notes are secured by facilities having a net book value of $106.9 million at March 31, 2022.

Interest Expense and Rate Swap Agreements

The following table summarizes interest expense ($ in thousands):


	Three Months Ended
	March 31,
	2022		2021
Interest expense on debt at contractual rates	$	9,558	$	10,452
Losses reclassified from accumulated other
comprehensive income into interest expense	—		1,778
Capitalized interest	(2)		(16)
Amortization of debt issuance costs, debt discount and other	642		759
Total interest expense	$	10,198	$	12,973

On December 31, 2021, our $400.0 million interest rate swap agreements matured that were in place to hedge against fluctuations in variable interest rates applicable to our bank loans.

Note 7. Commitments, Contingencies and Uncertainties

In the normal course of business, we enter into a variety of commitments, typically consisting of funding of revolving credit arrangements, construction and mezzanine loans to our operators to conduct expansions and acquisitions for their own account, and commitments for the funding of construction for expansion or renovation to our existing properties under lease. In our leasing operations, we offer to our tenants and to sellers of newly acquired properties a variety of inducements which originate contractually as contingencies but which may become commitments upon the satisfaction of the contingent event. Contingent payments earned will be included in the respective lease bases when funded.

As of March 31, 2022, we had working capital, construction and mezzanine loan commitments to seven operators for $274.5 million, of which we had funded $187.9 million toward these commitments.

As of March 31, 2022, we had $31.3 million of development commitments for construction and renovation for nine properties of which we had funded $23.9 million toward these commitments. In addition to these commitments, Discovery PropCo has committed to funding up to $2.0 million for the purchase of condominium units located at one of the facilities of which $1.0 million had been funded.

As of March 31, 2022, we had $33.9 million of contingent lease inducement commitments in seven lease agreements which are generally based on the performance of facility operations and may or may not be met by the tenant. At March 31, 2022, we had funded $1.5 million toward these commitments of which $1.0 million was funded during the three months ended March 31, 2022.

As provided above, loans funded do not include the effects of discounts or commitment fees.

The credit loss liability for unfunded loan commitments is estimated using the same methodology as for our funded mortgage and other notes receivable based on the estimated amount that we expect to fund. We applied the same COVID-19 pandemic adjustments as discussed in Note 4.

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The liability for expected credit losses on our unfunded loans is presented in the following table for the three months ended March 31, 2022 ($ in thousands):


Beginning balance January 1, 2022	$	955
Provision for expected credit losses	—
Balance at March 31, 2022	$	955

COVID-19 Pandemic Contingencies

Since the World Health Organization declared coronavirus disease 2019 a pandemic on March 11, 2020, the continually evolving pandemic has resulted in a widespread health crisis adversely affecting governments, businesses, and financial markets. The COVID-19 pandemic and related health and safety measures continue to impact the operations of many of the Company’s tenants, operators and borrowers. The federal government has provided economic assistance and other forms of assistance which mitigated to some extent the negative financial impact of the pandemic for certain of our tenants and operators who are eligible.

When applicable, we have accounted for rent concessions as variable lease payments, recorded as rental income when received, in accordance with the FASB's Lease Modification Q&A. Reference Note 2 for further discussion. We will evaluate any rent deferral requests as a result of the COVID-19 pandemic on a tenant-by-tenant basis. The extent of future concessions we make as a result of the COVID-19 pandemic, which could have a material impact on our future operating results, cannot be reasonably or reliably projected by us at this time.

As of March 31, 2022, aggregate pandemic-related rent concessions granted to tenants that have been accounted for as variable lease payments totaled approximately $41.4 million, net of cumulative repayments of $0.2 million and excluding any interest accrued. Of this total, net rent deferrals that are contractually agreed to be repaid are $35.9 million. During the first quarter of 2022, we granted rent deferrals of $6.3 million to six tenants, of which Bickford accounts for $4.0 million. Bickford was also granted a rent abatement of approximately $1.5 million. Repayments of rent deferrals during the first quarter of 2022 totaled $0.1 million.

We have agreed to defer approximately $1.8 million in contractual rent due for the second quarter of 2022. We anticipate that some tenants may need additional rent deferrals to assist them with the ongoing impact of the pandemic. The timing and amount of any additional deferrals cannot yet be determined.

Rent deferrals granted in the first quarter of 2021 totaled approximately $4.2 million, of which Bickford accounted for approximately $