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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, 2024
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 001-34950
SABRA HEALTH CARE REIT, INC.
(Exact Name of Registrant as Specified in Its Charter) 
Maryland 27-2560479
(State of Incorporation) (I.R.S. Employer Identification No.)
1781 Flight Way
Tustin, CA 92782
(888) 393-8248
(Address, zip code and telephone number of Registrant)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, $.01 par valueSBRAThe Nasdaq Stock Market LLC
 
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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller 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  
As of May 1, 2024, there were 231,495,570 shares of the registrant’s $0.01 par value Common Stock outstanding.


SABRA HEALTH CARE REIT, INC. AND SUBSIDIARIES
Index
 
1

References throughout this document to “Sabra,” “we,” “our,” “ours” and “us” refer to Sabra Health Care REIT, Inc. and its direct and indirect consolidated subsidiaries and not any other person.
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Quarterly Report on Form 10-Q (this “10-Q”) contain “forward-looking” information as that term is defined by the Private Securities Litigation Reform Act of 1995. Any statements that do not relate to historical or current facts or matters are forward-looking statements. Examples of forward-looking statements include all statements regarding our expected future financial position, results of operations, cash flows, liquidity, financing plans, business strategy, tenants, borrowers and Senior Housing - Managed communities (as defined below), the expected amounts and timing of dividends and other distributions, projected expenses and capital expenditures, competitive position, growth opportunities, potential investments, potential dispositions, plans and objectives for future operations, and compliance with and changes in governmental regulations. You can identify some of the forward-looking statements by the use of forward-looking words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “should,” “may” and other similar expressions, although not all forward-looking statements contain these identifying words.
Our actual results may differ materially from those projected or contemplated by our forward-looking statements as a result of various factors, including, among others, the following:
increased labor costs and historically low unemployment;
increases in market interest rates and inflation;
pandemics or epidemics, including COVID-19, and the related impact on our tenants, borrowers and Senior Housing - Managed communities;
operational risks with respect to our Senior Housing - Managed communities;
competitive conditions in our industry;
the loss of key management personnel;
uninsured or underinsured losses affecting our properties;
potential impairment charges and adjustments related to the accounting of our assets;
the potential variability of our reported rental and related revenues as a result of Accounting Standards Update (“ASU”) 2016-02, Leases, as amended by subsequent ASUs;
risks associated with our investment in our unconsolidated joint ventures;
catastrophic weather and other natural or man-made disasters, the effects of climate change on our properties and a failure to implement sustainable and energy-efficient measures;
increased operating costs and competition for our tenants, borrowers and Senior Housing - Managed communities;
increased healthcare regulation and enforcement;
our tenants’ dependency on reimbursement from governmental and other third-party payor programs;
the effect of our tenants, operators or borrowers declaring bankruptcy or becoming insolvent;
our ability to find replacement tenants and the impact of unforeseen costs in acquiring new properties;
the impact of litigation and rising insurance costs on the business of our tenants;
the impact of required regulatory approvals of transfers of healthcare properties;
environmental compliance costs and liabilities associated with real estate properties we own;
our tenants’, borrowers’ or operators’ failure to adhere to applicable privacy and data security laws;
a material breach of our or our tenants’, borrowers’ or operators’ information technology;
our concentration in the healthcare property sector, particularly in skilled nursing/transitional care facilities and senior housing communities, which makes our profitability more vulnerable to a downturn in a specific sector than if we were investing in multiple industries;
the significant amount of and our ability to service our indebtedness;
covenants in our debt agreements that may restrict our ability to pay dividends, make investments, incur additional indebtedness and refinance indebtedness on favorable terms;
adverse changes in our credit ratings;
our ability to make dividend distributions at expected levels;
our ability to raise capital through equity and debt financings;
changes and uncertainty in macroeconomic conditions and disruptions in the financial markets;
risks associated with our ownership of property outside the U.S., including currency fluctuations;
the relatively illiquid nature of real estate investments;
our ability to maintain our status as a real estate investment trust (“REIT”) under the federal tax laws;
compliance with REIT requirements and certain tax and tax regulatory matters related to our status as a REIT;
changes in tax laws and regulations affecting REITs;
2

the ownership limits and takeover defenses in our governing documents and under Maryland law, which may restrict change of control or business combination opportunities; and
the exclusive forum provisions in our bylaws.
We urge you to carefully consider these risks and review the additional disclosures we make concerning risks and other factors that may materially affect the outcome of our forward-looking statements and our future business and operating results, including those made in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023 (our “2023 Annual Report on Form 10-K”), as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission (the “SEC”), including subsequent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. We caution you that any forward-looking statements made in this 10-Q are not guarantees of future performance, events or results, and you should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. We do not intend, and we undertake no obligation, to update any forward-looking information to reflect events or circumstances after the date of this 10-Q or to reflect the occurrence of unanticipated events, unless required by law to do so.

3

PART I. FINANCIAL INFORMATION
 
ITEM 1.FINANCIAL STATEMENTS
SABRA HEALTH CARE REIT, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
 
March 31, 2024December 31, 2023
 (unaudited) 
Assets
Real estate investments, net of accumulated depreciation of $1,059,405 and $1,021,086 as of March 31, 2024 and December 31, 2023, respectively
$4,577,318 $4,617,261 
Loans receivable and other investments, net422,472 420,624 
Investment in unconsolidated joint ventures132,022 136,843 
Cash and cash equivalents59,927 41,285 
Restricted cash6,003 5,434 
Lease intangible assets, net28,301 30,897 
Accounts receivable, prepaid expenses and other assets, net148,395 133,806 
Total assets$5,374,438 $5,386,150 
Liabilities
Secured debt, net$46,810 $47,301 
Revolving credit facility146,127 94,429 
Term loans, net534,993 537,120 
Senior unsecured notes, net1,735,455 1,735,253 
Accounts payable and accrued liabilities112,764 136,981 
Lease intangible liabilities, net31,115 32,532 
Total liabilities2,607,264 2,583,616 
Commitments and contingencies (Note 13)
Equity
Preferred stock, $0.01 par value; 10,000,000 shares authorized, zero shares issued and outstanding as of March 31, 2024 and December 31, 2023
  
Common stock, $0.01 par value; 500,000,000 shares authorized, 231,494,286 and 231,266,020 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
2,315 2,313 
Additional paid-in capital4,495,663 4,494,755 
Cumulative distributions in excess of net income(1,761,999)(1,718,279)
Accumulated other comprehensive income31,195 23,745 
Total equity2,767,174 2,802,534 
Total liabilities and equity$5,374,438 $5,386,150 

See accompanying notes to consolidated financial statements.
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SABRA HEALTH CARE REIT, INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(dollars in thousands, except per share data)
(unaudited)
 
Three Months Ended March 31,
 20242023
Revenues:
Rental and related revenues (Note 6)$91,776 $95,870 
Resident fees and services66,031 56,721 
Interest and other income8,940 8,733 
Total revenues166,747 161,324 
Expenses:
Depreciation and amortization42,914 52,827 
Interest28,408 28,540 
Triple-net portfolio operating expenses4,324 4,168 
Senior housing - managed portfolio operating expenses49,669 43,637 
General and administrative11,890 10,502 
Recovery of loan losses(137)(208)
Impairment of real estate3,137 7,064 
Total expenses140,205 146,530 
Other income (expense):
Loss on extinguishment of debt (1,541)
Other income760 341 
Net loss on sales of real estate (21,515)
Total other income (expense)760 (22,715)
Income (loss) before loss from unconsolidated joint ventures and income tax expense27,302 (7,921)
Loss from unconsolidated joint ventures(595)(838)
Income tax expense(453)(728)
Net income (loss)$26,254 $(9,487)
  
Net income (loss), per:
Basic common share$0.11 $(0.04)
Diluted common share$0.11 $(0.04)
  
Weighted average number of common shares outstanding, basic231,453,564 231,164,876 
Weighted average number of common shares outstanding, diluted233,365,031 231,164,876 

See accompanying notes to consolidated financial statements.
5

SABRA HEALTH CARE REIT, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)
Three Months Ended March 31,
20242023
Net income (loss)$26,254 $(9,487)
Other comprehensive income:
Unrealized gain (loss), net of tax:
Foreign currency translation loss(1,498)(1,623)
Unrealized gain (loss) on cash flow hedges8,948 (2)
Total other comprehensive income (loss)7,450 (1,625)
Comprehensive income (loss)$33,704 $(11,112)

See accompanying notes to consolidated financial statements.

6


SABRA HEALTH CARE REIT, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(dollars in thousands, except per share data)
(unaudited)
 
Three Months Ended March 31, 2023
 Common StockAdditional
Paid-in Capital
Cumulative Distributions in Excess of Net IncomeAccumulated Other Comprehensive Income (Loss)Total Equity
 SharesAmounts
Balance, December 31, 2022231,009,295 $2,310 $4,486,967 $(1,451,945)$19,063 $3,056,395 
Net loss— — — (9,487)— (9,487)
Other comprehensive loss— — — — (1,625)(1,625)
Amortization of stock-based compensation— — 2,675 — — 2,675 
Common stock issuance, net185,853 2 (1,935)— — (1,933)
Common dividends ($0.30 per share)
— — — (69,798)— (69,798)
Balance, March 31, 2023231,195,148 $2,312 $4,487,707 $(1,531,230)$17,438 $2,976,227 
Three Months Ended March 31, 2024
 Common StockAdditional
Paid-in Capital
Cumulative Distributions in Excess of Net IncomeAccumulated Other Comprehensive IncomeTotal Equity
SharesAmounts
Balance, December 31, 2023231,266,020 $2,313 $4,494,755 $(1,718,279)$23,745 $2,802,534 
Net income— — — 26,254 — 26,254 
Other comprehensive income— — — — 7,450 7,450 
Amortization of stock-based compensation— — 3,049 — — 3,049 
Common stock issuance, net228,266 2 (2,141)— — (2,139)
Common dividends ($0.30 per share)
— — — (69,974)— (69,974)
Balance, March 31, 2024231,494,286 $2,315 $4,495,663 $(1,761,999)$31,195 $2,767,174 

See accompanying notes to consolidated financial statements.

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SABRA HEALTH CARE REIT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Three Months Ended March 31,
20242023
Cash flows from operating activities:
Net income (loss)$26,254 $(9,487)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization42,914 52,827 
Non-cash rental and related revenues591 (2,398)
Non-cash interest income7 (392)
Non-cash interest expense3,071 3,014 
Stock-based compensation expense2,521 2,229 
Loss on extinguishment of debt 1,541 
Recovery of loan losses(137)(208)
Net loss on sales of real estate 21,515 
Impairment of real estate3,137 7,064 
Loss from unconsolidated joint ventures595 838 
Distributions of earnings from unconsolidated joint ventures1,478 367 
Changes in operating assets and liabilities:
Accounts receivable, prepaid expenses and other assets, net(6,288)(2,782)
Accounts payable and accrued liabilities(21,348)(5,839)
Net cash provided by operating activities52,795 68,289 
Cash flows from investing activities:
Acquisition of real estate (39,630)
Origination and fundings of loans receivable(102)(1,800)
Origination and fundings of preferred equity investments(1,007)(6,384)
Additions to real estate(12,935)(19,540)
Repayments of loans receivable391 6,144 
Repayments of preferred equity investments617 1,433 
Investment in unconsolidated joint ventures(188)(4,797)
Net proceeds from the sales of real estate 152,259 
Net proceeds from sales-type lease 25,490 
Net cash (used in) provided by investing activities(13,224)113,175 
Cash flows from financing activities:
Net borrowings from (repayments of) revolving credit facility52,404 (118,442)
Proceeds from term loans 12,186 
Principal payments on secured debt(503)(490)
Payments of deferred financing costs(80)(18,127)
Issuance of common stock, net(2,606)(1,847)
Dividends paid on common stock(69,444)(69,351)
Net cash used in financing activities(20,229)(196,071)
Net increase (decrease) in cash, cash equivalents and restricted cash19,342 (14,607)
Effect of foreign currency translation on cash, cash equivalents and restricted cash(131)(641)
Cash, cash equivalents and restricted cash, beginning of period46,719 53,932 
Cash, cash equivalents and restricted cash, end of period$65,930 $38,684 
Supplemental disclosure of cash flow information:
Interest paid$20,495 $22,318 
Supplemental disclosure of non-cash investing activities:
Decrease in loans receivable and other investments due to acquisition of real estate$ $4,644 
See accompanying notes to consolidated financial statements.
8

SABRA HEALTH CARE REIT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 
1.     BUSINESS
Overview
Sabra Health Care REIT, Inc. (“Sabra” or the “Company”) was incorporated on May 10, 2010 as a wholly owned subsidiary of Sun Healthcare Group, Inc. (“Sun”) and commenced operations on November 15, 2010 following Sabra’s separation from Sun. Sabra elected to be treated as a real estate investment trust (“REIT”) with the filing of its United States (“U.S.”) federal income tax return for the taxable year beginning January 1, 2011. Sabra believes that it has been organized and operated, and it intends to continue to operate, in a manner to qualify as a REIT. Sabra’s primary business consists of acquiring, financing and owning real estate property to be leased to third-party tenants in the healthcare sector. Sabra primarily generates revenues by leasing properties to tenants throughout the U.S. and Canada. Sabra owns substantially all of its assets and properties and conducts its operations through Sabra Health Care Limited Partnership, a Delaware limited partnership (the “Operating Partnership”), of which Sabra is the sole general partner and a wholly owned subsidiary of Sabra is currently the only limited partner, or by subsidiaries of the Operating Partnership. The Company’s investment portfolio is primarily comprised of skilled nursing/transitional care facilities, senior housing communities (“Senior Housing - Leased”), behavioral health facilities and specialty hospitals and other facilities, in each case leased to tenants who are responsible for the operations of these facilities; senior housing communities operated by third-party property managers pursuant to property management agreements (“Senior Housing - Managed”); investments in joint ventures; investments in loans receivable; and preferred equity investments.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation
The accompanying consolidated financial statements include the accounts of Sabra and its wholly owned subsidiaries as of March 31, 2024 and December 31, 2023 and for the three month periods ended March 31, 2024 and 2023. All significant intercompany transactions and balances have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair statement of the results for such periods. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. For further information, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2023 included in the 2023 Annual Report on Form 10-K filed with the SEC.
GAAP requires the Company to identify entities for which control is achieved through voting rights or other means and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”). A VIE is broadly defined as an entity with one or more of the following characteristics: (a) the total equity investment at risk is insufficient to finance the entity’s activities without additional subordinated financial support; (b) as a group, the holders of the equity investment at risk lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. If the Company were determined to be the primary beneficiary of the VIE, the Company would consolidate investments in the VIE. The Company may change its original assessment of a VIE due to events such as modifications of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposal of all or a portion of an interest held by the primary beneficiary.
The Company identifies the primary beneficiary of a VIE as the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or
9

the right to receive benefits of the VIE that could be significant to the entity. The Company performs this analysis on an ongoing basis. As of March 31, 2024, the Company determined that it was not the primary beneficiary of any VIEs.
As it relates to investments in loans, in addition to the Company’s assessment of VIEs and whether the Company is the primary beneficiary of those VIEs, the Company evaluates the loan terms and other pertinent facts to determine whether the loan investment should be accounted for as a loan or as a real estate joint venture. If an investment has the characteristics of a real estate joint venture, including if the Company participates in the majority of the borrower’s expected residual profit, the Company would account for the investment as an investment in a real estate joint venture and not as a loan investment. Expected residual profit is defined as the amount of profit, whether called interest or another name, such as an equity kicker, above a reasonable amount of interest and fees expected to be earned by a lender. At March 31, 2024, none of the Company’s investments in loans were accounted for as real estate joint ventures.
As it relates to investments in joint ventures, the Company assesses any partners’ rights and their impact on the presumption of control of the partnership by any single partner. The Company also applies this guidance to managing member interests in limited liability companies. The Company reassesses its determination of which entity controls the joint venture if: there is a change to the terms or in the exercisability of the rights of any partners or members, the general partner or managing member increases or decreases its ownership interests, or there is an increase or decrease in the number of outstanding ownership interests. As of March 31, 2024, the Company’s determination of which entity controls its investments in joint ventures has not changed as a result of any reassessment.
Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates.
Recently Issued Accounting Standards Updates
In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance that provides transition relief for reference rate reform, including optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or a reference rate that is expected to be discontinued as a result of reference rate reform if certain criteria are met. ASU 2020-04 is effective upon issuance, and the provisions generally can be applied prospectively as of January 1, 2020 through December 31, 2024. The Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future Canadian Dollar Offered Rate (“CDOR”)-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. For all derivatives in hedge accounting relationships, the Company will utilize the effective relief in Topic 848 that allows for the continuation of hedge accounting throughout the transition process. Application of these expedients preserves the presentation of derivatives consistent with past presentation. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which refines the scope of Topic 848 and clarifies some of its guidance. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The Company does not expect the adoption of ASUs 2020-04, 2021-01 and 2022-06 to have a material impact on its consolidated financial statements.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses, as well as disclosure of the title and position of the chief operating decision maker (“CODM”) and how the CODM uses the reported measure(s) of segment profit or loss in assessing performance. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements when adopted.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to improve income tax disclosures, primarily through enhanced rate reconciliation disclosures, including specified categories, and enhanced income taxes paid disclosures, including disaggregation by federal, state and foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements when adopted.

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3.     RECENT REAL ESTATE ACQUISITIONS (CONSOLIDATED)
No acquisitions were completed during the three months ended March 31, 2024. During the three months ended March 31, 2023, the Company acquired one Senior Housing - Leased community and one Senior Housing - Managed community that was part of the Company’s proprietary development pipeline and was previously reflected as a preferred equity investment which had a book value of $4.6 million at the time of acquisition. The consideration was allocated as follows (in thousands):
Three Months Ended
March 31, 2023
Land$3,415 
Building and improvements45,333 
Tenant origination and absorption costs intangible assets2,706 
Tenant relationship intangible assets20 
Total consideration$51,474 
The tenant origination and absorption costs intangible assets and tenant relationship intangible assets had weighted average amortization periods as of the respective dates of acquisition of one year and 22 years, respectively, for the acquisitions completed during the three months ended March 31, 2023.
For the three months ended March 31, 2023, the Company recognized $1.7 million of total revenues and $0.2 million of net income from the facilities acquired during the three months ended March 31, 2023.

4.    INVESTMENT IN REAL ESTATE PROPERTIES
The Company’s real estate properties held for investment consisted of the following (dollars in thousands):
As of March 31, 2024
Property TypeNumber of
Properties
Number of
Beds/Units
Total
Real Estate
at Cost
Accumulated
Depreciation
Total
Real Estate
Investments, Net
Skilled Nursing/Transitional Care237 26,667 $3,043,320 $(555,220)$2,488,100 
Senior Housing - Leased38 3,191 475,831 (94,895)380,936 
Senior Housing - Managed66 6,341 1,392,189 (284,444)1,107,745 
Behavioral Health18 1,159 496,934 (75,334)421,600 
Specialty Hospitals and Other15 392 225,498 (48,808)176,690 
374 37,750 5,633,772 (1,058,701)4,575,071 
Corporate Level2,951 (704)2,247 
$5,636,723 $(1,059,405)$4,577,318 
As of December 31, 2023
Property TypeNumber of
Properties
Number of
Beds/Units
Total
Real Estate
at Cost
Accumulated
Depreciation
Total
Real Estate
Investments, Net
Skilled Nursing/Transitional Care241 26,769 $3,050,861 $(535,653)$2,515,208 
Senior Housing - Leased43 3,473 573,274 (109,601)463,673 
Senior Housing - Managed61 6,041 1,289,485 (255,803)1,033,682 
Behavioral Health18 1,159 496,737 (71,943)424,794 
Specialty Hospitals and Other15 392 225,443 (47,454)177,989 
378 37,834 5,635,800 (1,020,454)4,615,346 
Corporate Level2,547 (632)1,915 
$5,638,347 $(1,021,086)$4,617,261 
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March 31, 2024December 31, 2023
Building and improvements$4,843,475 $4,843,258 
Furniture and equipment239,086 238,185 
Land improvements10,253 10,306 
Land543,909 546,598 
Total real estate at cost5,636,723 5,638,347 
Accumulated depreciation(1,059,405)(1,021,086)
Total real estate investments, net$4,577,318 $4,617,261 
Capital and Other Expenditures
As of March 31, 2024, the Company’s aggregate commitment for future capital and other expenditures associated with facilities leased under triple-net operating leases was approximately $21 million. These commitments are principally for improvements to its facilities.
Senior Housing - Managed Communities
The Company’s Senior Housing - Managed communities offer residents certain ancillary services that are not contemplated in the lease with each resident (i.e., housekeeping, laundry, guest meals, etc.). These services are provided and paid for in addition to the standard services included in each resident lease (i.e., room and board, standard meals, etc.). The Company bills residents for ancillary services one month in arrears and recognizes revenue as the services are provided, as the Company has no continuing performance obligation related to those services. Resident fees and services include ancillary service revenue of $0.7 million and $0.5 million for the three months ended March 31, 2024 and 2023, respectively.
The Company received $1.3 million of insurance proceeds related to a fire that occurred at one of the Company’s Senior Housing - Managed communities, and recorded $0.9 million of business interruption insurance income during the three months ended March 31, 2024 which is included in other income on the accompanying consolidated statements of income (loss). The remaining proceeds were recorded as expense reimbursements in Senior Housing - Managed portfolio operating expenses on the accompanying consolidated statements of income (loss).
Investment in Unconsolidated Joint Ventures
The following is a summary of the Company’s investment in unconsolidated joint ventures (dollars in thousands):
Property Type
Number of
Properties as of
March 31, 2024
Ownership as of
March 31, 2024 (1)
Book Value
March 31, 2024December 31, 2023
Sienna Joint VentureSenior Housing - Managed12 50 %$115,921 $119,724 
Marlin Spring Joint VentureSenior Housing - Managed4 85 %16,101 17,119 
$132,022 $136,843 
(1)    These investments are not consolidated because the Company does not control, through voting rights or other means, the joint ventures.

5.    ASSETS HELD FOR SALE, IMPAIRMENT OF REAL ESTATE AND DISPOSITIONS
Assets Held for Sale
As of March 31, 2024, the Company determined that four skilled nursing/transitional care facilities with an aggregate net book value of $4.4 million met the criteria to be classified as assets held for sale, and this balance is included in accounts receivable, prepaid expenses and other assets, net on the consolidated balance sheets. Subsequent to March 31, 2024, the Company completed the sale of three of these facilities for an aggregate gross sales price of $6.2 million.
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Impairment of Real Estate
During the three months ended March 31, 2024 and 2023, the Company recognized real estate impairment of $3.1 million related to three skilled nursing/transitional care facilities that are held for sale and $7.1 million related to one skilled nursing/transitional care facility that has sold, respectively.
To estimate the fair value of the impaired facilities, the Company utilized a market approach which considered binding sale agreements, non-binding offers from unrelated third parties or model-derived valuations with significant unobservable inputs (Level 3 measurements), as applicable.
The Company continues to evaluate additional assets for sale as part of its initiative to recycle capital and further improve its portfolio quality. This could lead to a shorter hold period and could result in the determination that the full amount of the Company’s investment is not recoverable, resulting in an impairment charge or loss on sale which could be material.
Dispositions
No dispositions were completed during the three months ended March 31, 2024. The following table summarizes the Company’s dispositions for the period presented (dollars in millions):
Three Months Ended
March 31, 2023
Number of facilities8 
Consideration, net of closing costs$160.3 
Net carrying value181.8 
Net loss on sale$(21.5)
The Company recognized net loss of $22.1 million during the three months ended March 31, 2023, which includes net loss on sale from these facilities.
The sale of the disposition facilities does not represent a strategic shift that has or will have a major effect on the Company’s operations and financial results, and therefore the results of operations attributable to these facilities have remained in continuing operations.

6.    OPERATING LEASES
Lessor Accounting
As of March 31, 2024, the substantial majority of the Company’s real estate properties (excluding 66 Senior Housing - Managed communities) were leased under triple-net operating leases with expirations ranging from less than one year to 20 years. As of March 31, 2024, the leases had a weighted average remaining term of seven years. The leases generally include provisions to extend the lease terms and other negotiated terms and conditions. The Company, through its subsidiaries, retains substantially all of the risks and benefits of ownership of the real estate assets leased to the tenants. The Company may receive additional security under these operating leases in the form of letters of credit and security deposits from the lessee or guarantees from the parent of the lessee. Security deposits received in cash related to tenant leases are included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets and totaled $8.0 million and $16.4 million as of March 31, 2024 and December 31, 2023, respectively, and letters of credit deposited with the Company totaled approximately $64 million and $56 million as of March 31, 2024 and December 31, 2023, respectively. In addition, the Company’s tenants have deposited with the Company $12.0 million and $12.4 million as of March 31, 2024 and December 31, 2023, respectively, for future real estate taxes, insurance expenditures and tenant improvements related to the Company’s properties and their operations, and these amounts are included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets.
Lessor costs that are paid by the lessor and reimbursed by the lessee are included in the measurement of variable lease revenue and the associated expense. As a result, the Company recognized variable lease revenue and the associated expense of $3.3 million and $3.8 million during the three months ended March 31, 2024 and 2023, respectively.
The Company monitors the creditworthiness of its tenants by evaluating the ability of the tenants to meet their lease obligations to the Company based on the tenants’ financial performance, including, as applicable and appropriate, the evaluation of any parent guarantees (or the guarantees of other related parties) of such lease obligations. The primary basis for
13

the Company’s evaluation of the credit quality of its tenants (and more specifically the tenant’s ability to pay their rent obligations to the Company) is the tenant’s lease coverage ratio as supplemented by the parent’s fixed charge coverage ratio for those entities with a parent guarantee. These coverage ratios include earnings before interest, taxes, depreciation, amortization and rent (“EBITDAR”) to rent and earnings before interest, taxes, depreciation, amortization, rent and management fees (“EBITDARM”) to rent at the lease level and consolidated EBITDAR to total fixed charges at the parent guarantor level when such a guarantee exists. The Company obtains various financial and operational information from the majority of its tenants each month and reviews this information in conjunction with the above-described coverage metrics to identify financial and operational trends, evaluate the impact of the industry’s operational and financial environment (including the impact of government reimbursement), and evaluate the management of the tenant’s operations. These metrics help the Company identify potential areas of concern relative to its tenants’ credit quality and ultimately the tenant’s ability to generate sufficient liquidity to meet its obligations, including its obligation to continue to pay the rent due to the Company.
For the three months ended March 31, 2024, no tenant relationship represented 10% or more of the Company’s total revenues.
As of March 31, 2024, the future minimum rental payments from the Company’s properties held for investment under non-cancelable operating leases were as follows and may materially differ from actual future rental payments received (in thousands):
April 1 through December 31, 2024$278,698 
2025367,860 
2026351,473 
2027329,118 
2028305,441 
Thereafter1,300,476 
$2,933,066 
Lessee Accounting
For operating leases greater than 12 months for which the Company is the lessee, such as corporate office leases and ground leases, the Company recognizes a right-of-use (“ROU”) asset and related lease liability on its consolidated balance sheets at inception of the lease. ROU assets represent the Company’s right to use underlying assets for the lease term, and lease liabilities are determined based on the estimated present value of the Company’s minimum lease payments under the agreements. The discount rate used to determine the lease liabilities is based on the estimated incremental borrowing rate on a lease-by-lease basis. Certain of the Company’s lease agreements have options to extend or terminate the contract terms upon meeting certain criteria. The lease term utilized in the calculation of the lease liability includes these options if exercise is considered reasonably certain. As of March 31, 2024 and December 31, 2023, the Company had $11.4 million and $11.6 million of ROU assets included in accounts receivable, prepaid expenses and other assets, net, and $12.4 million and $12.5 million of lease liabilities included in accounts payable and accrued liabilities, respectively, on its consolidated balance sheets.
During the three months ended March 31, 2024 and 2023, the Company incurred lease expense of $0.4 million and $0.3 million, respectively. As of March 31, 2024, the weighted average remaining lease term and discount rate were 17 years and 8%, respectively, and the future minimum lease payments under the operating leases included in the Company’s lease liability were as follows (in thousands):
April 1 through December 31, 2024$996 
20251,802 
20261,324 
20271,347 
20281,330 
Thereafter18,104 
Undiscounted minimum lease payments included in the lease liability24,903 
Less: imputed interest(12,480)
Present value of lease liability$12,423 

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7.    LOANS RECEIVABLE AND OTHER INVESTMENTS
As of March 31, 2024 and December 31, 2023, the Company’s loans receivable and other investments consisted of the following (dollars in thousands):
As of March 31, 2024
Investment
Quantity
as of
March 31, 2024
Property Type
Principal Balance
as of
March 31, 2024 (1)
Book Value
as of
March 31, 2024
Book Value
as of December 31, 2023
Weighted Average Contractual Interest Rate / Rate of ReturnWeighted Average Annualized Effective Interest Rate / Rate of Return
Maturity Date
as of
March 31, 2024
Loans Receivable:
Mortgage2 Behavioral Health$319,000 $319,000 $319,000 7.6 %7.6 %11/01/26 - 01/31/27
Other12 Multiple53,620 50,181 50,440 7.8 %7.4 %10/01/23 - 05/01/29
14 372,620 369,181 369,440 7.7 %7.6 %
Allowance for loan losses— (6,528)(6,665)
$372,620 $362,653 $362,775 
Other Investments:
Preferred Equity5 Skilled Nursing / Senior Housing59,632 59,819 57,849 11.0 %11.0 %N/A
Total 19 $432,252 $422,472 $420,624 8.1 %8.1 %
(1)    Principal balance includes amounts funded and accrued but unpaid interest / preferred return and excludes capitalizable fees.
As of March 31, 2024, the Company has committed to provide up to $1.8 million of future funding related to one preferred equity investment and one loan receivable investment.
Additional information regarding the Company’s loans receivable is as follows (dollars in thousands):
Three Months Ended March 31,
20242023
Allowance for loan losses:
Balance at beginning of the period$6,665 $6,611 
Recovery of loan losses(137)(208)
Balance at end of the period$6,528 $6,403 
March 31, 2024December 31, 2023
Deteriorated credit quality:
Number of loans receivable investments1 1 
Principal balance$1,214 $1,214 
Book value  
Nonaccrual status:
Number of loans receivable investments3 3 
Book value$ $ 
As of March 31, 2024 and December 31, 2023, the Company did not consider any preferred equity investments to be impaired, and no preferred equity investments were on nonaccrual status.

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8.    DEBT
Secured Indebtedness
The Company’s secured debt consists of the following (dollars in thousands):
Principal Balance as ofAs of March 31, 2024
Interest Rate Type
March 31, 2024 (1)
December 31, 2023 (1)
Weighted Average
Interest Rate
Weighted Average
Effective Interest Rate
(2)
Maturity
Date
Fixed Rate$47,640 $48,143 2.85 %3.35 %May 2031 - 
August 2051
(1)     Principal balance does not include deferred financing costs, net of $0.8 million as of each of March 31, 2024 and December 31, 2023.
(2)     Weighted average effective interest rate includes private mortgage insurance.
Senior Unsecured Notes
The Company’s senior unsecured notes consist of the following (dollars in thousands):
Principal Balance as of
TitleMaturity Date
March 31, 2024 (1)
December 31, 2023 (1)
5.125% senior unsecured notes due 2026 (“2026 Notes”)
August 15, 2026$500,000 $500,000 
5.88% senior unsecured notes due 2027 (“2027 Notes”)
May 17, 2027100,000 100,000 
3.90% senior unsecured notes due 2029 (“2029 Notes”)
October 15, 2029350,000 350,000 
3.20% senior unsecured notes due 2031 (“2031 Notes”)
December 1, 2031800,000 800,000 
$1,750,000 $1,750,000 
(1)    Principal balance does not include discount, net of $4.4 million and deferred financing costs, net of $10.1 million as of March 31, 2024 and does not include discount, net of $4.3 million and deferred financing costs, net of $10.5 million as of December 31, 2023. In addition, the weighted average effective interest rate as of March 31, 2024 was 4.01%.
The 2026 Notes and the 2027 Notes were assumed as a result of the Company’s merger with Care Capital Properties, Inc. in 2017 and accrue interest at a rate of 5.125% and 5.88%, respectively, per annum. Interest is payable semiannually on February 15 and August 15 of each year for the 2026 Notes and on May 17 and November 17 of each year for the 2027 Notes.
The 2029 Notes were issued by the Operating Partnership and, until redemption of the Company’s previously outstanding 5.375% senior notes due 2023 in October 2019, Sabra Capital Corporation, wholly owned subsidiaries of the Company, and accrue interest at a rate of 3.90% per annum. Interest is payable semiannually on April 15 and October 15 of each year.
The 2031 Notes were issued by the Operating Partnership, a wholly owned subsidiary of the Company, and accrue interest at a rate of 3.20% per annum. Interest is payable semiannually on June 1 and December 1 of each year, commencing on June 1, 2022.
The obligations under the 2027 Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by Sabra and one of its non-operating subsidiaries, subject to release under certain customary circumstances. The obligations under the 2026 Notes, 2029 Notes and 2031 Notes are fully and unconditionally guaranteed, on an unsecured basis, by Sabra; provided, however, that such guarantee is subject to release under certain customary circumstances.
The indentures and agreements (the “Senior Notes Indentures”) governing the 2026 Notes, 2027 Notes, 2029 Notes and 2031 Notes (collectively, the “Senior Notes”) include customary events of default and require the Company to comply with specified restrictive covenants. As of March 31, 2024, the Company was in compliance with all applicable financial covenants under the Senior Notes Indentures.
Credit Agreement
On January 4, 2023, the Operating Partnership and Sabra Canadian Holdings, LLC (together, the “Borrowers”), and the other parties thereto entered into a sixth amended and restated unsecured credit agreement (the “Credit Agreement”). During the three months ended March 31, 2023, the Company recorded $18.1 million of deferred financing costs related to the Credit Agreement and recognized $1.5 million of loss on extinguishment of debt related to write-offs of deferred financing costs in connection with amending and restating the unsecured credit agreement.
The Credit Agreement includes a $1.0 billion revolving credit facility (the “Revolving Credit Facility”), a $430.0 million U.S. dollar term loan and a CAD $150.0 million Canadian dollar term loan (collectively, the “Term Loans”). Further, up to
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$350.0 million of the Revolving Credit Facility may be used for borrowings in certain foreign currencies. The Credit Agreement also contains an accordion feature that can increase the total available borrowings to $2.75 billion, subject to terms and conditions.
The Revolving Credit Facility has a maturity date of January 4, 2027, and includes two six-month extension options. The Term Loans have a maturity date of January 4, 2028.
As of March 31, 2024, there was $146.1 million (including CAD $40.8 million) outstanding under the Revolving Credit Facility and $853.9 million available for borrowing.
Borrowings under the Revolving Credit Facility bear interest on the outstanding principal amount at a rate equal to a ratings-based applicable interest margin plus, CDOR for Canadian dollar borrowings, or at the Operating Partnership’s option for U.S. dollar borrowings, either (a) Daily Simple SOFR, as defined in the Credit Agreement, or (b) a base rate determined as the greater of (i) the federal funds rate plus 0.5%, (ii) the prime rate, (iii) Term SOFR, as defined in the Credit Agreement, plus 1.0% (the “Base Rate”), and (iv) 1.00%. The ratings-based applicable interest margin for borrowings will vary based on the Debt Ratings, as defined in the Credit Agreement, and will range from 0.775% to 1.450% per annum for Daily Simple SOFR-based borrowings and 0.00% to 0.450% per annum for borrowings at the Base Rate. As of March 31, 2024, the weighted average interest rate on the Revolving Credit Facility was 6.51%. In addition, the Operating Partnership pays a facility fee ranging between 0.125% and 0.300% per annum based on the aggregate amount of commitments under the Revolving Credit Facility regardless of amounts outstanding thereunder.
The U.S. dollar Term Loan bears interest on the outstanding principal amount at a ratings-based applicable interest margin plus, at the Operating Partnership’s option, either (a) Term SOFR or (b) the Base Rate. The ratings-based applicable interest margin for borrowings will vary based on the Debt Ratings and will range from 0.850% to 1.650% per annum for Term SOFR-based borrowings and 0.00% to 0.650% per annum for borrowings at the Base Rate. As of March 31, 2024, the interest rate on the U.S. dollar Term Loan was 6.69%. The Canadian dollar Term Loan bears interest on the outstanding principal amount at a rate equal CDOR plus an interest margin that will range from 0.850% to 1.650% depending on the Debt Ratings. As of March 31, 2024, the interest rate on the Canadian dollar Term Loan was 6.54%.
The Company has interest rate swaps and interest rate collars that fix and set a cap and floor, respectively, for the SOFR portion of the interest rate for $430.0 million of SOFR-based borrowings under its U.S. dollar Term Loan at a weighted average rate of 2.69% and interest rate swaps that fix the CDOR portion of the interest rate for CAD $150.0 million of CDOR-based borrowings under its Canadian dollar Term Loan at a rate of 1.63%. As of March 31, 2024, the effective interest rate on the U.S. dollar and Canadian dollar Term Loans was 3.94% and 2.88%, respectively. In addition, the Canadian dollar Term Loan and the CAD $40.8 million outstanding as of March 31, 2024 under the Revolving Credit Facility are designated as net investment hedges. See Note 9, “Derivative and Hedging Instruments,” for further information.
The obligations of the Borrowers under the Credit Agreement are guaranteed by the Company and certain of its subsidiaries.
The Credit Agreement contains customary covenants that include restrictions or limitations on the ability to pay dividends, incur additional indebtedness, engage in non-healthcare related business activities, enter into transactions with affiliates and sell or otherwise transfer certain assets as well as customary events of default. The Credit Agreement also requires Sabra, through the Operating Partnership, to comply with specified financial covenants, which include a maximum total leverage ratio, a maximum secured debt leverage ratio, a minimum fixed charge coverage ratio, a maximum unsecured leverage ratio, a minimum tangible net worth requirement and a minimum unsecured interest coverage ratio. As of March 31, 2024, the Company was in compliance with all applicable financial covenants under the Credit Agreement.
Interest Expense
The Company incurred interest expense of $28.4 million and $28.5 million during the three months ended March 31, 2024 and 2023, respectively. Interest expense includes non-cash interest expense of $3.1 million and $3.0 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, the Company had $21.3 million and $16.5 million, respectively, of accrued interest included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets.
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Maturities
The following is a schedule of maturities for the Company’s outstanding debt as of March 31, 2024 (in thousands): 
Secured
Indebtedness
Revolving Credit
    Facility (1)
Term LoansSenior NotesTotal
April 1 through December 31, 2024$1,530 $ $ $ $1,530 
20252,089    2,089 
20262,147   500,000 502,147 
20272,206 146,127  100,000 248,333 
20282,266  540,760  543,026 
Thereafter37,402   1,150,000 1,187,402 
Total Debt47,640 146,127 540,760 1,750,000 2,484,527 
Discount, net   (4,443)(4,443)
Deferred financing costs, net(830) (5,767)(10,102)(16,699)
Total Debt, Net$46,810 $146,127 $534,993 $1,735,455 $2,463,385 
(1)    Revolving Credit Facility is subject to two six-month extension options.
    
9.    DERIVATIVE AND HEDGING INSTRUMENTS
The Company is exposed to various market risks, including the potential loss arising from adverse changes in interest rates and foreign exchange rates. The Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates and foreign exchange rates. The Company’s derivative financial instruments are used to manage differences in the amount of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.
Certain of the Company’s foreign operations expose the Company to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value in the Company’s functional currency, the U.S. dollar, of the Company’s investment in foreign operations, the cash receipts and payments related to these foreign operations and payments of interest and principal under Canadian dollar denominated debt. The Company enters into derivative financial instruments to protect the value of its foreign investments and fix a portion of the interest payments for certain debt obligations. The Company does not enter into derivatives for speculative purposes.
Cash Flow Hedges
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps and collars as part of its interest rate risk management strategy. As of March 31, 2024, approximately $8.6 million of gains, which are included in accumulated other comprehensive income, are expected to be reclassified into earnings in the next 12 months.
Net Investment Hedges
The Company is exposed to fluctuations in foreign exchange rates on investments it holds in Canada. The Company uses cross currency interest rate swaps to hedge its exposure to changes in foreign exchange rates on these foreign investments.
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The following presents the notional amount of derivative instruments as of the dates indicated (in thousands):
March 31, 2024December 31, 2023
Derivatives designated as cash flow hedges:
Denominated in U.S. Dollars (1)
$753,750 $753,750 
Denominated in Canadian Dollars (2)
$300,000 $300,000 
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars$52,920 $55,335 
Financial instruments designated as net investment hedges:
Denominated in Canadian Dollars$190,800 $194,300 
Derivatives not designated as net investment hedges:
Denominated in Canadian Dollars$3,380 $965 
(1) Balance as of March 31, 2024 includes two forward starting interest rate swaps with an effective date of August 2024 and an aggregate notional amount of $323.8 million.
(2)    Balance as of March 31, 2024 includes two forward starting interest rate swaps with an effective date of September 2024 and an aggregate notional amount of CAD $150.0 million.
Derivative and Financial Instruments Designated as Hedging Instruments
The following is a summary of the derivative and financial instruments designated as hedging instruments held by the Company at March 31, 2024 and December 31, 2023 (dollars in thousands):    
Count as of March 31, 2024
Fair Value as ofMaturity Dates
TypeDesignationMarch 31, 2024December 31, 2023Balance Sheet Location
Assets:
Interest rate swapsCash flow5 $6,022 $6,002 2024 - 2028Accounts receivable, prepaid expenses and other assets, net
Interest rate collarsCash flow2 2,250 3,216 2024Accounts receivable, prepaid expenses and other assets, net
Forward starting interest rate swapsCash flow4 14,982 6,736 2028Accounts receivable, prepaid expenses and other assets, net
Cross currency interest rate swapsNet investment2 3,881 2,964 2025Accounts receivable, prepaid expenses and other assets, net
$27,135 $18,918 
Liabilities:
CAD borrowings under Revolving Credit FacilityNet investment1 30,127 33,429 2027Revolving credit facility
CAD Term LoanNet investment1 110,760 113,190 2028Term loans, net
$140,887 $146,619 
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The following presents the effect of the Company’s derivative and financial instruments designated as hedging instruments on the consolidated statements of income (loss) and the consolidated statements of equity for the three months ended March 31, 2024 and 2023 (in thousands):
Gain (Loss) Recognized in Other Comprehensive Income
Three Months Ended March 31,
20242023
Cash Flow Hedges:
Interest rate products$11,492 $1,565 
Net Investment Hedges:
Foreign currency products911 (14)
CAD borrowings under Revolving Credit Facility(503)(1,026)
CAD term loan2,430 (140)
$14,330 $385 
Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
Three Months Ended March 31,
Income Statement Location20242023
Cash Flow Hedges:
Interest rate productsInterest expense$2,449 $1,572 
During the three months ended March 31, 2024 and 2023, no cash flow hedges were determined to be ineffective.
Derivatives Not Designated as Hedging Instruments
As of March 31, 2024, the Company had no material balances related to derivatives not designated as hedging instruments. During the three months ended March 31, 2024, the Company recorded $0.1 million of other income related to the portion of derivatives not designated as hedging instruments and no such expense was recorded during the three months ended March 31, 2023.
Offsetting Derivatives
The Company enters into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of March 31, 2024 and December 31, 2023 (in thousands):
As of March 31, 2024
Gross Amounts of Recognized Assets / LiabilitiesGross Amounts Offset in the Balance SheetNet Amounts of Assets / Liabilities presented in the Balance SheetGross Amounts Not Offset in the Balance Sheet
Financial InstrumentsCash Collateral ReceivedNet Amount
Offsetting Assets:
Derivatives$27,135 $ $27,135 $ $ $27,135 
Offsetting Liabilities:
Derivatives$ $ $ $ $ $ 
As of December 31, 2023
Gross Amounts of Recognized Assets / LiabilitiesGross Amounts Offset in the Balance SheetNet Amounts of Assets / Liabilities presented in the Balance SheetGross Amounts Not Offset in the Balance Sheet
Financial InstrumentsCash Collateral ReceivedNet Amount
Offsetting Assets:
Derivatives$18,918 $ $18,918 $ $ $18,918 
Offsetting Liabilities:
Derivatives$ $ $ $ $ $ 
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Credit Risk-related Contingent Features
The Company has agreements with each of its derivative counterparties that contain a provision pursuant to which the Company could be declared in default on the derivative obligation if the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender. As of March 31, 2024, the Company had no derivatives in a net liability position related to these agreements.

10.    FAIR VALUE DISCLOSURES
Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories:
Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;
Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and
Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable.
Financial Instruments
The fair value for certain financial instruments is derived using a combination of market quotes, pricing models and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments.
Financial instruments for which actively quoted prices or pricing parameters are available and whose markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments whose markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The carrying values of cash and cash equivalents, restricted cash, accounts payable, accrued liabilities and the Credit Agreement are reasonable estimates of fair value because of the short-term maturities of these instruments. Fair values for other financial instruments are derived as follows:
Loans receivable: These instruments are presented on the accompanying consolidated balance sheets at their amortized cost and not at fair value. The fair values of the loans receivable were estimated using an internal valuation model that considered the expected cash flows for the loans receivable, as well as the underlying collateral value and other credit enhancements as applicable. The Company utilized discount rates ranging from 6% to 14% with a weighted average rate of 7% in its fair value calculation. As such, the Company classifies these instruments as Level 3.
Preferred equity investments: These instruments are presented on the accompanying consolidated balance sheets at their cost and not at fair value. The fair values of the preferred equity investments were estimated using an internal valuation model that considered the expected future cash flows for the preferred equity investments, the underlying collateral value and other credit enhancements. The Company utilized discount rates ranging from 10% to 15% with a weighted average rate of 11% in its fair value calculation. As such, the Company classifies these instruments as Level 3.
Derivative instruments: The Company’s derivative instruments are presented at fair value on the accompanying consolidated balance sheets. The Company estimates the fair value of derivative instruments, including its interest rate swaps, interest rate collars and cross currency swaps, using the assistance of a third party using inputs that are observable in the market, which include forward yield curves and other relevant information. Although the Company has determined that the majority of the inputs used to value its derivative financial instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivative financial instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivative financial instruments. As a result, the
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Company has determined that its derivative financial instruments valuations in their entirety are classified in Level 2 of the fair value hierarchy.
Senior Notes: These instruments are presented on the accompanying consolidated balance sheets at their outstanding principal balance, net of unamortized deferred financing costs and premiums/discounts and not at fair value. The fair values of the Senior Notes were determined using third-party market quotes derived from orderly trades. As such, the Company classifies these instruments as Level 2.
Secured indebtedness: These instruments are presented on the accompanying consolidated balance sheets at their outstanding principal balance, net of unamortized deferred financing costs and premiums/discounts and not at fair value. The fair values of the Company’s secured debt were estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. The Company utilized a rate of 6% in its fair value calculation. As such, the Company classifies these instruments as Level 3.
The following are the face values, carrying amounts and fair values of the Company’s financial instruments as of March 31, 2024 and December 31, 2023 whose carrying amounts do not approximate their fair value (in thousands):
 As of March 31, 2024As of December 31, 2023
 
Face
Value
(1)
Carrying
Amount (2)
Fair
Value
Face
Value
(1)
Carrying
Amount
(2)
Fair
Value
Financial assets:
Loans receivable$372,620 $362,653 $379,941 $372,873 $362,775 $383,141 
Preferred equity investments59,632 59,819 61,684 57,681 57,849 59,526 
Financial liabilities:
Senior Notes1,750,000 1,735,455 1,574,855 1,750,000 1,735,253 1,567,428 
Secured indebtedness47,640 46,810 35,420 48,143 47,301 36,279 
(1)    Face value represents amounts contractually due under the terms of the respective agreements.
(2)    Carrying amount represents the book value of financial instruments, including unamortized premiums/discounts and deferred financing costs.
The Company determined the fair value of financial instruments as of March 31, 2024 whose carrying amounts do not approximate their fair value with valuation methods utilizing the following types of inputs (in thousands):
Fair Value Measurements Using
TotalQuoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
Financial assets:
Loans receivable$379,941 $ $ $379,941 
Preferred equity investments61,684   61,684 
Financial liabilities:
Senior Notes1,574,855  1,574,855  
Secured indebtedness35,420   35,420 
Disclosure of the fair value of financial instruments is based on pertinent information available to the Company at the applicable dates and requires a significant amount of judgment. Transaction volume for certain of the Company’s financial instruments remains relatively low, which has made the estimation of fair values difficult. Therefore, both the actual results and the Company’s estimate of fair value at a future date could be materially different.
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Items Measured at Fair Value on a Recurring Basis
During the three months ended March 31, 2024, the Company recorded the following amounts measured at fair value (in thousands):
Fair Value Measurements Using
TotalQuoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
Recurring Basis:
Financial assets:
Interest rate swaps$6,022 $ $6,022 $ 
Interest rate collars2,250  2,250  
Forward starting interest rate swaps14,982  14,982  
Cross currency interest rate swaps3,881  3,881  

11.    EQUITY
Common Stock
On February 23, 2023, the Company established an at-the-market equity offering program (the “ATM Program”) pursuant to which shares of its common stock having an aggregate gross sales price of up to $500.0 million may be sold from time to time (i) by the Company through a consortium of banks acting as sales agents or directly to the banks acting as principals or (ii) by a consortium of banks acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement. The use of a forward sale agreement would allow the Company to lock in a share price on the sale of shares at the time the agreement is effective, but defer receiving the proceeds from the sale of the shares until a later date. The Company may also elect to cash settle or net share settle all or a portion of its obligations under any forward sale agreement. The forward sale agreements have a one year term during which time the Company may settle the forward sales by delivery of physical shares of common stock to the forward purchasers or, at the Company’s election, in cash or net shares. The forward sale price that the Company expects to receive upon settlement will be the initial forward price established upon the effective date, subject to adjustments for (i) the forward purchasers’ stock borrowing costs and (ii) certain fixed price reductions during the term of the agreement.
During the three months ended March 31, 2024, no shares were sold under the ATM Program and the Company did not utilize the forward feature of the ATM Program. As of March 31, 2024, the Company had $500.0 million available under the ATM Program.
The following table lists the cash dividends on common stock declared and paid by the Company during the three months ended March 31, 2024:
Declaration Date Record Date Amount Per Share Dividend Payable Date
February 1, 2024 February 13, 2024 $0.30  February 29, 2024
During the three months ended March 31, 2024, the Company issued 0.2 million shares of common stock as a result of restricted stock unit vestings.
Upon any payment of shares to team members as a result of restricted stock unit vestings, the team members’ related tax withholding obligation will generally be satisfied by the Company reducing the number of shares to be delivered by a number of shares necessary to satisfy the related applicable tax withholding obligation. During the three months ended March 31, 2024 and 2023, the Company incurred $2.0 million and $1.4 million, respectively, in tax withholding obligations on behalf of its team members that were satisfied through a reduction in the number of shares delivered to those participants.
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Accumulated Other Comprehensive Income
The following is a summary of the Company’s accumulated other comprehensive income (in thousands):
March 31, 2024December 31, 2023
Foreign currency translation (loss) gain$(535)$963 
Unrealized gain on cash flow hedges31,730 22,782 
Total accumulated other comprehensive income$31,195 $23,745 

12.    EARNINGS PER COMMON SHARE
The following table illustrates the computation of basic and diluted earnings per share for the three months ended March 31, 2024 and 2023 (in thousands, except share and per share amounts):
Three Months Ended March 31,
20242023
Numerator
Net income (loss)$26,254 $(9,487)
Denominator
Basic weighted average common shares and common equivalents231,453,564 231,164,876 
Dilutive restricted stock units1,911,467  
Diluted weighted average common shares233,365,031 231,164,876 
Net income (loss), per:
Basic common share$0.11 $(0.04)
Diluted common share$0.11 $(0.04)
During the three months ended March 31, 2024 and 2023, approximately 2,300 and 0.7 million restricted stock units, respectively, were not included in computing diluted earnings per share because they were considered anti-dilutive.

13.    COMMITMENTS AND CONTINGENCIES
Environmental
As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. The Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities. As of March 31, 2024, the Company does not expect that compliance with existing environmental laws will have a material adverse effect on the Company’s financial condition and results of operations.
Legal Matters
From time to time, the Company and its subsidiaries are party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings where the likelihood of a loss contingency is reasonably possible and the amount or range of reasonably possible losses is material to the Company’s results of operations, financial condition or cash flows.

14.    SUBSEQUENT EVENTS
The Company evaluates subsequent events up until the date the consolidated financial statements are issued.
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Dividend Declaration
On May 8, 2024, the Company’s board of directors declared a quarterly cash dividend of $0.30 per share of common stock. The dividend will be paid on May 31, 2024 to common stockholders of record as of the close of business on May 20, 2024.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussion below contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those which are discussed in the “Risk Factors” section in Part I, Item 1A of our 2023 Annual Report on Form 10-K. Also see “Statement Regarding Forward-Looking Statements” preceding Part I.
The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements and the notes thereto.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is organized as follows:
Overview
Critical Accounting Policies and Estimates
Recently Issued Accounting Standards Update
Results of Operations
Liquidity and Capital Resources
Concentration of Credit Risk
Skilled Nursing Facility Reimbursement Rates
Overview
We operate as a self-administered, self-managed REIT that, through our subsidiaries, owns and invests in real estate serving the healthcare industry.
Our primary business consists of acquiring, financing and owning real estate property to be leased to third party tenants in the healthcare sector. We primarily generate revenues by leasing properties to tenants and owning properties operated by third-party property managers throughout the United States (“U.S.”) and Canada.
Our investment portfolio is primarily comprised of skilled nursing/transitional care facilities, senior housing communities (“Senior Housing - Leased”), behavioral health facilities, and specialty hospitals and other facilities, in each case leased to third-party operators; senior housing communities operated by third-party property managers pursuant to property management agreements (“Senior Housing - Managed”); investments in joint ventures; loans receivable; and preferred equity investments.
We expect to grow our investment portfolio while diversifying our portfolio by tenant, facility type and geography within the healthcare sector. We plan to achieve these objectives primarily through making investments directly or indirectly in healthcare real estate, including the development of purpose-built healthcare facilities with select developers. We also intend to achieve our objective of diversifying our portfolio by tenant and facility type through select asset sales and other arrangements with our tenants.
We employ a disciplined approach in our healthcare real estate investment strategy by investing in assets that provide attractive opportunities for dividend growth and appreciation of asset values, while maintaining balance sheet strength and liquidity, thereby creating long-term stockholder value.
We elected to be treated as a REIT with the filing of our U.S. federal income tax return for the taxable year beginning January 1, 2011. We believe that we have been organized and have operated, and we intend to continue to operate, in a manner to qualify as a REIT. We operate through an umbrella partnership, commonly referred to as an UPREIT structure, in which substantially all of our properties and assets are held by Sabra Health Care Limited Partnership, a Delaware limited partnership (the “Operating Partnership”), of which we are the sole general partner and a wholly owned subsidiary of ours is currently the only limited partner, or by subsidiaries of the Operating Partnership.
Market Trends and Uncertainties
Our operations have been and are expected to continue to be impacted by economic and market conditions. Increases in interest rates, labor shortages, supply chain disruptions, high inflation and increased volatility in public equity and fixed income markets have led to increased costs and limited the availability of capital.
The above factors, together with the impact of COVID-19, have resulted in decreased occupancy and increased operating costs for our tenants and borrowers, which have negatively impacted their operating results and may adversely impact their ability to make full and timely rental payments and debt service payments, respectively, to us. Our Senior Housing - Managed portfolio has been similarly impacted, and we expect that decreased occupancy and increased operating costs will continue to
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negatively impact the operating results of these investments. While our tenants, borrowers and Senior Housing - Managed portfolio have experienced increases in occupancy, certain of those occupancy rates are still below pre-pandemic levels. On the labor front, our tenants, borrowers and Senior Housing - Managed portfolio have significantly reduced their reliance on agency staffing which was a mainstay in the wake of COVID-19, and while they continue to experience improvements in both permanent labor availability and overall costs from the worst points of the pandemic, permanent labor supply remains lower and costs remain higher than pre-pandemic levels. We are, however, encouraged by increases our tenants are receiving in reimbursement rates in our skilled nursing/transitional care portfolio, as those increases have led to margin recovery despite occupancy being below pre-pandemic levels.
In some cases, we may have to restructure or temporarily defer tenants’ long-term rent obligations and may not be able to do so on terms that are as favorable to us as those currently in place. Reduced or modified rental and debt service amounts could result in the determination that the full amounts of our investments are not recoverable, which could result in an impairment charge. If our tenants and borrowers default on these obligations, such defaults could materially and adversely affect our results of operations and liquidity, in addition to resulting in potential impairment charges. Further, prolonged deterioration in the operating results for our investments in our Senior Housing - Managed portfolio could result in the determination that the full amounts of our investments are not recoverable, which could result in an impairment charge.
We regularly monitor the effects of economic and market conditions on our operations and financial position, as well as on the operations and financial position of our tenants and borrowers, in order to respond and adapt to the ongoing changes in our operating environment.
Critical Accounting Policies and Estimates
Our consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and in conjunction with the rules and regulations of the SEC. The preparation of our financial statements requires significant management judgments, assumptions and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses. A discussion of the accounting policies that management considers critical in that they involve significant management judgments and assumptions, require estimates about matters that are inherently uncertain and because they are important for understanding and evaluating our reported financial results is included in Part II, Item 7 of our 2023 Annual Report on Form 10-K filed with the SEC. There have been no significant changes to our critical accounting policies during the three months ended March 31, 2024.
Recently Issued Accounting Standards Update
See Note 2, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements for information concerning recently issued accounting standards updates.
Results of Operations
As of March 31, 2024, our investment portfolio consisted of 374 real estate properties held for investment, four assets held for sale, 14 investments in loans receivable, five preferred equity investments and two investments in unconsolidated joint ventures. As of March 31, 2023, our investment portfolio consisted of 396 real estate properties held for investment, 13 investments in loans receivable, six preferred equity investments and three investments in unconsolidated joint ventures. In general, we expect that income and expenses related to our portfolio will fluctuate in future periods in comparison to the corresponding prior periods as a result of investment and disposition activity and anticipated future changes in our portfolio. The results of operations presented are not directly comparable due to ongoing acquisition and disposition activity, including our capital recycling initiative.
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Comparison of results of operations for the three months ended March 31, 2024 versus the three months ended March 31, 2023 (dollars in thousands):
Three Months Ended March 31,Increase / (Decrease)Percentage
Difference
Variance due to Acquisitions, Originations and Dispositions (1)
Remaining Variance (2)
20242023
Revenues:
Rental and related revenues$91,776 $95,870 $(4,094)(4)%$(2,056)$(2,038)
Resident fees and services66,031 56,721 9,310 16 %883 8,427 
Interest and other income8,940 8,733 207 %(356)563 
Expenses:
Depreciation and amortization42,914 52,827 (9,913)(19)%(1,943)(7,970)
Interest28,408 28,540 (132)— %— (132)
Triple-net portfolio operating expenses4,324 4,168 156 %(62)218 
Senior housing - managed portfolio operating expenses49,669 43,637 6,032 14 %186 5,846 
General and administrative11,890 10,502 1,388 13 %— 1,388 
Recovery of loan losses(137)(208)71 (34)%