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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 June 30, 2022
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.)
18500 Von Karman Avenue, Suite 550
Irvine, CA 92612
(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 July 29, 2022, there were 230,968,872 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, operators 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:
the ongoing COVID-19 pandemic and measures intended to prevent its spread, and the related impact on our tenants, operators 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 and the possibility of environmental compliance costs and liabilities;
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 for our tenants and operators, due to labor market challenges and macroeconomic factors such as inflation;
increased healthcare regulation and enforcement;
our tenants’ dependency on reimbursement from governmental and other third-party payor programs;
the effect of our tenants 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’ or operators’ failure to adhere to applicable privacy and data security laws, or a material breach of our or our tenants’ 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;
increases in market interest rates;
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 in foreign currency exchange rates and other risks associated with our ownership of property outside the U.S.;
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, 2021 (our “2021 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)
 
June 30, 2022December 31, 2021
 (unaudited) 
Assets
Real estate investments, net of accumulated depreciation of $897,568 and $831,324 as of June 30, 2022 and December 31, 2021, respectively
$5,045,129 $5,162,884 
Loans receivable and other investments, net395,342 399,086 
Investment in unconsolidated joint ventures219,920 96,680 
Cash and cash equivalents67,153 111,996 
Restricted cash4,368 3,890 
Lease intangible assets, net49,836 54,063 
Accounts receivable, prepaid expenses and other assets, net179,684 138,108 
Total assets$5,961,432 $5,966,707 
Liabilities
Secured debt, net$50,177 $66,663 
Revolving credit facility142,341  
Term loans, net553,695 594,246 
Senior unsecured notes, net1,734,008 1,733,566 
Accounts payable and accrued liabilities117,682 142,989 
Lease intangible liabilities, net45,803 49,713 
Total liabilities2,643,706 2,587,177 
Commitments and contingencies (Note 12)
Equity
Preferred stock, $0.01 par value; 10,000,000 shares authorized, zero shares issued and outstanding as of June 30, 2022 and December 31, 2021
  
Common stock, $0.01 par value; 500,000,000 shares authorized, 230,968,872 and 230,398,655 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
2,310 2,304 
Additional paid-in capital4,482,239 4,482,451 
Cumulative distributions in excess of net income(1,176,968)(1,095,204)
Accumulated other comprehensive income (loss)10,145 (10,021)
Total equity3,317,726 3,379,530 
Total liabilities and equity$5,961,432 $5,966,707 

See accompanying notes to consolidated financial statements.
4

SABRA HEALTH CARE REIT, INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(dollars in thousands, except per share data)
(unaudited)
 
Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Revenues:
Rental and related revenues (Note 4)$103,168 $110,783 $213,054 $224,166 
Interest and other income8,653 3,031 19,645 5,972 
Resident fees and services44,136 39,118 86,363 75,159 
   
Total revenues155,957 152,932 319,062 305,297 
  
Expenses:
Depreciation and amortization45,172 44,491 90,428 88,866 
Interest25,530 24,270 50,502 48,713 
Triple-net portfolio operating expenses4,852 5,000 9,863 10,135 
Senior housing - managed portfolio operating expenses34,026 28,901 67,130 57,846 
General and administrative8,649 8,811 19,045 17,749 
(Recovery of) provision for loan losses and other reserves(270)(109)205 1,916 
Impairment of real estate11,745  11,745  
   
Total expenses129,704 111,364 248,918 225,225 
  
Other (expense) income:
Loss on extinguishment of debt (54)(271)(847)
Other (expense) income(2,163)(24)(2,095)109 
Net loss on sales of real estate(4,501)(3,752)(4,501)(2,439)
Total other expense(6,664)(3,830)(6,867)(3,177)
Income before loss from unconsolidated joint ventures and income tax expense19,589 37,738 63,277 76,895 
Loss from unconsolidated joint ventures(2,529)(169,789)(5,331)(174,799)
Income tax expense(255)(522)(539)(1,222)
Net income (loss)$16,805 $(132,573)$57,407 $(99,126)
  
Net income (loss), per:
Basic common share$0.07 $(0.61)$0.25 $(0.46)
    
Diluted common share$0.07 $(0.61)$0.25 $(0.46)
    
Weighted-average number of common shares outstanding, basic230,967,163 216,264,207 230,913,462 213,870,329 
 
Weighted-average number of common shares outstanding, diluted231,681,536 216,264,207 231,641,958 213,870,329 

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 June 30,Six Months Ended June 30,
2022202120222021
Net income (loss)$16,805 $(132,573)$57,407 $(99,126)
Other comprehensive income:
Unrealized gain (loss), net of tax:
Foreign currency translation gain (loss)3,081 (218)2,437 (469)
Unrealized gain (loss) on cash flow hedges5,390 (9,583)17,729 24,206 
Total other comprehensive income (loss)8,471 (9,801)20,166 23,737 
Comprehensive income (loss)$25,276 $(142,374)$77,573 $(75,389)

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 June 30, 2021
 Common StockAdditional
Paid-in Capital
Cumulative Distributions in Excess of Net IncomeAccumulated Other Comprehensive LossTotal Equity
 SharesAmounts
Balance, March 31, 2021215,930,202 $2,159 $4,254,134 $(746,516)$(6,373)$3,503,404 
Net loss— — — (132,573)— (132,573)
Other comprehensive loss— — — — (9,801)(9,801)
Amortization of stock-based compensation— — 2,857 — — 2,857 
Common stock issuance, net4,893,902 49 84,542 — — 84,591 
Common dividends ($0.30 per share)
— — — (65,415)— (65,415)
Balance, June 30, 2021220,824,104 $2,208 $4,341,533 $(944,504)$(16,174)$3,383,063 
Three Months Ended June 30, 2022
 Common StockAdditional
Paid-in Capital
Cumulative Distributions in Excess of Net IncomeAccumulated Other Comprehensive IncomeTotal Equity
SharesAmounts
Balance, March 31, 2022230,954,777 $2,310 $4,481,634 $(1,124,095)$1,674 $3,361,523 
Net income— — — 16,805 — 16,805 
Other comprehensive income— — — — 8,471 8,471 
Amortization of stock-based compensation— — 1,183 — — 1,183 
Common stock issuance, net14,095 — (578)— — (578)
Common dividends ($0.30 per share)
— — — (69,678)— (69,678)
Balance, June 30, 2022230,968,872 $2,310 $4,482,239 $(1,176,968)$10,145 $3,317,726 

See accompanying notes to consolidated financial statements.

7


SABRA HEALTH CARE REIT, INC.
CONSOLIDATED STATEMENTS OF EQUITY (CONTINUED)
(dollars in thousands, except per share data)
(unaudited)
 
Six Months Ended June 30, 2021
 Common StockAdditional
Paid-in Capital
Cumulative Distributions in Excess of Net IncomeAccumulated Other Comprehensive (Loss) IncomeTotal Equity
 SharesAmounts
Balance, December 31, 2020210,560,815 $2,106 $4,163,228 $(716,195)$(39,911)$3,409,228 
Net loss— — — (99,126)— (99,126)
Other comprehensive income— — — — 23,737 23,737 
Amortization of stock-based compensation— — 5,692 — — 5,692 
Common stock issuance, net10,263,289 102 172,613 — — 172,715 
Common dividends ($0.60 per share)
— — — (129,183)— (129,183)
Balance, June 30, 2021220,824,104 $2,208 $4,341,533 $(944,504)$(16,174)$3,383,063 
Six Months Ended June 30, 2022
 Common StockAdditional
Paid-in Capital
Cumulative Distributions in Excess of Net IncomeAccumulated Other Comprehensive (Loss) IncomeTotal Equity
SharesAmounts
Balance, December 31, 2021230,398,655 $2,304 $4,482,451 $(1,095,204)$(10,021)$3,379,530 
Net income— — — 57,407 — 57,407 
Other comprehensive income— — — — 20,166 20,166 
Amortization of stock-based compensation— — 3,856 — — 3,856 
Common stock issuance, net570,217 6 (4,068)— — (4,062)
Common dividends ($0.60 per share)
— — — (139,171)— (139,171)
Balance, June 30, 2022230,968,872 $2,310 $4,482,239 $(1,176,968)$10,145 $3,317,726 

See accompanying notes to consolidated financial statements.
8

SABRA HEALTH CARE REIT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Six Months Ended June 30,
20222021
Cash flows from operating activities:
Net income (loss)$57,407 $(99,126)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization90,428 88,866 
Non-cash rental and related revenues(8,061)(10,627)
Non-cash interest income(1,094)(914)
Non-cash interest expense5,502 3,645 
Stock-based compensation expense3,250 4,559 
Loss on extinguishment of debt271 847 
Provision for loan losses and other reserves205 1,916 
Net loss on sales of real estate4,501 2,439 
Impairment of real estate11,745  
Other-than-temporary impairment of unconsolidated joint venture 164,126 
Loss from unconsolidated joint ventures5,331 10,673 
Other non-cash items2,167  
Changes in operating assets and liabilities:
Accounts receivable, prepaid expenses and other assets, net(6,074)(2,361)
Accounts payable and accrued liabilities(25,895)(11,777)
Net cash provided by operating activities139,683 152,266 
Cash flows from investing activities:
Acquisition of real estate(20,573)(62,107)
Origination and fundings of preferred equity investments(4,990)(3,394)
Additions to real estate(19,495)(21,736)
Escrow deposits for potential investments(836) 
Repayments of loans receivable4,466 1,135 
Repayments of preferred equity investments1,333 513 
Investment in unconsolidated joint venture(128,007) 
Net proceeds from the sales of real estate40,003 8,381 
Net cash used in investing activities(128,099)(77,208)
Cash flows from financing activities:
Net borrowings from revolving credit facility142,353  
Principal payments on term loans(40,000)(110,000)
Principal payments on secured debt(16,547)(1,446)
Payments of deferred financing costs(6)(7)
Issuance of common stock, net(3,803)172,698 
Dividends paid on common stock(138,565)(128,050)
Net cash used in financing activities(56,568)(66,805)
Net (decrease) increase in cash, cash equivalents and restricted cash(44,984)8,253 
Effect of foreign currency translation on cash, cash equivalents and restricted cash619 159 
Cash, cash equivalents and restricted cash, beginning of period115,886 65,523 
Cash, cash equivalents and restricted cash, end of period$71,521 $73,935 
Supplemental disclosure of cash flow information:
Interest paid$49,968 $45,658 
Supplemental disclosure of non-cash investing activities:
Decrease in loans receivable and other investments due to acquisition of real estate$5,623 $ 

See accompanying notes to consolidated financial statements.
9

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 and operators 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 third-party operators; 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 June 30, 2022 and December 31, 2021 and for the three and six month periods ended June 30, 2022 and 2021. 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 and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. For further information, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 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
10

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 June 30, 2022, 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 June 30, 2022, 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 limited partners’ rights and their impact on the presumption of control of the limited 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 sole 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 June 30, 2022, 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 Update
Issued but Not Yet Adopted
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. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. 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. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

11

3.     RECENT REAL ESTATE ACQUISITIONS (CONSOLIDATED)
During the six months ended June 30, 2022, the Company acquired one Senior Housing - Managed community. The investment was part of the Company’s proprietary development pipeline and was previously reflected as a preferred equity investment which had a book value of $5.6 million at the time of acquisition. During the six months ended June 30, 2021, the Company acquired two Senior Housing - Managed communities, one behavioral health facility and land to develop one skilled nursing/transitional care facility. The consideration was allocated as follows (in thousands):
Six Months Ended June 30,
20222021
Land$3,691 $3,610 
Building and improvements21,168 55,962 
Tenant origination and absorption costs intangible assets1,337 2,525 
Tenant relationship intangible assets 10 
Total consideration$26,196 $62,107 
The tenant origination and absorption costs intangible assets had an amortization period as of the date of acquisition of one year, for the acquisition completed during the six months ended June 30, 2022. 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 two years and 26 years, respectively, for acquisitions completed during the six months ended June 30, 2021.
For the three and six months ended June 30, 2022, the Company recognized $1.3 million and $2.2 million of total revenues, respectively, and $0.4 million and $0.6 million of net loss, respectively, from the facility acquired during the six months ended June 30, 2022. For the three and six months ended June 30, 2021, the Company recognized $2.3 million and $2.7 million of total revenues, respectively, and $0.2 million and $0.3 million of net income, respectively, from the facilities acquired during the six months ended June 30, 2021.

4.    INVESTMENT IN REAL ESTATE PROPERTIES
The Company’s real estate properties held for investment consisted of the following (dollars in thousands):
As of June 30, 2022
Property TypeNumber of
Properties
Number of
Beds/Units
Total
Real Estate
at Cost
Accumulated
Depreciation
Total
Real Estate
Investments, Net
Skilled Nursing/Transitional Care272 30,251 $3,560,595 $(511,806)$3,048,789 
Senior Housing - Leased55 3,965 693,341 (108,029)585,312 
Senior Housing - Managed50 5,266 1,041,558 (190,810)850,748 
Behavioral Health14 795 420,880 (47,083)373,797 
Specialty Hospitals and Other15 392 225,443 (39,331)186,112 
406 40,669 5,941,817 (897,059)5,044,758 
Corporate Level880 (509)371 
$5,942,697 $(897,568)$5,045,129 
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As of December 31, 2021
Property TypeNumber of
Properties
Number of
Beds/Units
Total
Real Estate
at Cost
Accumulated
Depreciation
Total
Real Estate
Investments, Net
Skilled Nursing/Transitional Care279 30,920 $3,617,359 $(474,534)$3,142,825 
Senior Housing - Leased60 4,099 720,581 (104,046)616,535 
Senior Housing - Managed49 5,140 1,012,398 (174,098)838,300 
Behavioral Health13 795 417,659 (41,556)376,103 
Specialty Hospitals and Other15 392 225,348 (36,623)188,725 
416 41,346 5,993,345 (830,857)5,162,488 
Corporate Level863 (467)396 
$5,994,208 $(831,324)$5,162,884 
June 30, 2022December 31, 2021
Building and improvements$5,101,294 $5,145,096 
Furniture and equipment265,594 262,969 
Land improvements4,050 4,295 
Land571,759 581,848 
Total real estate at cost5,942,697 5,994,208 
Accumulated depreciation(897,568)(831,324)
Total real estate investments, net$5,045,129 $5,162,884 
Operating Leases
As of June 30, 2022, the substantial majority of the Company’s real estate properties (excluding 50 Senior Housing - Managed communities) were leased under triple-net operating leases with expirations ranging from less than one year to 20 years. As of June 30, 2022, 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 $12.2 million and $28.6 million as of June 30, 2022 and December 31, 2021, respectively, and letters of credit deposited with the Company totaled approximately $79 million and $63 million as of June 30, 2022 and December 31, 2021, respectively. In addition, the Company’s tenants have deposited with the Company $16.9 million and $16.8 million as of June 30, 2022 and December 31, 2021, 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 $4.4 million and $9.4 million during the three and six months ended June 30, 2022, respectively, and $4.8 million and $9.6 million during the three and six months ended June 30, 2021, 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 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
13

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.
The Avamere Family of Companies (“Avamere”) leases 27 facilities from the Company and has been impacted by census declines, labor cost increases and cash flow constraints as a result of the COVID-19 pandemic. In 2021, the Company concluded that its lease with Avamere should no longer be accounted for on an accrual basis and used Avamere’s $11.9 million letter of credit to fund rent. In 2022, Avamere’s lease was amended to, among other things, reduce Avamere’s annual base rent to $30.7 million from $44.1 million effective February 1, 2022.
For the three and six months ended June 30, 2022, no tenant relationship represented 10% or more of the Company’s total revenues.
As of June 30, 2022, 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):
July 1 through December 31, 2022$196,502 
2023390,351 
2024391,434 
2025386,768 
2026371,249 
Thereafter1,464,368 
$3,200,672 
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 $0.3 million and $0.7 million for the three and six months ended June 30, 2022, respectively, and $0.3 million and $0.6 million for the three and six months ended June 30, 2021, respectively.
During each of the three and six months ended June 30, 2022 and 2021, the Company recognized government grants of $0.1 million and $0.5 million, respectively, in resident fees and services 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
June 30, 2022
Ownership as of
June 30, 2022
Book Value
June 30, 2022December 31, 2021
Enlivant Joint Venture (1)
Senior Housing - Managed157 49 %$91,556 $96,680 
Sienna Joint VentureSenior Housing - Managed12 50 %128,364  
$219,920 $96,680 
(1)    As of June 30, 2022 and December 31, 2021, the book value of the Company’s investment in the Enlivant Joint Venture includes an unamortized basis difference of $289.9 million and $293.7 million, respectively. The unamortized basis difference is related to the difference between the amount the Company purchased its interest in the Enlivant Joint Venture for and the historical cost basis of the assets.
During the six months ended June 30, 2022, the Company formed a joint venture with Sienna Senior Living (the “Sienna Joint Venture”), and the Sienna Joint Venture completed the acquisition of 12 senior housing communities that are being managed by Sienna Senior Living. The gross investment by the Sienna Joint Venture totaled CAD $379.0 million, excluding acquisition costs. In addition, the Sienna Joint Venture assumed CAD $53.4 million of debt.
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During each of the three and six months ended June 30, 2022, the Company recognized government grants of $3.4 million in loss from unconsolidated joint ventures on the accompanying consolidated statements of income (loss). No government grants were recognized in loss from unconsolidated joint ventures during the three and six months ended June 30, 2021.
During the second quarter of 2021, the Company re-evaluated its plans with respect to its joint venture with affiliates of TPG Real Estate, the real estate platform of TPG (the “Enlivant Joint Venture”) and determined that it intends to eventually exit its 49% stake. The Company concluded that the carrying value exceeded the estimated fair value of the investment and deemed the decline to be other-than-temporary. This resulted in the Company recording an impairment charge totaling $164.1 million during the three months ended June 30, 2021.
TPG also owns Enlivant, the senior housing management platform that manages the portfolio owned by the Enlivant Joint Venture. The ongoing operating performance of the Enlivant Joint Venture, as well as whether TPG is able to secure a buyer on favorable terms or at all, will impact the ultimate amounts realized from the Enlivant Joint Venture and may require the Company to recognize an additional impairment charge in the future with respect to this investment. Accordingly, the amount ultimately realized by the Company for its investment in the Enlivant Joint Venture could materially differ from its estimated fair value as reflected in the consolidated balance sheets as of June 30, 2022.
Net Investment in Sales-Type Lease
As of June 30, 2022, the Company had a $25.4 million net investment in one skilled nursing/transitional care facility leased to an operator under a sales-type lease, as the tenant is obligated to purchase the property at the end of the lease term. The net investment in sales-type lease is recorded in accounts receivable, prepaid expenses and other assets, net on the accompanying consolidated balance sheets and represents the present value of total rental payments of $1.9 million, plus the estimated purchase price of $25.6 million, less the unearned lease income of $2.0 million and allowance for credit losses of $0.1 million as of June 30, 2022. Unearned lease income represents the excess of the minimum lease payments and residual value over the cost of the investment. Unearned lease income is deferred and amortized to income over the lease term to provide a constant yield when collectability of the lease payments is reasonably assured. Income from the Company’s net investment in sales-type lease was $0.6 million and $1.2 million for the three and six months ended June 30, 2022, respectively, and $0.6 million and $1.2 million for the three and six months ended June 30, 2021, respectively, and is reflected in interest and other income on the accompanying consolidated statements of income (loss). During the three and six months ended June 30, 2022, the Company reduced its allowance for credit losses by $31,000 and $0.1 million, respectively. During the three and six months ended June 30, 2021, the Company reduced its allowance for credit losses by $21,000 and increased its allowance for credit losses by $0.1 million, respectively. During the six months ended June 30, 2021, the Company was required to recognize a $1.0 million gain on sale of real estate prior to the sale to the tenant as a result of a lease modification and reassessing the classification of the lease and determining it should be accounted for as a sales-type lease. Future minimum lease payments contractually due under the sales-type lease at June 30, 2022 were as follows: $1.2 million for the remainder of 2022 and $0.8 million for 2023.

5.    ASSETS HELD FOR SALE, IMPAIRMENT OF REAL ESTATE AND DISPOSITIONS
Assets Held for Sale
As of June 30, 2022, the Company determined that three skilled nursing/transitional care facilities with an aggregate net book value of $22.9 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 June 30, 2022, the Company completed the sale of one of the facilities for a gross sales price of $6.5 million.
Impairment of Real Estate
During the six months ended June 30, 2022, the Company recognized an $11.7 million real estate impairment related to the three skilled nursing/transitional care facilities classified as assets held for sale as of June 30, 2022 and one additional skilled nursing/transitional care facility.
To estimate the fair value of the impaired facilities, the Company utilized a market approach which considered binding sale agreements (Level 2 measurements), non-binding offers from unrelated third parties or model-derived valuations with significant unobservable inputs (Level 3 measurements), as applicable.
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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 which could be material.
Dispositions
The following table summarizes the Company’s dispositions for the periods presented (dollars in millions):
Six Months Ended June 30,
20222021
Number of facilities8 4
Consideration, net of closing costs$40.0 $11.3 
Net carrying value44.5 14.7 
Net loss on sale$(4.5)$(3.4)
Net loss$(3.2)$(1.8)
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.    LOANS RECEIVABLE AND OTHER INVESTMENTS
As of June 30, 2022 and December 31, 2021, the Company’s loans receivable and other investments consisted of the following (dollars in thousands):
As of June 30, 2022
Investment
Quantity
as of
June 30, 2022
Property Type
Principal Balance
as of
June 30, 2022 (1)
Book Value
as of
June 30, 2022
Book Value
as of
December 31, 2021
Weighted Average Contractual Interest Rate / Rate of ReturnWeighted Average Annualized Effective Interest Rate / Rate of Return
Maturity Date
as of
June 30, 2022
Loans Receivable:
Mortgage2 Behavioral Health$309,000 $309,000 $309,000 7.7 %7.7 %11/01/26 - 01/31/27
Construction   3,347