Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 21, 2022 | Jun. 30, 2021 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 000-52566 | ||
Entity Registrant Name | SUMMIT HEALTHCARE REIT, INC. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 73-1721791 | ||
Entity Address, Address Line One | 2 South Pointe Drive, Suite 100 | ||
Entity Address, City or Town | Lake Forest | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92630 | ||
City Area Code | 800 | ||
Local Phone Number | 978-8136 | ||
Title of 12(g) Security | Common stock, $0.001 par value | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 23,027,978 | ||
Entity Central Index Key | 0001310383 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
No Trading Symbol Flag | true | ||
Auditor Name | BDO USA, LLP | ||
Auditor Firm ID | 243 | ||
Auditor Location | Costa Mesa, California |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 10,488,000 | $ 14,658,000 |
Restricted cash | 2,673,000 | 2,933,000 |
Real estate properties, net | 192,862,000 | 44,921,000 |
Notes receivable | 0 | 262,000 |
Tenant and other receivables, net | 3,386,000 | 4,677,000 |
Deferred leasing commissions, net | 466,000 | 536,000 |
Other assets, net | 1,349,000 | 1,203,000 |
Equity-method investments | 7,902,000 | 11,375,000 |
Total assets | 219,126,000 | 80,565,000 |
LIABILITIES AND EQUITY | ||
Accounts payable and accrued liabilities | 2,551,000 | 2,530,000 |
Security deposits | 4,651,000 | 664,000 |
Loans payable, net of debt issuance costs | 180,370,000 | 45,274,000 |
Total liabilities | 187,572,000 | 48,468,000 |
Commitments and contingencies (Note 9) | ||
Stockholders' Equity | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding at December 31, 2021 and 2020 | 0 | 0 |
Common stock, $0.001 par value; 290,000,000 shares authorized; 23,027,978 shares issued and outstanding at December 31, 2021 and 2020 | 23,000 | 23,000 |
Additional paid-in capital | 116,401,000 | 116,335,000 |
Accumulated deficit | (85,041,000) | (84,456,000) |
Total stockholders' equity | 31,383,000 | 31,902,000 |
Noncontrolling interests | 171,000 | 195,000 |
Total equity | 31,554,000 | 32,097,000 |
Total liabilities and equity | $ 219,126,000 | $ 80,565,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 290,000,000 | 290,000,000 |
Common stock, shares issued | 23,027,978 | 23,027,978 |
Common stock, shares outstanding | 23,027,978 | 23,027,978 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues: | ||
Total rental revenues | $ 5,974,000 | $ 6,448,000 |
Acquisition and asset management fees | 953,000 | 1,312,000 |
Interest income from notes receivable | 26,000 | 27,000 |
Total operating revenue | 6,953,000 | 7,787,000 |
Expenses: | ||
Property operating costs | 1,023,000 | 947,000 |
General and administrative | 5,245,000 | 4,063,000 |
Depreciation and amortization | 1,841,000 | 1,667,000 |
Total operating expenses | 8,109,000 | 6,677,000 |
Operating (loss) income | (1,156,000) | 1,110,000 |
(Loss) income from equity-method investees | (354,000) | 555,000 |
Gain on sale of equity-method investment | 3,515,000 | 0 |
Other income | 20,000 | 58,000 |
Interest expense | (2,535,000) | (2,280,000) |
Net loss | (510,000) | (557,000) |
Noncontrolling interests' share in net (income) loss | (75,000) | (56,000) |
Net loss applicable to common stockholders | $ (585,000) | $ (613,000) |
Basic and diluted: | ||
Net loss applicable to common stockholders, Basic | $ (0.03) | $ (0.03) |
Net loss applicable to common stockholders, Diluted | $ (0.03) | $ (0.03) |
Weighted average shares used to calculate earnings per common share: | ||
Basic | 23,027,978 | 23,027,978 |
Diluted | 23,027,978 | 23,027,978 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity | Noncontrolling Interests | Total |
Balance at Dec. 31, 2019 | $ 23,000 | $ 116,184,000 | $ (83,843,000) | $ 32,364,000 | $ 200,000 | $ 32,564,000 |
Balance (in shares) at Dec. 31, 2019 | 23,027,978 | |||||
Stock-based compensation | $ 0 | 151,000 | 0 | 151,000 | 0 | 151,000 |
Distributions paid to noncontrolling interests | 0 | 0 | 0 | 0 | (61,000) | (61,000) |
Net income (loss) | 0 | 0 | (613,000) | (613,000) | 56,000 | (557,000) |
Balance at Dec. 31, 2020 | $ 23,000 | 116,335,000 | (84,456,000) | 31,902,000 | 195,000 | 32,097,000 |
Balance (in shares) at Dec. 31, 2020 | 23,027,978 | |||||
Stock-based compensation | $ 0 | 66,000 | 0 | 66,000 | 0 | 66,000 |
Distributions paid to noncontrolling interests | 0 | 0 | 0 | 0 | (99,000) | (99,000) |
Net income (loss) | 0 | 0 | (585,000) | (585,000) | 75,000 | (510,000) |
Balance at Dec. 31, 2021 | $ 23,000 | $ 116,401,000 | $ (85,041,000) | $ 31,383,000 | $ 171,000 | $ 31,554,000 |
Balance (in shares) at Dec. 31, 2021 | 23,027,978 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (510,000) | $ (557,000) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Amortization of debt issuance costs | 108,000 | 90,000 |
Depreciation and amortization | 1,841,000 | 1,667,000 |
Amortization of above/below market lease intangible | 32,000 | 0 |
Straight line rents | 377,000 | (227,000) |
Write-off of debt issuance costs | 0 | 77,000 |
Stock-based compensation expense | 66,000 | 151,000 |
Gain on sale of equity-method investment | (3,515,000) | 0 |
Loss (income) from equity-method investees | 354,000 | (555,000) |
Change in operating assets and liabilities: | ||
Tenant and other receivables, net | 763,000 | 700,000 |
Other assets | 682,000 | (703,000) |
Accounts payable and accrued liabilities | 114,000 | 117,000 |
Security deposits | 4,064,000 | 0 |
Net cash provided by operating activities | 4,376,000 | 760,000 |
Cash flows from investing activities: | ||
Real estate acquisitions | (150,664,000) | 0 |
Investments in equity-method investees | (590,000) | 0 |
Proceeds from sale of equity-method investment | 5,411,000 | 0 |
Distributions received from equity-method investees | 1,888,000 | 972,000 |
Payments from notes receivable | 262,000 | 313,000 |
Net cash (used in) provided by investing activities | (143,693,000) | 1,285,000 |
Cash flows from financing activities: | ||
Proceeds from issuance of loans payable | 138,750,000 | 11,863,000 |
Payments of loans payable | (1,061,000) | (11,677,000) |
Distributions paid to noncontrolling interests | (99,000) | (61,000) |
Debt issuance costs | (2,703,000) | (656,000) |
Net cash provided by (used in) financing activities | 134,887,000 | (531,000) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (4,430,000) | 1,514,000 |
Cash, cash equivalents and restricted cash - beginning of year | 17,591,000 | 16,077,000 |
Cash, cash equivalents and restricted cash - end of year | 13,161,000 | 17,591,000 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest: | $ 2,014,000 | $ 1,828,000 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2021 | |
Organization | |
Organization | 1. Organization Summit Healthcare REIT, Inc. (“Summit”) is a real estate investment trust that owns 100% of 14 properties, 95.3% of four properties, a 10% equity interest in an unconsolidated equity-method investment that holds 17 properties, a 35% equity interest in an unconsolidated equity-method investment that holds two properties, a 20% equity interest in an unconsolidated equity-method investment that holds two properties, a 10% equity interest in an unconsolidated equity-method investment that holds nine properties, and a 10% equity interest in an unconsolidated equity-method investment that holds six properties. In June 2021, we sold our 15% equity interest in an unconsolidated equity-method investment that held 14 properties. Summit is a Maryland corporation, formed in 2004 under the General Corporation Law of Maryland for the purpose of investing in and owning real estate. As used in these notes, the “Company”, “we”, “us” and “our” refer to Summit and its consolidated subsidiaries, including Summit Healthcare Operating Partnership, L.P. (the “Operating Partnership”), except where the context otherwise requires. We conduct substantially all of our operations through the Operating Partnership, which is a Delaware limited partnership. We own a 99.88%general partner interest in the Operating Partnership, and Cornerstone Realty Advisors, LLC (“CRA”), a former affiliate, owns a 0.12% limited partnership interest. Summit and the Operating Partnership are managed and operated as one entity, and Summit has no significant assets other than its investment in the Operating Partnership. Summit, as the general partner of the Operating Partnership, controls the Operating Partnership and consolidates the assets, liabilities, and results of operations of the Operating Partnership. Therefore, the assets and liabilities of Summit and the Operating Partnership are the same. Cornerstone Healthcare Partners LLC – Consolidated Joint Venture We own 95% of Cornerstone Healthcare Partners LLC (“CHP LLC”), which was formed in 2012, and the remaining 5% noncontrolling interest is owned by Cornerstone Healthcare Real Estate Fund, Inc. (“CHREF”), an affiliate of CRA. CHP LLC is consolidated within our financial statements and owns four properties (the “JV Properties”) with another partially owned subsidiary. As of December 31, 2021 and 2020, we own a 95.3%interest in the four JV Properties, and CHREF owns a 4.7% interest. Summit Union Life Holdings, LLC – Equity-Method Investment In April, 2015, through our Operating Partnership, we entered into a limited liability company agreement with Best Years, LLC (“Best Years”), an unrelated entity and a U.S.-based affiliate of Union Life Insurance Co, Ltd. (a Chinese corporation), and formed Summit Union Life Holdings, LLC (the “SUL JV”). The SUL JV is not consolidated in our consolidated financial statements and is accounted for under the equity-method in our consolidated financial statements (see Note 5). As of December 31, 2021 and 2020, we have a 10%interest in the SUL JV which owns 17 properties. Summit Fantasia Holdings, LLC – Equity-Method Investment In September 2016, through our Operating Partnership, we entered into a limited liability company agreement with Fantasia Investment III LLC (“Fantasia”), an unrelated entity and a U.S.-based affiliate of Fantasia Holdings Group Co., Limited (a Chinese corporation listed on the Stock Exchange of Hong Kong (HKEX)), and formed Summit Fantasia Holdings, LLC (the “Fantasia JV”). The Fantasia JV is not consolidated in our consolidated financial statements and is accounted for under the equity-method in our consolidated financial statements. As of December 31, 2021 and 2020, we have a 35%interest in the Fantasia JV which owns two properties. Summit Fantasia Holdings II, LLC – Equity-Method Investment In December 2016, through our Operating Partnership, we entered into a limited liability company agreement with Fantasia, and formed Summit Fantasia Holdings II, LLC (the “Fantasia II JV”). The Fantasia II JV is not consolidated in our consolidated financial statements and is accounted for under the equity-method in our consolidated financial statements. As of December 31, 2021 and 2020, we have a 20%interest in the Fantasia II JV which owns two properties. Summit Fantasia Holdings III, LLC - Equity-Method Investment In July 2017, through our Operating Partnership, we entered into a limited liability company agreement with Fantasia and formed Summit Fantasia Holdings III, LLC (the “Fantasia III JV”). The Fantasia III JV is not consolidated in our consolidated financial statements and is accounted for under the equity-method in the Company’s consolidated financial statements. As of December 31, 2021 and 2020, we have a 10%interest in the Fantasia III JV which owns nine properties. Summit Fantasy Pearl Holdings, LLC – Equity-Method Investment In October 2017, through our Operating Partnership, we entered into a limited liability company agreement with Fantasia, Atlantis Senior Living 9, LLC, a Delaware limited liability company (“Atlantis”), and Fantasy Pearl LLC, a Delaware limited liability company (“Fantasy”), and formed Summit Fantasy Pearl Holdings, LLC (the “FPH JV”). The FPH JV is not consolidated in our consolidated financial statements and is accounted for under the equity-method in the Company’s consolidated financial statements. As of December 31, 2021 and 2020, we have a 10%interest in the FPH JV which owns six properties. Indiana JV– Equity-Method Investment In June 2021, we sold our 15% interest in the Indiana joint venture (the “Indiana JV”) for approximately $5.4 million. See Note 5 for further information. The Indiana JV was not consolidated in our consolidated financial statements and was accounted for under the equity-method prior to the sale of our equity interest. As of December 31, 2021 and 2020, we had a 0% and 15% interest in the Indiana JV, respectively, which owned 14 properties. Summit Healthcare Asset Management, LLC (TRS) Summit Healthcare Asset Management, LLC (“SAM TRS”) is our wholly-owned taxable REIT subsidiary (“TRS”). We serve as the manager of the SUL JV, Fantasia JV, Fantasia II JV, Fantasia III JV, FPH JV and the Indiana JV prior to the sale of our equity interest (collectively, our “Equity-Method Investments”), and provide management services in exchange for fees and reimbursements. All acquisition fees and asset management fees earned by us are paid to SAM TRS and expenses incurred by us, as the manager, are reimbursed from SAM TRS. See Notes 5 and 7 for further information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The summary of significant accounting policies presented below is designed to assist in understanding our consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of our management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, or GAAP, in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements. Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, the Operating Partnership, and its consolidated companies and are prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). All intercompany accounts and transactions have been eliminated in consolidation. The Financial Accounting Standards Board (“FASB”) issued Accounting Standard Codification (“ASC”) 810, Consolidation Use of Estimates The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base these estimates on various assumptions that we believe to be reasonable under the circumstances, and these estimates form the basis for our judgments concerning the carrying values of assets and liabilities that are not readily apparent from other sources. We periodically evaluate these estimates and judgments based on available information and experience. Actual results could differ from our estimates under different assumptions and conditions. If actual results significantly differ from our estimates, our financial condition and results of operations could be materially impacted. Cash and Cash Equivalents We consider all short-term, highly liquid investments that are readily convertible to cash with a maturity of three months or less at the time of purchase to be cash equivalents. As of December 31, 2021, we had cash accounts in excess of FDIC-insured limits. We do not believe we are exposed to any significant credit risk on cash and cash equivalents. Restricted Cash Restricted cash represent restricted cash held by our lenders in interest bearing accounts related to impound reserve accounts for property taxes, insurance and capital funds as required under the terms of the loan agreements. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown on the consolidated statements of cash flows: December 31, December 31, 2021 2020 Cash and cash equivalents $ 10,488,000 $ 14,658,000 Restricted cash 2,673,000 2,933,000 Total cash, cash equivalents, and restricted cash shown on the consolidated statements of cash flows $ 13,161,000 $ 17,591,000 Investments in Real Estate and Depreciation We allocate the purchase price of our properties in accordance with ASC 805 – Business Combinations. If the acquisition does not meet the definition of a business, we record the acquisition as an asset acquisition. For transactions that are business combinations, acquisition costs are expensed as incurred. For transactions that are an asset acquisition, acquisition costs are capitalized as incurred. Upon an asset acquisition of a property, we allocate the purchase price of the property based upon the relative fair value of the tangible and intangible assets acquired and liabilities assumed, which generally consists of land, buildings, site improvements, furniture and fixtures and intangible assets. The determination of fair value involves the use of significant judgment and estimation. We value land based on various inputs, which may include internal analysis of recently acquired properties, existing comparable properties within our portfolio, or third party appraisals or valuations based on comparable sales. We allocate the purchase price to tangible assets of an acquired property by valuing the property as if it were vacant. We are required to make subjective assessments as to the estimated useful lives of our depreciable assets. We consider the period of future benefit of the assets to determine the appropriate estimated useful lives. Depreciation of our assets is being charged to expense on a straight-line basis over the estimated useful lives. We depreciate the fair value allocated to building and improvements over estimated useful lives ranging from 15 to 39 years. We estimate the value of furniture and fixtures based on the assets’ depreciated replacement cost. We depreciate the fair value allocated to furniture and fixtures over estimated useful lives ranging from three to six years. In allocating the purchase price to identified intangible assets and liabilities of an acquired property, the value of above/below-market leases and in-place leases are estimated as follows: The value of above/below market leases is based on the differences between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) estimated fair market lease rates from the perspective of a market participant for the corresponding in-place leases, measured, for above-market leases, over a period equal to the remaining non-cancelable term of the lease and, for below-market leases, over a period equal to the initial term plus any below market fixed rate renewal periods. The above/below market leases are amortized as an adjustment to rental revenue over the remaining term of the respective leases. The value of in-place leases consisting of tenant origination and absorption costs and leasing commissions avoided is based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during expected lease-up periods, current market conditions, discount rates, and costs to execute similar leases. The value of in-place leases are amortized over the remaining term of the respective leases and included in depreciation and amortization in the consolidated statements of operations. If a tenant vacates its space prior to its contractual expiration date, any unamortized balance of their related intangible asset is recorded in the consolidated statements of operations. Assets held for sale are not depreciated. Impairment of Real Estate Properties We evaluate the recoverability of the carrying value of our real estate properties on a property-by-property basis. We review our properties for recoverability when events or circumstances, including changes in the Company's use of property or the strategy for its overall business, plans to sell a property before its depreciable life has ended, occupancy changes, significant near-term lease expirations, significant deteriorations of the underlying cash flows of the property, and other market factors indicate that the carrying amount of the property may not be recoverable. Impairment is measured as the amount by which the carrying amount of the property exceeds the fair value of the property. We recorded no impairment charges in 2021 and 2020. Fair Value Measurements Fair value represents the estimate of the proceeds to be received, or paid in the case of a liability, in a current transaction between willing parties. ASC 820, Fair Value Measurement, Financial assets and liabilities are categorized based on the inputs to the valuation techniques as follows: Level 1. Level 2. Level 3. Assets and liabilities measured at fair value are classified according to the lowest level input that is significant to their valuation. A financial instrument that has a significant unobservable input along with significant observable inputs may still be classified as a Level 3 instrument. We generally determine or calculate the fair value of financial instruments using quoted market prices in active markets when such information is available or use appropriate present value or other valuation techniques, such as discounted cash flow analyses, incorporating available market discount rate information for similar types of instruments and our estimates for non-performance and liquidity risk. These techniques are significantly affected by the assumptions used, including the discount rate, credit spreads, and estimates of future cash flow. There were no assets or liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2021. Fair Value Measurement of Financial Instruments Our consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, notes receivable, deposits, tenant and other receivables, certain other assets, accounts payable and accrued liabilities, security deposits and loans payable. With the exception of the loans payable discussed below, we consider the carrying values to approximate fair value for such financial instruments because of the short period of time between origination of the instruments and their expected payment. As of December 31, 2021 and 2020, the fair value of loans payable was $177.3 million and $52.6 million, compared to the principal balance (excluding debt discount) of $184.9 million and $47.2 million, respectively. The fair value of loans payable was estimated using lending rates available to us for financial instruments with similar terms and maturities. To estimate fair value as of December 31, 2021, we utilized discount rates ranging from 4.0% to 12.0% and a weighted average discount rate of 6.0%. As the inputs to our valuation estimate are neither observable in nor supported by market activity, our loans payable are classified as Level 3 liabilities within the fair value hierarchy. At December 31, 2021 and 2020, we do not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in our consolidated financial statements. Variable Interest Entities We analyze our contractual and/or other interests to determine whether such interests constitute an interest in a VIE in accordance with ASC 810, Consolidation Tenant and Other Receivables Tenant and other receivables are comprised of rental and tenant reimbursement billings due from tenants, the cumulative amount of future adjustments necessary to present rental income on a straight-line basis, asset management fees and distributions receivable. Tenant receivables for rental revenues are recorded at the original amount earned. Allowance for Credit Losses The allowance for credit losses is maintained on all receivables except for lease receivables and is maintained at a level believed adequate to absorb potential losses in our receivables. The determination of the credit allowance is based on a quarterly evaluation of each of these receivables, including general economic conditions and estimated collectability. We evaluate the collectability of our receivables based on a combination of credit quality indicators, including, but not limited to, payment status, historical charge-offs, and financial strength of the lessee or equity method investment. A receivable is considered to have deteriorated in credit quality when, based on current information and events, it is probable that we will be unable to collect all amounts due. As of December 31, 2021, the allowance for credit losses is immaterial. Deferred Financing Costs Costs incurred with potential financing arrangements are recorded as deferred debt issuance costs. Costs incurred in connection with completed debt financing are recorded as debt issuance costs. Debt issuance costs are amortized using the straight-line basis which approximates the effective interest rate method, over the contractual terms of the respective financings, and are presented net of loans payable in loans payable, net of debt issuance costs, in the consolidated balance sheets. Deferred Leasing Commissions Leasing commissions (paid to CRA prior to April 1, 2014) were capitalized at cost and are being amortized on a straight-line basis over the related lease term. As of December 31, 2021 and 2020, total costs incurred were $1.1 million, and the unamortized balance was approximately $0.5 million. Amortization expense for each of the years ended December 31, 2021 and 2020 was approximately $70,000. Other Assets Other assets consist primarily of intangible assets of above/below market rates, net of amortization, deferred financing and acquisition costs, prepaid insurance, property taxes and other. Additionally, other assets will be amortized to expense over their future service periods. Balances without future economic benefit are expensed as they are identified. Equity-Method Investments We report our investments in unconsolidated entities, over whose operating and financial policies we have the ability to exercise significant influence but not control, under the equity method of accounting. Under this method of accounting, our pro rata share of the applicable entity’s earnings or losses is included in our consolidated statements of operations. We initially record our investments based on either the carrying value for properties contributed or the cash invested. We evaluate our equity-method investments for impairment whenever events or changes in circumstances indicate that the carrying value of our investments may exceed the fair value. If it is determined that a decline in the fair value of our investments is not temporary, and if such reduced fair value is below its carrying value, an impairment is recorded. Determining fair value involves significant judgment. Our estimates consider available evidence including the present value of the expected future cash flows discounted at market rates, general economic conditions and other relevant factors. We did not record any impairments related to our equity-method investments for the years ended December 31, 2021 and 2020. Rental Revenue We recognize revenue based on FASB Accounting Standards Update (“ASU”) 2016-02, Leases Additionally, where real estate taxes were paid directly by our tenants to taxing authorities, we do not record any revenue or expense. For our triple-net leasing arrangements in which the tenant remits payment for real estate taxes to us and we pay the taxing authority, we have included the associated revenue and expense in total rental revenues and property operating costs on the consolidated statements of operations. We also made an accounting policy election to keep short-term leases less than twelve months off the balance sheet for all classes of underlying assets. Additionally, under Topic 842, we must assess if all payments due under the lease are likely to be collected. If tenant lease payments are not likely to be collected, then the revenues will be recognized on a cash basis (or if the answer changes at a later date, the revenues are adjusted to reflect what it would have been on a cash basis) and the adjustments will be recorded through rental revenues, rather than bad debt expense. During 2021, we determined that two of our leases were uncollectible (see Note 3) and therefore, we recorded rental revenue received on the cash basis. Acquisition and Asset Management Fees The Company records acquisition and asset management fee revenue based on ASC 606, Revenue from Contracts with Customers (Topic 606) Stock-Based Compensation We record stock-based compensation expense for share-based payments to employees and directors, including grants of stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model. Compensation expense is recognized ratably over the vesting term and is included in general and administrative expense in our consolidated statements of operations. Forfeitures are recognized as they occur. See Note 10 for further information. Noncontrolling Interest in Consolidated Subsidiary Noncontrolling interest relates to the interest in the consolidated entities that are not wholly-owned by us. As of December 31, 2021 and 2020, the noncontrolling interest mainly relates to CHP, LLC. ASC 810-10-65, Consolidation We periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling interest as permanent equity in the consolidated balance sheets. Any noncontrolling interest that fails to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (a) the carrying amount, or (b) its redemption value as of the end of the period in which the determination is made. Income Taxes We have elected to be taxed as a REIT, under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”) beginning with our taxable year ending December 31, 2006. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to currently distribute at least 90% of the REIT’s ordinary taxable income to stockholders. As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service were to grant us relief under certain statutory provisions. Such an event could materially and adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we will be organized and operate in such a manner as to qualify for treatment as a REIT and intend to operate for the foreseeable future in such a manner so that we will remain qualified as a REIT for federal income tax purposes. Given the applicable statute of limitations, we generally are subject to audit by the Internal Revenue Service (“IRS”) for the year ended December 31, 2017 and subsequent years, and state income tax returns are subject to audit for the year ended December 31, 2016 and subsequent years. We have elected to treat SAM TRS as a taxable REIT subsidiary, which generally may engage in any business, including the provision of customary or non-customary services for our tenants. SAM TRS is treated as a regular corporation and is subject to federal income tax and applicable state income and franchise taxes at regular corporate rates. SAM TRS has deferred tax assets related to their NOL for a total of $1,779,000, which has a full valuation allowance as of December 31, 2021 and 2020. Due to the losses incurred and the full valuation allowance on deferred tax assets, there was no tax provision related to SAM TRS in 2021 and 2020. Uncertain Tax Positions In accordance with the requirements of ASC 740, Income Taxes, Basic and Diluted Net Income (Loss) and Distributions per Common Share Basic earnings per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all stock options are used to repurchase common stock at our NAV value. Lake Forest Lease We have entered into a lease agreement, as amended, for corporate office space located in Lake Forest, California, which expires in April 2022 (the “LF Lease”). In 2020, based on Topic 842, we recorded a right-of-use asset and lease liability equal to the present value of the remaining lease payments within the consolidated balance sheet. As a result, the Company recognized a right-of-use asset lease liability As of December 31, 2021 and 2020, the Company had a ROU operating lease asset of $0.03 million and $0.1 million, respectively, recorded in other assets in our consolidated balance sheets and a lease liability of $0.03 million and $0.1 million, respectively, recorded in our consolidated balance sheets in accrued liabilities. The Company recognized lease expense, calculated as the remaining cost of the lease allocated over the remaining lease term on a straight-line basis. Lease expense is presented as part of continuing operations within general and administrative expenses in the consolidated statements of operations. For the years ended December 31, 2021 and 2020, the Company recognized approximately $0.1 million in lease expense. For the years ended December 31, 2021 and 2020, the Company paid approximately $0.1 million in rent relating to the LF Lease. As a payment arising from an operating lease, the $0.1 million is classified within operating activities in the consolidated statements of cash flows. As of December 31, 2021, the remaining lease term for LF Lease is 4 months. Because we do not have access to the discount rate implicit in the lease, we have utilized our estimated incremental borrowing rate as the discount rate. The estimated discount rate associated with our corporate operating lease is 5%. Pursuant to ASC 842, the remaining lease payments on the LF Lease through April 2022 is $36,000. Recently Adopted Accounting Pronouncements In January 2020, the FASB issued ASU 2020-01 to clarify the interaction among the accounting standards for equity securities, equity method investments and certain derivatives. The new ASU clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The adoption of the new standard on January 1, 2021 did not have a material effect on the Company’s financial position, results of operations, or cash flows. Coronavirus (COVID-19) Since it was first reported in December 2019, COVID-19 has spread globally. The outbreak has led governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to control its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders. The COVID-19 pandemic and measures to prevent its spread negatively impacted senior housing and skilled nursing facilities in a number of ways, including but not limited to: ● Decreased occupancy and increased operating costs for the Company’s tenants and borrowers, which may adversely impact their ability to make full and timely rental and debt payments to the Company. The Company may have to restructure tenants’ long-term rent obligations in the future and may not be able to do so on terms that are as favorable to the Company as those currently in place. Reduced or modified rental and debt amounts could result in the determination that the full amounts of the Company’s real estate properties are not recoverable, which could result in an impairment charge. ● Decreased occupancy and increased operating costs for the Company’s Equity-Method Investments that own senior housing and skilled nursing facilities, which may negatively impact the operating results of these investments. The Equity-Method Investments may have to restructure tenants’ long-term rent obligations and may not be able to do so on terms that are as favorable to the Equity-Method Investments as those currently in place. Prolonged deterioration in the operating results for these investments could result in the determination that the full amounts of the Company’s investments are not recoverable, which could result in an impairment charge. See Note 3 for financial issues related to two of our owned facilities. Additionally, some of our Equity-Method Investment tenants have experienced decreased occupancy and increased operating costs related to COVID-19; however, there have been no rent concessions for such tenants during 2021. It is impossible to predict the continuing effect and ultimate impact of the COVID-19 pandemic on our operations and results as the situation is continuing to evolve. The rapid development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact on the demand for senior housing and skilled nursing and presents material uncertainty and risk with respect to our business, operations, financial condition and liquidity, including recording impairments, lease modifications and credit losses associated with notes receivable in future periods. |
Investments in Real Estate Prop
Investments in Real Estate Properties | 12 Months Ended |
Dec. 31, 2021 | |
Investments in Real Estate Properties | |
Investments in Real Estate Properties | 3. Investments in Real Estate Properties As of December 31, 2021 and 2020, investments in real estate properties including those held by our consolidated subsidiaries (excluding the 36 properties owned by our unconsolidated Equity-Method Investments) are set forth below: December 31, December 31, 2021 2020 Land $ 15,565,000 $ 6,237,000 Buildings and improvements 166,989,000 48,295,000 Less: accumulated depreciation (11,395,000) (9,853,000) Buildings and improvements, net 155,594,000 38,442,000 Furniture and fixtures 12,137,000 4,230,000 Less: accumulated depreciation (4,194,000) (3,988,000) Furniture and fixtures, net 7,943,000 242,000 Intangible lease assets 13,778,000 — Less: accumulated amortization (18,000) — Intangible lease assets, net 13,760,000 — Real estate properties, net $ 192,862,000 $ 44,921,000 Depreciation and amortization expense (excluding leasing commission amortization) for the years ended December 31, 2021 and 2020 was approximately $1.8 million and $1.6 million, respectively. As of December 31, 2021, our portfolio consisted of 18 real estate properties which were 100% leased to the tenants of the related facilities. During 2021, our tenants for the Pennington Gardens and Sundial Assisted Living facilities experienced a material adverse effect on their operations related to COVID-19 and other operator issues, that affected their ability to make their rent payments in 2021. As a result, we experienced the following impacts: Pennington Gardens Operations LLC In October 2020, under a court order, a receiver assumed the responsibilities of operating and managing our Pennington Gardens facility in Chandler, Arizona. Beginning in March 2021, we recorded rent payments on a cash basis and wrote off the remaining straight-line rent receivable of $0.4 million. In October 2021 , we reached an agreement with the tenant to terminate the lease. We notified the lender and the U.S. Department of Housing and Urban Development (“HUD”) and requested emergency approval to change the operator and terminate the lease, but due to circumstances out of our control, that and the formal approval are currently still in process. On February 3, 2022, the current receiver, who was acting as the operator, received the license to be the licensed operator. As such, on February 10, 2022, the tenant’s lease was terminated, and we received $0.2 million from the tenant as part of the settlement agreement. Concurrently, we entered into a new lease agreement with Pennington Gardens Operations LLC, the newly formed operating company for Pennington Gardens, which is a wholly owned subsidiary of SHOP TRS, a recently formed wholly-owned taxable REIT subsidiary of Summit. As such, the operations of Pennington Gardens will be consolidated in our financial statements beginning February 11, 2022, and all intercompany transactions will be eliminated. Sundial Operations LLC For our Sundial Assisted Living facility in Redding, California, in October 2021, we reached an agreement with the tenant to terminate the lease, and we are currently requesting approval from HUD to terminate the lease and install a new operator/manager. Once approved by HUD, the lease will be terminated and the operations of Sundial Assisted Living will be consolidated in our financial statements. Beginning in June 2021, we recorded rent payments on a cash basis and in May 2021, wrote off the remaining straight-line rent receivable of $0.1 million. The following table provides summary information regarding our portfolio (excluding the 36 properties owned by our unconsolidated Equity-Method Investments and the $12.75 million loan from Oxford (see Note 4) with Summit Georgia Holdings LLC, our wholly-owned subsidiary) as of December 31, 2021: Loans Payable, Excluding Debt Purchase Issuance Property Location Date Purchased Type (1) Price Costs Sheridan Care Center Sheridan, OR August 3, 2012 SNF $ 4,100,000 $ 4,169,000 Fernhill Care Center Portland, OR August 3, 2012 SNF 4,500,000 3,657,000 Friendship Haven Healthcare and Rehabilitation Center Galveston County, TX September 14, 2012 SNF 15,000,000 11,539,000 Pacific Health and Rehabilitation Center Tigard, OR December 24, 2012 SNF 8,140,000 6,097,000 Brookstone of Aledo Aledo, IL July 2, 2013 AL 8,625,000 6,732,000 Sundial Assisted Living Redding, CA December 18, 2013 AL 3,500,000 3,739,000 Pennington Gardens Chandler, AZ July 17, 2017 AL/MC 13,400,000 10,194,000 Yucaipa Hill Post Acute Yucaipa, CA July 2, 2021 SNF 10,715,000 8,014,000 Creekside Post Acute Yucaipa, CA July 2, 2021 SNF 4,780,000 3,575,000 University Post Acute Mentone, CA July 2, 2021 SNF 4,560,000 3,412,000 Calhoun Health Center Calhoun, GA December 30, 2021 SNF 7,670,000 6,549,000 Maple Ridge Health Care Center Cartersville, GA December 30, 2021 SNF 13,548,000 11,568,000 Chatsworth Health Care Center Chatsworth, GA December 30, 2021 SNF 29,785,000 25,432,000 East Lake Arbor Decatur, GA December 30, 2021 SNF 15,640,000 13,354,000 Fairburn Health Care Center Fairburn, GA December 30, 2021 SNF 14,644,000 12,503,000 Grandview Health Care Center Jasper, GA December 30, 2021 SNF 10,061,000 8,591,000 Rosemont at Stone Mountain Stone Mountain, GA December 30, 2021 SNF 23,908,000 20,414,000 Willowwood Nursing Center & Rehab Flowery Branch, GA December 30, 2021 SNF 14,744,000 12,589,000 Total: $ 207,320,000 $ 172,128,000 (1) SNF is an abbreviation for skilled nursing facility. AL is an abbreviation for assisted living facility. MC is an abbreviation for memory care facility. Future Minimum Lease Payments The future minimum lease payments to be received under existing operating leases (not including leases being recorded on the cash basis or intercompany leases) for our consolidated properties as of December 31, 2021 are as follows: Years ending December 31, 2022 $ 17,698,000 2023 17,983,000 2024 18,272,000 2025 18,566,000 2026 18,865,000 Thereafter 165,462,000 $ 256,846,000 2021 Acquisitions CA3 Properties On July 2, 2021, through our wholly-owned subsidiary, we acquired three skilled nursing facilities, two located in Yucaipa, California and one located in Mentone, California (collectively, the “CA3 Properties”), for the purchase price of $20,055,000, which was funded through cash on hand plus the proceeds from the loan described in Note 4. We incurred approximately $80,000 in acquisition costs in connection with these acquisitions. The CA3 Properties are leased to three tenants under three separate 15-year triple net leases, each of which has The following table represents the allocation of the relative fair value of the real estate acquired for the CA3 Properties acquisition: Land $ 2,293,000 Building and improvements 15,908,000 Furniture and fixtures 448,000 Intangible lease assets and above/below market leases (1) 1,484,000 Total purchase price plus acquisition costs $ 20,133,000 (1) Above market leases intangible asset of $1.0 million is included in other assets, net on the consolidated balance sheets. GA8 Properties On December 30, 2021, through our wholly-owned subsidiary, we acquired eight skilled nursing facilities located in Georgia (collectively, the “GA8 Properties”), for the total purchase price of $130,000,000, which was funded through cash on hand plus the proceeds from the loans described in Note 4 below. The GA8 Properties are leased to eight tenants under eight separate 15-year triple net leases, each of which has two five-year renewal options. The following table represents the allocation of the relative fair value of the real estate acquired for the GA8 Properties acquisition: Land $ 7,035,000 Building and improvements 102,786,000 Furniture and fixtures 7,458,000 Intangible lease assets 13,252,000 Total purchase price plus acquisition costs $ 130,531,000 2020 Acquisitions None. Intangible Assets The following intangible lease assets are included in the consolidated balance sheet as of December 31, 2021 and are detailed in the following table: Accumulated Weighted Average Gross Balance at Amortization at Remaining Life Balance Sheet December 31, 2021 December 31, 2021 (Years) Classification Above-market lease intangibles $ 959,000 $ 32,000 14.50 Other assets, net In-place lease intangibles 13,777,000 18,000 14.98 Real estate properties, net Total intangibles $ 14,736,000 $ 50,000 14.95 Expected future amortization for the next five years of the intangible assets as of December 31, 2021 is $982,000 per year . |
Loans Payable
Loans Payable | 12 Months Ended |
Dec. 31, 2021 | |
Loans Payable | |
Loans Payable | 4. Loans Payable As of December 31, 2021 and 2020, loans payable consisted of the following December 31, 2021 December 31, 2020 Loans payable to Lument (formerly ORIX Real Estate Capital, LLC) (insured by HUD) in monthly installments of approximately $183,000, including interest, ranging from a fixed rate of 2.79% to 4.2%, due in September 2039 through April 2055, and as of December 31, 2021 and 2020, collateralized by Sheridan, Fernhill, Pacific Health, Aledo, Sundial and Friendship Haven. $ 35,934,000 $ 36,857,000 Loan payable to Capital One Multifamily Finance, LLC (insured by HUD) in monthly installments of approximately $49,000, including interest at a fixed rate of 4.23%, due in September 2053, and collateralized by Pennington Gardens. 10,194,000 10,330,000 Loan payable to CIBC Bank, USA in monthly installments of approximately of $65,000 interest only through July 2022 at LIBOR (with a floor of 1%) plus 4% (5% at December 31, 2021), due in July 2024, and as of December 31, 2021, collateralized by Yucaipa Hill Post Acute, Creekside Post Acute and University Post Acute. 15,000,000 — Loan payable to CIBC Bank, USA in monthly installments of approximately $314,000 (interest only through December 2023) at SOFR plus 3.50% with a SOFR floor of 0.5%, (4% at December 31, 2021), due in December 2024, and as of December 31, 2021, collateralized by Calhoun Health Center, Maple Ridge Health Care Center, Chatsworth Health Care Center, East Lake Arbor, Fairburn Health Care Center, Grandview Health Care Center, Rosemont at Stone Mountain, and Willowwood Nursing Center & Rehab. 91,000,000 — Loan payable to Oxford Finance, LLC in monthly installments of approximately $207,000 (interest only through maturity), at LIBOR (with a floor of 1%) plus 11% (12% at December 31, 2021) due in March 2025, collateralized in second position by Calhoun Health Center, Maple Ridge Health Care Center, Chatsworth Health Care Center, East Lake Arbor, Fairburn Health Care Center, Grandview Health Care Center, Rosemont at Stone Mountain, and Willowwood Nursing Center & Rehab. 20,000,000 — Loan payable to Oxford Finance, LLC in monthly installments of approximately $132,000 (interest only through maturity), at LIBOR (with a floor of 1%) plus 11% (12% at December 31, 2021) due in December 2026, secured by the equity interests of our wholly-owned subsidiary, Summit Georgia Holdings LLC, the parent holding company for the GA8 Properties. 12,750,000 — 184,878,000 47,187,000 Less debt issuance costs (4,508,000) (1,913,000) Total loans payable $ 180,370,000 $ 45,274,000 As of December 31, 2021, we have total debt obligations of approximately $184.9 million that will mature between 2024 and 2055. See Note 3 for loans payable balance for each property. All of the loans payable have certain financial and non-financial covenants, including ratios and financial statement considerations. As of December 31, 2021, we were in compliance with all of our debt covenants. In connection with our loans payable, we incurred debt issuance costs. As of December 31, 2021 and 2020, the unamortized balance of the debt issuance costs was approximately $4.5 million and $1.9 million, respectively. These debt issuance costs are being amortized over the life of their respective financing agreements using the straight-line basis which approximates the effective interest rate method. For the years ended December 31, 2021 and 2020, approximately $0.1 million and $0.2 million, respectively, of debt issuance costs were amortized and included in interest expense in our consolidated statements of operations. During the years ended December 31, 2021 and 2020, we incurred approximately $2.4 million and $2.1 million, respectively, of interest expense related (excluding debt issuance cost amortization) to our loans payable. The principal payments due on the loans payable (excluding debt issuance costs) for each of the five following years and thereafter ending December 31 are as follows: Principal Year Amount 2022 1,269,000 2023 1,475,000 2024 106,731,000 2025 21,246,000 2026 14,042,000 Thereafter 40,115,000 $ 184,878,000 The following information notes the loan activity for the years ended December 31, 2021 and 2020: CA3 Properties On July 2, 2021, in conjunction with the acquisition of the CA3 Properties (see Note 3), we entered into a first priority $15.0 million mortgage loan collateralized by the CA3 Properties with CIBC Bank, USA (“CIBC”). The loan bears interest at the One Month London Interbank Offer Rate (“LIBOR”) (with a floor of 1%) plus 4.00%, or the Secured Overnight Financing Rate (“SOFR”) when LIBOR is discontinued, and matures on July 2, 2024. The loan is interest only for the first year and thereafter requires additional monthly installments of principal that are held by the lender in a cash loan guarantee fund until maturity. The loan may be prepaid at any time with no penalty if the CA3 Properties are refinanced through HUD, otherwise we would be required to pay a prepayment premium equal to three percent (3%), two percent (2%) and one percent (1%) of the amount of the outstanding principal balance of the Loan prepaid if such prepayment occurs on or prior to the first (1st), second (2nd) and third (3rd) year anniversary of the closing date, respectively. In the event the Company sells or transfers one or more properties, we would be required to pay an exit fee equal to (i) one-half of one percent (0.5%) of the amount of the outstanding principal balance of the Loan if such sale or transfer occurs on or prior to the second (2nd) year anniversary of the Closing Date; and (ii) zero percent (0%) if such sale or transfer occurs after the second (2nd) year anniversary of the Closing Date. Additionally, the CIBC loan has certain financial and non-financial covenants. GA8 Properties We acquired our interest in the GA8 Properties subject to a $91 million first priority mortgage loan collateralized by those properties, a $20 million subordinated term loan collateralized by those properties and a $12.75 million mezzanine loan secured by the equity interests of the wholly-owned subsidiary, Summit Georgia Holdings LLC, the parent holding company for the GA8 Properties. On December 30, 2021, we entered into a loan agreement with CIBC for $91.0 million in principal amount. The loan bears interest at the SOFR plus 3.50% with a SOFR floor of 50 basis points, or the bank’s base rate plus 0.75% (with a minimum of 4.0%), and matures on December 30, 2024. The loan is interest-only for two years and then requires additional monthly installments of principal that are held by the lender in a cash loan guarantee fund until maturity. The loan may be prepaid at any time with no penalty if the GA8 Properties are refinanced through HUD, otherwise we would be required to pay an a prepayment premium equal to three percent (3%), two percent (2%) and one percent (1%) of the amount of the outstanding principal balance of the Loan prepaid if such prepayment occurs on or prior to the first (1st), second (2nd) and third (3rd) year anniversary of the closing date, respectively. In the event the Company sells or transfers one or more properties, we would be required to pay an exit fee equal to (i) one-half of one percent (0.5%) of the amount of the outstanding principal balance of the Loan if such sale or transfer occurs on or prior to the second (2nd) year anniversary of the Closing Date; and (ii) zero percent (0%) if such sale or transfer occurs after the second (2nd) year anniversary of the Closing Date. On December 30, 2021, we entered into a subordinated term loan agreement with Oxford for $20.0 million in principal amount. The loan bears interest at LIBOR plus 11.0% with a LIBOR floor of 100 basis points (or with a LIBOR replacement rate), and matures on March 31, 2025. The loan is interest only. The entire loan may be prepaid at any time and would be subject at that time to a prepayment premium fee equal to five percent (5%), two percent (2%) and one percent (1%) of the amount repaid if the repayment is made or the loan is accelerated prior to first (1st), second (2nd) and third (3rd) year anniversary of the closing date, respectively, or no prepayment fee if the GA8 Properties are refinanced through HUD. Additionally, we are required to pay an exit fee of $100,000 if the loan is paid off by December 31, 2024, or $140,000 if the loan is paid off after that date. On December 30, 2021, we entered into a mezzanine loan agreement with Oxford for $12.75 million in principal amount. The loan bears interest at LIBOR plus 11.0% with a LIBOR floor of 100 basis points (or with a LIBOR replacement rate), and matures on December 30, 2026. The loan is interest-only and requires a monthly fee in the amount of (i) twenty-two percent (22%) of net cash flow attributable to each month or portion thereof during the loan term, and (ii) five percent (5%) of net cash flow attributable to each month or portion thereof during the post-repayment period which is the earlier of (i) the second anniversary of the loan repayment date and (ii) the date upon which Summit no longer owns any direct or indirect interest in any of the properties and all accrued monthly fees, all excess cash fees and all other liabilities then due agent or lenders are indefeasibly paid in full. The entire Oxford mezzanine loan may be prepaid at any time prior to the three-year anniversary and would be subject at that time to a yield maintenance premium fee equal to the interest that would have been paid for the full three years, which will be due and payable upon the earliest of the maturity or acceleration of the loan, or payment of the loan in full. HUD-insured loans We have six properties with HUD-insured loans from Lument Capital (formerly ORIX Real Estate Capital, LLC) and one property with a HUD-insured loan from Capital One Multifamily Finance, LLC. See table above listing loans payable for further information. All of the HUD-insured loans are subject to customary representations, warranties and ongoing covenants and agreements with respect to the operation of the facilities, including the provision for certain maintenance and other reserve accounts for property tax, insurance, and capital expenditures, with respect to the facilities all as described in the HUD agreements. These reserves are included in restricted cash in our consolidated balance sheets. |
Equity-Method Investments
Equity-Method Investments | 12 Months Ended |
Dec. 31, 2021 | |
Equity-Method Investments | |
Equity-Method Investments | 5. Equity-Method Investments As of December 31, 2021 and 2020, the balances of our Equity-Method Investments were approximately $7.9 million and $11.4 million, respectively, and are as follows: Summit Union Life Holdings, LLC The SUL JV will exist until an event of dissolution occurs, as defined in the limited liability company agreement of the SUL JV (the “SUL LLC Agreement”). Under the SUL LLC Agreement, net operating cash flow of the SUL JV will be distributed monthly, first to the Operating Partnership and Best Years pari passu pari passu As of December 31, 2021 and 2020, the balance of our equity-method investment related to the SUL JV was approximately $2.9 million and $2.7 million, respectively. Summit Fantasia Holdings, LLC The Fantasia JV will exist until an event of dissolution occurs, as defined in the limited liability company agreement of the Fantasia JV (the “Fantasia LLC Agreement”). Under the Fantasia LLC Agreement, as amended in April 2018, net operating cash flow of the Fantasia JV will be distributed quarterly, first to the Operating Partnership and Fantasia pari passu pari passu As of December 31, 2021 and 2020, the balance of our equity-method investment related to the Fantasia JV was approximately $2.0 million. Summit Fantasia Holdings II, LLC The Fantasia II JV will exist until an event of dissolution occurs, as defined in the limited liability company agreement of the Fantasia II JV (the “Fantasia II LLC Agreement”). Under the Fantasia II LLC Agreement, net operating cash flow of the Fantasia JV will be distributed quarterly, first to the Operating Partnership and Fantasia pari passu pari passu As of December 31, 2021 and 2020, the balance of our equity-method investment related to the Fantasia II JV was approximately $1.3 million and $1.4 million, respectively. Summit Fantasia Holdings III, LLC The Fantasia III JV will continue until an event of dissolution occurs, as defined in the limited liability company agreement of the Fantasia III JV (the “Fantasia III LLC Agreement”). Under the Fantasia III LLC Agreement, net operating cash flow of the Fantasia III JV will be distributed quarterly, first to the Operating Partnership and Fantasia pari passu pari passu As of December 31, 2021 and 2020, the balance of our equity-method investment related to the Fantasia III JV was approximately $1.5 million and $1.6 million, respectively. Summit Fantasy Pearl Holdings, LLC The FPH JV will continue until an event of dissolution occurs, as defined in the limited liability company agreement of the FPH JV (the “FPH LLC Agreement”). Under the FPH LLC Agreement, net operating cash flow of the FPH JV will be distributed quarterly, first to the members pari passu pari passu As of December 31, 2021 and 2020, the balance of our equity-method investment related to the FPH JV was approximately $0.2 million and $0.2 million, respectively. Indiana JV In June 2021, we sold our 15% interest in the Indiana JV for approximately $5.4 million in cash. For the year ended December 31, 2021, we recorded approximately $3.5 million in gain on the sale from this equity-method investment which is included in our consolidated statements of operations under gain on sale of equity-method investment. As of December 31, 2021 and 2020, the balance of our equity-method investment related to the Indiana JV was approximately $0 million and $3.5 million, respectively. Summarized Financial Data for Equity-Method Investments Our Equity-Method Investments are significant equity-method investments in the aggregate. The results of operations of our Equity-Method Investments for the year ending December 31, 2021 are summarized below: Fantasia Fantasia Fantasia FPH Indiana Combined SUL JV JV II JV III JV JV JV Total Revenue $ 20,575,000 $ 3,591,000 $ 3,716,000 $ 8,213,000 $ 3,615,000 $ (3,166,000) (1) $ 36,544,000 Income (loss) from operations $ 6,911,000 $ 129,000 $ 1,935,000 $ 4,131,000 $ 1,680,000 $ (5,093,000) $ 9,693,000 Net income (loss) $ 2,594,000 $ 298,000 $ 988,000 $ 2,015,000 $ 1,685,000 $ (8,567,000) $ (987,000) Summit interest in Equity-Method Investments net income (loss) $ 259,000 $ 104,000 $ 198,000 $ 202,000 $ 169,000 $ (1,286,000) $ (354,000) (1) This amount has been revised to reflect the revenues of the Indiana JV prior to the sale of our 15% interest, which include $1.5 million in above market lease amortization and $2.1 million in straight-line rent receivable write off related to a change in the collectability assessment for lease payments due from the Indiana JV’s tenants as well as $0.5 million in interest income. There was no impact on the loss allocated to the Company as a result of this revision. The results of operations of our Equity-Method Investments for the year ending December 31, 2020 are summarized below: Fantasia Fantasia Fantasia FPH Indiana Combined SUL JV JV II JV III JV JV JV Total Revenue $ 18,247,000 $ 4,112,000 $ 3,557,000 $ 7,982,000 $ 3,537,000 $ 11,786,000 $ 49,221,000 Income from operations $ 7,831,000 $ 557,000 $ 1,960,000 $ 4,132,000 $ 1,681,000 $ 7,447,000 $ 23,608,000 Net income (loss) $ 3,465,000 $ (55,000) $ 992,000 $ 1,795,000 $ (779,000) $ (479,000) $ 4,939,000 Summit interest in Equity-Method Investments net income (loss) $ 346,000 $ (19,000) $ 198,000 $ 179,000 $ (78,000) $ (71,000) $ 555,000 Distributions from Equity-Method Investments As of December 31, 2021 and 2020, we have distributions receivable, which is included in tenant and other receivables in our consolidated balance sheets, as follows: December 31, December 31, 2021 2020 SULH JV $ 273,000 $ 466,000 Fantasia JV 205,000 36,000 Fantasia II JV 54,000 51,000 Fantasia III JV 22,000 257,000 FPH JV 28,000 26,000 Indiana JV - 498,000 Total $ 582,000 $ 1,334,000 For the years ended December 31, 2021 and 2020, we received cash distributions, which are included in our cash flows from operating activities in the change in tenant and other receivables, and cash flows from investing activities, using the cumulative earnings approach, as follows: Year Ended December 31, 2021 Year Ended December 31, 2020 Total Cash Cash Flow Cash Flow Total Cash Cash Flow Cash Flow Distributions from from Distributions from from Received Operating Investing Received Operating Investing SUL JV $ 837,000 $ 259,000 $ 578,000 $ 499,000 $ 346,000 $ 153,000 Fantasia JV — — — 144,000 — 144,000 Fantasia II JV 301,000 197,000 104,000 292,000 198,000 94,000 Fantasia III JV 500,000 202,000 298,000 104,000 104,000 — FPH JV 153,000 18,000 135,000 152,000 — 152,000 Indiana JV 773,000 — 773,000 429,000 — 429,000 Total $ 2,564,000 $ 676,000 $ 1,888,000 $ 1,620,000 $ 648,000 $ 972,000 Acquisition and Asset Management Fees We serve as the manager of our Equity-Method Investments and provide management services in exchange for fees and reimbursements. As the manager, we are paid an acquisition fee, as defined in the agreements. Additionally, we are paid an annual asset management fee for managing the properties held by our Equity-Method Investments, as defined in the agreements. For the years ended December 31, 2021 and 2020, we recorded approximately $1.0 million and $1.3million, respectively, in acquisition and asset management fees from our Equity-Method Investments. |
Receivables
Receivables | 12 Months Ended |
Dec. 31, 2021 | |
Receivables | |
Receivables | 6. Receivables Tenant and Other Receivables, net Tenant and other receivables, net consists of: December 31, December 31, 2021 2020 Straight-line rent receivables $ 2,395,000 $ 2,772,000 Distribution receivables from Equity-Method Investments 582,000 1,334,000 Asset management fees 323,000 432,000 Other receivables 86,000 139,000 Total $ 3,386,000 $ 4,677,000 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions | |
Related Party Transactions | 7. Related Party Transactions CRA Prior to the termination of our advisory agreement on April 1, 2014 with CRA (our former advisor, a related party), we incurred costs related to fees paid and costs reimbursed for services rendered to us by CRA through March 31, 2014. Some of the fees we had paid to CRA were considered to be in excess of allowed amounts and, therefore, CRA was required to reimburse us for the amount of the excess costs we paid to them. As of December 31, 2021 and 2020, the receivables from CRA are fully reserved due to the uncertainty of collectability and are included in tenant and other receivables in our consolidated balance sheets (see Note 9). As of December 31, 2021 and 2020, we had the following receivables and reserves: Receivables Reserves Balance Organizational and offering costs $ 738,000 $ (738,000) $ — Asset management fees and expenses 32,000 (32,000) — Operating expenses (direct and indirect) 189,000 (189,000) — Operating expenses (2%/25% Test) 1,717,000 (1,717,000) — Total $ 2,676,000 $ (2,676,000) $ — Equity-Method Investments See Notes 5 and 6 for further discussion of distributions and acquisition and asset management fees related to our Equity-Method Investments. |
Concentration of Risk
Concentration of Risk | 12 Months Ended |
Dec. 31, 2021 | |
Concentration of Risk | |
Concentration of Risk | 8. Concentration of Risk As of December 31, 2021, we owned eight properties in Georgia, four properties in California, three properties in Oregon, one property in Texas, one property in Illinois, and one property in Arizona (excluding the 36 properties held by our Equity-Method Investments). Accordingly, there is a geographic concentration of risk subject to economic conditions in certain states. Additionally, as of December 31, 2021, we leased our 18 real estate properties to 16 different tenants under long-term triple net leases. For the year ended December 31, 2021, three of the sixteen tenants each had rental revenue greater than 10% (38%, 26%, and 16%). As of December 31, 2020, we leased our seven real estate properties to five different tenants under long-term triple net leases. For the year ended December 31, 2020, four of the five tenants each had rental revenue greater than 10% (35%, 24%, 20% and 15%). As of December 31, 2021, our GA8 Properties are considered to be a significant asset concentration as the aggregate net assets of the GA8 Properties were greater than 20% of our total assets due to cross-default provisions in the leases. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | 9. Commitments and Contingencies We inspect our properties under a Phase I assessment for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist, we are not currently aware of any environmental liability with respect to the properties that would have a material effect on our consolidated financial condition, results of operations and cash flows. Further, we are not aware of any environmental liability or any unasserted claim or assessment with respect to an environmental liability that we believe would require additional disclosure or the recording of a loss contingency. Our commitments and contingencies include the usual obligations of real estate owners and licensed operators in the normal course of business. In the opinion of management, these matters are not expected to have a material impact on our consolidated financial condition, results of operations and cash flows. We are also subject to contingent losses resulting from litigation against the Company. Legal Proceedings On April 1, 2014, CRA and Cornerstone Ventures, Inc. filed a complaint in the Superior Court of California for the County of Orange-Central Justice Center, Case No. 30-2014-00714004-CU-BT-CJC, naming the Company, its former directors, one of its officers and one of its former officers as defendants, seeking declaratory and injunctive relief and compensatory and punitive damages. On September 17, 2014, we filed a First Amended Cross-Complaint seeking compensatory damages and an accounting pursuant to Sections 10(c)(i) and 17(c)(ii) of the Advisory Agreement and including any monies Plaintiffs and Terry Roussel directly or indirectly received from or paid to the Company. On February 22, 2018, the action was assigned to a different trial judge. On May 29, 2018, the Company filed a motion for terminating and monetary sanctions against CRA, Cornerstone Ventures, Inc. and their counsel, Winget Spadafora & Schwartzberg. On November 30, 2018, the new trial judge vacated the trial date, pending resolution of the Company’s motion for terminating and monetary sanctions against CRA and Cornerstone Ventures, Inc. and denied the Company’s motion for sanctions against Winget Spadafora & Schwartzberg. On February 13, 2019, the trial judge held another hearing on the Company’s motion for terminating and monetary sanctions and indicated that it intended to grant the Company’s motion for terminating sanctions and award the Company monetary sanctions. On March 14, 2019, the Court entered an Order and Judgment granting the Company’s motion for terminating sanctions, awarding the Company monetary sanctions in the amount of $588,672, and dismissing CRA and Cornerstone Ventures Inc.’s Complaint with prejudice. On May 21, 2019, CRA and Cornerstone Ventures, Inc. filed a notice of appeal from the Judgment and, on June 3, 2019, the Company filed a notice of cross-appeal from the Judgment. On July 9, 2019, the California Court of Appeal, Fourth District dismissed CRA and Cornerstone Ventures, Inc.’s appeal with prejudice. The briefing to the Court of Appeal, Fourth District on the Company’s appeals against CRA, Cornerstone Ventures, Inc and Winget Spadafora & Schwartzberg was completed on April 27, 2020. On October 28, 2020, the Court of Appeal issued an opinion affirming in part, and reversing, in part, the trial court’s opinion and remanded the action back to the trial court. On February 11, 2021, the trial court issued an order awarding an additional $189,645 in monetary sanctions for the period prior to July 12, 2016 in favor of the Company and against CRA and Cornerstone Ventures Inc.. Due to the fact that CRA and Cornerstone Ventures Inc. currently have no assets, and the sanctions we were awarded are subordinated to several other existing liens and judgments against them, we have no expectation of collecting any of the $778,317 that we have been awarded by the Court. In September 2015, a bankruptcy petition was filed against Healthcare Real Estate Partners, LLC (“HCRE”) by the investors in Healthcare Real Estate Fund, LLC and Healthcare Real Estate Qualified Purchasers Fund, LLC (collectively, the “Funds”). HCRE did not timely respond to the involuntary petition and the Bankruptcy Court entered an Order of Relief making HCRE a debtor in bankruptcy. As a result, HCRE was removed as manager under the Funds’ operating agreement. Thereafter the Company became the manager of the Funds and purchased the investors’ interests in the Funds for approximately $0.9 million. Following the subsequent dismissal of the involuntary bankruptcy petition filed against it, HCRE filed a motion for attorneys’ fees and damages and a separate complaint for violation of the automatic stay against the petitioning creditors and the Company in the United States Bankruptcy Court of the District of Delaware. The Bankruptcy Court granted a motion to dismiss the complaint for violation of the automatic stay filed jointly by the petitioning creditors and us, and dismissed the complaint with prejudice. HCRE appealed the Bankruptcy Court’s decision to the United States District Court for the District of Delaware which affirmed the Bankruptcy Court’s dismissal of the complaint in a decision dated September 9, 2018. On October 11, 2018, HCRE appealed the District Court’s decision affirming the Bankruptcy Court’s dismissal of the complaint to the United States Court of Appeals for the Third Circuit. On October 22, 2019, the Third Circuit granted HCRE’s appeal, reversing the District Court and holding that HCRE could assert the adversary complaint seeking damages for violation of the automatic stay. The Company filed a Petition for Rehearing on November 5, 2019 asserting that HCRE is not entitled to assert a claim for damages for violation of the automatic stay. This Petition was denied and the mandate was issued sending the matter back to the Bankruptcy Court. The Bankruptcy Court held a status conference on February 4, 2021, and subsequently entered scheduling orders to govern discovery and pretrial matters, and discovery is ongoing. The parties have filed dispositive motions, including a motion filed by the Company and the petitioning creditors for judgment on the pleadings. On February 4, 2022, the Bankruptcy Court entered an order denying the motion for judgment on the pleadings on the basis that the Bankruptcy Court would consider the points raised therein after trial. The Bankruptcy Court also entered an order denying HCRE’s motion to dismiss certain counterclaims and severing certain other counterclaims asserted by the petitioning creditors and the Company against HCRE on jurisdictional grounds, with the effect that such counterclaims may be pursued in the United States District Court. The Bankruptcy Court subsequently entered a further amended scheduling order, directing that remaining discovery be completed by May 15, 2022 and scheduling a final pretrial conference for August 17, 2022. Based on the assessment by management of the numerous legal arguments that can be raised on this claim, the Company believes that a loss is currently not probable or estimable under ASC 450, “Contingencies”, and as of December 31, 2021 no accrual has been made with regard to the claim. We will continue to vigorously defend ourselves against all of HCRE’s remaining alleged claims. Indemnification and Employment Agreements We have entered into indemnification agreements with certain of our executive officers and directors which indemnify them against all judgments, penalties, fines and amounts paid in settlement and all expenses actually and reasonably incurred by him or her in connection with any proceeding. Additionally, effective October 19, 2021, we entered into new employment agreements with our executive officers for a term of three years. These employment agreements include customary terms relating to salary, bonus, position, duties and benefits (including eligibility for equity compensation), as well as a cash payment following a change in control of the Company, as defined in such agreements. Management of our Equity-Method Investments As the manager of our Equity-Method Investments, we are responsible for managing the day-to-day operations. Additionally, we could be subject to a capital call from our Equity-Method Investments. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity | |
Equity | 10. Equity Distributions The Company declared no cash distributions per common share during the years ended December 31, 2021 and 2020. Our distribution reinvestment plan was suspended indefinitely effective December 31, 2010. At this time, we cannot provide any assurance as to if or when we will resume our distribution reinvestment plan. Share-Based Compensation Plans Upon the grant of stock options, we determine the exercise price by using our estimated per-share value, which is calculated by aggregating the estimated fair value of our investments in real estate and the estimated fair value of our other assets, subtracting the book value of our liabilities, utilizing a discount for the fact that the shares are not currently traded on a national securities exchange and a lack of a control premium, and divided the total by the number of our common shares outstanding at the time the options were granted. The fair value of each grant is estimated on the date of grant using the Black-Scholes option-pricing model. Assumptions required by the model include the risk-free interest rate, the expected life of the options, the expected stock price volatility over the expected life of the options, and the expected distribution yield. Compensation expense for employee stock options is recognized ratably over the vesting term. The expected life of the options was based on the simplified method as we do not have sufficient historical exercise data. The risk-free interest rate was based on the U.S. Treasury yield curve at the date of grant using the expected life of the options at the date of grant. Volatility was based on historical volatility of the stock prices for a sample of publicly traded companies with risk profiles similar to ours. The valuation model applied in this calculation utilizes highly subjective assumptions that could potentially change over time, including the expected stock price volatility and the expected life of an option. Summit Healthcare REIT, Inc. 2015 Omnibus Incentive Plan On October 28, 2015, we adopted the Summit Healthcare REIT, Inc. 2015 Omnibus Incentive Plan (“Incentive Plan”). The purpose of the Incentive Plan is to provide a means through which to attract and retain key personnel and to provide a means whereby current or prospective directors, officers, employees, consultants and advisors can acquire and maintain an equity interest in us, or be paid incentive compensation, including incentive compensation measured by reference to the value of our common stock, thereby strengthening their commitment to our welfare and aligning their interests with those of our stockholders. We may grant non-qualified stock options and incentive stock options, stock appreciation rights, restricted stock and restricted stock units, and performance based compensation awards. Stock options granted under the Incentive Plan are required to have a per share exercise price that is not less than 100% of the fair market value of our common stock underlying such stock options on the date an option is granted (other than in the case of options that are substitute awards). All stock options that are intended to qualify as incentive stock options must be granted pursuant to an award agreement expressly stating that the option is intended to qualify as an incentive stock option, and will be subject to the terms and conditions that comply with the rules as may be prescribed by Section 422 of the Code. The maximum term for stock options granted under the Incentive Plan will be ten years from the initial date of grant. The Incentive Plan provides that the total number of shares of common stock that may be issued is 3,000,000, of which 1,132,092 is available for future issuances as of December 31, 2021. On January 1, 2020, the Compensation Committee of the Board of Directors approved the issuance of 45,000 stock options under our Summit Healthcare REIT, Inc. 2015 Omnibus Incentive Plan (“Incentive Plan”) to our non-executive employees. The stock options vest monthly beginning on February 1, 2020 and continuing over a three-year period through January 1, 2023. The options expire 10 years from the grant date. The estimated fair value using the Black-Scholes option-pricing model with the following weighted average assumptions: 2020 Stock options granted 45,000 Expected volatility 22.31 % Expected term 5.75 years Risk-free interest rate 1.72 % Dividend yield 0 % Fair value per stock option $ 0.57 There were no stock option grants in 2021. The Compensation Committee of the Board of Directors approved the issuance of 90,000 stock options under our Summit Healthcare REIT, Inc. 2015 Omnibus Incentive Plan (“Incentive Plan”) to be issued to our non-executive employees in 2022. The following table summarizes our stock options as of December 31, 2021: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term Value Options outstanding at January 1, 2020 1,826,908 $ 2.09 Granted 45,000 2.26 Exercised — Cancelled/forfeited — Options outstanding at December 31, 2020 1,871,908 $ 2.09 Granted — Exercised — Cancelled/forfeited (4,000) 2.26 Options outstanding at December 31, 2021 1,867,908 $ 2.09 5.82 $ 1,596,000 Options exercisable at December 31, 2021 1,842,102 $ 2.08 5.78 $ 1,579,000 For our outstanding non-vested options as of December 31, 2021, the weighted average grant date fair value per share was $0.58. As of December 31, 2021, we have unrecognized stock-based compensation expense related to unvested stock options which is expected to be recognized as follows: Years Ending December 31, 2022 14,000 2023 1,000 $ 15,000 The stock-based compensation expense reported for the years ended December 31, 2021 and 2020 was approximately $66,000 and $151,000, respectively, and is included in general and administrative expense in the consolidated statements of operations. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting | |
Segment Reporting | 11. Segment Reporting ASC 280, Segment Reporting |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events | |
Subsequent Events | 12. Subsequent Events See Note 3 for further information regarding Pennington Gardens Operations LLC. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, the Operating Partnership, and its consolidated companies and are prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). All intercompany accounts and transactions have been eliminated in consolidation. The Financial Accounting Standards Board (“FASB”) issued Accounting Standard Codification (“ASC”) 810, Consolidation |
Use of Estimates | Use of Estimates The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base these estimates on various assumptions that we believe to be reasonable under the circumstances, and these estimates form the basis for our judgments concerning the carrying values of assets and liabilities that are not readily apparent from other sources. We periodically evaluate these estimates and judgments based on available information and experience. Actual results could differ from our estimates under different assumptions and conditions. If actual results significantly differ from our estimates, our financial condition and results of operations could be materially impacted. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all short-term, highly liquid investments that are readily convertible to cash with a maturity of three months or less at the time of purchase to be cash equivalents. As of December 31, 2021, we had cash accounts in excess of FDIC-insured limits. We do not believe we are exposed to any significant credit risk on cash and cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash represent restricted cash held by our lenders in interest bearing accounts related to impound reserve accounts for property taxes, insurance and capital funds as required under the terms of the loan agreements. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown on the consolidated statements of cash flows: December 31, December 31, 2021 2020 Cash and cash equivalents $ 10,488,000 $ 14,658,000 Restricted cash 2,673,000 2,933,000 Total cash, cash equivalents, and restricted cash shown on the consolidated statements of cash flows $ 13,161,000 $ 17,591,000 |
Investments in Real Estate and Depreciation | Investments in Real Estate and Depreciation We allocate the purchase price of our properties in accordance with ASC 805 – Business Combinations. If the acquisition does not meet the definition of a business, we record the acquisition as an asset acquisition. For transactions that are business combinations, acquisition costs are expensed as incurred. For transactions that are an asset acquisition, acquisition costs are capitalized as incurred. Upon an asset acquisition of a property, we allocate the purchase price of the property based upon the relative fair value of the tangible and intangible assets acquired and liabilities assumed, which generally consists of land, buildings, site improvements, furniture and fixtures and intangible assets. The determination of fair value involves the use of significant judgment and estimation. We value land based on various inputs, which may include internal analysis of recently acquired properties, existing comparable properties within our portfolio, or third party appraisals or valuations based on comparable sales. We allocate the purchase price to tangible assets of an acquired property by valuing the property as if it were vacant. We are required to make subjective assessments as to the estimated useful lives of our depreciable assets. We consider the period of future benefit of the assets to determine the appropriate estimated useful lives. Depreciation of our assets is being charged to expense on a straight-line basis over the estimated useful lives. We depreciate the fair value allocated to building and improvements over estimated useful lives ranging from 15 to 39 years. We estimate the value of furniture and fixtures based on the assets’ depreciated replacement cost. We depreciate the fair value allocated to furniture and fixtures over estimated useful lives ranging from three to six years. In allocating the purchase price to identified intangible assets and liabilities of an acquired property, the value of above/below-market leases and in-place leases are estimated as follows: The value of above/below market leases is based on the differences between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) estimated fair market lease rates from the perspective of a market participant for the corresponding in-place leases, measured, for above-market leases, over a period equal to the remaining non-cancelable term of the lease and, for below-market leases, over a period equal to the initial term plus any below market fixed rate renewal periods. The above/below market leases are amortized as an adjustment to rental revenue over the remaining term of the respective leases. The value of in-place leases consisting of tenant origination and absorption costs and leasing commissions avoided is based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during expected lease-up periods, current market conditions, discount rates, and costs to execute similar leases. The value of in-place leases are amortized over the remaining term of the respective leases and included in depreciation and amortization in the consolidated statements of operations. If a tenant vacates its space prior to its contractual expiration date, any unamortized balance of their related intangible asset is recorded in the consolidated statements of operations. Assets held for sale are not depreciated. |
Impairment of Real Estate Properties | Impairment of Real Estate Properties We evaluate the recoverability of the carrying value of our real estate properties on a property-by-property basis. We review our properties for recoverability when events or circumstances, including changes in the Company's use of property or the strategy for its overall business, plans to sell a property before its depreciable life has ended, occupancy changes, significant near-term lease expirations, significant deteriorations of the underlying cash flows of the property, and other market factors indicate that the carrying amount of the property may not be recoverable. Impairment is measured as the amount by which the carrying amount of the property exceeds the fair value of the property. We recorded no impairment charges in 2021 and 2020. |
Fair Value Measurement | Fair Value Measurements Fair value represents the estimate of the proceeds to be received, or paid in the case of a liability, in a current transaction between willing parties. ASC 820, Fair Value Measurement, Financial assets and liabilities are categorized based on the inputs to the valuation techniques as follows: Level 1. Level 2. Level 3. Assets and liabilities measured at fair value are classified according to the lowest level input that is significant to their valuation. A financial instrument that has a significant unobservable input along with significant observable inputs may still be classified as a Level 3 instrument. We generally determine or calculate the fair value of financial instruments using quoted market prices in active markets when such information is available or use appropriate present value or other valuation techniques, such as discounted cash flow analyses, incorporating available market discount rate information for similar types of instruments and our estimates for non-performance and liquidity risk. These techniques are significantly affected by the assumptions used, including the discount rate, credit spreads, and estimates of future cash flow. There were no assets or liabilities measured at fair value on a nonrecurring basis during the year ended December 31, 2021. |
Fair Value Measurement Of Financial Instruments | Fair Value Measurement of Financial Instruments Our consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, notes receivable, deposits, tenant and other receivables, certain other assets, accounts payable and accrued liabilities, security deposits and loans payable. With the exception of the loans payable discussed below, we consider the carrying values to approximate fair value for such financial instruments because of the short period of time between origination of the instruments and their expected payment. As of December 31, 2021 and 2020, the fair value of loans payable was $177.3 million and $52.6 million, compared to the principal balance (excluding debt discount) of $184.9 million and $47.2 million, respectively. The fair value of loans payable was estimated using lending rates available to us for financial instruments with similar terms and maturities. To estimate fair value as of December 31, 2021, we utilized discount rates ranging from 4.0% to 12.0% and a weighted average discount rate of 6.0%. As the inputs to our valuation estimate are neither observable in nor supported by market activity, our loans payable are classified as Level 3 liabilities within the fair value hierarchy. At December 31, 2021 and 2020, we do not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in our consolidated financial statements. |
Variable Interest Entities | Variable Interest Entities We analyze our contractual and/or other interests to determine whether such interests constitute an interest in a VIE in accordance with ASC 810, Consolidation |
Tenant and Other Receivables | Tenant and Other Receivables Tenant and other receivables are comprised of rental and tenant reimbursement billings due from tenants, the cumulative amount of future adjustments necessary to present rental income on a straight-line basis, asset management fees and distributions receivable. Tenant receivables for rental revenues are recorded at the original amount earned. |
Allowance for Credit Losses | Allowance for Credit Losses The allowance for credit losses is maintained on all receivables except for lease receivables and is maintained at a level believed adequate to absorb potential losses in our receivables. The determination of the credit allowance is based on a quarterly evaluation of each of these receivables, including general economic conditions and estimated collectability. We evaluate the collectability of our receivables based on a combination of credit quality indicators, including, but not limited to, payment status, historical charge-offs, and financial strength of the lessee or equity method investment. A receivable is considered to have deteriorated in credit quality when, based on current information and events, it is probable that we will be unable to collect all amounts due. As of December 31, 2021, the allowance for credit losses is immaterial. |
Deferred Financing Costs | Deferred Financing Costs Costs incurred with potential financing arrangements are recorded as deferred debt issuance costs. Costs incurred in connection with completed debt financing are recorded as debt issuance costs. Debt issuance costs are amortized using the straight-line basis which approximates the effective interest rate method, over the contractual terms of the respective financings, and are presented net of loans payable in loans payable, net of debt issuance costs, in the consolidated balance sheets. |
Deferred Leasing Commissions | Deferred Leasing Commissions Leasing commissions (paid to CRA prior to April 1, 2014) were capitalized at cost and are being amortized on a straight-line basis over the related lease term. As of December 31, 2021 and 2020, total costs incurred were $1.1 million, and the unamortized balance was approximately $0.5 million. Amortization expense for each of the years ended December 31, 2021 and 2020 was approximately $70,000. |
Other Assets | Other Assets Other assets consist primarily of intangible assets of above/below market rates, net of amortization, deferred financing and acquisition costs, prepaid insurance, property taxes and other. Additionally, other assets will be amortized to expense over their future service periods. Balances without future economic benefit are expensed as they are identified. |
Equity-Method Investments | Equity-Method Investments We report our investments in unconsolidated entities, over whose operating and financial policies we have the ability to exercise significant influence but not control, under the equity method of accounting. Under this method of accounting, our pro rata share of the applicable entity’s earnings or losses is included in our consolidated statements of operations. We initially record our investments based on either the carrying value for properties contributed or the cash invested. We evaluate our equity-method investments for impairment whenever events or changes in circumstances indicate that the carrying value of our investments may exceed the fair value. If it is determined that a decline in the fair value of our investments is not temporary, and if such reduced fair value is below its carrying value, an impairment is recorded. Determining fair value involves significant judgment. Our estimates consider available evidence including the present value of the expected future cash flows discounted at market rates, general economic conditions and other relevant factors. We did not record any impairments related to our equity-method investments for the years ended December 31, 2021 and 2020. |
Rental Revenue | Rental Revenue We recognize revenue based on FASB Accounting Standards Update (“ASU”) 2016-02, Leases Additionally, where real estate taxes were paid directly by our tenants to taxing authorities, we do not record any revenue or expense. For our triple-net leasing arrangements in which the tenant remits payment for real estate taxes to us and we pay the taxing authority, we have included the associated revenue and expense in total rental revenues and property operating costs on the consolidated statements of operations. We also made an accounting policy election to keep short-term leases less than twelve months off the balance sheet for all classes of underlying assets. Additionally, under Topic 842, we must assess if all payments due under the lease are likely to be collected. If tenant lease payments are not likely to be collected, then the revenues will be recognized on a cash basis (or if the answer changes at a later date, the revenues are adjusted to reflect what it would have been on a cash basis) and the adjustments will be recorded through rental revenues, rather than bad debt expense. During 2021, we determined that two of our leases were uncollectible (see Note 3) and therefore, we recorded rental revenue received on the cash basis. |
Acquisition and Asset Management Fees | Acquisition and Asset Management Fees The Company records acquisition and asset management fee revenue based on ASC 606, Revenue from Contracts with Customers (Topic 606) |
Stock-Based Compensation | Stock-Based Compensation We record stock-based compensation expense for share-based payments to employees and directors, including grants of stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model. Compensation expense is recognized ratably over the vesting term and is included in general and administrative expense in our consolidated statements of operations. Forfeitures are recognized as they occur. See Note 10 for further information. |
Noncontrolling Interest in Consolidated Subsidiary | Noncontrolling Interest in Consolidated Subsidiary Noncontrolling interest relates to the interest in the consolidated entities that are not wholly-owned by us. As of December 31, 2021 and 2020, the noncontrolling interest mainly relates to CHP, LLC. ASC 810-10-65, Consolidation We periodically evaluate individual noncontrolling interests for the ability to continue to recognize the noncontrolling interest as permanent equity in the consolidated balance sheets. Any noncontrolling interest that fails to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (a) the carrying amount, or (b) its redemption value as of the end of the period in which the determination is made. |
Income Taxes | Income Taxes We have elected to be taxed as a REIT, under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”) beginning with our taxable year ending December 31, 2006. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to currently distribute at least 90% of the REIT’s ordinary taxable income to stockholders. As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service were to grant us relief under certain statutory provisions. Such an event could materially and adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we will be organized and operate in such a manner as to qualify for treatment as a REIT and intend to operate for the foreseeable future in such a manner so that we will remain qualified as a REIT for federal income tax purposes. Given the applicable statute of limitations, we generally are subject to audit by the Internal Revenue Service (“IRS”) for the year ended December 31, 2017 and subsequent years, and state income tax returns are subject to audit for the year ended December 31, 2016 and subsequent years. We have elected to treat SAM TRS as a taxable REIT subsidiary, which generally may engage in any business, including the provision of customary or non-customary services for our tenants. SAM TRS is treated as a regular corporation and is subject to federal income tax and applicable state income and franchise taxes at regular corporate rates. SAM TRS has deferred tax assets related to their NOL for a total of $1,779,000, which has a full valuation allowance as of December 31, 2021 and 2020. Due to the losses incurred and the full valuation allowance on deferred tax assets, there was no tax provision related to SAM TRS in 2021 and 2020. |
Uncertain Tax Positions | Uncertain Tax Positions In accordance with the requirements of ASC 740, Income Taxes, |
Basic and Diluted Net Income (Loss) and Distributions per Common Share | Basic and Diluted Net Income (Loss) and Distributions per Common Share Basic earnings per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) by the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares are calculated in accordance with the treasury stock method, which assumes that proceeds from the exercise of all stock options are used to repurchase common stock at our NAV value. |
Lake Forest Lease | Lake Forest Lease We have entered into a lease agreement, as amended, for corporate office space located in Lake Forest, California, which expires in April 2022 (the “LF Lease”). In 2020, based on Topic 842, we recorded a right-of-use asset and lease liability equal to the present value of the remaining lease payments within the consolidated balance sheet. As a result, the Company recognized a right-of-use asset lease liability As of December 31, 2021 and 2020, the Company had a ROU operating lease asset of $0.03 million and $0.1 million, respectively, recorded in other assets in our consolidated balance sheets and a lease liability of $0.03 million and $0.1 million, respectively, recorded in our consolidated balance sheets in accrued liabilities. The Company recognized lease expense, calculated as the remaining cost of the lease allocated over the remaining lease term on a straight-line basis. Lease expense is presented as part of continuing operations within general and administrative expenses in the consolidated statements of operations. For the years ended December 31, 2021 and 2020, the Company recognized approximately $0.1 million in lease expense. For the years ended December 31, 2021 and 2020, the Company paid approximately $0.1 million in rent relating to the LF Lease. As a payment arising from an operating lease, the $0.1 million is classified within operating activities in the consolidated statements of cash flows. As of December 31, 2021, the remaining lease term for LF Lease is 4 months. Because we do not have access to the discount rate implicit in the lease, we have utilized our estimated incremental borrowing rate as the discount rate. The estimated discount rate associated with our corporate operating lease is 5%. Pursuant to ASC 842, the remaining lease payments on the LF Lease through April 2022 is $36,000. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In January 2020, the FASB issued ASU 2020-01 to clarify the interaction among the accounting standards for equity securities, equity method investments and certain derivatives. The new ASU clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The adoption of the new standard on January 1, 2021 did not have a material effect on the Company’s financial position, results of operations, or cash flows. |
Coronavirus (COVID-19) | Coronavirus (COVID-19) Since it was first reported in December 2019, COVID-19 has spread globally. The outbreak has led governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to control its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders. The COVID-19 pandemic and measures to prevent its spread negatively impacted senior housing and skilled nursing facilities in a number of ways, including but not limited to: ● Decreased occupancy and increased operating costs for the Company’s tenants and borrowers, which may adversely impact their ability to make full and timely rental and debt payments to the Company. The Company may have to restructure tenants’ long-term rent obligations in the future and may not be able to do so on terms that are as favorable to the Company as those currently in place. Reduced or modified rental and debt amounts could result in the determination that the full amounts of the Company’s real estate properties are not recoverable, which could result in an impairment charge. ● Decreased occupancy and increased operating costs for the Company’s Equity-Method Investments that own senior housing and skilled nursing facilities, which may negatively impact the operating results of these investments. The Equity-Method Investments may have to restructure tenants’ long-term rent obligations and may not be able to do so on terms that are as favorable to the Equity-Method Investments as those currently in place. Prolonged deterioration in the operating results for these investments could result in the determination that the full amounts of the Company’s investments are not recoverable, which could result in an impairment charge. See Note 3 for financial issues related to two of our owned facilities. Additionally, some of our Equity-Method Investment tenants have experienced decreased occupancy and increased operating costs related to COVID-19; however, there have been no rent concessions for such tenants during 2021. It is impossible to predict the continuing effect and ultimate impact of the COVID-19 pandemic on our operations and results as the situation is continuing to evolve. The rapid development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact on the demand for senior housing and skilled nursing and presents material uncertainty and risk with respect to our business, operations, financial condition and liquidity, including recording impairments, lease modifications and credit losses associated with notes receivable in future periods. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Schedule of restrictions on cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown on the consolidated statements of cash flows: December 31, December 31, 2021 2020 Cash and cash equivalents $ 10,488,000 $ 14,658,000 Restricted cash 2,673,000 2,933,000 Total cash, cash equivalents, and restricted cash shown on the consolidated statements of cash flows $ 13,161,000 $ 17,591,000 |
Investments in Real Estate Pr_2
Investments in Real Estate Properties (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Real Estate Properties [Line Items] | |
Schedule of Business Acquisitions, by Acquisition | As of December 31, 2021 and 2020, investments in real estate properties including those held by our consolidated subsidiaries (excluding the 36 properties owned by our unconsolidated Equity-Method Investments) are set forth below: December 31, December 31, 2021 2020 Land $ 15,565,000 $ 6,237,000 Buildings and improvements 166,989,000 48,295,000 Less: accumulated depreciation (11,395,000) (9,853,000) Buildings and improvements, net 155,594,000 38,442,000 Furniture and fixtures 12,137,000 4,230,000 Less: accumulated depreciation (4,194,000) (3,988,000) Furniture and fixtures, net 7,943,000 242,000 Intangible lease assets 13,778,000 — Less: accumulated amortization (18,000) — Intangible lease assets, net 13,760,000 — Real estate properties, net $ 192,862,000 $ 44,921,000 |
Schedule of Real Estate Properties | The following table provides summary information regarding our portfolio (excluding the 36 properties owned by our unconsolidated Equity-Method Investments and the $12.75 million loan from Oxford (see Note 4) with Summit Georgia Holdings LLC, our wholly-owned subsidiary) as of December 31, 2021: Loans Payable, Excluding Debt Purchase Issuance Property Location Date Purchased Type (1) Price Costs Sheridan Care Center Sheridan, OR August 3, 2012 SNF $ 4,100,000 $ 4,169,000 Fernhill Care Center Portland, OR August 3, 2012 SNF 4,500,000 3,657,000 Friendship Haven Healthcare and Rehabilitation Center Galveston County, TX September 14, 2012 SNF 15,000,000 11,539,000 Pacific Health and Rehabilitation Center Tigard, OR December 24, 2012 SNF 8,140,000 6,097,000 Brookstone of Aledo Aledo, IL July 2, 2013 AL 8,625,000 6,732,000 Sundial Assisted Living Redding, CA December 18, 2013 AL 3,500,000 3,739,000 Pennington Gardens Chandler, AZ July 17, 2017 AL/MC 13,400,000 10,194,000 Yucaipa Hill Post Acute Yucaipa, CA July 2, 2021 SNF 10,715,000 8,014,000 Creekside Post Acute Yucaipa, CA July 2, 2021 SNF 4,780,000 3,575,000 University Post Acute Mentone, CA July 2, 2021 SNF 4,560,000 3,412,000 Calhoun Health Center Calhoun, GA December 30, 2021 SNF 7,670,000 6,549,000 Maple Ridge Health Care Center Cartersville, GA December 30, 2021 SNF 13,548,000 11,568,000 Chatsworth Health Care Center Chatsworth, GA December 30, 2021 SNF 29,785,000 25,432,000 East Lake Arbor Decatur, GA December 30, 2021 SNF 15,640,000 13,354,000 Fairburn Health Care Center Fairburn, GA December 30, 2021 SNF 14,644,000 12,503,000 Grandview Health Care Center Jasper, GA December 30, 2021 SNF 10,061,000 8,591,000 Rosemont at Stone Mountain Stone Mountain, GA December 30, 2021 SNF 23,908,000 20,414,000 Willowwood Nursing Center & Rehab Flowery Branch, GA December 30, 2021 SNF 14,744,000 12,589,000 Total: $ 207,320,000 $ 172,128,000 (1) SNF is an abbreviation for skilled nursing facility. AL is an abbreviation for assisted living facility. MC is an abbreviation for memory care facility. |
Schedule of Future Minimum Rental Payments to be received | The future minimum lease payments to be received under existing operating leases (not including leases being recorded on the cash basis or intercompany leases) for our consolidated properties as of December 31, 2021 are as follows: Years ending December 31, 2022 $ 17,698,000 2023 17,983,000 2024 18,272,000 2025 18,566,000 2026 18,865,000 Thereafter 165,462,000 $ 256,846,000 |
Schedule of intangible lease assets | The following intangible lease assets are included in the consolidated balance sheet as of December 31, 2021 and are detailed in the following table: Accumulated Weighted Average Gross Balance at Amortization at Remaining Life Balance Sheet December 31, 2021 December 31, 2021 (Years) Classification Above-market lease intangibles $ 959,000 $ 32,000 14.50 Other assets, net In-place lease intangibles 13,777,000 18,000 14.98 Real estate properties, net Total intangibles $ 14,736,000 $ 50,000 14.95 |
CA3 Properties | |
Real Estate Properties [Line Items] | |
Schedule of the allocation of the relative fair value of the real estate | The following table represents the allocation of the relative fair value of the real estate acquired for the CA3 Properties acquisition: Land $ 2,293,000 Building and improvements 15,908,000 Furniture and fixtures 448,000 Intangible lease assets and above/below market leases (1) 1,484,000 Total purchase price plus acquisition costs $ 20,133,000 (1) Above market leases intangible asset of $1.0 million is included in other assets, net on the consolidated balance sheets. |
GA8 Properties | |
Real Estate Properties [Line Items] | |
Schedule of the allocation of the relative fair value of the real estate | The following table represents the allocation of the relative fair value of the real estate acquired for the GA8 Properties acquisition: Land $ 7,035,000 Building and improvements 102,786,000 Furniture and fixtures 7,458,000 Intangible lease assets 13,252,000 Total purchase price plus acquisition costs $ 130,531,000 |
Loans Payable (Tables)
Loans Payable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Loans Payable | |
Schedule of debt | As of December 31, 2021 and 2020, loans payable consisted of the following December 31, 2021 December 31, 2020 Loans payable to Lument (formerly ORIX Real Estate Capital, LLC) (insured by HUD) in monthly installments of approximately $183,000, including interest, ranging from a fixed rate of 2.79% to 4.2%, due in September 2039 through April 2055, and as of December 31, 2021 and 2020, collateralized by Sheridan, Fernhill, Pacific Health, Aledo, Sundial and Friendship Haven. $ 35,934,000 $ 36,857,000 Loan payable to Capital One Multifamily Finance, LLC (insured by HUD) in monthly installments of approximately $49,000, including interest at a fixed rate of 4.23%, due in September 2053, and collateralized by Pennington Gardens. 10,194,000 10,330,000 Loan payable to CIBC Bank, USA in monthly installments of approximately of $65,000 interest only through July 2022 at LIBOR (with a floor of 1%) plus 4% (5% at December 31, 2021), due in July 2024, and as of December 31, 2021, collateralized by Yucaipa Hill Post Acute, Creekside Post Acute and University Post Acute. 15,000,000 — Loan payable to CIBC Bank, USA in monthly installments of approximately $314,000 (interest only through December 2023) at SOFR plus 3.50% with a SOFR floor of 0.5%, (4% at December 31, 2021), due in December 2024, and as of December 31, 2021, collateralized by Calhoun Health Center, Maple Ridge Health Care Center, Chatsworth Health Care Center, East Lake Arbor, Fairburn Health Care Center, Grandview Health Care Center, Rosemont at Stone Mountain, and Willowwood Nursing Center & Rehab. 91,000,000 — Loan payable to Oxford Finance, LLC in monthly installments of approximately $207,000 (interest only through maturity), at LIBOR (with a floor of 1%) plus 11% (12% at December 31, 2021) due in March 2025, collateralized in second position by Calhoun Health Center, Maple Ridge Health Care Center, Chatsworth Health Care Center, East Lake Arbor, Fairburn Health Care Center, Grandview Health Care Center, Rosemont at Stone Mountain, and Willowwood Nursing Center & Rehab. 20,000,000 — Loan payable to Oxford Finance, LLC in monthly installments of approximately $132,000 (interest only through maturity), at LIBOR (with a floor of 1%) plus 11% (12% at December 31, 2021) due in December 2026, secured by the equity interests of our wholly-owned subsidiary, Summit Georgia Holdings LLC, the parent holding company for the GA8 Properties. 12,750,000 — 184,878,000 47,187,000 Less debt issuance costs (4,508,000) (1,913,000) Total loans payable $ 180,370,000 $ 45,274,000 |
Schedule of maturities of long-term debt | The principal payments due on the loans payable (excluding debt issuance costs) for each of the five following years and thereafter ending December 31 are as follows: Principal Year Amount 2022 1,269,000 2023 1,475,000 2024 106,731,000 2025 21,246,000 2026 14,042,000 Thereafter 40,115,000 $ 184,878,000 |
Equity-Method Investments (Tabl
Equity-Method Investments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity-Method Investments | |
Schedule of results of operations | The results of operations of our Equity-Method Investments for the year ending December 31, 2021 are summarized below: Fantasia Fantasia Fantasia FPH Indiana Combined SUL JV JV II JV III JV JV JV Total Revenue $ 20,575,000 $ 3,591,000 $ 3,716,000 $ 8,213,000 $ 3,615,000 $ (3,166,000) (1) $ 36,544,000 Income (loss) from operations $ 6,911,000 $ 129,000 $ 1,935,000 $ 4,131,000 $ 1,680,000 $ (5,093,000) $ 9,693,000 Net income (loss) $ 2,594,000 $ 298,000 $ 988,000 $ 2,015,000 $ 1,685,000 $ (8,567,000) $ (987,000) Summit interest in Equity-Method Investments net income (loss) $ 259,000 $ 104,000 $ 198,000 $ 202,000 $ 169,000 $ (1,286,000) $ (354,000) (1) This amount has been revised to reflect the revenues of the Indiana JV prior to the sale of our 15% interest, which include $1.5 million in above market lease amortization and $2.1 million in straight-line rent receivable write off related to a change in the collectability assessment for lease payments due from the Indiana JV’s tenants as well as $0.5 million in interest income. There was no impact on the loss allocated to the Company as a result of this revision. The results of operations of our Equity-Method Investments for the year ending December 31, 2020 are summarized below: Fantasia Fantasia Fantasia FPH Indiana Combined SUL JV JV II JV III JV JV JV Total Revenue $ 18,247,000 $ 4,112,000 $ 3,557,000 $ 7,982,000 $ 3,537,000 $ 11,786,000 $ 49,221,000 Income from operations $ 7,831,000 $ 557,000 $ 1,960,000 $ 4,132,000 $ 1,681,000 $ 7,447,000 $ 23,608,000 Net income (loss) $ 3,465,000 $ (55,000) $ 992,000 $ 1,795,000 $ (779,000) $ (479,000) $ 4,939,000 Summit interest in Equity-Method Investments net income (loss) $ 346,000 $ (19,000) $ 198,000 $ 179,000 $ (78,000) $ (71,000) $ 555,000 |
Schedule of distributions receivable | As of December 31, 2021 and 2020, we have distributions receivable, which is included in tenant and other receivables in our consolidated balance sheets, as follows: December 31, December 31, 2021 2020 SULH JV $ 273,000 $ 466,000 Fantasia JV 205,000 36,000 Fantasia II JV 54,000 51,000 Fantasia III JV 22,000 257,000 FPH JV 28,000 26,000 Indiana JV - 498,000 Total $ 582,000 $ 1,334,000 |
Schedule of cash distributions | Year Ended December 31, 2021 Year Ended December 31, 2020 Total Cash Cash Flow Cash Flow Total Cash Cash Flow Cash Flow Distributions from from Distributions from from Received Operating Investing Received Operating Investing SUL JV $ 837,000 $ 259,000 $ 578,000 $ 499,000 $ 346,000 $ 153,000 Fantasia JV — — — 144,000 — 144,000 Fantasia II JV 301,000 197,000 104,000 292,000 198,000 94,000 Fantasia III JV 500,000 202,000 298,000 104,000 104,000 — FPH JV 153,000 18,000 135,000 152,000 — 152,000 Indiana JV 773,000 — 773,000 429,000 — 429,000 Total $ 2,564,000 $ 676,000 $ 1,888,000 $ 1,620,000 $ 648,000 $ 972,000 |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Receivables | |
Schedule of tenant and other receivables | Tenant and other receivables, net consists of: December 31, December 31, 2021 2020 Straight-line rent receivables $ 2,395,000 $ 2,772,000 Distribution receivables from Equity-Method Investments 582,000 1,334,000 Asset management fees 323,000 432,000 Other receivables 86,000 139,000 Total $ 3,386,000 $ 4,677,000 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions | |
Schedule of receivables and reserves related to CRA | As of December 31, 2021 and 2020, we had the following receivables and reserves: Receivables Reserves Balance Organizational and offering costs $ 738,000 $ (738,000) $ — Asset management fees and expenses 32,000 (32,000) — Operating expenses (direct and indirect) 189,000 (189,000) — Operating expenses (2%/25% Test) 1,717,000 (1,717,000) — Total $ 2,676,000 $ (2,676,000) $ — |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity | |
Schedule of estimated fair value using assumptions | 2020 Stock options granted 45,000 Expected volatility 22.31 % Expected term 5.75 years Risk-free interest rate 1.72 % Dividend yield 0 % Fair value per stock option $ 0.57 |
Schedule of stock options | The following table summarizes our stock options as of December 31, 2021: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term Value Options outstanding at January 1, 2020 1,826,908 $ 2.09 Granted 45,000 2.26 Exercised — Cancelled/forfeited — Options outstanding at December 31, 2020 1,871,908 $ 2.09 Granted — Exercised — Cancelled/forfeited (4,000) 2.26 Options outstanding at December 31, 2021 1,867,908 $ 2.09 5.82 $ 1,596,000 Options exercisable at December 31, 2021 1,842,102 $ 2.08 5.78 $ 1,579,000 |
Schedule of unrecognized stock-based compensation expense | Years Ending December 31, 2022 14,000 2023 1,000 $ 15,000 |
Organization (Details)
Organization (Details) | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2021USD ($) | Dec. 31, 2021USD ($)property | Dec. 31, 2020USD ($)property | |
Organization [Line Items] | |||
Equity method investment ownership percentage | 100.00% | ||
Equity-method investments | $ | $ 7,902,000 | $ 11,375,000 | |
Number of owned properties | 14 | ||
Cornerstone Operating Partnership [Member] | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 99.88% | ||
Cornerstone Operating Partnership [Member] | Cornerstone Realty Advisors, LLC | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest by Affiliates | 0.12% | ||
Summit Healthcare Operating Partnership | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 99.88% | ||
Cornerstone Healthcare Partners [Member] | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 95.00% | ||
Cornerstone Healthcare Real Estate Fund [Member] | |||
Organization [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 5.00% | ||
JV Properties [Member] | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 95.30% | 95.30% | |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 4.70% | 4.70% | |
Number of owned properties | 4 | 4 | |
Summit Union Life Holding | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 10.00% | 10.00% | |
Number of owned properties | 17 | 17 | |
Fantasia III JV | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 10.00% | 10.00% | |
Number of owned properties | 9 | 9 | |
Summit Fantasy Pearl Holdings, LLC | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 10.00% | 10.00% | |
Number of owned properties | 6 | 6 | |
Fantasia II JV | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 20.00% | 20.00% | |
Number of owned properties | 2 | 2 | |
Fantasia JV | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 35.00% | 35.00% | |
Number of owned properties | 2 | 2 | |
Indiana JV | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 15.00% | 0.00% | 15.00% |
Equity method investment ownership percentage | 15.00% | ||
Equity-method investments | $ | $ 5,400,000 | ||
Number of owned properties | 14 | 14 | |
Cornerstone Realty Advisors, LLC | |||
Organization [Line Items] | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 0.12% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |||
Cash and cash equivalents | $ 10,488,000 | $ 14,658,000 | |
Restricted cash | 2,673,000 | 2,933,000 | |
Total cash, cash equivalents, and restricted cash shown on the consolidated statements of cash flows | 13,161,000 | 17,591,000 | $ 16,077,000 |
Straight-line rents | $ (377,000) | $ 227,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 31, 2020 | |
Summary of Significant Accounting Policies [Line Items] | ||||
Loans Payable, Fair Value Disclosure | $ 177,300,000 | $ 52,600,000 | ||
Long-term Debt, Gross | 184,878,000 | 47,187,000 | ||
Deferred Costs, Total | 1,100,000 | 1,100,000 | ||
Deferred Costs, Leasing, Net, Total | 466,000 | 536,000 | ||
Amortization | 70,000 | 70,000 | ||
Deferred Tax Assets, Valuation Allowance | 1,779,000 | 1,779,000 | ||
Operating Lease, Right-of-Use Asset | $ 300,000 | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets | |||
Operating Lease, Liability | $ 300,000 | |||
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Accounts Payable and Accrued Liabilities | |||
Additions to Other Assets, Amount | 30,000 | 100,000 | ||
Accrued Liabilities | 30,000 | 100,000 | ||
Operating Lease, Expense | 100,000 | 100,000 | ||
Payments for Rent | 100,000 | 100,000 | ||
Operating Lease, Payments | $ 100,000 | |||
Operating Lease, Weighted Average Discount Rate, Percent | 5.00% | |||
Operating Remaining lease term | 4 months | |||
Financing Receivable, Net | $ 0 | $ 262,000 | ||
Payments to Acquire Equipment on Lease | $ 36,000 | |||
Real Estate Investment Trust [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Percentage Of Taxable Income | 90.00% | |||
Minimum [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Fair Value, Inputs Discount Rate, Loans payable | 4.00% | |||
Minimum [Member] | Property, Plant and Equipment, Other Types [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 15 years | |||
Maximum [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Fair Value, Inputs Discount Rate, Loans payable | 12.00% | |||
Maximum [Member] | Property, Plant and Equipment, Other Types [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 39 years | |||
Weighted Average [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Fair Value, Inputs Discount Rate, Loans payable | 6.00% |
Investments in Real Estate Pr_3
Investments in Real Estate Properties - Investments in real estate properties (Details) - USD ($) | Dec. 30, 2021 | Jul. 02, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Real Estate Properties [Line Items] | ||||
Real estate properties, net | $ 192,862,000 | $ 44,921,000 | ||
CA3 Properties | ||||
Real Estate Properties [Line Items] | ||||
Total purchase price plus acquisition costs | $ 20,055,000 | 20,133,000 | ||
GA8 Properties | ||||
Real Estate Properties [Line Items] | ||||
Total purchase price plus acquisition costs | $ 130,000,000 | 130,531,000 | ||
Land | ||||
Real Estate Properties [Line Items] | ||||
Real estate properties, net | 15,565,000 | 6,237,000 | ||
Land | CA3 Properties | ||||
Real Estate Properties [Line Items] | ||||
Total purchase price plus acquisition costs | 2,293,000 | |||
Land | GA8 Properties | ||||
Real Estate Properties [Line Items] | ||||
Investments in real estate | 7,035,000 | |||
Buildings and improvements | ||||
Real Estate Properties [Line Items] | ||||
Investments in real estate | 166,989,000 | 48,295,000 | ||
Less: accumulated depreciation | (11,395,000) | (9,853,000) | ||
Real estate properties, net | 155,594,000 | 38,442,000 | ||
Buildings and improvements | CA3 Properties | ||||
Real Estate Properties [Line Items] | ||||
Total purchase price plus acquisition costs | 15,908,000 | |||
Buildings and improvements | GA8 Properties | ||||
Real Estate Properties [Line Items] | ||||
Investments in real estate | 102,786,000 | |||
Furniture and fixtures | ||||
Real Estate Properties [Line Items] | ||||
Investments in real estate | 12,137,000 | 4,230,000 | ||
Less: accumulated depreciation | (4,194,000) | (3,988,000) | ||
Real estate properties, net | 7,943,000 | $ 242,000 | ||
Furniture and fixtures | CA3 Properties | ||||
Real Estate Properties [Line Items] | ||||
Total purchase price plus acquisition costs | 448,000 | |||
Furniture and fixtures | GA8 Properties | ||||
Real Estate Properties [Line Items] | ||||
Investments in real estate | 7,458,000 | |||
Intangible lease assets | ||||
Real Estate Properties [Line Items] | ||||
Investments in real estate | 13,778,000 | |||
Less: accumulated depreciation | (18,000) | |||
Real estate properties, net | 13,760,000 | |||
Intangible lease assets | CA3 Properties | ||||
Real Estate Properties [Line Items] | ||||
Total purchase price plus acquisition costs | 1,484,000 | |||
Intangible lease assets | GA8 Properties | ||||
Real Estate Properties [Line Items] | ||||
Investments in real estate | $ 13,252,000 |
Investments in Real Estate Pr_4
Investments in Real Estate Properties - Summary information regarding portfolio (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Real Estate Properties [Line Items] | |
Purchase Price | $ 207,320,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 172,128,000 |
Sheridan Care Center | |
Real Estate Properties [Line Items] | |
Location | Sheridan, OR |
Date Purchased | Aug. 3, 2012 |
Type | SNF |
Purchase Price | $ 4,100,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 4,169,000 |
Fernhill Care Center | |
Real Estate Properties [Line Items] | |
Location | Portland, OR |
Date Purchased | Aug. 3, 2012 |
Type | SNF |
Purchase Price | $ 4,500,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 3,657,000 |
Friendship Haven Healthcare and Rehabilitation Center | |
Real Estate Properties [Line Items] | |
Location | Galveston County, TX |
Date Purchased | Sep. 14, 2012 |
Type | SNF |
Purchase Price | $ 15,000,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 11,539,000 |
Pacific Health and Rehabilitation Center | |
Real Estate Properties [Line Items] | |
Location | Tigard, OR |
Date Purchased | Dec. 24, 2012 |
Type | SNF |
Purchase Price | $ 8,140,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 6,097,000 |
Brookstone of Aledo | |
Real Estate Properties [Line Items] | |
Location | Aledo, IL |
Date Purchased | Jul. 2, 2013 |
Type | AL |
Purchase Price | $ 8,625,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 6,732,000 |
Sundial Assisted Living | |
Real Estate Properties [Line Items] | |
Location | Redding, CA |
Date Purchased | Dec. 18, 2013 |
Type | AL |
Purchase Price | $ 3,500,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 3,739,000 |
Pennington Gardens | |
Real Estate Properties [Line Items] | |
Location | Chandler, AZ |
Date Purchased | Jul. 17, 2017 |
Type | AL/MC |
Purchase Price | $ 13,400,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 10,194,000 |
Yucaipa Hill Post Acute | |
Real Estate Properties [Line Items] | |
Location | Yucaipa, CA |
Date Purchased | Jul. 2, 2021 |
Type | SNF |
Purchase Price | $ 10,715,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 8,014,000 |
Creekside Post Acute | |
Real Estate Properties [Line Items] | |
Location | Yucaipa, CA |
Date Purchased | Jul. 2, 2021 |
Type | SNF |
Purchase Price | $ 4,780,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 3,575,000 |
University Post Acute | |
Real Estate Properties [Line Items] | |
Location | Mentone, CA |
Date Purchased | Jul. 2, 2021 |
Type | SNF |
Purchase Price | $ 4,560,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 3,412,000 |
Calhoun Health Center | |
Real Estate Properties [Line Items] | |
Location | Calhoun, GA |
Date Purchased | Dec. 30, 2021 |
Type | SNF |
Purchase Price | $ 7,670,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 6,549,000 |
Maple Ridge Health Care Center | |
Real Estate Properties [Line Items] | |
Location | Cartersville, GA |
Date Purchased | Dec. 30, 2021 |
Type | SNF |
Purchase Price | $ 13,548,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 11,568,000 |
East Lake Arbor | |
Real Estate Properties [Line Items] | |
Location | Decatur, GA |
Date Purchased | Dec. 30, 2021 |
Type | SNF |
Purchase Price | $ 15,640,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 13,354,000 |
Chatsworth Health Care Center | |
Real Estate Properties [Line Items] | |
Location | Chatsworth, GA |
Date Purchased | Dec. 30, 2021 |
Type | SNF |
Purchase Price | $ 29,785,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 25,432,000 |
Fairburn Health Care Center | |
Real Estate Properties [Line Items] | |
Location | Fairburn, GA |
Date Purchased | Dec. 30, 2021 |
Type | SNF |
Purchase Price | $ 14,644,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 12,503,000 |
Grandview Health Care Center | |
Real Estate Properties [Line Items] | |
Location | Jasper, GA |
Date Purchased | Dec. 30, 2021 |
Type | SNF |
Purchase Price | $ 10,061,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 8,591,000 |
Rosemont at Stone Mountain | |
Real Estate Properties [Line Items] | |
Location | Stone Mountain, GA |
Date Purchased | Dec. 30, 2021 |
Type | SNF |
Purchase Price | $ 23,908,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 20,414,000 |
Willowwood Nursing Center & Rehab | |
Real Estate Properties [Line Items] | |
Location | Flowery Branch, GA |
Date Purchased | Dec. 30, 2021 |
Type | SNF |
Purchase Price | $ 14,744,000 |
Loans Payable, Excluding Debt Issuance Costs | $ 12,589,000 |
Investments in Real Estate Pr_5
Investments in Real Estate Properties - Future Minimum Lease Payments (Details) | Dec. 31, 2021USD ($) |
Investments in Real Estate Properties | |
2022 | $ 17,698,000 |
2023 | 17,983,000 |
2024 | 18,272,000 |
2025 | 18,566,000 |
2026 | 18,865,000 |
Thereafter | 165,462,000 |
Operating Leases, Future Minimum Payments Receivable | $ 256,846,000 |
Investments in Real Estate Pr_6
Investments in Real Estate Properties - Intangible lease assets (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Gross | $ 14,736,000 |
Accumulated Amortization | $ 50,000 |
Weighted Average Remaining Life (Years) | 14 years 11 months 12 days |
Intangible assets | $ 982,000 |
Above-market lease intangibles | |
Finite-Lived Intangible Assets [Line Items] | |
Gross | 959,000 |
Accumulated Amortization | $ 32,000 |
Weighted Average Remaining Life (Years) | 14 years 6 months |
In-place lease intangibles | |
Finite-Lived Intangible Assets [Line Items] | |
Gross | $ 13,777,000 |
Accumulated Amortization | $ 18,000 |
Weighted Average Remaining Life (Years) | 14 years 11 months 23 days |
Investments in Real Estate Pr_7
Investments in Real Estate Properties - Additional information (Details) | Feb. 10, 2022USD ($) | Dec. 30, 2021USD ($) | Dec. 10, 2021facilitytenant | Jul. 02, 2021USD ($)facilityitem | May 31, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($)property | Dec. 31, 2021 | Dec. 31, 2021property |
Real Estate Properties [Line Items] | ||||||||||
Number of leased real estate properties | 7 | 18 | 18 | |||||||
Depreciation and amortization | $ 1,800,000 | $ 1,600,000 | ||||||||
Equity-method investments | $ 7,902,000 | 11,375,000 | ||||||||
Percentage of Real Estate Properties | 100.00% | |||||||||
Deferred Costs | $ 1,100,000 | $ 1,100,000 | ||||||||
CA3 Properties | ||||||||||
Real Estate Properties [Line Items] | ||||||||||
Market lease intangible assets | 1,000,000 | |||||||||
Business Combination, Acquisition Related Costs | $ 80,000 | |||||||||
Number of skilled nursing facilities acquired | facility | 3 | |||||||||
Purchase price amount | $ 20,055,000 | 20,133,000 | ||||||||
Number of unrelated parties for lease under acquisition | item | 3 | |||||||||
Lease term under three separate triple net leases | 15 years | |||||||||
CA3 Properties | First renewal options | ||||||||||
Real Estate Properties [Line Items] | ||||||||||
Lease renewal options | 5 years | |||||||||
CA3 Properties | Second renewal options | ||||||||||
Real Estate Properties [Line Items] | ||||||||||
Lease renewal options | 5 years | |||||||||
CA3 Properties | Yucaipa, California | ||||||||||
Real Estate Properties [Line Items] | ||||||||||
Number of skilled nursing facilities acquired | facility | 2 | |||||||||
CA3 Properties | Mentone, California | ||||||||||
Real Estate Properties [Line Items] | ||||||||||
Number of skilled nursing facilities acquired | facility | 1 | |||||||||
GA8 Properties | ||||||||||
Real Estate Properties [Line Items] | ||||||||||
Purchase price amount | $ 130,000,000 | 130,531,000 | ||||||||
Number of unrelated parties for lease under acquisition | tenant | 8 | |||||||||
Lease term under three separate triple net leases | 15 years | |||||||||
GA8 Properties | First renewal options | ||||||||||
Real Estate Properties [Line Items] | ||||||||||
Lease renewal options | 5 years | |||||||||
GA8 Properties | Second renewal options | ||||||||||
Real Estate Properties [Line Items] | ||||||||||
Lease renewal options | 5 years | |||||||||
GA8 Properties | Georgia | ||||||||||
Real Estate Properties [Line Items] | ||||||||||
Number of skilled nursing facilities acquired | facility | 8 | |||||||||
Pennington Gardens facility in Chandler, Arizona | ||||||||||
Real Estate Properties [Line Items] | ||||||||||
Rent receivable written off | $ 400,000 | |||||||||
Rent proceeds received, Settlement | $ 200,000 | |||||||||
Sundial Assisted Living facility in Redding, California | ||||||||||
Real Estate Properties [Line Items] | ||||||||||
Number of leased real estate properties | property | 36 | |||||||||
Equity-method investments | $ 12,750,000 | |||||||||
Rent receivable written off | $ 100,000 |
Loans Payable - Debt (Details)
Loans Payable - Debt (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 184,878,000 | $ 47,187,000 |
Less debt issuance costs | (4,508,000) | (1,913,000) |
Total loans payable | 180,370,000 | 45,274,000 |
CIBC Bank | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 15,000,000 | 0 |
CIBC Bank | SOFR [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 91,000,000 | 0 |
Capital One Multifamily Finance LLC [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 10,194,000 | 10,330,000 |
Lument Capital (formerly ORIX Real Estate Capital, LLC) [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 35,934,000 | 36,857,000 |
Oxford Finance, LLC [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 20,000,000 | 0 |
Oxford Finance, LLC [Member] | GA8 Properties | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 12,750,000 | $ 0 |
Loans Payable (Details) (Parent
Loans Payable (Details) (Parenthetical) - USD ($) | Dec. 30, 2021 | Jul. 02, 2021 | Dec. 31, 2021 |
Debt Instrument, Periodic Payment | $ 12,750,000 | ||
Debt Instrument, Description of Variable Rate Basis | 100 | ||
Debt Instrument, Interest Rate, Stated Percentage | 11.00% | ||
LIBOR [Member] | |||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | ||
LIBOR floor (as a percentage) | 1.00% | ||
Interest on loan with LIBOR | 11.00% | ||
SOFR [Member] | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | ||
LIBOR floor (as a percentage) | 3.50% | ||
Interest on loan with LIBOR | 0.50% | ||
CIBC Bank | |||
Debt Instrument, Periodic Payment | $ 314,000 | ||
CA3 Properties | CIBC Bank | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||
Principal amount of loan | $ 15,000,000 | $ 65,000 | |
LIBOR floor (as a percentage) | 4.00% | 1.00% | |
Interest on loan with LIBOR | 1.00% | 4.00% | |
Percentage of prepayment premium if prepayment occurs on or prior to first year anniversary | 3.00% | ||
Percentage of prepayment premium if prepayment occurs on second year anniversary | 2.00% | ||
Percentage of prepayment premium if prepayment occurs on third year anniversary | 1.00% | ||
Percentage of exit fee if sale or transfer occurs on or prior to second year anniversary | 0.50% | ||
Percentage of exit fee if sale or transfer occurs after second year anniversary | 0.00% | ||
GA8 Properties | Summit Georgia Holdings LLC | |||
Principal amount of loan | $ 12,750,000 | ||
GA8 Properties | LIBOR [Member] | |||
Debt Instrument, Description of Variable Rate Basis | 100 | ||
GA8 Properties | SOFR [Member] | |||
Debt Instrument, Description of Variable Rate Basis | 50 | ||
Debt Instrument, Interest Rate, Stated Percentage | 0.75% | ||
Interest on loan with LIBOR | 3.50% | ||
GA8 Properties | CIBC Bank | |||
Debt Instrument, Periodic Payment | $ 91,000,000 | ||
Minimum [Member] | GA8 Properties | SOFR [Member] | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | ||
Capital One Multifamily Finance LLC [Member] | |||
Debt Instrument, Periodic Payment | $ 49,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.23% | ||
Oxford Finance, LLC [Member] | |||
Debt Instrument, Periodic Payment | $ 207,000 | ||
Principal amount of loan | $ 132,000 | ||
Oxford Finance, LLC [Member] | LIBOR [Member] | |||
LIBOR floor (as a percentage) | 1.00% | ||
Interest on loan with LIBOR | 11.00% | ||
Oxford Finance, LLC [Member] | GA8 Properties | |||
Debt Instrument, Periodic Payment | $ 20,000,000 | ||
Percentage of prepayment premium if prepayment occurs on or prior to first year anniversary | 5.00% | ||
Percentage of prepayment premium if prepayment occurs on second year anniversary | 2.00% | ||
Percentage of prepayment premium if prepayment occurs on third year anniversary | 1.00% | ||
Oxford Finance, LLC [Member] | GA8 Properties | LIBOR [Member] | |||
Debt Instrument, Interest Rate, Stated Percentage | 11.00% | ||
Lument Capital (formerly ORIX Real Estate Capital, LLC) [Member] | |||
Debt Instrument, Periodic Payment | $ 183,000 | ||
Lument Capital (formerly ORIX Real Estate Capital, LLC) [Member] | Minimum [Member] | |||
Debt Instrument, Interest Rate, Stated Percentage | 2.79% | ||
Lument Capital (formerly ORIX Real Estate Capital, LLC) [Member] | Maximum [Member] | |||
Debt Instrument, Interest Rate, Stated Percentage | 4.20% | ||
First Priority Mortgage Loan [Member] | GA8 Properties | |||
Principal amount of loan | $ 91,000,000 | ||
Percentage of prepayment premium if prepayment occurs on or prior to first year anniversary | 3.00% | ||
Percentage of prepayment premium if prepayment occurs on second year anniversary | 2.00% | ||
Percentage of prepayment premium if prepayment occurs on third year anniversary | 1.00% | ||
Percentage of exit fee if sale or transfer occurs on or prior to second year anniversary | 0.50% | ||
Percentage of exit fee if sale or transfer occurs after second year anniversary | 0.00% | ||
Second Priority Mortgage Loan [Member] | GA8 Properties | |||
Principal amount of loan | $ 20,000,000 |
Loans Payable - Maturities of l
Loans Payable - Maturities of long term debt (Details) | Dec. 31, 2021USD ($) |
Loans Payable | |
2022 | $ 1,269,000 |
2023 | 1,475,000 |
2024 | 106,731,000 |
2025 | 21,246,000 |
2026 | 14,042,000 |
Thereafter | 40,115,000 |
Total | $ 184,878,000 |
Loans Payable - Additional info
Loans Payable - Additional information (Details) - USD ($) | Dec. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2024 |
Debt Instrument [Line Items] | ||||
Debt Instrument, Periodic Payment | $ 12,750,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 11.00% | |||
Long-term Debt, Gross | $ 184,878,000 | $ 47,187,000 | ||
Debt Instrument, Unamortized Discount | 4,508,000 | 1,913,000 | ||
Amortization of Debt Discount (Premium) | 100,000 | 200,000 | ||
Write-off of debt issuance costs | 0 | 77,000 | ||
Interest Expense, Debt | 2,400,000 | 2,100,000 | ||
Long-term Debt, Fair Value | $ 100,000 | |||
Debt Extinguishment Percentage | 22.00% | |||
Payments of Debt Issuance Costs | 2,703,000 | 656,000 | ||
Debt Instrument, Description of Variable Rate Basis | 100 | |||
Prepayment Premium percentage Prior to First anniversary | 5.00% | |||
Debt Instrument, Unamortized Discount | 4,508,000 | 1,913,000 | ||
Loan paid off after due date | 140,000 | |||
Lument Capital (formerly ORIX Real Estate Capital, LLC) [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Periodic Payment | 183,000 | |||
Long-term Debt, Gross | $ 35,934,000 | $ 36,857,000 |
Equity-Method Investments - Sum
Equity-Method Investments - Summarized Financial Data for Equity-Method Investments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Equity Method Investments [Line Items] | ||
Revenue | $ 6,953,000 | $ 7,787,000 |
Income (loss) from operations | 9,693,000 | 23,608,000 |
Net income (loss) | (510,000) | (557,000) |
Summit interest in Equity-Method Investments net income (loss) | $ (354,000) | 555,000 |
Equity method investment ownership percentage | 100.00% | |
SUL JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Income (loss) from operations | $ 6,911,000 | 7,831,000 |
Summit interest in Equity-Method Investments net income (loss) | 259,000 | 346,000 |
Fantasia JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Income (loss) from operations | 129,000 | 557,000 |
Summit interest in Equity-Method Investments net income (loss) | 104,000 | (19,000) |
Fantasia II JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Income (loss) from operations | 1,935,000 | 1,960,000 |
Summit interest in Equity-Method Investments net income (loss) | 198,000 | 198,000 |
Fantasia III JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Income (loss) from operations | 4,131,000 | 4,132,000 |
Summit interest in Equity-Method Investments net income (loss) | 202,000 | 179,000 |
FPH JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Income (loss) from operations | 1,680,000 | 1,681,000 |
Summit interest in Equity-Method Investments net income (loss) | 169,000 | (78,000) |
Indiana JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Income (loss) from operations | (5,093,000) | 7,447,000 |
Summit interest in Equity-Method Investments net income (loss) | (1,286,000) | (71,000) |
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenue | 36,544,000 | 49,221,000 |
Net income (loss) | (987,000) | 4,939,000 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | SUL JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenue | 20,575,000 | 18,247,000 |
Net income (loss) | 2,594,000 | 3,465,000 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | Fantasia JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenue | 3,591,000 | 4,112,000 |
Net income (loss) | 298,000 | (55,000) |
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | Fantasia II JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenue | 3,716,000 | 3,557,000 |
Net income (loss) | 988,000 | 992,000 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | Fantasia III JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenue | 8,213,000 | 7,982,000 |
Net income (loss) | 2,015,000 | 1,795,000 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | FPH JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenue | 3,615,000 | 3,537,000 |
Net income (loss) | 1,685,000 | (779,000) |
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | Indiana JV | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenue | (3,166,000) | 11,786,000 |
Net income (loss) | $ (8,567,000) | $ (479,000) |
Equity method investment ownership percentage | 15.00% | |
Above market lease amortization | $ 1,500,000 | |
Straight-line rent receivable write off | 2,100,000 | |
Interest income | $ 500,000 |
Equity-Method Investments - Dis
Equity-Method Investments - Distributions receivable (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Dividends Receivable | $ 582,000 | $ 1,334,000 |
SULH JV | ||
Dividends Receivable | 273,000 | 466,000 |
Fantasia II JV | ||
Dividends Receivable | 54,000 | 51,000 |
Fantasia JV | ||
Dividends Receivable | 205,000 | 36,000 |
Fantasia III JV | ||
Dividends Receivable | 22,000 | 257,000 |
FPH JV | ||
Dividends Receivable | 28,000 | 26,000 |
Indiana JV | ||
Dividends Receivable | $ 0 | $ 498,000 |
Equity-Method Investments - Cas
Equity-Method Investments - Cash Distributions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total Cash Distributions Received | $ 2,564,000 | $ 1,620,000 |
Cash Flow from Operating Activities | 676,000 | 648,000 |
Cash Flow from Investing Activities | 1,888,000 | 972,000 |
SUL JV | ||
Total Cash Distributions Received | 837,000 | 499,000 |
Cash Flow from Operating Activities | 259,000 | 346,000 |
Cash Flow from Investing Activities | 578,000 | 153,000 |
Fantasia JV | ||
Total Cash Distributions Received | 0 | 144,000 |
Cash Flow from Operating Activities | 0 | |
Cash Flow from Investing Activities | 0 | 144,000 |
Fantasia II JV | ||
Total Cash Distributions Received | 301,000 | 292,000 |
Cash Flow from Operating Activities | 197,000 | 198,000 |
Cash Flow from Investing Activities | 104,000 | 94,000 |
Fantasia III JV | ||
Total Cash Distributions Received | 500,000 | 104,000 |
Cash Flow from Operating Activities | 202,000 | 104,000 |
Cash Flow from Investing Activities | 298,000 | |
FPH JV | ||
Total Cash Distributions Received | 153,000 | 152,000 |
Cash Flow from Operating Activities | 18,000 | 0 |
Cash Flow from Investing Activities | 135,000 | 152,000 |
Indiana JV | ||
Total Cash Distributions Received | 773,000 | 429,000 |
Cash Flow from Operating Activities | 0 | |
Cash Flow from Investing Activities | $ 773,000 | $ 429,000 |
Equity-Method Investments - Add
Equity-Method Investments - Additional information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Apr. 30, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity method investment ownership percentage | 100.00% | |||
Equity Method Investments | $ 7,902,000 | $ 11,375,000 | ||
Dividends Receivable | 582,000 | 1,334,000 | ||
Proceeds from Dividends Received | 676,000 | 648,000 | ||
Gain on Sale of Equity Investments | 3,500,000 | |||
Revenue from Contract with Customer, Including Assessed Tax | $ 953,000 | $ 1,312,000 | ||
Operating Partnership [Member] | ||||
Net Operating Cash Flows, Percentage of Interest | 50.00% | |||
Capital Proceeds, Percentage of Interest | 50.00% | |||
Indiana JV | ||||
Equity method investment ownership percentage | 15.00% | |||
Equity Method Investments | $ 5,400,000 | |||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 15.00% | 0.00% | 15.00% | |
Summit Fantasia ll Holdings LLC | ||||
Equity Method Investments | $ 1,300,000 | $ 1,400,000 | ||
Summit Fantasia ll Holdings LLC | Acquisition and Asset Management Fees | ||||
Equity Method Investments | $ 1,000,000 | 1,300,000 | ||
Summit Fantasia Holdings III, LLC [Member] | ||||
Percentage of interest in annual return | 9.00% | |||
Indiana JV | ||||
Equity Method Investment, Amount Sold | $ 5,400,000 | |||
Equity Method Investments | $ 0 | 3,500,000 | ||
Summit Union Life Holdings, LLC [Member] | ||||
Minimum percentage of interest in annual return | 9.00% | |||
Percentage of interest in annual return | 10.00% | |||
Equity Method Investments | $ 2,900,000 | 2,700,000 | ||
Summit Union Life Holdings, LLC [Member] | Operating Partnership [Member] | ||||
Net Operating Cash Flows, Percentage of Interest | 25.00% | |||
Capital Proceeds, Percentage of Interest | 25.00% | |||
Summit Fantasia Holdings Llc [Member] | ||||
Percentage of interest in annual return | 8.00% | |||
Equity Method Investments | $ 2,000,000 | 2,000,000 | ||
Summit Fantasia Holdings Llc [Member] | Operating Partnership [Member] | ||||
Net Operating Cash Flows, Percentage of Interest | 50.00% | |||
Capital Proceeds, Percentage of Interest | 50.00% | |||
Summit Fantasia ll Holdings LLC | ||||
Percentage of interest in annual return | 8.00% | |||
Summit Fantasia ll Holdings LLC | Operating Partnership [Member] | ||||
Net Operating Cash Flows, Percentage of Interest | 30.00% | |||
Capital Proceeds, Percentage of Interest | 30.00% | |||
Summit Fantasia ll Holdings LLC | Fantasia Investment III LLC [Member] | ||||
Net Operating Cash Flows, Percentage of Interest | 70.00% | |||
Capital Proceeds, Percentage of Interest | 70.00% | |||
Summit Fantasia Holdings III, LLC [Member] | ||||
Percentage of interest in annual return | 9.00% | |||
Summit Fantasia Holdings III, LLC [Member] | Operating Partnership [Member] | ||||
Net Operating Cash Flows, Percentage of Interest | 25.00% | |||
Capital Proceeds, Percentage of Interest | 25.00% | |||
Summit Fantasia Holdings III, LLC [Member] | Fantasia Investment III LLC [Member] | ||||
Net Operating Cash Flows, Percentage of Interest | 75.00% | |||
Capital Proceeds, Percentage of Interest | 75.00% | |||
Summit Fantasy Pearl Holdings, LLC | ||||
Percentage of interest in annual return | 9.00% | |||
Equity Method Investments | $ 200,000 | 200,000 | ||
Summit Fantasy Pearl Holdings, LLC | Operating Partnership [Member] | ||||
Net Operating Cash Flows, Percentage of Interest | 20.00% | |||
Capital Proceeds, Percentage of Interest | 20.00% | |||
Summit Fantasy Pearl Holdings, LLC | Fantasia Investment III LLC [Member] | ||||
Net Operating Cash Flows, Percentage of Interest | 7.25% | |||
Capital Proceeds, Percentage of Interest | 7.25% | |||
Summit Fantasy Pearl Holdings, LLC | Summit Fantasy Pearl Holdings, LLC- Equity-Method Investment | ||||
Net Operating Cash Flows, Percentage of Interest | 65.25% | |||
Capital Proceeds, Percentage of Interest | 65.25% | |||
Summit Fantasy Pearl Holdings, LLC | Atlantis [Member] | ||||
Net Operating Cash Flows, Percentage of Interest | 7.50% | |||
Capital Proceeds, Percentage of Interest | 7.50% | |||
Best Years Llc [Member] | Summit Union Life Holdings, LLC [Member] | ||||
Net Operating Cash Flows, Percentage of Interest | 75.00% | |||
Capital Proceeds, Percentage of Interest | 75.00% | |||
Minimum [Member] | Best Years Llc [Member] | ||||
Equity method investment ownership percentage | 9.00% | |||
Maximum [Member] | Best Years Llc [Member] | ||||
Equity method investment ownership percentage | 10.00% | |||
Summit Fantasia Holdings III, LLC [Member] | ||||
Equity Method Investments | $ 1,500,000 | 1,600,000 | ||
Indiana JV | ||||
Dividends Receivable | 0 | $ 498,000 | ||
Proceeds from Dividends Received | $ 0 |
Receivables (Details)
Receivables (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Receivables | ||
Straight-line rent receivables | $ 2,395,000 | $ 2,772,000 |
Distribution receivables from Equity-Method Investments | 582,000 | 1,334,000 |
Asset management fees | 323,000 | 432,000 |
Other receivables | 86,000 | 139,000 |
Total | $ 3,386,000 | $ 4,677,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - Cornerstone Realty Advisors, LLC | Dec. 31, 2021USD ($) |
Receivables | $ 2,676,000 |
Reserves | (2,676,000) |
Balance | 0 |
Organizational and offering costs | |
Receivables | 738,000 |
Reserves | (738,000) |
Balance | 0 |
Asset management fees and expenses | |
Receivables | 32,000 |
Reserves | (32,000) |
Balance | 0 |
Operating expenses (direct and indirect) | |
Receivables | 189,000 |
Reserves | (189,000) |
Balance | 0 |
Operating expenses (2%/25% Test) | |
Receivables | 1,717,000 |
Reserves | (1,717,000) |
Balance | $ 0 |
Concentration of Risk (Details)
Concentration of Risk (Details) | 12 Months Ended | ||
Dec. 31, 2021tenant | Dec. 31, 2020tenantproperty | Dec. 31, 2021property | |
Concentration Risk [Line Items] | |||
Number of owned properties held by Equity Method Investment | 36 | ||
Number of leased real estate properties | 18 | 7 | 18 |
Number of tenants had rental revenue greater than 10% | tenant | 4 | ||
Number of tenants under long-term triple net leases | tenant | 16 | 5 | |
Number of tenants represents more than 10% of our rental revenue | tenant | 3 | ||
Percentage of GA8 properties | 20.00% | ||
Customer Concentration Risk [Member] | Tenant One [Member] | Tenant One, Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 10.00% | 10.00% | |
Customer Concentration Risk [Member] | Tenant Two [Member] | Tenant Two, Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 38.00% | 35.00% | |
Customer Concentration Risk [Member] | Tenant Three [Member] | Tenant Three, Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 26.00% | 24.00% | |
Customer Concentration Risk [Member] | Tenant Four [Member] | Tenant Four Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 20.00% | ||
Customer Concentration Risk [Member] | Tenant Five [Member] | Tenant Five Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 16.00% | 15.00% | |
Georgia | |||
Concentration Risk [Line Items] | |||
Number of Owned Properties | 8 | ||
California | |||
Concentration Risk [Line Items] | |||
Number of Owned Properties | 4 | ||
Oregon | |||
Concentration Risk [Line Items] | |||
Number of Owned Properties | 3 | ||
Texas | |||
Concentration Risk [Line Items] | |||
Number of Owned Properties | 1 | ||
Illinois | |||
Concentration Risk [Line Items] | |||
Number of Owned Properties | 1 | ||
Arizona | |||
Concentration Risk [Line Items] | |||
Number of Owned Properties | 1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Feb. 11, 2021 | Mar. 14, 2019 | Dec. 31, 2021 |
Commitments and Contingencies | |||
Amount of monetary sanctions | $ 588,672 | ||
Amount of additional monetary sanction | $ 189,645 | ||
Purchased the investors' interests | $ 900,000 | ||
Litigation settlement, amount awarded by the court | $ 778,317 |
Equity - Black-Scholes option-p
Equity - Black-Scholes option-pricing model (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Equity | ||
Stock options granted | 0 | 45,000 |
Expected volatility | 22.31% | |
Expected term | 5 years 9 months | |
Risk-free interest rate | 1.72% | |
Dividend yield | 0.00% | |
Fair value per stock option | $ 0.57 |
Equity - Stock options (Details
Equity - Stock options (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Equity | ||
Options outstanding, Beginning Balance | 1,871,908 | 1,826,908 |
Granted | 0 | 45,000 |
Exercised | 0 | |
Cancelled/forfeited | (4,000) | |
Options outstanding, Ending Balance | 1,867,908 | 1,871,908 |
Options exercisable, Ending Balance | 1,842,102 | |
Weighted Average Exercise Price, Outstanding at Beginning Balance | $ 2.09 | $ 2.09 |
Weighted Average Exercise Price, Granted | 2.26 | |
Weighted Average Exercise Price, Cancelled/forfeited | 2.26 | |
Weighted Average Exercise Price, Outstanding at Ending Balance | 2.09 | $ 2.09 |
Weighted Average Exercise Price, Exercisable at Ending Balance | $ 2.08 | |
Options outstanding, Weighted Average Remaining Contractual Term | 5 years 9 months 25 days | |
Options exercisable, Weighted Average Remaining Contractual Term | 5 years 9 months 10 days | |
Options outstanding, Aggregate Intrinsic Value | $ 1,596,000 | |
Options exercisable, Aggregate Intrinsic Value | $ 1,579,000 |
Equity - Unrecognized stock-bas
Equity - Unrecognized stock-based compensation expense (Details) | Dec. 31, 2021USD ($) |
Schedule of Equity Method Investments [Line Items] | |
Unrecognized stock-based compensation expense related to unvested stock options, net of forfeitures | $ 15,000 |
2022 | |
Schedule of Equity Method Investments [Line Items] | |
Unrecognized stock-based compensation expense related to unvested stock options, net of forfeitures | 14,000 |
2023 | |
Schedule of Equity Method Investments [Line Items] | |
Unrecognized stock-based compensation expense related to unvested stock options, net of forfeitures | $ 1,000 |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) | Jan. 01, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of Equity [Line Items] | |||
Granted | 0 | 45,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.57 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 5 years 9 months 25 days | ||
General and Administrative Expense [Member] | |||
Schedule of Equity [Line Items] | |||
Allocated Share-based Compensation Expense | $ 66,000 | $ 151,000 | |
Director [Member] | |||
Schedule of Equity [Line Items] | |||
Granted | 45,000 | ||
Share-based Payment Arrangement, Employee [Member] | |||
Schedule of Equity [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.58 | ||
Omnibus Incentive Plan [Member] | |||
Schedule of Equity [Line Items] | |||
Granted | 90,000 | ||
Common Stock, Capital Shares Reserved for Future Issuance | 1,132,092 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 3,000,000 |