Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | May 13, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2021 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Entity File Number | 000-55190 | |
Entity Registrant Name | NorthStar Healthcare Income, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 27-3663988 | |
Entity Address, Address Line One | 590 Madison Avenue, 34th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10022 | |
City Area Code | 212 | |
Local Phone Number | 547-2600 | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 191,266,239 | |
Entity Central Index Key | 0001503707 | |
Entity Current Reporting Status | Yes | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Assets | |||
Cash and cash equivalents | $ 90,966 | $ 65,995 | |
Restricted cash | 20,276 | 27,575 | |
Operating real estate, net | 1,457,397 | 1,483,930 | |
Investments in unconsolidated ventures | 221,944 | 229,173 | |
Real estate debt investments, net | 36,112 | 55,864 | |
Assets held for sale | 5,000 | 5,000 | |
Receivables, net | 7,277 | 14,735 | |
Goodwill and intangible assets, net | 26,016 | 26,483 | |
Other assets | 17,367 | 9,681 | |
Total assets | [1] | 1,882,355 | 1,918,436 |
Liabilities | |||
Mortgage and other notes payable, net | 1,397,718 | 1,416,871 | |
Line of credit - related party | 35,000 | 35,000 | |
Due to related party | 3,812 | 8,318 | |
Escrow deposits payable | 4,386 | 3,851 | |
Accounts payable and accrued expenses | 33,632 | 38,393 | |
Other liabilities | 3,938 | 3,941 | |
Total liabilities | [1] | 1,478,486 | 1,506,374 |
Commitments and contingencies (Note 13) | |||
NorthStar Healthcare Income, Inc. Stockholders’ Equity | |||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of March 31, 2021 and December 31, 2020 | 0 | 0 | |
Common stock, $0.01 par value, 400,000,000 shares authorized, 191,052,014 and 190,409,341 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively | 1,910 | 1,904 | |
Additional paid-in capital | 1,712,563 | 1,710,023 | |
Retained earnings (accumulated deficit) | (1,313,218) | (1,302,755) | |
Accumulated other comprehensive income (loss) | (7) | 467 | |
Total NorthStar Healthcare Income, Inc. stockholders’ equity | 401,248 | 409,639 | |
Non-controlling interests | 2,621 | 2,423 | |
Total equity | 403,869 | 412,062 | |
Total liabilities and equity | $ 1,882,355 | $ 1,918,436 | |
[1] | Represents the consolidated assets and liabilities of NorthStar Healthcare Income Operating Partnership, LP (the “Operating Partnership”). The Operating Partnership is a consolidated variable interest entity (“VIE”), of which the Company is the sole general partner and owns approximately 99.99%. As of March 31, 2021, the Operating Partnership includes $0.5 billion and $0.5 billion of assets and liabilities, respectively, of certain VIEs that are consolidated by the Operating Partnership. Refer to Note 2, “Summary of Significant Accounting Policies.” |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 | |
Common stock, shares issued (in shares) | 191,052,014 | 190,409,341 | |
Common stock, shares outstanding (in shares) | 191,052,014 | 190,409,341 | |
Assets | [1] | $ 1,882,355 | $ 1,918,436 |
Liabilities | [1] | $ 1,478,486 | $ 1,506,374 |
Primary Beneficiary | |||
Ownership interest in operating partnership | 99.99% | ||
Primary Beneficiary | Northstar Healthcare Income Operating Partnership, LP | |||
Ownership interest in operating partnership | 99.99% | ||
Assets | $ 500,000 | ||
Liabilities | $ 500,000 | ||
[1] | Represents the consolidated assets and liabilities of NorthStar Healthcare Income Operating Partnership, LP (the “Operating Partnership”). The Operating Partnership is a consolidated variable interest entity (“VIE”), of which the Company is the sole general partner and owns approximately 99.99%. As of March 31, 2021, the Operating Partnership includes $0.5 billion and $0.5 billion of assets and liabilities, respectively, of certain VIEs that are consolidated by the Operating Partnership. Refer to Note 2, “Summary of Significant Accounting Policies.” |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Property and other revenues | ||
Resident fee income | $ 28,282 | $ 32,847 |
Rental income | 29,051 | 39,980 |
Other revenue | 1 | 64 |
Total property and other revenues | 57,334 | 72,891 |
Net interest income | ||
Interest income on debt investments | 2,213 | 1,905 |
Expenses | ||
Real estate properties - operating expenses | 45,618 | 45,701 |
Interest expense | 16,025 | 16,679 |
Transaction costs | 54 | 7 |
Asset management and other fees - related party | 2,769 | 4,431 |
General and administrative expenses | 3,033 | 3,029 |
Depreciation and amortization | 15,387 | 16,489 |
Impairment loss | 786 | 0 |
Total expenses | 83,672 | 86,336 |
Other income (loss) | ||
Other income | 7,360 | 0 |
Realized gain (loss) on investments and other | 7,515 | 0 |
Income (loss) before equity in earnings (losses) of unconsolidated ventures and income tax expense | (9,250) | (11,540) |
Equity in earnings (losses) of unconsolidated ventures | (890) | (993) |
Income tax expense | (15) | (14) |
Net income (loss) | (10,155) | (12,547) |
Net (income) loss attributable to non-controlling interests | (308) | 66 |
Net income (loss) attributable to NorthStar Healthcare Income, Inc. common stockholders | $ (10,463) | $ (12,481) |
Net income (loss) per share of common stock, basic/diluted (in dollars per share) | $ (0.05) | $ (0.07) |
Weighted average number of shares of common stock outstanding, basic/diluted (in shares) | 190,630,723 | 189,038,484 |
Distributions declared per share of common stock (in dollars per share) | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (10,155) | $ (12,547) |
Other comprehensive income (loss) | ||
Foreign currency translation adjustments related to investment in unconsolidated venture | (474) | (1,044) |
Total other comprehensive income (loss) | (474) | (1,044) |
Comprehensive income (loss) | (10,629) | (13,591) |
Comprehensive (income) loss attributable to non-controlling interests | (308) | 66 |
Comprehensive income (loss) attributable to NorthStar Healthcare Income, Inc. common stockholders | $ (10,937) | $ (13,525) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Total Company’s Stockholders’ Equity | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interests |
Beginning Balance (in shares) at Dec. 31, 2019 | 189,111,000 | ||||||
Beginning Balance at Dec. 31, 2019 | $ 667,504 | $ 662,384 | $ 1,891 | $ 1,702,260 | $ (1,041,297) | $ (470) | $ 5,120 |
Increase (Decrease) in Stockholder's Equity | |||||||
Share-based payment of advisor asset management fees (in shares) | 400,000 | ||||||
Share-based payment of advisor asset management fees | 2,500 | 2,500 | $ 4 | 2,496 | |||
Amortization of equity-based compensation | 38 | 38 | 38 | ||||
Non-controlling interests - contributions | 86 | 86 | |||||
Non-controlling interests - distributions | (85) | (85) | |||||
Shares redeemed for cash (in shares) | (320,000) | ||||||
Shares redeemed for cash | (1,998) | (1,998) | $ (3) | (1,995) | |||
Other comprehensive income (loss) | (1,044) | (1,044) | (1,044) | ||||
Net income (loss) | (12,547) | (12,481) | (12,481) | (66) | |||
Ending Balance (in shares) at Mar. 31, 2020 | 189,191,000 | ||||||
Ending Balance at Mar. 31, 2020 | $ 654,454 | 649,399 | $ 1,892 | 1,702,799 | (1,053,778) | (1,514) | 5,055 |
Beginning Balance (in shares) at Dec. 31, 2020 | 190,409,341 | 190,409,000 | |||||
Beginning Balance at Dec. 31, 2020 | $ 412,062 | 409,639 | $ 1,904 | 1,710,023 | (1,302,755) | 467 | 2,423 |
Increase (Decrease) in Stockholder's Equity | |||||||
Share-based payment of advisor asset management fees (in shares) | 600,000 | 643,000 | |||||
Share-based payment of advisor asset management fees | $ 2,500 | 2,500 | $ 6 | 2,494 | |||
Amortization of equity-based compensation | 46 | 46 | 46 | ||||
Non-controlling interests - contributions | 240 | 240 | |||||
Non-controlling interests - distributions | (350) | (350) | |||||
Other comprehensive income (loss) | (474) | (474) | (474) | ||||
Net income (loss) | $ (10,155) | (10,463) | (10,463) | 308 | |||
Ending Balance (in shares) at Mar. 31, 2021 | 191,052,014 | 191,052,000 | |||||
Ending Balance at Mar. 31, 2021 | $ 403,869 | $ 401,248 | $ 1,910 | $ 1,712,563 | $ (1,313,218) | $ (7) | $ 2,621 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (10,155) | $ (12,547) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Equity in (earnings) losses of unconsolidated ventures | 890 | 993 |
Depreciation and amortization | 15,387 | 16,489 |
Impairment loss | 786 | 0 |
Amortization of below market debt | 784 | 766 |
Straight-line rental (income) loss, net | 7,639 | 11 |
Amortization of discount/accretion of premium on investments | (112) | (30) |
Amortization of deferred financing costs | 147 | 471 |
Amortization of equity-based compensation | 46 | 38 |
Paid-in-kind interest added to real estate debt investment loan principal | (105) | 0 |
Realized (gain) loss on investments and other | (7,515) | 0 |
Allowance for uncollectible accounts | 653 | 200 |
Issuance of common stock as payment for asset management fees | 2,500 | 2,500 |
Changes in assets and liabilities: | ||
Receivables | (833) | (822) |
Other assets | (7,686) | (1,690) |
Due to related party | (4,506) | (749) |
Escrow deposits payable | 535 | 26 |
Accounts payable and accrued expenses | (5,336) | (3,217) |
Other liabilities | 221 | (10) |
Net cash (used in) provided by operating activities | (6,660) | 2,429 |
Cash flows from investing activities: | ||
Capital expenditures for operating real estate | (2,416) | (2,127) |
Sale of operating real estate | 21,258 | 0 |
Repayment of real estate debt investment | 24,878 | 0 |
Investment in unconsolidated ventures | (250) | 0 |
Distributions from unconsolidated ventures | 859 | 1,765 |
Real estate debt investment modification fee | 346 | 0 |
Other assets | 0 | (903) |
Net cash provided by (used in) investing activities | 44,675 | (1,265) |
Cash flows from financing activities: | ||
Borrowings from mortgage notes | 26,000 | 0 |
Repayment of mortgage notes | (45,722) | (5,942) |
Payment of deferred financing costs | (362) | 0 |
Payments under finance leases | (149) | (147) |
Shares redeemed for cash | 0 | (1,998) |
Contributions from non-controlling interests | 240 | 86 |
Distributions to non-controlling interests | (350) | (85) |
Net cash (used in) provided by financing activities | (20,343) | (8,086) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 17,672 | (6,922) |
Cash, cash equivalents and restricted cash-beginning of period | 93,570 | 58,820 |
Cash, cash equivalents and restricted cash-end of period | 111,242 | 51,898 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Accrued capital expenditures | 575 | 943 |
Capitalized interest for mortgage and other notes payable | $ 0 | $ 222 |
Business and Organization
Business and Organization | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | Business and Organization NorthStar Healthcare Income, Inc., together with its consolidated subsidiaries (the “Company”), manages a diversified portfolio of investments in healthcare real estate, owned directly or through joint ventures, with a focus on the mid-acuity seniors housing sector, which the Company defines as assisted living (“ALF”), memory care (“MCF”), skilled nursing (“SNF”), independent living (“ILF”) facilities and continuing care retirement communities (“CCRC”), which have independent living, assisted living, skilled nursing and memory care available on one campus. Primarily through joint ventures, the Company is also invested in other healthcare property types, including medical office buildings (“MOB”), hospitals, rehabilitation facilities and ancillary healthcare services businesses. The Company’s investments are predominantly in the United States, but through its joint ventures also has international investments in the United Kingdom. The Company was formed in October 2010 as a Maryland corporation and commenced operations in February 2013. The Company elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), commencing with the taxable year ended December 31, 2013. The Company conducts its operations so as to continue to qualify as a REIT for U.S. federal income tax purposes. Substantially all of the Company’s business is conducted through NorthStar Healthcare Income Operating Partnership, LP (the “Operating Partnership”). The Company is the sole general partner of the Operating Partnership. The limited partners of the Operating Partnership are NorthStar Healthcare Income Advisor, LLC (the “Prior Advisor”) and NorthStar Healthcare Income OP Holdings, LLC (the “Special Unit Holder”), each an affiliate of the Company’s sponsor. The Prior Advisor invested $1,000 in the Operating Partnership in exchange for common units and the Special Unit Holder invested $1,000 in the Operating Partnership and was issued a separate class of limited partnership units (the “Special Units”), which are collectively recorded as non-controlling interests on the accompanying consolidated balance sheets as of March 31, 2021 and December 31, 2020. As the Company issued shares, it contributed substantially all of the proceeds from its continuous, public offerings to the Operating Partnership as a capital contribution. As of March 31, 2021, the Company’s limited partnership interest in the Operating Partnership was 99.99%. The Company’s charter authorizes the issuance of up to 400.0 million shares of common stock with a par value of $0.01 per share and up to 50.0 million shares of preferred stock with a par value of $0.01 per share. The board of directors of the Company is authorized to amend its charter, without the approval of the stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue. The Company is externally managed and has no employees. The Company is sponsored by Colony Capital, Inc. (NYSE: CLNY) (“Colony Capital” or the “Sponsor”), a leading global investment management firm. Colony Capital manages capital on behalf of its stockholders, as well as institutional and retail investors in private funds and non-traded and traded REITs. The Company’s advisor, CNI NSHC Advisors, LLC (the “Advisor”), is a subsidiary of Colony Capital and manages its day-to-day operations pursuant to an advisory agreement. From inception through March 31, 2021, the Company raised total gross proceeds from the sale of shares of common stock totaling $2.0 billion (the “Offering”), including $232.6 million pursuant to its distribution reinvestment plan (the “DRP”). Impact of COVID-19 The world continues to experience the broad effects of the coronavirus 2019 (“COVID-19”) pandemic, with efforts to address the pandemic impacting economic and financial markets globally and across all facets of industries, including real estate. The Company's healthcare real estate business and investments have experienced a myriad of challenges, including, but not limited to, declines in resident occupancy and operating cash flows, increases in cost burden faced by operators, lease concessions sought by tenants, and a stressed market affecting real estate values in general. The recovery from the impact of the COVID-19 pandemic on the Company’s operational and financial performance will depend on a variety of factors, which may differ considerably across regions and fluctuate over time. Recent guidance from state and local governments, including the easing of restrictions, the resumption of normal business operations in many municipalities, and lower reported infection rates are encouraging signs towards a recovery from the effects of the pandemic. Significant vaccine deployment and acceptance has begun to mitigate the number of confirmed COVID-19 cases, which in turn has helped to reduce preventative operating costs that continue to be incurred. However, occupancy challenges are still anticipated until such time that the rate of resident move-outs is outpaced by new resident admissions, for which the future trend remains uncertain. The Company anticipates a recovery of its healthcare real estate business will span over future periods. An extended recovery period increases the risk of a prolonged negative impact on the Company’s financial condition and results of operations. While the Company has the ability to meet its near term liquidity needs, general market concerns over credit and liquidity continue and the effects of COVID-19 may also lead to heightened risk of litigation, with an ensuing increase in litigation and related costs. At this time, the progression of the global economic recovery from the broad effects of COVID-19 remains difficult for the Company to assess and estimate the future impact of COVID-19 on the Company's results of operations. Accordingly, any estimates of the effects of COVID-19 as reflected and/or discussed in these financial statements are based upon the Company's best estimates using information known to the Company as of the date of this Quarterly Report on Form 10-Q, and such estimates may change, the effects of which could be material. The Company will continue to monitor the progression of the economic recovery from COVID-19 and reassess its effects on the Company’s results of operations and recoverability of value across its assets as conditions change. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Accounting The accompanying unaudited consolidated financial statements and related notes of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the consolidated financial statements prepared under U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which was filed with the U.S. Securities and Exchange Commission on March 23, 2021. Principles of Consolidation The consolidated financial statements include the accounts of the Company, the Operating Partnership and their consolidated subsidiaries. The Company consolidates entities in which it has a controlling financial interest by first considering if an entity meets the definition of a variable interest entity (“VIE”) for which the Company is deemed to be the primary beneficiary or if the Company has the power to control an entity through majority voting interest or other arrangements. All significant intercompany balances are eliminated in consolidation. Variable Interest Entities A VIE is an entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The determination of whether an entity is a VIE includes both a qualitative and quantitative analysis. The Company bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and relevant financial agreements and the quantitative analysis on the forecasted cash flow of the entity. The Company reassesses its initial evaluation of an entity as a VIE upon the occurrence of certain reconsideration events. A VIE must be consolidated only by its primary beneficiary, which is defined as the party who, along with its affiliates and agents, has both the: (i) power to direct the activities that most significantly impact the VIE’s economic performance; and (ii) obligation to absorb the losses of the VIE or the right to receive the benefits from the VIE, which could be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE by considering qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of its investment; the obligation or likelihood for the Company or other interests to provide financial support; consideration of the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders and the similarity with and significance to the business activities of the Company and the other interests. The Company reassesses its determination of whether it is the primary beneficiary of a VIE each reporting period. Judgments related to these determinations include estimates about the current and future fair value and performance of investments held by these VIEs and general market conditions. During the three months ended March 31, 2021, the Company determined that a reconsideration event for an unconsolidated VIE did not result in a change in the evaluation that the Company is not the primary beneficiary. The Company evaluates its investments and financings, including investments in unconsolidated ventures and securitization financing transactions to determine whether each investment or financing is a VIE. The Company analyzes new investments and financings, as well as reconsideration events for existing investments and financings, which vary depending on type of investment or financing. As of March 31, 2021, the Company has identified certain consolidated and unconsolidated VIEs. Assets of each of the VIEs, other than the Operating Partnership, may only be used to settle obligations of the respective VIE. Creditors of each of the VIEs have no recourse to the general credit of the Company. Consolidated VIEs The most significant consolidated VIEs are the Operating Partnership and certain properties that have non-controlling interests. These entities are VIEs because the non-controlling interests do not have substantive kick-out or participating rights. The Operating Partnership consolidates certain properties that have non-controlling interests. Included in operating real estate, net on the Company’s consolidated balance sheets as of March 31, 2021 is $477.3 million related to such consolidated VIEs. Included in mortgage and other notes payable, net on the Company’s consolidated balance sheet as of March 31, 2021 is $444.2 million, collateralized by the real estate assets of the related consolidated VIEs. Unconsolidated VIEs As of March 31, 2021, the Company identified unconsolidated VIEs related to its real estate equity investments with a carrying value of $221.9 million. The Company’s maximum exposure to loss as of March 31, 2021 would not exceed the carrying value of its investment in the VIEs and its investment in a mezzanine loan to a subsidiary of one of the VIEs. Based on management’s analysis, the Company determined that it is not the primary beneficiary of these VIEs and, accordingly, they are not consolidated in the Company’s financial statements as of March 31, 2021. During the three months ended March 31, 2021, the Company contributed $0.3 million to an unconsolidated VIE. As of March 31, 2021, there were no explicit arrangements or implicit variable interests that could require the Company to provide financial support to its unconsolidated VIEs. Voting Interest Entities A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated. The Company does not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party or through a simple majority vote. The Company performs on-going reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework. Investments in Unconsolidated Ventures A non-controlling, unconsolidated ownership interest in an entity may be accounted for using the equity method or the Company may elect the fair value option. The Company will account for an investment under the equity method of accounting if it has the ability to exercise significant influence over the operating and financial policies of an entity, but does not have a controlling financial interest. Under the equity method, the investment is adjusted each period for capital contributions and distributions and its share of the entity’s net income (loss). Capital contributions, distributions and net income (loss) of such entities are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of preferred returns and allocation formulas, if any, as described in such governing documents. Equity method investments are recognized using a cost accumulation model, in which the investment is recognized based on the cost to the investor, which includes acquisition fees. The Company records as an expense certain acquisition costs and fees associated with consolidated investments deemed to be business combinations and capitalizes these costs for investments deemed to be acquisitions of an asset, including an equity method investment. Non-controlling Interests A non-controlling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to the Company. A non-controlling interest is required to be presented as a separate component of equity on the consolidated balance sheets and presented separately as net income (loss) and comprehensive income (loss) attributable to controlling and non-controlling interests. An allocation to a non-controlling interest may differ from the stated ownership percentage interest in such entity as a result of a preferred return and allocation formula, if any, as described in such governing documents. Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that could affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates and assumptions. Any estimates of the effects of COVID-19 as reflected and/or discussed in these financial statements are based upon the Company's best estimates using information known to the Company as of the date of this Quarterly Report on Form 10-Q. Such estimates may change and the impact of which could be material. Cash, Cash Equivalents and Restricted Cash The Company considers all highly-liquid investments with an original maturity date of three months or less to be cash equivalents. Cash, including amounts restricted, may at times exceed the Federal Deposit Insurance Corporation deposit insurance limit of $250,000 per institution. The Company mitigates credit risk by placing cash and cash equivalents with major financial institutions. To date, the Company has not experienced any losses on cash and cash equivalents. Restricted cash consists of amounts related to operating real estate (escrows for taxes, insurance, capital expenditures, security deposits received from tenants and payments required under certain lease agreements) and other escrows required by lenders of the Company’s borrowings. The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported on the consolidated balance sheets to the total of such amounts as reported on the consolidated statements of cash flows (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Cash and cash equivalents $ 90,966 $ 65,995 Restricted cash 20,276 27,575 Total cash, cash equivalents and restricted cash $ 111,242 $ 93,570 Operating Real Estate Operating real estate is carried at historical cost less accumulated depreciation. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their useful life. Ordinary repairs and maintenance are expensed as incurred. Operating real estate is depreciated using the straight-line method over the estimated useful life of the assets, summarized as follows: Category: Term: Building 30 to 50 years Building improvements Lesser of the useful life or remaining life of the building Land improvements 9 to 15 years Tenant improvements Lesser of the useful life or remaining term of the lease Furniture, fixtures and equipment 5 to 14 years Construction costs incurred in connection with the Company’s investments are capitalized and included in operating real estate, net on the consolidated balance sheets. Construction in progress is not depreciated until the asset is available for its intended use. Lessee Accounting A leasing arrangement, a right to control the use of an identified asset for a period of time in exchange for consideration, is classified by the lessee either as a finance lease, which represents a financed purchase of the leased asset, or as an operating lease. For leases with terms greater than 12 months, a lease asset and a lease liability are recognized on the balance sheet at commencement date based on the present value of lease payments over the lease term. Lease renewal or termination options are included in the lease asset and lease liability only if it is reasonably certain that the option to extend would be exercised or the option to terminate would not be exercised. As the implicit rate in most leases are not readily determinable, the Company’s incremental borrowing rate for each lease at commencement date is used to determine the present value of lease payments. Consideration is given to the Company’s recent debt financing transactions, as well as publicly available data for instruments with similar characteristics, adjusted for the respective lease term, when estimating incremental borrowing rates. Lease expense is recognized over the lease term based on an effective interest method for finance leases and on a straight-line basis for operating leases. Right of Use (“ROU”) - Finance Assets The Company has entered into finance leases for equipment totaling $3.4 million, which is included in furniture, fixtures, and equipment within operating real estate, net on the Company’s consolidated balance sheets. The leased equipment is amortized on a straight-line basis. For the three months ended March 31, 2021 and 2020, payments for finance leases totaled $0.2 million, respectively. The following table presents the future minimum lease payments under finance leases and the present value of the minimum lease payments, which are included in other liabilities on the Company’s consolidated balance sheets (dollars in thousands): April 1 to December 31, 2021 $ 498 Years Ending December 31: 2022 576 2023 155 2024 59 2025 17 Thereafter 9 Total minimum lease payments $ 1,314 Less: Amount representing interest $ (165) Present value of minimum lease payments $ 1,149 The weighted average interest rate related to the finance lease obligations is 6.3% with a weighted average lease term of 2.0 years. As of March 31, 2021, there were no leases that had yet to commence which would create significant rights and obligations to the Company as lessee. Assets Held For Sale The Company classifies certain long-lived assets as held for sale once the criteria, as defined by U.S. GAAP, have been met and are expected to sell within one year. Long-lived assets to be disposed of are reported at the lower of their carrying amount or fair value minus cost to sell, with any write-down recorded to impairment loss on the consolidated statements of operations. Depreciation and amortization is not recorded for assets classified as held for sale. As of March 31, 2021 and December 31, 2020, the Company classified two operating real estate properties within the Kansas City portfolio as held for sale, as presented on its consolidated balance sheets. Real Estate Debt Investments Real estate debt investments are generally intended to be held to maturity and, accordingly, are carried at cost, net of unamortized loan fees, premium, discount and unfunded commitments. Debt investments where the Company does not have the intent to hold the loan for the foreseeable future or until its expected payoff are classified as held for sale and recorded at the lower of cost or estimated fair value. Refer to “—Credit Losses on Real Estate Debt Investments and Receivables” for additional information on estimated credit loses for real estate debt investments. Goodwill, Intangible Assets and Deferred Costs Deferred Costs Deferred costs primarily include deferred financing costs and deferred lease costs. Deferred financing costs represent commitment fees, legal and other third-party costs associated with obtaining financing. These costs are recorded against the carrying value of such financing and are amortized to interest expense over the term of the financing using the effective interest method. Unamortized deferred financing costs are expensed to realized gain (loss) on investments and other, when the associated borrowing is repaid before maturity. Costs incurred in seeking financing transactions which do not close are expensed in the period in which it is determined that the financing will not occur. Deferred lease costs consist of fees incurred to initiate and renew operating leases, which are amortized on a straight-line basis over the remaining lease term and are recorded to depreciation and amortization in the consolidated statements of operations. Identified Intangibles The Company records acquired identified intangibles, such as the value of in-place leases, goodwill and other intangibles, based on estimated fair value at the acquisition date. The value allocated to the identified intangibles is amortized over the remaining lease term. In-place leases are amortized into depreciation and amortization expense. Impairment analysis for identified intangible assets is performed in connection with the impairment assessment of the related operating real estate. An impairment establishes a new basis for the identified intangible asset and any impairment loss recognized is not subject to subsequent reversal. Refer to “—Impairment on Operating Real Estate and Investments in Unconsolidated Ventures” for additional information. Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination and is not amortized. The Company performs an annual impairment test for goodwill in the fourth quarter and evaluates the recoverability whenever events or changes in circumstances indicate that the carrying value of goodwill may not be fully recoverable. In making such assessment, qualitative factors are used to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the estimated fair value of the reporting unit is less than its carrying value, then an impairment charge is recorded. Identified intangible assets are recorded in deferred costs and intangible assets, net on the consolidated balance sheets. The following table presents deferred costs and intangible assets, net (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Goodwill and intangible assets, net: In-place lease value, net $ 4,186 $ 4,635 Goodwill 21,387 21,387 Certificate of need intangible assets 380 380 Subtotal intangible assets 25,953 26,402 Deferred costs, net 63 81 Total $ 26,016 $ 26,483 The Company recorded $0.5 million of amortization expense for in-place leases and deferred costs for the three months ended March 31, 2021 and 2020, respectively. In-place lease value, net includes a gross asset amount of $130.0 million for in-place leases related to the Company’s direct investment - net lease properties, of which $125.8 million has been amortized as of March 31, 2021. All other in-place leases related to the Company’s direct investment - operating properties have been fully amortized as of March 31, 2021. The following table presents future amortization of in-place lease value and deferred costs (dollars in thousands): April 1 to December 31, 2021 $ 1,403 Years Ending December 31: 2022 593 2023 337 2024 337 2025 337 Thereafter 1,242 Total $ 4,249 Other Assets The following table presents a summary of other assets (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Other assets: Healthcare facility regulatory reserve deposit (1) $ 6,000 $ — Remainder interest in condominium units (2) 2,327 2,327 Prepaid expenses 5,834 3,798 Lease / rent inducements, net 2,415 2,246 Utility deposits 513 447 Other 278 863 Total $ 17,367 $ 9,681 _______________________________________ (1) As of March 31, 2021, a net lease operator is in possession of the regulatory reserve deposit, and accordingly, the amount has been reclassified from restricted cash on the consolidated balance sheets. (2) Represents future interests in property subject to life estates. Revenue Recognition Operating Real Estate Rental income from operating real estate is derived from leasing of space to healthcare operators, including rent received from the Company’s net lease properties and rent, ancillary service fees and other related revenue earned from ILF residents. Rental revenue recognition commences when the operator takes legal possession of the leased space and the leased space is substantially ready for its intended use. The leases are for fixed terms of varying length and generally provide for rentals and expense reimbursements to be paid in monthly installments. Rental income from leases is recognized on a straight-line basis over the term of the respective leases. ILF resident agreements are generally short-term in nature and may allow for termination with 30 days’ notice. The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in receivables, net on the consolidated balance sheets. The Company amortizes any operator inducements as a reduction of revenue utilizing the straight-line method over the term of the lease. The Company also generates operating income from operating healthcare properties. Revenue related to operating healthcare properties includes resident room and care charges, ancillary fees and other resident service charges. Rent is charged and revenue is recognized when such services are provided, generally defined per the resident agreement as of the date upon which a resident occupies a room or uses the services. Resident agreements are generally short-term in nature and may allow for termination with 30 days’ notice. Income derived from our ALFs, MCFs and CCRCs is recorded in resident fee income in the consolidated statements of operations. Lease income from operators and residents is recognized at lease commencement only to the extent collection is expected to be probable in consideration of operators’ and residents’ creditworthiness. This assessment is based on several qualitative and quantitative factors, including and as appropriate, the payment history, ability to satisfy its lease obligations, the value of the underlying collateral or deposit, if any, and current economic conditions. If collection is assessed to not be probable thereafter, lease income recognized is limited to lease payments collected, with the reversal of any income recognized to date in excess of amounts received. If collection is subsequently reassessed to be probable, lease income is adjusted to reflect the amount of income that would have been recognized had collection always been assessed as probable. A summary of lease income recognized for the three months ended March 31, 2021 for the Company’s direct net lease properties is as follows: • The operator of the Smyrna property failed to remit rental payments and accordingly no lease income was recognized. For additional information, refer to Note 14, “Subsequent Events.” • The performance of the operator of the Arbors portfolio has been significantly impacted by COVID-19. Rental payments were delayed throughout 2020, however the operator ultimately satisfied its rent obligations through December 2020. During the three months ended March 31, 2021, the operator failed to remit contractual monthly rent obligations and it is not probable that these obligations will be satisfied in the future. Accordingly, the Company recorded lease income to the extent lease payments were received. In addition, lease income was reduced by $7.4 million for the write-off of straight-line rent receivables, as full collection of rent under the lease was deemed not to be probable. • Despite the adverse effects of COVID-19 on its operations, the operator of the Fountains portfolio remitted full contractual rent, including a portion of the rent deferred under its lease forbearance agreement. For additional information, refer to Note 14, “Subsequent Events.” For the three months ended March 31, 2021 and 2020, total property and other revenues includes variable lease revenues of $3.3 million and $4.2 million, respectively. Variable lease income includes ancillary services provided to operator/residents, as well as non-recurring services and fees at the Company’s operating facilities. In addition, during the three months ended March 31, 2021, the Company recognized $7.4 million in grant income received from the Provider Relief Fund administered by the U.S Department of Health & Human Services (“DHHS”). The grant income is classified as other income in the consolidated statements of operations. Lease Concessions Related to COVID-19 As a result of the COVID-19 crisis, the Company continues to engage with affected operators on a case-by-case basis to evaluate and respond to the current environment and assess the potential for flexible payment terms. For lease concessions resulting directly from the impact of COVID-19 that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee, for example, where total payments required by the modified contract will be substantially the same as or less than the original contract, the Company made a policy election to account for the concessions as though the enforceable rights and obligations for those concessions existed in the lease contracts, under a relief provided by the Financial Accounting Standards Board (“FASB”). Under the relief, the concessions will not be treated as lease modifications that are accounted for over the remaining term of the respective leases, as the Company believes this would not accurately reflect the temporary economic effect of the concessions. Instead, (i) rent deferrals that meet the criteria will be treated as if no changes were made to the lease contract, with continued recognition of lease income and receivable under the original terms of the contract; and (ii) rent forgiveness that meets the criteria will be accounted for as variable lease payments in the affected periods. Effective June 1, 2020, the Company granted a lease concession to the operator of its Fountains net lease portfolio. The concession allowed the operator to defer a portion of contractual rent payments for a 90-day period, with full contractual rent to be repaid over the 12 months following the concession period. The lease concession provided the operator relief consistent with the debt forbearance received from the lender of the properties in the portfolio. The lease concession period ended on August 31, 2020 and the operator has resumed remitting contractual rent payments, including amounts related to deferred rent granted under the lease concession. Deferred rental payments outstanding as of March 31, 2021 totaled $1.2 million for the Fountains net lease portfolio. As there were no substantive changes to the original lease or changes in total cash flows, the concession was not treated as a lease modification and the Company continues to recognize lease income and receivables under the original terms of the lease. Real Estate Debt Investments Interest income is recognized on an accrual basis and any related premium, discount, origination costs and fees are amortized over the life of the investment using the effective interest method. The amortization is reflected as an adjustment to interest income in the consolidated statements of operations. The amortization of a premium or accretion of a discount is discontinued if such investment is reclassified to held for sale. Income recognition is suspended for an investment at the earlier of the date at which payments become 90-days past due or when, in the opinion of the Company, a full recovery of income and principal becomes doubtful. When the ultimate collectability of the principal of an investment is in doubt, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the principal of an investment is not in doubt, contractual interest is recorded as interest income when received, under the cash basis method until an accrual is resumed when the investment becomes contractually current and performance is demonstrated to be resumed. Interest accrued and not collected will be reversed against interest income. An investment is written off when it is no longer realizable and/or legally discharged. Impairment on Operating Real Estate and Investments in Unconsolidated Ventures Due to uncertainties over the extent and duration of the economic fallout from COVID-19, it is difficult for the Company to assess and estimate the future economic effects of COVID-19 with any meaningful precision. As the future impact of COVID-19 will depend on many factors beyond the Company’s control and knowledge, the resulting effect on impairment of the Company's real estate held for investment and held for sale and investments in unconsolidated ventures may materially differ from the Company's current expectations and further impairment charges may be recorded in future periods. Operating Real Estate The Company’s real estate portfolio is reviewed on a quarterly basis, or more frequently as necessary, to assess whether there are any indicators that the value of its operating real estate may be impaired or that its carrying value may not be recoverable. A property’s value is considered impaired if the Company’s estimate of the aggregate expected future undiscounted cash flow generated by the property is less than the carrying value. In conducting this review, the Company considers U.S. macroeconomic factors, real estate and healthcare sector conditions, together with asset specific and other factors. To the extent an impairment has occurred, the loss is measured as the excess of the carrying value of the property over the estimated fair value and recorded in impairment loss in the consolidated statements of operations. Real estate held for sale is stated at the lower of its carrying amount or estimated fair value less disposal cost, with any write-down to disposal cost recorded as an impairment loss. For any increase in fair value less disposal cost subsequent to classification as held for sale, the impairment may be reversed, but only up to the amount of cumulative loss previously recognized. The Company considered the potential impact of the COVID-19 pandemic on the future net operating income of its healthcare real estate held for investment as an indicator of impairment. Fair values were estimated based upon the income capitalization approach, using net operating income for each property and applying indicative capitalization rates. During the three months ended March 31, 2021, the Company recorded impairment losses totaling $0.8 million on its Smyrna net lease property as a result of lower estimated future cash flows and market value. Investments in Unconsolidated Ventures The Company reviews its investments in unconsolidated ventures for which the Company did not elect the fair value option on a quarterly basis, or more frequently as necessary, to assess whether there are any indicators that the value may be impaired or that its carrying value may not be recoverable. An investment is considered impaired if the projected net recoverable amount over the expected holding period is less than the carrying value. In conducting this review, the Company considers global macroeconomic factors, including real estate sector conditions, together with investment specific and other factors. To the extent an impairment has occurred and is considered to be other than temporary, the loss is measured as the excess of the carrying value of the investment over the estimated fair value and recorded in equity in earnings (losses) of unconsolidated ventures in the consolidated statements of operations. During the three months ended March 31, 2021, the Company did not impair any of its investments |
Operating Real Estate
Operating Real Estate | 3 Months Ended |
Mar. 31, 2021 | |
Real Estate [Abstract] | |
Operating Real Estate | Operating Real Estate The following table presents operating real estate, net (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Land $ 230,406 $ 234,706 Land improvements 23,215 23,797 Buildings and improvements 1,376,487 1,389,706 Tenant improvements 16,523 16,172 Construction in progress 2,587 2,535 Furniture, fixtures and equipment 106,673 108,055 Subtotal $ 1,755,891 $ 1,774,971 Less: Accumulated depreciation (298,494) (291,041) Operating real estate, net $ 1,457,397 $ 1,483,930 For the three months ended March 31, 2021 and 2020, depreciation expense was $14.9 million and $16.0 million, respectively. Within the table above, buildings and improvements have been reduced by accumulated impairment losses of $194.7 million and $213.9 million as of March 31, 2021 and December 31, 2020, respectively. Impairment loss, as presented on the consolidated statements of operations, totaled $0.8 million for the three months ended March 31, 2021. There was no impairment loss recorded for the three months ended March 31, 2020. Refer to Note 2, “Summary of Significant Accounting Policies” for further discussion. |
Investments in Unconsolidated V
Investments in Unconsolidated Ventures | 3 Months Ended |
Mar. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Ventures | Investments in Unconsolidated Ventures All investments in unconsolidated ventures are accounted for under the equity method. The following tables present the Company’s investments in unconsolidated ventures (dollars in thousands): Carrying Value (1) Portfolio Acquisition Date Ownership March 31, 2021 (Unaudited) December 31, 2020 Eclipse May-2014 5.6 % $ 5,484 $ 5,624 Envoy (2) Sep-2014 11.4 % 2 2 Diversified US/UK Dec-2014 14.3 % 85,622 89,651 Espresso (3) Jul-2015 36.7 % — — Trilogy Dec-2015 23.2 % 130,618 133,896 Subtotal $ 221,726 $ 229,173 Operator Platform (4) Jul-2017 20.0 % 218 — Total $ 221,944 $ 229,173 _______________________________________ (1) Includes $1.3 million, $13.4 million, $7.6 million and $9.8 million of capitalized acquisition costs for the Company’s investments in the Eclipse, Diversified US/UK, Espresso and Trilogy joint ventures, respectively. (2) In March 2019, the Envoy joint venture completed the sale of its remaining 11 properties for a sales price of $118.0 million, which generated net proceeds to the Company totaling $4.3 million. The Company’s carrying value for its investment in the Envoy joint venture represents additional proceeds to be received upon satisfaction of certain conditions under the sale. (3) As a result of impairments and other non-cash reserves recorded by the joint venture, the Company’s carrying value of its Espresso unconsolidated investment was reduced to zero in the fourth quarter of 2018. The Company has recorded the excess equity in losses related to its unconsolidated venture as a reduction to the carrying value of its mezzanine loan, which was originated to a subsidiary of the Espresso joint venture. (4) Represents investment in Solstice Senior Living, LLC (“Solstice”), the manager of the Winterfell portfolio. Solstice is a joint venture between affiliates of Integral Senior Living, LLC (“ISL”), a management company of ILF, ALF and MCF founded in 2000, which owns 80.0%, and the Company, which owns 20.0%. During the three months ended March 31, 2021, the Company contributed an additional $0.3 million to Solstice. Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Portfolio Equity in Earnings (Losses) Cash Distributions Equity in Earnings (Losses) Cash Distributions Eclipse $ (140) $ — $ (199) $ 86 Envoy — — — 192 Diversified US/UK (2,698) 859 (2,090) 1,487 Espresso 5,257 — (217) — Trilogy (3,277) — 1,528 — Subtotal $ (858) $ 859 $ (978) $ 1,765 Operator Platform (1) (32) — (15) — Total $ (890) $ 859 $ (993) $ 1,765 _______________________________________ (1) Represents the Company’s investment in Solstice. Summarized Financial Data The following table presents the combined balance sheets as of March 31, 2021 and December 31, 2020 and combined statements of operations for the three months ended March 31, 2021 and 2020 of the Diversified US/UK, Espresso and Trilogy unconsolidated ventures (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Three Months Ended March 31, 2021 2020 Assets Operating real estate, net $ 3,875,013 $ 3,895,920 Total revenues $ 305,693 $ 354,673 Other assets 1,082,143 1,207,812 Net income (loss) $ (18,619) $ (8,616) Total assets $ 4,957,156 $ 5,103,732 Liabilities and equity Total liabilities $ 3,929,266 $ 4,047,895 Equity 1,027,890 1,055,837 Total liabilities and equity $ 4,957,156 $ 5,103,732 |
Real Estate Debt Investments
Real Estate Debt Investments | 3 Months Ended |
Mar. 31, 2021 | |
Real Estate [Abstract] | |
Real Estate Debt Investments | Real Estate Debt Investments The following table presents the Company’s one debt investment (dollars in thousands): Principal Amount Carrying Value (1) Asset Type: March 31, 2021 (Unaudited) December 31, 2020 March 31, 2021 (Unaudited) December 31, 2020 Effective Interest Rate (2) Final Maturity Date Mezzanine loan (1) $ 49,409 $ 74,182 $ 36,112 $ 55,864 15.0 % Jan 2022 _______________________________________ (1) As a result of impairments and other non-cash reserves recorded by the joint venture, the Company’s carrying value of its Espresso unconsolidated investment was reduced to zero in the fourth quarter of 2018. The Company has recorded the excess equity in losses related to its unconsolidated investment as a reduction to the carrying value of its mezzanine loan, which was originated to a subsidiary of the Espresso joint venture. As of March 31, 2021 and December 31, 2020, the cumulative excess equity in losses included in the mezzanine loan carrying value were $13.1 million and $18.3 million, respectively. (2) Represents the effective interest rate as of March 31, 2021, which includes a fixed rate of 14% and 1% payment-in-kind (“PIK”). During the three months ended March 31, 2021, the Company received principal repayments on its debt investment totaling $24.9 million. The borrower has funded these principal repayments through net proceeds generated from the sale of underlying collateral and available operating cash flow. For additional information, refer to Note 14, “Subsequent Events.” The Company evaluates its debt investment at least quarterly based on: (i) whether the borrower is currently paying contractual debt service in accordance with its contractual terms; and (ii) whether the Company believes the borrower will be able to perform under its contractual terms in the future, as well as the Company’s expectations as to the ultimate recovery of principal. The Company considers historical credit loss information, current conditions, the effects of expectations of changes in future macroeconomic conditions as well as reasonable and supportable forecasts. As of March 31, 2021, the Company’s debt investment was performing in accordance with the contractual terms of its governing documents. The Company continues to assess the collectability of principal and interest and expects to receive full payment of contractual interest and recover the principal outstanding. As of March 31, 2021, contractual debt service has been paid in accordance with contractual terms. For the three months ended March 31, 2021, the mezzanine loan represented 100% of the Company’s interest income on debt investments as presented on the consolidated statements of operations. |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings The following table presents the Company’s mortgage and other notes payable (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Recourse vs. Non-Recourse Final Maturity (1) Contractual Interest Rate (2) Principal Amount (3) Carrying Value (3) Principal (3) Carrying (3) Mortgage notes payable, net Watermark Aqua Portfolio Denver, CO Non-recourse Repaid LIBOR + 2.92% $ — $ — $ 20,189 $ 20,183 Frisco, TX (4) Non-recourse Feb 2026 3.0% 26,000 25,337 18,770 18,764 Milford, OH Non-recourse Sep 2026 LIBOR + 2.68% 18,760 18,440 18,760 18,423 Rochester Portfolio Rochester, NY Non-recourse Feb 2025 4.25% 19,662 19,587 19,907 19,830 Rochester, NY (5) Non-recourse Aug 2027 LIBOR + 2.34% 101,224 100,408 101,224 100,378 Rochester, NY Non-recourse Aug 2021 LIBOR + 2.90% 12,800 12,674 12,800 12,584 Arbors Portfolio (6) Various locations Non-recourse Feb 2025 3.99% 86,838 86,109 87,302 86,521 Watermark Fountains Portfolio (7) Various locations Non-recourse Jun 2022 3.92% 384,221 383,400 386,607 385,606 Various locations Non-recourse Jun 2022 5.56% 73,100 72,887 73,439 73,180 Winterfell Portfolio (8) Various locations Non-recourse Jun 2025 4.17% 619,018 605,284 622,045 607,526 Avamere Portfolio (9) Various locations Non-recourse Feb 2027 4.66% 70,124 69,678 70,427 69,962 Subtotal mortgage notes payable, net $ 1,411,747 $ 1,393,804 $ 1,431,470 $ 1,412,957 Other notes payable Oak Cottage Santa Barbara, CA Non-recourse Feb 2022 6.00% 3,914 3,914 3,914 3,914 Subtotal other notes payable, net $ 3,914 $ 3,914 $ 3,914 $ 3,914 Total mortgage and other notes payable, net $ 1,415,661 $ 1,397,718 $ 1,435,384 $ 1,416,871 _______________________________________ (1) Refer to Note 14, “Subsequent Events” for additional information regarding mortgage notes maturity extensions. (2) Floating rate borrowings total $132.8 million of principal outstanding and reference one-month LIBOR. (3) The difference between principal amount and carrying value of mortgage notes payable is attributable to deferred financing costs, net for all borrowings, other than the Winterfell portfolio which is attributable to below market debt intangibles. (4) In January 2021, the Company refinanced its existing mortgage note payable with a new $26.0 million mortgage note payable. The new mortgage note carries a fixed interest rate of 3.0% through February 2024, followed by the greater of the fixed rate or one-month LIBOR plus 2.80% through the initial maturity date of February 2026. (5) Composed of seven individual mortgage notes payable secured by seven healthcare real estate properties, cross-collateralized and subject to cross-default. (6) Composed of four individual mortgage notes payable secured by four healthcare real estate properties, cross-collateralized and subject to cross-default. (7) Includes $384.2 million principal amount of fixed rate borrowings, secured by 14 healthcare real estate properties, cross-collateralized and subject to cross-default, as well as a supplemental financing totaling $73.1 million of principal, secured by seven healthcare real estate properties, cross-collateralized and subject to cross-default. (8) Composed of 32 individual mortgage notes payable secured by 32 healthcare real estate properties, cross-collateralized and subject to cross-default. (9) Composed of five individual mortgage notes payable secured by five healthcare real estate properties, cross-collateralized and subject to cross-default. The following table presents future scheduled principal payments on mortgage and other notes payable based on final maturity (dollars in thousands): April 1 to December 31, 2021 $ 33,973 Years Ending December 31: 2022 467,008 2023 19,696 2024 20,406 2025 670,302 Thereafter 204,276 Total $ 1,415,661 As of March 31, 2021, the operator for the Arbors portfolio failed to remit rent and comply with other contractual terms of its lease agreement, which resulted in a default under the operator’s lease, which in turn, resulted in a default under the mortgage notes collateralized by the properties. In response to the operational challenges resulting from the COVID-19 pandemic, the Company entered into forbearance agreements to defer contractual debt service for borrowings on properties within the Aqua, Rochester, Arbors, Winterfell and Fountains portfolios. The aggregate outstanding principal amount of these borrowings totaled $1.3 billion as of March 31, 2021. The deferred debt service must be repaid following the forbearance period with no additional interest or penalties incurred by the Company, subject to satisfaction of certain conditions. The deferral of payments ended during the year ended December 31, 2020 and the Company has resumed remitting debt service, together with the deferred debt service, on these mortgage notes payable. Deferred debt service is scheduled to be repaid in full for all borrowings by January 2022. These borrowings remain in technical default and are subject to the terms of the forbearance agreements until all deferred debt service is repaid. In addition, the forbearance agreement for a mortgage note payable on a property within the Rochester portfolio temporarily waived financial covenants under the mortgage note through December 31, 2020. As of March 31, 2021, the property is in compliance with the financial covenants under the mortgage note. Line of Credit - Related Party The following table presents the Company’s borrowings under the Sponsor line of credit as of March 31, 2021 (dollars in thousands): Capacity Principal Outstanding Contractual Interest Rate Maturity Date Sponsor Line of Credit $ 35,000 $ 35,000 LIBOR + 3.50% Dec 2022 In October 2017, the Company obtained a revolving line of credit from an affiliate of Colony Capital, the Sponsor (the “Sponsor Line”). As of March 31, 2021, the Sponsor Line has a borrowing capacity of $35.0 million at an interest rate of 3.5% plus LIBOR and has a maturity date of December 2022. In April 2020, the Company borrowed $35.0 million under the Sponsor Line to improve its liquidity position as a result of the COVID-19 pandemic. Interest expense on the Company’s consolidated statements of operations includes $0.3 million related to the Sponsor Line for the three months ended March 31, 2021. |
Related Party Arrangements
Related Party Arrangements | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Arrangements | Related Party Arrangements Advisor Subject to certain restrictions and limitations, the Advisor is responsible for managing the Company’s affairs on a day-to-day basis and for identifying, acquiring, originating and asset managing investments on behalf of the Company. The Advisor may delegate certain of its obligations to affiliated entities, which may be organized under the laws of the United States or foreign jurisdictions. References to the Advisor include the Advisor and any such affiliated entities. For such services, to the extent permitted by law and regulations, the Advisor receives fees and reimbursements from the Company. Pursuant to the advisory agreement, the Advisor may defer or waive fees in its discretion. Below is a description and table of the fees and reimbursements incurred to the Advisor. In June 2020, the advisory agreement was renewed for an additional one-year term commencing on June 30, 2020, with terms identical to those in effect through June 30, 2020, but for the elimination of disposition fees. Fees to Advisor Asset Management Fee Effective January 1, 2018, the Advisor receives a monthly asset management fee equal to one-twelfth of 1.5% of the Company’s most recently published aggregate estimated net asset value, as may be subsequently adjusted for any special distribution declared by the board of directors in connection with a sale, transfer or other disposition of a substantial portion of the Company’s assets, with $2.5 million per calendar quarter of such fee paid in shares of the Company’s common stock at a price per share equal to the most recently published net asset value per share. The Advisor has also agreed that all shares of the Company’s common stock issued to it in consideration of the asset management fee will be subordinate in the Company’s share repurchase program (the “Share Repurchase Program”) to shares of the Company’s common stock held by third party stockholders for a period of two years, unless the advisory agreement is earlier terminated. Incentive Fee The Advisor is entitled to receive distributions equal to 15.0% of net cash flows of the Company, whether from continuing operations, repayment of loans, disposition of assets or otherwise, but only after stockholders have received, in the aggregate, cumulative distributions equal to their invested capital plus a 6.75% cumulative, non-compounded annual pre-tax return on such invested capital. From inception through March 31, 2021, the Advisor has not received any incentive fees from the Company. Acquisition Fee Effective January 1, 2018, the Advisor no longer receives an acquisition fee in connection with the Company’s acquisitions of real estate properties or debt investments. Disposition Fee Effective June 30, 2020, the Advisor no longer has the potential to receive a disposition fee in connection with the sale of real estate properties or debt investments. Reimbursements to Advisor Operating Costs The Advisor is entitled to receive reimbursement for direct and indirect operating costs incurred by the Advisor in connection with administrative services provided to the Company. The Advisor allocates, in good faith, indirect costs to the Company related to the Advisor’s and its affiliates’ employees, occupancy and other general and administrative costs and expenses in accordance with the terms of, and subject to the limitations contained in, the advisory agreement with the Advisor. The indirect costs include the Company’s allocable share of the Advisor’s compensation and benefit costs associated with dedicated or partially dedicated personnel who spend all or a portion of their time managing the Company’s affairs, based upon the percentage of time devoted by such personnel to the Company’s affairs. The indirect costs also include rental and occupancy, technology, office supplies, travel and entertainment and other general and administrative costs and expenses. However, there is no reimbursement for personnel costs related to executive officers (although there may be reimbursement for certain executive officers of the Advisor) and other personnel involved in activities for which the Advisor receives an acquisition fee or a disposition fee. The Advisor allocates these costs to the Company relative to its and its affiliates’ other managed companies in good faith and has reviewed the allocation with the Company’s board of directors, including its independent directors. The Advisor updates the board of directors on a quarterly basis of any material changes to the expense allocation and provides a detailed review to the board of directors, at least annually, and as otherwise requested by the board of directors. The Company reimburses the Advisor quarterly for operating costs (including the asset management fee) based on a calculation for the four preceding fiscal quarters not to exceed the greater of: (i) 2.0% of its average invested assets; or (ii) 25.0% of its net income determined without reduction for any additions to reserves for depreciation, loan losses or other similar non-cash reserves and excluding any gain from the sale of assets for that period. Notwithstanding the above, the Company may reimburse the Advisor for expenses in excess of this limitation if a majority of the Company’s independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. The Company calculates the expense reimbursement quarterly based upon the trailing twelve-month period. Summary of Fees and Reimbursements The following tables present the fees and reimbursements incurred and paid to the Advisor (dollars in thousands): Type of Fee or Reimbursement Due to Related Party as of December 31, 2020 Three Months Ended March 31, 2021 Due to Related Party as of March 31, 2021 (Unaudited) Financial Statement Location Incurred Paid Fees to Advisor Entities Asset management (1) Asset management and other fees-related party $ 923 $ 2,769 $ (2,769) (2) $ 923 Reimbursements to Advisor Entities Operating costs (2) General and administrative expenses 7,395 2,889 (7,395) 2,889 Total $ 8,318 $ 5,658 $ (10,164) $ 3,812 _______________________________________ (1) Includes $2.5 million paid in shares of the Company’s common stock. (2) As of March 31, 2021, the Advisor did not have any unreimbursed operating costs which remained eligible to be allocated to the Company. Pursuant to the advisory agreement, for the three months ended March 31, 2021, the Company issued 0.6 million shares totaling $2.5 million, based on the estimated value per share on the date of each issuance, to an affiliate of the Advisor as part of its asset management fee. As of March 31, 2021, the Advisor, the Sponsor and their affiliates owned a total of 5.3 million shares or $20.8 million of the Company’s common stock based on the Company’s most recent estimated value per share. As of March 31, 2021, the Advisor, the Sponsor and their affiliates owned 2.5% of the total outstanding shares of the Company’s common stock. Investments in Joint Ventures Solstice, the manager of the Winterfell portfolio, is a joint venture between affiliates of ISL, which owns 80.0%, and the Company, which owns 20.0%. For the three months ended March 31, 2021, the Company recognized property management fee expense of $1.2 million paid to Solstice related to the Winterfell portfolio. The below table indicates the Company’s investments for which Colony Capital is also an equity partner in the joint venture. Each investment was approved by the Company’s board of directors, including all of its independent directors. Refer to Note 4, “Investments in Unconsolidated Ventures” for further discussion of these investments: Portfolio Partner(s) Acquisition Date Ownership Eclipse Colony Capital/Formation Capital, LLC May 2014 5.6% Diversified US/UK Colony Capital December 2014 14.3% In connection with the acquisition of the Diversified US/UK portfolio by NorthStar Realty Finance Corp. (“NorthStar Realty”), now a subsidiary of Colony Capital, and the Company, the Sponsor acquired a 43.0%, as adjusted, ownership interest in American Healthcare Investors, LLC (“AHI”). In December 2015, the Company, through a joint venture with Griffin-American Healthcare REIT III, Inc., a REIT sponsored and advised by AHI, acquired a 29.0% interest in the Trilogy portfolio, a $1.2 billion healthcare portfolio and contributed $201.7 million for its interest. The purchase was approved by the Company’s board of directors, including all of its independent directors. In October 2018, the Company sold 20.0% of its ownership interest in the Trilogy joint venture, which generated gross proceeds of $48.0 million and reduced its ownership interest in the joint venture from approximately 29% to 23%. The Company sold the ownership interest to a wholly-owned subsidiary of the operating partnership of Griffin-American Healthcare REIT IV, Inc., a REIT sponsored by AHI. Mezzanine Loan In July 2015, the Company originated a $75.0 million mezzanine loan to a subsidiary of the Espresso joint venture, of which the Company owns a minority interest. Refer to Note 5, “Real Estate Debt Investments” for further discussion. Line of Credit - Related Party The Company has the Sponsor Line, which provides up to $35.0 million at an interest rate of 3.5% plus LIBOR. Refer to Note 6, “Borrowings” for further discussion. |
Equity-Based Compensation
Equity-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Equity-Based CompensationThe Company adopted a long-term incentive plan, as amended (the “Plan”), which it may use to attract and retain qualified officers, directors, employees and consultants, as well as an independent directors compensation plan, which is a component of the Plan. Under the Plan, 2.0 million shares of restricted common stock were eligible to be issued. Pursuant to the Plan, as of March 31, 2021, the Company’s independent directors were granted a total of 159,932 shares of restricted common stock for an aggregate $1.3 million, based on the share price on the date of each grant. The restricted stock granted prior to 2015 generally vested quarterly over four years and the restricted stock granted in and subsequent to 2015 generally vests quarterly over two years. However, the stock will become fully vested on the earlier occurrence of: (i) the termination of the independent director’s service as a director due to his or her death or disability; or (ii) a change in control of the Company.The Company recognized equity-based compensation expense of $45,625 and $38,125, for the three months ended March 31, 2021 and 2020, respectively. Equity-based compensation expense is related to the issuance of restricted stock to the independent directors and is recorded in general and administrative expenses in the consolidated statements of operations. Unrecognized equity-based compensation for unvested shares totaled $147,625 and $193,250 as of March 31, 2021 and December 31, 2020, respectively. Unvested shares totaled 23,546 and 30,403 as of March 31, 2021 and December 31, 2020, respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock The Company stopped accepting subscriptions for its Offering on December 17, 2015 and all of the shares initially registered for its Offering were issued on or before January 19, 2016. The Company issued 173.4 million shares of common stock generating gross proceeds of $1.7 billion, excluding proceeds from the DRP. Distribution Reinvestment Plan The Company adopted the DRP through which common stockholders may elect to reinvest an amount equal to the distributions declared on their shares in additional shares of the Company’s common stock in lieu of receiving cash distributions. The purchase price under the Company’s initial DRP was $9.50. In connection with its determination of the offering price for shares of the Company’s common stock in the follow-on offering, the board of directors determined that distributions may be reinvested in shares of the Company’s common stock at a price of $9.69 per share, which was approximately 95% of the offering price of $10.20 per share established for purposes of the follow-on offering. In April 2016, the board of directors determined that distributions may be reinvested in shares of the Company’s common stock at a price equal to the most recent estimated value per share of the shares of common stock. The following table presents the price at which dividends were invested based on when the price became effective: Effective Date Estimated Value per Share Valuation Date April 2016 $ 8.63 12/31/2015 December 2016 9.10 6/30/2016 December 2017 8.50 6/30/2017 December 2018 7.10 6/30/2018 December 2019 6.25 6/30/2019 December 2020 3.89 6/30/2020 No selling commissions or dealer manager fees were paid on shares issued pursuant to the DRP. The board of directors of the Company may amend, suspend or terminate the DRP for any reason upon ten-days’ notice to participants, except that the Company may not amend the DRP to eliminate a participant’s ability to withdraw from the DRP. For the three months ended March 31, 2021, the Company has not issued shares of common stock pursuant to the DRP. From inception through March 31, 2021, the Company issued 25.7 million shares of common stock, generating gross offering proceeds of $232.6 million pursuant to the DRP. Distributions Effective February 1, 2019, the Company’s board of directors determined to suspend distributions in order to preserve capital and liquidity and no distributions were declared during the three months ended March 31, 2021. In order to continue to qualify as a REIT, the Company must distribute annually dividends equal to at least 90% of its REIT taxable income (with certain adjustments). For the three months ended March 31, 2021, the Company generated net operating losses for tax purposes. The Company did not have positive REIT taxable income for its taxable year ending December 31, 2020, therefore, it was not required to make distributions to its stockholders in 2020 to qualify as a REIT. The Company’s most recently filed tax return is for the year ended December 31, 2019 and includes a net operating loss carry-forward of $86.0 million. Share Repurchase Program The Company adopted the Share Repurchase Program that enabled stockholders to sell their shares to the Company in limited circumstances. The Company is not obligated to repurchase shares under the Share Repurchase Program. The Company may amend, suspend or terminate the Share Repurchase Program at its discretion at any time, subject to certain notice requirements. In April 2020, the Company’s board of directors determined to suspend all repurchases under the Share Repurchase Program effective April 30, 2020 in order to preserve capital and liquidity and has not repurchased any shares during the three months ended March 31, 2021. |
Non-controlling Interests
Non-controlling Interests | 3 Months Ended |
Mar. 31, 2021 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interests | Non-controlling Interests Operating Partnership Non-controlling interests include the aggregate limited partnership interests in the Operating Partnership held by limited partners, other than the Company. Income (loss) attributable to the non-controlling interests is based on the limited partners’ ownership percentage of the Operating Partnership. Income (loss) allocated to the Operating Partnership non-controlling interests for the three months ended March 31, 2021 and 2020 was de minimis. Other |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair Value Measurement The fair value of financial instruments is categorized based on the priority of the inputs to the valuation technique and categorized into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Financial assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows: Level 1. Quoted prices for identical assets or liabilities in an active market. Level 2. Financial assets and liabilities whose values are based on the following: a) Quoted prices for similar assets or liabilities in active markets. b) Quoted prices for identical or similar assets or liabilities in non-active markets. c) Pricing models whose inputs are observable for substantially the full term of the asset or liability. d) Pricing models whose inputs are derived principally from or corroborated by observable market data for substantially the full term of the asset or liability. Level 3. Prices or valuation techniques based on inputs that are both unobservable and significant to the overall fair value measurement. Fair Value of Financial Instruments U.S. GAAP requires disclosure of fair value about all financial instruments. The following disclosure of estimated fair value of financial instruments was determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value. The following table presents the principal amount, carrying value and fair value of certain financial assets and liabilities (dollars in thousands): March 31, 2021 December 31, 2020 Principal Amount Carrying Value Fair Value Principal Amount Carrying Value Fair Value Financial assets: (1) Real estate debt investments, net $ 49,409 $ 36,112 $ 49,409 $ 74,182 $ 55,864 $ 74,182 Financial liabilities: (1) Mortgage and other notes payable, net $ 1,415,661 $ 1,397,718 $ 1,342,460 $ 1,435,384 $ 1,416,871 $ 1,354,832 Line of credit - related party 35,000 35,000 35,000 35,000 35,000 35,000 _______________________________________ (1) The fair value of other financial instruments not included in this table is estimated to approximate their carrying value. Disclosure about fair value of financial instruments is based on pertinent information available to management as of the reporting date. Although management is not aware of any factors that would significantly affect fair value, such amounts have not been comprehensively revalued for purposes of these consolidated financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein. Real Estate Debt Investments, Net The Company’s real estate debt investment’s fair value was determined by comparing the current yield to the estimated yield for newly originated loans with similar credit risk or the market yield at which a third party might expect to purchase such investment; or based on discounted cash flow projections of principal and interest expected to be collected, which includes consideration of the financial standing of the borrower or sponsor as well as operating results of the underlying collateral. As of the reporting date, the Company believes that principal amount approximates fair value. The fair value measurement of the Company’s real estate debt investment is generally based on unobservable inputs, and as such, are classified as Level 3 of the fair value hierarchy. Mortgage and Other Notes Payable, Net and Line of Credit - Related Party The Company primarily uses rates currently available with similar terms and remaining maturities to estimate fair value. These measurements are determined using comparable U.S. Treasury and LIBOR rates as of the end of the reporting period. These fair value measurements are based on observable inputs, and as such, are classified as Level 2 of the fair value hierarchy. Nonrecurring Fair Values The Company measures fair value of certain assets on a nonrecurring basis when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Adjustments to fair value generally result from the application of lower of amortized cost or fair value accounting for assets held for sale or otherwise, write-down of asset values due to impairment. The following table summarizes the fair value, measured at the time of impairment, of Level 3 assets which have been measured at fair value on a nonrecurring basis during the periods presented and the associated impairment losses (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Fair Value Impairment Losses Fair Value Impairment Losses Operating real estate, net $ 1,900 $ 786 $ 234,650 $ 164,215 Assets held for sale — — 5,000 1,753 Operating Real Estate, Net Operating real estate that is impaired is carried at fair value at the time of impairment. Impairment was driven by various factors that impacted undiscounted future net cash flows, including declines in operating performance, market growth assumptions, and expected margins to be generated by the properties. Fair value of impaired operating real estate was estimated based upon various approaches including discounted cash flow analysis using terminal capitalization rates ranging from 6.00% to 7.75% and discount rates ranging from 7.0% to 8.75%, third party appraisals, offer prices or broker opinions of value. Assets Held For Sale |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company conducts its business through the following five segments, which are based on how management reviews and manages its business. • Direct Investments - Net Lease - Healthcare properties operated under net leases with an operator. • Direct Investments - Operating - Healthcare properties operated pursuant to management agreements with healthcare managers. • Unconsolidated Investments - Healthcare joint ventures, including properties operated under net leases with operators or pursuant to management agreements with healthcare managers, in which the Company owns a minority interest. • Debt Investments - Mortgage loans or mezzanine loans to owners of healthcare real estate. • Corporate - The corporate segment includes corporate level asset management and other fees - related party and general and administrative expenses. The Company primarily generates rental and resident fee income from its direct investments and interest income on real estate debt investments. Additionally, the Company reports its proportionate interest of revenues and expenses from unconsolidated investments through equity in earnings (losses) of unconsolidated ventures. The following tables present segment reporting (dollars in thousands): Direct Investments Three Months Ended March 31, 2021 Net Lease Operating Unconsolidated Investments Debt Corporate (1) Total Property and other revenues $ (776) $ 58,109 $ — $ — $ 1 $ 57,334 Interest income on debt investments — — — 2,213 — 2,213 Real estate properties - operating expenses (25) (45,593) — — — (45,618) Interest expense (2,873) (12,835) — — (317) (16,025) Transaction costs — (54) — — — (54) Asset management and other fees - related party — — — — (2,769) (2,769) General and administrative expenses (41) — — — (2,992) (3,033) Depreciation and amortization (3,854) (11,533) — — — (15,387) Impairment loss (786) — — — — (786) Other income — 7,360 — — — 7,360 Realized gain (loss) on investments and other — 7,515 — — — 7,515 Equity in earnings (losses) of unconsolidated ventures — — (890) — — (890) Income tax expense — (15) — — — (15) Net income (loss) $ (8,355) $ 2,954 $ (890) $ 2,213 $ (6,077) $ (10,155) _______________________________________ (1) Includes unallocated asset management fee-related party and general and administrative expenses. Direct Investments Three Months Ended March 31, 2020 Net Lease Operating Unconsolidated Investments Debt Corporate (1) Total Property and other revenues $ 8,222 $ 64,606 $ — $ — $ 63 $ 72,891 Interest income on debt investments — — — 1,905 — 1,905 Real estate properties - operating expenses (13) (45,688) — — — (45,701) Interest expense (2,964) (13,715) — — — (16,679) Transaction costs — (7) — — — (7) Asset management and other fees - related party — — — — (4,431) (4,431) General and administrative expenses (44) 14 — (9) (2,990) (3,029) Depreciation and amortization (3,737) (12,752) — — — (16,489) Impairment loss — — — — — — Other income — — — — — — Realized gain (loss) on investments and other — — — — — — Equity in earnings (losses) of unconsolidated ventures — — (993) — — (993) Income tax benefit (expense) — (14) — — — (14) Net income (loss) $ 1,464 $ (7,556) $ (993) $ 1,896 $ (7,358) $ (12,547) _______________________________________ (1) Includes unallocated asset management fee-related party and general and administrative expenses. The following table presents total assets by segment (dollars in thousands): Direct Investments Total Assets: Net Lease Operating Unconsolidated Investments Debt Corporate (1) Total March 31, 2021 (unaudited) $ 342,132 $ 1,209,511 $ 221,941 $ 36,749 $ 72,022 $ 1,882,355 December 31, 2020 348,688 1,223,045 229,170 56,502 61,031 1,918,436 ______________________________________ (1) Represents primarily corporate cash and cash equivalents balances. The following table presents the operators and managers of the Company’s properties, excluding properties owned through unconsolidated joint ventures (dollars in thousands): Three Months Ended March 31, 2021 Operator / Manager Properties Under Management Units Under Management (1) Property and Other Revenues (2) % of Total Property and Other Revenues Watermark Retirement Communities 29 5,049 $ 33,365 58.2 % Solstice Senior Living (3) 32 4,000 24,079 42.0 % Avamere Health Services 5 453 4,164 7.3 % Arcadia Management (4) 4 572 (6,351) (11.1) % Integral Senior Living (5) 1 44 2,077 3.6 % Senior Lifestyle Corporation (6) 1 63 — — % Total 72 10,181 $ 57,334 100.0 % ______________________________________ (1) Represents rooms for ALFs and ILFs and beds for MCFs and SNFs, based on predominant type. (2) Includes rental income received from the Company’s net lease properties as well as rental income, ancillary service fees and other related revenue earned from ILF residents and resident fee income derived from the Company’s ALFs, MCFs and CCRCs, which includes resident room and care charges, ancillary fees and other resident service charges. (3) Solstice is a joint venture of which affiliates of ISL own 80%. (4) During the three months ended March 31, 2021, the Company recorded lease income to the extent lease payments were received. Lease income was reduced by $7.4 million for the write-off of straight-line rent receivables, as full collection of rent under the lease was deemed not to be probable. (5) Property count and units excludes two ISL properties designated as held for sale as of March 31, 2021. (6) Operator has failed to remit rental payments during the three months ended March 31, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies As of March 31, 2021, the Company believes there are no material contingencies that would affect its results of operations, cash flows or financial position. Litigation and Claims The Company may be involved in various litigation matters arising in the ordinary course of its business. Although the Company is unable to predict with certainty the eventual outcome of any litigation, any current legal proceedings are not expected to have a material adverse effect on its financial position or results of operations. The Company’s tenants, operators and managers may be involved in various litigation matters arising in the ordinary course of their business. The unfavorable resolution of any such actions, investigations or claims could, individually or in the aggregate, materially adversely affect such tenants’, operators’ or managers’ liquidity, financial condition or results of operations and their ability to satisfy their respective obligations to the Company, which, in turn, could have a material adverse effect on the Company. Environmental Matters The Company follows a policy of monitoring its properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist at its properties, the Company is not currently aware of any environmental liability with respect to its properties that would have a material effect on its consolidated financial position, results of operations or cash flows. Further, the Company is not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability that it believes would require additional disclosure or the recording of a loss contingency. General Uninsured Losses The Company obtains various types of insurance to mitigate the impact of professional liability, property, business interruption, liability, flood, windstorm, earthquake, environmental and terrorism related losses. The Company attempts to obtain appropriate policy terms, conditions, limits and deductibles considering the relative risk of loss, the cost of such coverage and current industry practice. There are, however, certain types of extraordinary losses, such as those due to acts of war or other events that may be either uninsurable or not economically insurable. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The following is a discussion of material events which have occurred subsequent to March 31, 2021 through the issuance of the consolidated financial statements. Lease Modification Effective April 15, 2021, the Company executed a lease modification with the operator of its Fountains portfolio. The modification defers up to $3.0 million of contractual rent payments over the remaining term of the lease, which will be forgiven at the expiration or earlier termination of the lease, subject to the satisfaction and compliance with certain terms and conditions. The lease modification also requires a minimum amount of capital improvements to be funded by both the operator and Company over the remaining term of the lease. Real Estate Debt Investment From April 1, 2021 through May 13, 2021 , the Company has received principal repayments on its mezzanine loan debt investment which total $21.8 million. The borrower funded these principal repayments through net proceeds generated from the sale of underlying collateral and available operating cash flow. Borrowings In April 2021, the Company extended the maturity date of a mortgage note payable for a property within the Rochester portfolio from August 2021 to August 2022 and made a $1.0 million principal repayment toward the outstanding principal balance. Net Lease Purchase and Sale Agreement In May 2021, the Company executed a purchase and sale agreement for the Smyrna net lease property with a sales price of $2.0 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting The accompanying unaudited consolidated financial statements and related notes of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and note disclosures normally included in the consolidated financial statements prepared under U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which was filed with the U.S. Securities and Exchange Commission on March 23, 2021. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company, the Operating Partnership and their consolidated subsidiaries. The Company consolidates entities in which it has a controlling financial interest by first considering if an entity meets the definition of a variable interest entity (“VIE”) for which the Company is deemed to be the primary beneficiary or if the Company has the power to control an entity through majority voting interest or other arrangements. All significant intercompany balances are eliminated in consolidation. |
Variable Interest Entities | Variable Interest Entities A VIE is an entity that lacks one or more of the characteristics of a voting interest entity. A VIE is defined as an entity in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The determination of whether an entity is a VIE includes both a qualitative and quantitative analysis. The Company bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability and relevant financial agreements and the quantitative analysis on the forecasted cash flow of the entity. The Company reassesses its initial evaluation of an entity as a VIE upon the occurrence of certain reconsideration events. A VIE must be consolidated only by its primary beneficiary, which is defined as the party who, along with its affiliates and agents, has both the: (i) power to direct the activities that most significantly impact the VIE’s economic performance; and (ii) obligation to absorb the losses of the VIE or the right to receive the benefits from the VIE, which could be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE by considering qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of its investment; the obligation or likelihood for the Company or other interests to provide financial support; consideration of the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders and the similarity with and significance to the business activities of the Company and the other interests. The Company reassesses its determination of whether it is the primary beneficiary of a VIE each reporting period. Judgments related to these determinations include estimates about the current and future fair value and performance of investments held by these VIEs and general market conditions. During the three months ended March 31, 2021, the Company determined that a reconsideration event for an unconsolidated VIE did not result in a change in the evaluation that the Company is not the primary beneficiary. The Company evaluates its investments and financings, including investments in unconsolidated ventures and securitization financing transactions to determine whether each investment or financing is a VIE. The Company analyzes new investments and financings, as well as reconsideration events for existing investments and financings, which vary depending on type of investment or financing. As of March 31, 2021, the Company has identified certain consolidated and unconsolidated VIEs. Assets of each of the VIEs, other than the Operating Partnership, may only be used to settle obligations of the respective VIE. Creditors of each of the VIEs have no recourse to the general credit of the Company. Consolidated VIEs The most significant consolidated VIEs are the Operating Partnership and certain properties that have non-controlling interests. These entities are VIEs because the non-controlling interests do not have substantive kick-out or participating rights. The Operating Partnership consolidates certain properties that have non-controlling interests. Included in operating real estate, net on the Company’s consolidated balance sheets as of March 31, 2021 is $477.3 million related to such consolidated VIEs. Included in mortgage and other notes payable, net on the Company’s consolidated balance sheet as of March 31, 2021 is $444.2 million, collateralized by the real estate assets of the related consolidated VIEs. Unconsolidated VIEs |
Voting Interest Entities | Voting Interest Entities A voting interest entity is an entity in which the total equity investment at risk is sufficient to enable it to finance its activities independently and the equity holders have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the losses of the entity and the right to receive the residual returns of the entity. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. If the Company has a majority voting interest in a voting interest entity, the entity will generally be consolidated. The Company does not consolidate a voting interest entity if there are substantive participating rights by other parties and/or kick-out rights by a single party or through a simple majority vote. The Company performs on-going reassessments of whether entities previously evaluated under the voting interest framework have become VIEs, based on certain events, and therefore subject to the VIE consolidation framework. |
Investments in Unconsolidated Ventures | Investments in Unconsolidated Ventures A non-controlling, unconsolidated ownership interest in an entity may be accounted for using the equity method or the Company may elect the fair value option. The Company will account for an investment under the equity method of accounting if it has the ability to exercise significant influence over the operating and financial policies of an entity, but does not have a controlling financial interest. Under the equity method, the investment is adjusted each period for capital contributions and distributions and its share of the entity’s net income (loss). Capital contributions, distributions and net income (loss) of such entities are recorded in accordance with the terms of the governing documents. An allocation of net income (loss) may differ from the stated ownership percentage interest in such entity as a result of preferred returns and allocation formulas, if any, as described in such governing documents. Equity method investments are recognized using a cost accumulation model, in which the investment is recognized based on the cost to the investor, which includes acquisition fees. The Company records as an expense certain acquisition costs and fees associated with consolidated investments deemed to be business combinations and capitalizes these costs for investments deemed to be acquisitions of an asset, including an equity method investment. |
Non-controlling Interests | Non-controlling Interests A non-controlling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to the Company. A non-controlling interest is required to be presented as a separate component of equity on the consolidated balance sheets and presented separately as net income (loss) and comprehensive income (loss) attributable to controlling and non-controlling interests. An allocation to a non-controlling interest may differ from the stated ownership percentage interest in such entity as a result of a preferred return and allocation formula, if any, as described in such governing documents. |
Estimates | Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that could affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates and assumptions. Any estimates of the effects of COVID-19 as reflected and/or discussed in these financial statements are based upon the Company's best estimates using information known to the Company as of the date of this Quarterly Report on Form 10-Q. Such estimates may change and the impact of which could be material. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company considers all highly-liquid investments with an original maturity date of three months or less to be cash equivalents. Cash, including amounts restricted, may at times exceed the Federal Deposit Insurance Corporation deposit insurance limit of $250,000 per institution. The Company mitigates credit risk by placing cash and cash equivalents with major financial institutions. To date, the Company has not experienced any losses on cash and cash equivalents. |
Operating Real Estate | Operating real estate is carried at historical cost less accumulated depreciation. Major replacements and betterments which improve or extend the life of the asset are capitalized and depreciated over their useful life. Ordinary repairs and maintenance are expensed as incurred. Operating real estate is depreciated using the straight-line method over the estimated useful life of the assets, summarized as follows: Category: Term: Building 30 to 50 years Building improvements Lesser of the useful life or remaining life of the building Land improvements 9 to 15 years Tenant improvements Lesser of the useful life or remaining term of the lease Furniture, fixtures and equipment 5 to 14 years |
Lessee Accounting | Lessee Accounting A leasing arrangement, a right to control the use of an identified asset for a period of time in exchange for consideration, is classified by the lessee either as a finance lease, which represents a financed purchase of the leased asset, or as an operating lease. For leases with terms greater than 12 months, a lease asset and a lease liability are recognized on the balance sheet at commencement date based on the present value of lease payments over the lease term. Lease renewal or termination options are included in the lease asset and lease liability only if it is reasonably certain that the option to extend would be exercised or the option to terminate would not be exercised. As the implicit rate in most leases are not readily determinable, the Company’s incremental borrowing rate for each lease at commencement date is used to determine the present value of lease payments. Consideration is given to the Company’s recent debt financing transactions, as well as publicly available data for instruments with similar characteristics, adjusted for the respective lease term, when estimating incremental borrowing rates. Lease expense is recognized over the lease term based on an effective interest method for finance leases and on a straight-line basis for operating leases. Right of Use (“ROU”) - Finance Assets |
Assets Held for Sale | Assets Held For SaleThe Company classifies certain long-lived assets as held for sale once the criteria, as defined by U.S. GAAP, have been met and are expected to sell within one year. Long-lived assets to be disposed of are reported at the lower of their carrying amount or fair value minus cost to sell, with any write-down recorded to impairment loss on the consolidated statements of operations. Depreciation and amortization is not recorded for assets classified as held for sale. |
Real Estate Debt Investments | Real Estate Debt InvestmentsReal estate debt investments are generally intended to be held to maturity and, accordingly, are carried at cost, net of unamortized loan fees, premium, discount and unfunded commitments. Debt investments where the Company does not have the intent to hold the loan for the foreseeable future or until its expected payoff are classified as held for sale and recorded at the lower of cost or estimated fair value. |
Deferred Costs | Deferred CostsDeferred costs primarily include deferred financing costs and deferred lease costs. Deferred financing costs represent commitment fees, legal and other third-party costs associated with obtaining financing. These costs are recorded against the carrying value of such financing and are amortized to interest expense over the term of the financing using the effective interest method. Unamortized deferred financing costs are expensed to realized gain (loss) on investments and other, when the associated borrowing is repaid before maturity. Costs incurred in seeking financing transactions which do not close are expensed in the period in which it is determined that the financing will not occur. Deferred lease costs consist of fees incurred to initiate and renew operating leases, which are amortized on a straight-line basis over the remaining lease term and are recorded to depreciation and amortization in the consolidated statements of operations. |
Identified Intangibles | Identified Intangibles The Company records acquired identified intangibles, such as the value of in-place leases, goodwill and other intangibles, based on estimated fair value at the acquisition date. The value allocated to the identified intangibles is amortized over the remaining lease term. In-place leases are amortized into depreciation and amortization expense. Impairment analysis for identified intangible assets is performed in connection with the impairment assessment of the related operating real estate. An impairment establishes a new basis for the identified intangible asset and any impairment loss recognized is not subject to subsequent reversal. Refer to “—Impairment on Operating Real Estate and Investments in Unconsolidated Ventures” for additional information. Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination and is not amortized. The Company performs an annual impairment test for goodwill in the fourth quarter and evaluates the recoverability whenever events or changes in circumstances indicate that the carrying value of goodwill may not be fully recoverable. In making such assessment, qualitative factors are used to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the estimated fair value of the reporting unit is less than its carrying value, then an impairment charge is recorded. |
Acquisition Fees and Expenses | Acquisition Fees and Expenses The total of all acquisition fees and expenses for an investment, including acquisition fees to the Advisor, cannot exceed, in the aggregate, 6.0% of the contract purchase price of such investment unless such excess is approved by a majority of the Company’s directors, including a majority of its independent directors. Effective January 1, 2018, the Advisor no longer receives an acquisition fee in connection with the Company’s acquisitions of real estate properties or debt investments. For the three months ended March 31, 2021, the Company did not incur any acquisition fees or expenses to the Advisor or third parties. The Company records as an expense for certain acquisition costs and fees associated with transactions deemed to be business combinations in which it consolidates the asset and capitalizes these costs for transactions deemed to be acquisitions of an asset, including an equity investment. |
Revenue Recognition | Revenue Recognition Operating Real Estate Rental income from operating real estate is derived from leasing of space to healthcare operators, including rent received from the Company’s net lease properties and rent, ancillary service fees and other related revenue earned from ILF residents. Rental revenue recognition commences when the operator takes legal possession of the leased space and the leased space is substantially ready for its intended use. The leases are for fixed terms of varying length and generally provide for rentals and expense reimbursements to be paid in monthly installments. Rental income from leases is recognized on a straight-line basis over the term of the respective leases. ILF resident agreements are generally short-term in nature and may allow for termination with 30 days’ notice. The excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in receivables, net on the consolidated balance sheets. The Company amortizes any operator inducements as a reduction of revenue utilizing the straight-line method over the term of the lease. The Company also generates operating income from operating healthcare properties. Revenue related to operating healthcare properties includes resident room and care charges, ancillary fees and other resident service charges. Rent is charged and revenue is recognized when such services are provided, generally defined per the resident agreement as of the date upon which a resident occupies a room or uses the services. Resident agreements are generally short-term in nature and may allow for termination with 30 days’ notice. Income derived from our ALFs, MCFs and CCRCs is recorded in resident fee income in the consolidated statements of operations. Lease income from operators and residents is recognized at lease commencement only to the extent collection is expected to be probable in consideration of operators’ and residents’ creditworthiness. This assessment is based on several qualitative and quantitative factors, including and as appropriate, the payment history, ability to satisfy its lease obligations, the value of the underlying collateral or deposit, if any, and current economic conditions. If collection is assessed to not be probable thereafter, lease income recognized is limited to lease payments collected, with the reversal of any income recognized to date in excess of amounts received. If collection is subsequently reassessed to be probable, lease income is adjusted to reflect the amount of income that would have been recognized had collection always been assessed as probable. A summary of lease income recognized for the three months ended March 31, 2021 for the Company’s direct net lease properties is as follows: • The operator of the Smyrna property failed to remit rental payments and accordingly no lease income was recognized. For additional information, refer to Note 14, “Subsequent Events.” • The performance of the operator of the Arbors portfolio has been significantly impacted by COVID-19. Rental payments were delayed throughout 2020, however the operator ultimately satisfied its rent obligations through December 2020. During the three months ended March 31, 2021, the operator failed to remit contractual monthly rent obligations and it is not probable that these obligations will be satisfied in the future. Accordingly, the Company recorded lease income to the extent lease payments were received. In addition, lease income was reduced by $7.4 million for the write-off of straight-line rent receivables, as full collection of rent under the lease was deemed not to be probable. • Despite the adverse effects of COVID-19 on its operations, the operator of the Fountains portfolio remitted full contractual rent, including a portion of the rent deferred under its lease forbearance agreement. For additional information, refer to Note 14, “Subsequent Events.” For the three months ended March 31, 2021 and 2020, total property and other revenues includes variable lease revenues of $3.3 million and $4.2 million, respectively. Variable lease income includes ancillary services provided to operator/residents, as well as non-recurring services and fees at the Company’s operating facilities. In addition, during the three months ended March 31, 2021, the Company recognized $7.4 million in grant income received from the Provider Relief Fund administered by the U.S Department of Health & Human Services (“DHHS”). The grant income is classified as other income in the consolidated statements of operations. Lease Concessions Related to COVID-19 As a result of the COVID-19 crisis, the Company continues to engage with affected operators on a case-by-case basis to evaluate and respond to the current environment and assess the potential for flexible payment terms. For lease concessions resulting directly from the impact of COVID-19 that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee, for example, where total payments required by the modified contract will be substantially the same as or less than the original contract, the Company made a policy election to account for the concessions as though the enforceable rights and obligations for those concessions existed in the lease contracts, under a relief provided by the Financial Accounting Standards Board (“FASB”). Under the relief, the concessions will not be treated as lease modifications that are accounted for over the remaining term of the respective leases, as the Company believes this would not accurately reflect the temporary economic effect of the concessions. Instead, (i) rent deferrals that meet the criteria will be treated as if no changes were made to the lease contract, with continued recognition of lease income and receivable under the original terms of the contract; and (ii) rent forgiveness that meets the criteria will be accounted for as variable lease payments in the affected periods. Effective June 1, 2020, the Company granted a lease concession to the operator of its Fountains net lease portfolio. The concession allowed the operator to defer a portion of contractual rent payments for a 90-day period, with full contractual rent to be repaid over the 12 months following the concession period. The lease concession provided the operator relief consistent with the debt forbearance received from the lender of the properties in the portfolio. The lease concession period ended on August 31, 2020 and the operator has resumed remitting contractual rent payments, including amounts related to deferred rent granted under the lease concession. Deferred rental payments outstanding as of March 31, 2021 totaled $1.2 million for the Fountains net lease portfolio. As there were no substantive changes to the original lease or changes in total cash flows, the concession was not treated as a lease modification and the Company continues to recognize lease income and receivables under the original terms of the lease. Real Estate Debt Investments Interest income is recognized on an accrual basis and any related premium, discount, origination costs and fees are amortized over the life of the investment using the effective interest method. The amortization is reflected as an adjustment to interest income in the consolidated statements of operations. The amortization of a premium or accretion of a discount is discontinued if such investment is reclassified to held for sale. |
Impairment on Operating Real Estate and Investments in Unconsolidated Ventures | Impairment on Operating Real Estate and Investments in Unconsolidated Ventures Due to uncertainties over the extent and duration of the economic fallout from COVID-19, it is difficult for the Company to assess and estimate the future economic effects of COVID-19 with any meaningful precision. As the future impact of COVID-19 will depend on many factors beyond the Company’s control and knowledge, the resulting effect on impairment of the Company's real estate held for investment and held for sale and investments in unconsolidated ventures may materially differ from the Company's current expectations and further impairment charges may be recorded in future periods. Operating Real Estate The Company’s real estate portfolio is reviewed on a quarterly basis, or more frequently as necessary, to assess whether there are any indicators that the value of its operating real estate may be impaired or that its carrying value may not be recoverable. A property’s value is considered impaired if the Company’s estimate of the aggregate expected future undiscounted cash flow generated by the property is less than the carrying value. In conducting this review, the Company considers U.S. macroeconomic factors, real estate and healthcare sector conditions, together with asset specific and other factors. To the extent an impairment has occurred, the loss is measured as the excess of the carrying value of the property over the estimated fair value and recorded in impairment loss in the consolidated statements of operations. Real estate held for sale is stated at the lower of its carrying amount or estimated fair value less disposal cost, with any write-down to disposal cost recorded as an impairment loss. For any increase in fair value less disposal cost subsequent to classification as held for sale, the impairment may be reversed, but only up to the amount of cumulative loss previously recognized. The Company considered the potential impact of the COVID-19 pandemic on the future net operating income of its healthcare real estate held for investment as an indicator of impairment. Fair values were estimated based upon the income capitalization approach, using net operating income for each property and applying indicative capitalization rates. |
Credit Losses on Real Estate Debt Investments and Receivables | Credit Losses on Real Estate Debt Investments and Receivables The current expected credit loss (“CECL”) model, in estimating expected credit losses over the life of a financial instrument at the time of origination or acquisition, considers historical loss experiences, current conditions and the effects of reasonable and supportable expectations of changes in future macroeconomic conditions. The Company assesses the estimate of expected credit losses on a quarterly basis or more frequently as necessary. The Company considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Company measures expected credit losses of real estate debt investments and other receivables (“Financial Assets”) on a collective basis when similar risk characteristics exist. If the Company determines that a particular Financial Asset does not share risk characteristics with its other Financial Assets, the Company evaluates the Financial Asset for expected credit losses on an individual basis. When developing an estimate of expected credit losses on Financial Assets, the Company considers available information relevant to assessing the collectability of cash flows. This information may include internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts. The Company considers relevant qualitative and quantitative factors that relate to the environment in which the Company operates and are specific to the borrower. |
Equity-Based Compensation | Equity-Based Compensation The Company accounts for equity-based compensation awards using the fair value method, which requires an estimate of fair value of the award at the time of grant. All fixed equity-based awards to directors, which have no vesting conditions other than time of service, are amortized to compensation expense over the awards’ vesting period on a straight-line basis. Equity-based compensation is classified within general and administrative expenses in the consolidated statements of operations. |
Income Taxes | Income Taxes The Company elected to be taxed as a REIT and to comply with the related provisions of the Internal Revenue Code beginning in its taxable year ended December 31, 2013. Accordingly, the Company will generally not be subject to U.S. federal income tax to the extent of its distributions to stockholders as long as certain asset, gross income and share ownership tests are met. To maintain its qualification as a REIT, the Company must annually distribute dividends equal to at least 90.0% of its REIT taxable income (with certain adjustments) to its stockholders and meet certain other requirements. The Company believes that all of the criteria to maintain the Company’s REIT qualification have been met for the applicable periods, but there can be no assurance that these criteria will continue to be met in subsequent periods. If the Company were to fail to meet these requirements, it would be subject to U.S. federal income tax and potential interest and penalties, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company’s accounting policy with respect to interest and penalties is to classify these amounts as a component of income tax expense, where applicable. The Company has assessed its tax positions for all open tax years, which include 2017 to 2020, and concluded there were no material uncertainties to be recognized. The Company may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. The Company made a joint election to treat certain subsidiaries as taxable REIT subsidiaries (“TRS”) which may be subject to U.S. federal, state and local income taxes. In general, a TRS of the Company may perform services for managers/operators/residents of the Company, hold assets that the Company cannot hold directly and may engage in any real estate or non-real estate related business. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) |
Foreign Currency | Foreign Currency Assets and liabilities denominated in a foreign currency for which the functional currency is a foreign currency are translated using the currency exchange rate in effect at the end of the period presented and the results of operations for such entities are translated into U.S. dollars using the average currency exchange rate in effect during the period. The resulting foreign currency translation adjustment is recorded as a component of accumulated OCI in the consolidated statements of equity. Assets and liabilities denominated in a foreign currency for which the functional currency is the U.S. dollar are remeasured using the currency exchange rate in effect at the end of the period presented and the results of operations for such entities are remeasured into U.S. dollars using the average currency exchange rate in effect during the period. As of March 31, 2021 and December 31, 2020, the Company had exposure to foreign currency through an investment in an unconsolidated venture, the effects of which are reflected as a component of accumulated OCI in the consolidated statements of equity and in equity in earnings (losses) in the consolidated statements of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Adopted in 2021 Income Tax Accounting— In December 2019, the FASB issued Accounting Standards Update ("ASU") No. 2019-12, Simplifying the Accounting for Income Taxes . The ASU simplifies accounting for income taxes by eliminating certain exceptions to the general approach in Accounting Standards Codification (“ASC”) 740, Income Taxes, and clarifies certain aspects of the guidance for more consistent application. The simplifications relate to intraperiod tax allocations when there is a loss in continuing operations and a gain outside of continuing operations, accounting for tax law or tax rate changes and year-to-date losses in interim periods, recognition of deferred tax liability for outside basis difference when investment ownership changes, and accounting for franchise taxes that are partially based on income. The ASU also provides new guidance that clarifies the accounting for transactions resulting in a step-up in tax basis of goodwill, among other changes. Transition is generally prospective, other than the provision related to outside basis difference which is on a modified retrospective basis with cumulative effect adjusted to retained earnings at the beginning of the period adopted, and franchise tax provision which is on either full or modified retrospective. The Company adopted ASU No. 2019-12 on January 1, 2021, with no transitional impact upon adoption. Accounting for Certain Equity Investments— In January 2020, the FASB issued ASU No. 2020-01, Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 . The ASU clarifies that if as a result of an observable transaction, an equity investment under the measurement alternative is transitioned into equity method and vice versa, an equity method investment is transitioned into measurement alternative, the investment is to be remeasured immediately before and after the transaction, respectively. The ASU also clarifies that certain forward contracts or purchased options to acquire equity securities that are not deemed to be derivatives or in-substance common stock will generally be measured using the fair value principles of ASC 321 before settlement or exercise, and that an entity should not be considering how it will account for the resulting investments upon eventual settlement or exercise. The Company adopted ASU No. 2020-01 on January 1, 2021, with no transitional impact upon adoption. Future Application of Accounting Standards Reference Rate Reform— In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The guidance in Topic 848 is optional, the election of which provides temporary relief for the accounting effects on contracts, hedging relationships and other transactions impacted by the transition from interbank offered rates (such as London Interbank Offered Rate (“LIBOR”)) that are expected to be discontinued by the end of 2021 to alternative reference rates (such as Secured Overnight Financing Rate). Modification of contractual terms to effect the reference rate reform transition on debt, leases, derivatives and other contracts is eligible for relief from modification accounting and accounted for as a continuation of the existing contract. Topic 848 is effective upon issuance through December 31, 2022, and may be applied retrospectively to January 1, 2020. The Company may elect practical expedients or exceptions as applicable over time as reference rate reform activities occur. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported on the consolidated balance sheets to the total of such amounts as reported on the consolidated statements of cash flows (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Cash and cash equivalents $ 90,966 $ 65,995 Restricted cash 20,276 27,575 Total cash, cash equivalents and restricted cash $ 111,242 $ 93,570 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash as reported on the consolidated balance sheets to the total of such amounts as reported on the consolidated statements of cash flows (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Cash and cash equivalents $ 90,966 $ 65,995 Restricted cash 20,276 27,575 Total cash, cash equivalents and restricted cash $ 111,242 $ 93,570 |
Schedule of Operating Real Estate Estimated Useful Life | Operating real estate is depreciated using the straight-line method over the estimated useful life of the assets, summarized as follows: Category: Term: Building 30 to 50 years Building improvements Lesser of the useful life or remaining life of the building Land improvements 9 to 15 years Tenant improvements Lesser of the useful life or remaining term of the lease Furniture, fixtures and equipment 5 to 14 years |
Schedule of Future Minimum Lease Payments for Capital Leases | The following table presents the future minimum lease payments under finance leases and the present value of the minimum lease payments, which are included in other liabilities on the Company’s consolidated balance sheets (dollars in thousands): April 1 to December 31, 2021 $ 498 Years Ending December 31: 2022 576 2023 155 2024 59 2025 17 Thereafter 9 Total minimum lease payments $ 1,314 Less: Amount representing interest $ (165) Present value of minimum lease payments $ 1,149 |
Summary of Deferred Costs and Intangible Assets | The following table presents deferred costs and intangible assets, net (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Goodwill and intangible assets, net: In-place lease value, net $ 4,186 $ 4,635 Goodwill 21,387 21,387 Certificate of need intangible assets 380 380 Subtotal intangible assets 25,953 26,402 Deferred costs, net 63 81 Total $ 26,016 $ 26,483 |
Schedule of Deferred Costs and Intangible Assets, Future Amortization Expense | The following table presents future amortization of in-place lease value and deferred costs (dollars in thousands): April 1 to December 31, 2021 $ 1,403 Years Ending December 31: 2022 593 2023 337 2024 337 2025 337 Thereafter 1,242 Total $ 4,249 |
Schedule of Other Assets | The following table presents a summary of other assets (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Other assets: Healthcare facility regulatory reserve deposit (1) $ 6,000 $ — Remainder interest in condominium units (2) 2,327 2,327 Prepaid expenses 5,834 3,798 Lease / rent inducements, net 2,415 2,246 Utility deposits 513 447 Other 278 863 Total $ 17,367 $ 9,681 _______________________________________ (1) As of March 31, 2021, a net lease operator is in possession of the regulatory reserve deposit, and accordingly, the amount has been reclassified from restricted cash on the consolidated balance sheets. (2) Represents future interests in property subject to life estates. |
Operating Real Estate (Tables)
Operating Real Estate (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Real Estate [Abstract] | |
Schedule of Operating Real Estate | The following table presents operating real estate, net (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Land $ 230,406 $ 234,706 Land improvements 23,215 23,797 Buildings and improvements 1,376,487 1,389,706 Tenant improvements 16,523 16,172 Construction in progress 2,587 2,535 Furniture, fixtures and equipment 106,673 108,055 Subtotal $ 1,755,891 $ 1,774,971 Less: Accumulated depreciation (298,494) (291,041) Operating real estate, net $ 1,457,397 $ 1,483,930 |
Investments in Unconsolidated_2
Investments in Unconsolidated Ventures (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | The following tables present the Company’s investments in unconsolidated ventures (dollars in thousands): Carrying Value (1) Portfolio Acquisition Date Ownership March 31, 2021 (Unaudited) December 31, 2020 Eclipse May-2014 5.6 % $ 5,484 $ 5,624 Envoy (2) Sep-2014 11.4 % 2 2 Diversified US/UK Dec-2014 14.3 % 85,622 89,651 Espresso (3) Jul-2015 36.7 % — — Trilogy Dec-2015 23.2 % 130,618 133,896 Subtotal $ 221,726 $ 229,173 Operator Platform (4) Jul-2017 20.0 % 218 — Total $ 221,944 $ 229,173 _______________________________________ (1) Includes $1.3 million, $13.4 million, $7.6 million and $9.8 million of capitalized acquisition costs for the Company’s investments in the Eclipse, Diversified US/UK, Espresso and Trilogy joint ventures, respectively. (2) In March 2019, the Envoy joint venture completed the sale of its remaining 11 properties for a sales price of $118.0 million, which generated net proceeds to the Company totaling $4.3 million. The Company’s carrying value for its investment in the Envoy joint venture represents additional proceeds to be received upon satisfaction of certain conditions under the sale. (3) As a result of impairments and other non-cash reserves recorded by the joint venture, the Company’s carrying value of its Espresso unconsolidated investment was reduced to zero in the fourth quarter of 2018. The Company has recorded the excess equity in losses related to its unconsolidated venture as a reduction to the carrying value of its mezzanine loan, which was originated to a subsidiary of the Espresso joint venture. (4) Represents investment in Solstice Senior Living, LLC (“Solstice”), the manager of the Winterfell portfolio. Solstice is a joint venture between affiliates of Integral Senior Living, LLC (“ISL”), a management company of ILF, ALF and MCF founded in 2000, which owns 80.0%, and the Company, which owns 20.0%. During the three months ended March 31, 2021, the Company contributed an additional $0.3 million to Solstice. Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Portfolio Equity in Earnings (Losses) Cash Distributions Equity in Earnings (Losses) Cash Distributions Eclipse $ (140) $ — $ (199) $ 86 Envoy — — — 192 Diversified US/UK (2,698) 859 (2,090) 1,487 Espresso 5,257 — (217) — Trilogy (3,277) — 1,528 — Subtotal $ (858) $ 859 $ (978) $ 1,765 Operator Platform (1) (32) — (15) — Total $ (890) $ 859 $ (993) $ 1,765 _______________________________________ (1) Represents the Company’s investment in Solstice. Summarized Financial Data The following table presents the combined balance sheets as of March 31, 2021 and December 31, 2020 and combined statements of operations for the three months ended March 31, 2021 and 2020 of the Diversified US/UK, Espresso and Trilogy unconsolidated ventures (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Three Months Ended March 31, 2021 2020 Assets Operating real estate, net $ 3,875,013 $ 3,895,920 Total revenues $ 305,693 $ 354,673 Other assets 1,082,143 1,207,812 Net income (loss) $ (18,619) $ (8,616) Total assets $ 4,957,156 $ 5,103,732 Liabilities and equity Total liabilities $ 3,929,266 $ 4,047,895 Equity 1,027,890 1,055,837 Total liabilities and equity $ 4,957,156 $ 5,103,732 The below table indicates the Company’s investments for which Colony Capital is also an equity partner in the joint venture. Each investment was approved by the Company’s board of directors, including all of its independent directors. Refer to Note 4, “Investments in Unconsolidated Ventures” for further discussion of these investments: Portfolio Partner(s) Acquisition Date Ownership Eclipse Colony Capital/Formation Capital, LLC May 2014 5.6% Diversified US/UK Colony Capital December 2014 14.3% |
Real Estate Debt Investments (T
Real Estate Debt Investments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Real Estate [Abstract] | |
Schedule of the Company's Real Estate Debt Investments | The following table presents the Company’s one debt investment (dollars in thousands): Principal Amount Carrying Value (1) Asset Type: March 31, 2021 (Unaudited) December 31, 2020 March 31, 2021 (Unaudited) December 31, 2020 Effective Interest Rate (2) Final Maturity Date Mezzanine loan (1) $ 49,409 $ 74,182 $ 36,112 $ 55,864 15.0 % Jan 2022 _______________________________________ (1) As a result of impairments and other non-cash reserves recorded by the joint venture, the Company’s carrying value of its Espresso unconsolidated investment was reduced to zero in the fourth quarter of 2018. The Company has recorded the excess equity in losses related to its unconsolidated investment as a reduction to the carrying value of its mezzanine loan, which was originated to a subsidiary of the Espresso joint venture. As of March 31, 2021 and December 31, 2020, the cumulative excess equity in losses included in the mezzanine loan carrying value were $13.1 million and $18.3 million, respectively. (2) Represents the effective interest rate as of March 31, 2021, which includes a fixed rate of 14% and 1% payment-in-kind (“PIK”). |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Summary of Borrowings | The following table presents the Company’s mortgage and other notes payable (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Recourse vs. Non-Recourse Final Maturity (1) Contractual Interest Rate (2) Principal Amount (3) Carrying Value (3) Principal (3) Carrying (3) Mortgage notes payable, net Watermark Aqua Portfolio Denver, CO Non-recourse Repaid LIBOR + 2.92% $ — $ — $ 20,189 $ 20,183 Frisco, TX (4) Non-recourse Feb 2026 3.0% 26,000 25,337 18,770 18,764 Milford, OH Non-recourse Sep 2026 LIBOR + 2.68% 18,760 18,440 18,760 18,423 Rochester Portfolio Rochester, NY Non-recourse Feb 2025 4.25% 19,662 19,587 19,907 19,830 Rochester, NY (5) Non-recourse Aug 2027 LIBOR + 2.34% 101,224 100,408 101,224 100,378 Rochester, NY Non-recourse Aug 2021 LIBOR + 2.90% 12,800 12,674 12,800 12,584 Arbors Portfolio (6) Various locations Non-recourse Feb 2025 3.99% 86,838 86,109 87,302 86,521 Watermark Fountains Portfolio (7) Various locations Non-recourse Jun 2022 3.92% 384,221 383,400 386,607 385,606 Various locations Non-recourse Jun 2022 5.56% 73,100 72,887 73,439 73,180 Winterfell Portfolio (8) Various locations Non-recourse Jun 2025 4.17% 619,018 605,284 622,045 607,526 Avamere Portfolio (9) Various locations Non-recourse Feb 2027 4.66% 70,124 69,678 70,427 69,962 Subtotal mortgage notes payable, net $ 1,411,747 $ 1,393,804 $ 1,431,470 $ 1,412,957 Other notes payable Oak Cottage Santa Barbara, CA Non-recourse Feb 2022 6.00% 3,914 3,914 3,914 3,914 Subtotal other notes payable, net $ 3,914 $ 3,914 $ 3,914 $ 3,914 Total mortgage and other notes payable, net $ 1,415,661 $ 1,397,718 $ 1,435,384 $ 1,416,871 _______________________________________ (1) Refer to Note 14, “Subsequent Events” for additional information regarding mortgage notes maturity extensions. (2) Floating rate borrowings total $132.8 million of principal outstanding and reference one-month LIBOR. (3) The difference between principal amount and carrying value of mortgage notes payable is attributable to deferred financing costs, net for all borrowings, other than the Winterfell portfolio which is attributable to below market debt intangibles. (4) In January 2021, the Company refinanced its existing mortgage note payable with a new $26.0 million mortgage note payable. The new mortgage note carries a fixed interest rate of 3.0% through February 2024, followed by the greater of the fixed rate or one-month LIBOR plus 2.80% through the initial maturity date of February 2026. (5) Composed of seven individual mortgage notes payable secured by seven healthcare real estate properties, cross-collateralized and subject to cross-default. (6) Composed of four individual mortgage notes payable secured by four healthcare real estate properties, cross-collateralized and subject to cross-default. (7) Includes $384.2 million principal amount of fixed rate borrowings, secured by 14 healthcare real estate properties, cross-collateralized and subject to cross-default, as well as a supplemental financing totaling $73.1 million of principal, secured by seven healthcare real estate properties, cross-collateralized and subject to cross-default. (8) Composed of 32 individual mortgage notes payable secured by 32 healthcare real estate properties, cross-collateralized and subject to cross-default. (9) Composed of five individual mortgage notes payable secured by five healthcare real estate properties, cross-collateralized and subject to cross-default. |
Schedule of Principal on Borrowings based on Final Maturity | The following table presents future scheduled principal payments on mortgage and other notes payable based on final maturity (dollars in thousands): April 1 to December 31, 2021 $ 33,973 Years Ending December 31: 2022 467,008 2023 19,696 2024 20,406 2025 670,302 Thereafter 204,276 Total $ 1,415,661 The following table presents the Company’s borrowings under the Sponsor line of credit as of March 31, 2021 (dollars in thousands): Capacity Principal Outstanding Contractual Interest Rate Maturity Date Sponsor Line of Credit $ 35,000 $ 35,000 LIBOR + 3.50% Dec 2022 |
Related Party Arrangements (Tab
Related Party Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of the Fees and Reimbursements Incurred to the Advisor and Dealer Manager | The following tables present the fees and reimbursements incurred and paid to the Advisor (dollars in thousands): Type of Fee or Reimbursement Due to Related Party as of December 31, 2020 Three Months Ended March 31, 2021 Due to Related Party as of March 31, 2021 (Unaudited) Financial Statement Location Incurred Paid Fees to Advisor Entities Asset management (1) Asset management and other fees-related party $ 923 $ 2,769 $ (2,769) (2) $ 923 Reimbursements to Advisor Entities Operating costs (2) General and administrative expenses 7,395 2,889 (7,395) 2,889 Total $ 8,318 $ 5,658 $ (10,164) $ 3,812 _______________________________________ (1) Includes $2.5 million paid in shares of the Company’s common stock. (2) As of March 31, 2021, the Advisor did not have any unreimbursed operating costs which remained eligible to be allocated to the Company. |
Schedule of Joint Ventures | The following tables present the Company’s investments in unconsolidated ventures (dollars in thousands): Carrying Value (1) Portfolio Acquisition Date Ownership March 31, 2021 (Unaudited) December 31, 2020 Eclipse May-2014 5.6 % $ 5,484 $ 5,624 Envoy (2) Sep-2014 11.4 % 2 2 Diversified US/UK Dec-2014 14.3 % 85,622 89,651 Espresso (3) Jul-2015 36.7 % — — Trilogy Dec-2015 23.2 % 130,618 133,896 Subtotal $ 221,726 $ 229,173 Operator Platform (4) Jul-2017 20.0 % 218 — Total $ 221,944 $ 229,173 _______________________________________ (1) Includes $1.3 million, $13.4 million, $7.6 million and $9.8 million of capitalized acquisition costs for the Company’s investments in the Eclipse, Diversified US/UK, Espresso and Trilogy joint ventures, respectively. (2) In March 2019, the Envoy joint venture completed the sale of its remaining 11 properties for a sales price of $118.0 million, which generated net proceeds to the Company totaling $4.3 million. The Company’s carrying value for its investment in the Envoy joint venture represents additional proceeds to be received upon satisfaction of certain conditions under the sale. (3) As a result of impairments and other non-cash reserves recorded by the joint venture, the Company’s carrying value of its Espresso unconsolidated investment was reduced to zero in the fourth quarter of 2018. The Company has recorded the excess equity in losses related to its unconsolidated venture as a reduction to the carrying value of its mezzanine loan, which was originated to a subsidiary of the Espresso joint venture. (4) Represents investment in Solstice Senior Living, LLC (“Solstice”), the manager of the Winterfell portfolio. Solstice is a joint venture between affiliates of Integral Senior Living, LLC (“ISL”), a management company of ILF, ALF and MCF founded in 2000, which owns 80.0%, and the Company, which owns 20.0%. During the three months ended March 31, 2021, the Company contributed an additional $0.3 million to Solstice. Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Portfolio Equity in Earnings (Losses) Cash Distributions Equity in Earnings (Losses) Cash Distributions Eclipse $ (140) $ — $ (199) $ 86 Envoy — — — 192 Diversified US/UK (2,698) 859 (2,090) 1,487 Espresso 5,257 — (217) — Trilogy (3,277) — 1,528 — Subtotal $ (858) $ 859 $ (978) $ 1,765 Operator Platform (1) (32) — (15) — Total $ (890) $ 859 $ (993) $ 1,765 _______________________________________ (1) Represents the Company’s investment in Solstice. Summarized Financial Data The following table presents the combined balance sheets as of March 31, 2021 and December 31, 2020 and combined statements of operations for the three months ended March 31, 2021 and 2020 of the Diversified US/UK, Espresso and Trilogy unconsolidated ventures (dollars in thousands): March 31, 2021 (Unaudited) December 31, 2020 Three Months Ended March 31, 2021 2020 Assets Operating real estate, net $ 3,875,013 $ 3,895,920 Total revenues $ 305,693 $ 354,673 Other assets 1,082,143 1,207,812 Net income (loss) $ (18,619) $ (8,616) Total assets $ 4,957,156 $ 5,103,732 Liabilities and equity Total liabilities $ 3,929,266 $ 4,047,895 Equity 1,027,890 1,055,837 Total liabilities and equity $ 4,957,156 $ 5,103,732 The below table indicates the Company’s investments for which Colony Capital is also an equity partner in the joint venture. Each investment was approved by the Company’s board of directors, including all of its independent directors. Refer to Note 4, “Investments in Unconsolidated Ventures” for further discussion of these investments: Portfolio Partner(s) Acquisition Date Ownership Eclipse Colony Capital/Formation Capital, LLC May 2014 5.6% Diversified US/UK Colony Capital December 2014 14.3% |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Dividend Investment Estimated Value per Share | The following table presents the price at which dividends were invested based on when the price became effective: Effective Date Estimated Value per Share Valuation Date April 2016 $ 8.63 12/31/2015 December 2016 9.10 6/30/2016 December 2017 8.50 6/30/2017 December 2018 7.10 6/30/2018 December 2019 6.25 6/30/2019 December 2020 3.89 6/30/2020 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of the Principal Amount, Carrying Value and Fair Value of Certain Financial Assets and Liabilities | The following table presents the principal amount, carrying value and fair value of certain financial assets and liabilities (dollars in thousands): March 31, 2021 December 31, 2020 Principal Amount Carrying Value Fair Value Principal Amount Carrying Value Fair Value Financial assets: (1) Real estate debt investments, net $ 49,409 $ 36,112 $ 49,409 $ 74,182 $ 55,864 $ 74,182 Financial liabilities: (1) Mortgage and other notes payable, net $ 1,415,661 $ 1,397,718 $ 1,342,460 $ 1,435,384 $ 1,416,871 $ 1,354,832 Line of credit - related party 35,000 35,000 35,000 35,000 35,000 35,000 _______________________________________ (1) The fair value of other financial instruments not included in this table is estimated to approximate their carrying value. March 31, 2021 (Unaudited) December 31, 2020 Fair Value Impairment Losses Fair Value Impairment Losses Operating real estate, net $ 1,900 $ 786 $ 234,650 $ 164,215 Assets held for sale — — 5,000 1,753 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Summary of Segment Reporting | The following tables present segment reporting (dollars in thousands): Direct Investments Three Months Ended March 31, 2021 Net Lease Operating Unconsolidated Investments Debt Corporate (1) Total Property and other revenues $ (776) $ 58,109 $ — $ — $ 1 $ 57,334 Interest income on debt investments — — — 2,213 — 2,213 Real estate properties - operating expenses (25) (45,593) — — — (45,618) Interest expense (2,873) (12,835) — — (317) (16,025) Transaction costs — (54) — — — (54) Asset management and other fees - related party — — — — (2,769) (2,769) General and administrative expenses (41) — — — (2,992) (3,033) Depreciation and amortization (3,854) (11,533) — — — (15,387) Impairment loss (786) — — — — (786) Other income — 7,360 — — — 7,360 Realized gain (loss) on investments and other — 7,515 — — — 7,515 Equity in earnings (losses) of unconsolidated ventures — — (890) — — (890) Income tax expense — (15) — — — (15) Net income (loss) $ (8,355) $ 2,954 $ (890) $ 2,213 $ (6,077) $ (10,155) _______________________________________ (1) Includes unallocated asset management fee-related party and general and administrative expenses. Direct Investments Three Months Ended March 31, 2020 Net Lease Operating Unconsolidated Investments Debt Corporate (1) Total Property and other revenues $ 8,222 $ 64,606 $ — $ — $ 63 $ 72,891 Interest income on debt investments — — — 1,905 — 1,905 Real estate properties - operating expenses (13) (45,688) — — — (45,701) Interest expense (2,964) (13,715) — — — (16,679) Transaction costs — (7) — — — (7) Asset management and other fees - related party — — — — (4,431) (4,431) General and administrative expenses (44) 14 — (9) (2,990) (3,029) Depreciation and amortization (3,737) (12,752) — — — (16,489) Impairment loss — — — — — — Other income — — — — — — Realized gain (loss) on investments and other — — — — — — Equity in earnings (losses) of unconsolidated ventures — — (993) — — (993) Income tax benefit (expense) — (14) — — — (14) Net income (loss) $ 1,464 $ (7,556) $ (993) $ 1,896 $ (7,358) $ (12,547) _______________________________________ (1) Includes unallocated asset management fee-related party and general and administrative expenses. |
Summary of Assets by Segment | The following table presents total assets by segment (dollars in thousands): Direct Investments Total Assets: Net Lease Operating Unconsolidated Investments Debt Corporate (1) Total March 31, 2021 (unaudited) $ 342,132 $ 1,209,511 $ 221,941 $ 36,749 $ 72,022 $ 1,882,355 December 31, 2020 348,688 1,223,045 229,170 56,502 61,031 1,918,436 ______________________________________ |
Schedule of Real Estate Properties | The following table presents the operators and managers of the Company’s properties, excluding properties owned through unconsolidated joint ventures (dollars in thousands): Three Months Ended March 31, 2021 Operator / Manager Properties Under Management Units Under Management (1) Property and Other Revenues (2) % of Total Property and Other Revenues Watermark Retirement Communities 29 5,049 $ 33,365 58.2 % Solstice Senior Living (3) 32 4,000 24,079 42.0 % Avamere Health Services 5 453 4,164 7.3 % Arcadia Management (4) 4 572 (6,351) (11.1) % Integral Senior Living (5) 1 44 2,077 3.6 % Senior Lifestyle Corporation (6) 1 63 — — % Total 72 10,181 $ 57,334 100.0 % ______________________________________ (1) Represents rooms for ALFs and ILFs and beds for MCFs and SNFs, based on predominant type. (2) Includes rental income received from the Company’s net lease properties as well as rental income, ancillary service fees and other related revenue earned from ILF residents and resident fee income derived from the Company’s ALFs, MCFs and CCRCs, which includes resident room and care charges, ancillary fees and other resident service charges. (3) Solstice is a joint venture of which affiliates of ISL own 80%. (4) During the three months ended March 31, 2021, the Company recorded lease income to the extent lease payments were received. Lease income was reduced by $7.4 million for the write-off of straight-line rent receivables, as full collection of rent under the lease was deemed not to be probable. (5) Property count and units excludes two ISL properties designated as held for sale as of March 31, 2021. (6) Operator has failed to remit rental payments during the three months ended March 31, 2021. |
Business and Organization (Deta
Business and Organization (Details) | 3 Months Ended | 74 Months Ended | |
Mar. 31, 2021USD ($)employee$ / sharesshares | Mar. 31, 2021USD ($)employee$ / sharesshares | Dec. 31, 2020$ / sharesshares | |
Class of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | shares | 400,000,000 | 400,000,000 | 400,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | shares | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 |
Number of employees | employee | 0 | 0 | |
Net proceeds from issuance of common stock | $ 2,000,000,000 | ||
Dividend Reinvestment Plan | |||
Class of Stock [Line Items] | |||
Net proceeds from issuance of common stock | $ 232,600,000 | ||
Advisor | |||
Class of Stock [Line Items] | |||
Non-controlling interest investment in operating partnership | $ 1,000 | ||
Special Unit Holder | |||
Class of Stock [Line Items] | |||
Non-controlling interest investment in operating partnership | $ 1,000 | ||
Primary Beneficiary | |||
Class of Stock [Line Items] | |||
Limited partnership interest in operating partnership | 99.99% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | Mar. 31, 2021USD ($)propertyd | Dec. 31, 2020USD ($)property | Dec. 31, 2015USD ($) | Mar. 31, 2021USD ($)d | Mar. 31, 2020USD ($) |
Variable Interest Entities | |||||
Operating real estate, net | $ 1,457,397,000 | $ 1,483,930,000 | $ 1,457,397,000 | ||
Mortgage and other notes payable, net | 1,397,718,000 | 1,416,871,000 | 1,397,718,000 | ||
Investments in unconsolidated ventures | 221,944,000 | $ 229,173,000 | 221,944,000 | ||
Payments to acquire investment in unconsolidated VIE | 250,000 | $ 0 | |||
Finance Lease Obligations | |||||
Finance leases for equipment | $ 3,400,000 | 3,400,000 | |||
Payments of finance lease obligations | $ 200,000 | 200,000 | |||
Weighted average interest rate (percent) | 6.30% | 6.30% | |||
Remaining lease term (years) | 2 years | 2 years | |||
Number of properties held for sale | property | 2 | 2 | |||
Identified Intangibles | |||||
Amortization expense for in-place leases and deferred costs | $ 500,000 | 500,000 | |||
Days notice required for lease termination | d | 30 | 30 | |||
Variable lease revenues | $ 3,300,000 | 4,200,000 | |||
Other income | $ 7,360,000 | 0 | |||
Concession period (days) | 90 days | ||||
Repayment period (months) | 12 months | ||||
Payments deferred | $ 1,200,000 | $ 1,200,000 | |||
Impairment loss | 786,000 | 0 | |||
Investments in Unconsolidated Ventures | |||||
Impairment recognized | $ 0 | ||||
Acquisition Fees and Expenses | |||||
Acquisition fee and expense cap | 6.00% | 6.00% | |||
Income Taxes | |||||
Deferred tax asset | $ 21,900,000 | $ 21,900,000 | |||
Income tax expense | 15,000 | $ 14,000 | |||
Trilogy | |||||
Variable Interest Entities | |||||
Payments to acquire investment in unconsolidated VIE | $ 201,700,000 | ||||
Arbors Portfolio | |||||
Identified Intangibles | |||||
Write-off of straight-line rent receivables | 7,400,000 | ||||
Leases, Acquired-in-Place | |||||
Identified Intangibles | |||||
In-place lease value, gross | 130,000,000 | 130,000,000 | |||
In-place lease value, accumulated amortization | 125,800,000 | 125,800,000 | |||
Variable Interest Entity, Primary Beneficiary | |||||
Variable Interest Entities | |||||
Operating real estate, net | 477,300,000 | 477,300,000 | |||
Mortgage and other notes payable, net | $ 444,200,000 | $ 444,200,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 90,966 | $ 65,995 | ||
Restricted cash | 20,276 | 27,575 | ||
Total cash, cash equivalents and restricted cash | $ 111,242 | $ 93,570 | $ 51,898 | $ 58,820 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Estimated Useful Lives (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Building | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 30 years |
Building | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 50 years |
Land improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 9 years |
Land improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 15 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 5 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (in years) | 14 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Future Minimum Lease Payments from Capital Leases (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Accounting Policies [Abstract] | |
April 1 to December 31, 2021 | $ 498 |
2022 | 576 |
2023 | 155 |
2024 | 59 |
2025 | 17 |
Thereafter | 9 |
Total minimum lease payments | 1,314 |
Less: Amount representing interest | (165) |
Present value of minimum lease payments | $ 1,149 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Deferred Costs and Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Goodwill and intangible assets, net: | ||
In-place lease value, net | $ 4,186 | $ 4,635 |
Goodwill | 21,387 | 21,387 |
Certificate of need intangible assets | 380 | 380 |
Subtotal intangible assets | 25,953 | 26,402 |
Deferred costs, net | 63 | 81 |
Total | $ 26,016 | $ 26,483 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Schedule of Future Amortization Expense (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Accounting Policies [Abstract] | |
April 1 to December 31, 2021 | $ 1,403 |
2022 | 593 |
2023 | 337 |
2024 | 337 |
2025 | 337 |
Thereafter | 1,242 |
Total | $ 4,249 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Other Assets and Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Other assets: | ||
Healthcare facility regulatory reserve deposit | $ 6,000 | |
Remainder interest in condominium units | 2,327 | $ 2,327 |
Prepaid expenses | 5,834 | 3,798 |
Lease / rent inducements, net | 2,415 | 2,246 |
Utility deposits | 513 | 447 |
Other | 278 | 863 |
Total | $ 17,367 | $ 9,681 |
Operating Real Estate - Identif
Operating Real Estate - Identifiable Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Real Estate [Abstract] | ||
Land | $ 230,406 | $ 234,706 |
Land improvements | 23,215 | 23,797 |
Buildings and improvements | 1,376,487 | 1,389,706 |
Tenant improvements | 16,523 | 16,172 |
Construction in progress | 2,587 | 2,535 |
Furniture, fixtures and equipment | 106,673 | 108,055 |
Subtotal | 1,755,891 | 1,774,971 |
Less: Accumulated depreciation | (298,494) | (291,041) |
Operating real estate, net | $ 1,457,397 | $ 1,483,930 |
Operating Real Estate - Narrati
Operating Real Estate - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Real Estate [Line Items] | |||
Depreciation | $ 14,900,000 | $ 16,000,000 | |
Impairment loss | 800,000 | $ 0 | |
Building and Building Improvements | |||
Real Estate [Line Items] | |||
Accumulated impairment | $ 194,700,000 | $ 213,900,000 |
Investments in Unconsolidated_3
Investments in Unconsolidated Ventures - Changes in Carrying Value (Details) | 1 Months Ended | 3 Months Ended | ||||
Mar. 31, 2019USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2019facility | Dec. 31, 2018USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||||
Carrying value | $ 221,944,000 | $ 229,173,000 | ||||
Number of properties sold | facility | 11 | |||||
Proceeds from sale of held-for-sale property | $ 118,000,000 | |||||
Proceeds from sale of held-for-sale property, net | $ 4,300,000 | |||||
Payments to acquire investment in unconsolidated VIE | 250,000 | $ 0 | ||||
Equity in earnings (losses) of unconsolidated ventures | (890,000) | (993,000) | ||||
Cash Distributions | 859,000 | 1,765,000 | ||||
Eclipse, Envoy, Griffin-American, Espresso, Trilogy | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Carrying value | 221,726,000 | 229,173,000 | ||||
Equity in earnings (losses) of unconsolidated ventures | (858,000) | (978,000) | ||||
Cash Distributions | $ 859,000 | 1,765,000 | ||||
Eclipse | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percentage) | 5.60% | |||||
Carrying value | $ 5,484,000 | 5,624,000 | ||||
Capitalized acquisition costs | 1,300,000 | 1,300,000 | ||||
Equity in earnings (losses) of unconsolidated ventures | (140,000) | (199,000) | ||||
Cash Distributions | $ 0 | 86,000 | ||||
Envoy | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percentage) | 11.40% | |||||
Carrying value | $ 2,000 | 2,000 | ||||
Equity in earnings (losses) of unconsolidated ventures | 0 | 0 | ||||
Cash Distributions | $ 0 | 192,000 | ||||
Diversified US/UK | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percentage) | 14.30% | |||||
Carrying value | $ 85,622,000 | 89,651,000 | ||||
Capitalized acquisition costs | 13,400,000 | 13,400,000 | ||||
Equity in earnings (losses) of unconsolidated ventures | (2,698,000) | (2,090,000) | ||||
Cash Distributions | $ 859,000 | 1,487,000 | ||||
Espresso | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percentage) | 36.70% | |||||
Carrying value | $ 0 | 0 | ||||
Capitalized acquisition costs | 7,600,000 | 7,600,000 | ||||
Equity in earnings (losses) of unconsolidated ventures | 5,257,000 | (217,000) | ||||
Cash Distributions | $ 0 | 0 | ||||
Espresso | Mezzanine loans | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Carrying value | $ 0 | |||||
Trilogy | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percentage) | 23.20% | |||||
Carrying value | $ 130,618,000 | 133,896,000 | ||||
Capitalized acquisition costs | 9,800,000 | 9,800,000 | ||||
Equity in earnings (losses) of unconsolidated ventures | (3,277,000) | 1,528,000 | ||||
Cash Distributions | $ 0 | 0 | ||||
Operator Platform | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percentage) | 20.00% | |||||
Carrying value | $ 218,000 | $ 0 | ||||
Equity in earnings (losses) of unconsolidated ventures | (32,000) | (15,000) | ||||
Cash Distributions | $ 0 | $ 0 | ||||
Solstice Senior Living | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Noncontrolling interest, ownership percentage by parent (as a percentage) | 80.00% | |||||
Winterfell | Solstice Senior Living | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest (as a percentage) | 20.00% | |||||
Winterfell | Solstice Senior Living | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Noncontrolling interest, ownership percentage by parent (as a percentage) | 80.00% |
Investments in Unconsolidated_4
Investments in Unconsolidated Ventures - Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Schedule of Equity Method Investments [Line Items] | |||||
Operating real estate, net | $ 1,457,397 | $ 1,483,930 | |||
Other assets | 17,367 | 9,681 | |||
Total assets | [1] | 1,882,355 | 1,918,436 | ||
Liabilities | [1] | 1,478,486 | 1,506,374 | ||
Equity | 403,869 | $ 654,454 | 412,062 | $ 667,504 | |
Total liabilities and equity | 1,882,355 | 1,918,436 | |||
Revenues | 57,334 | 72,891 | |||
Net income (loss) | (10,155) | (12,547) | |||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Operating real estate, net | 3,875,013 | 3,895,920 | |||
Other assets | 1,082,143 | 1,207,812 | |||
Total assets | 4,957,156 | 5,103,732 | |||
Liabilities | 3,929,266 | 4,047,895 | |||
Equity | 1,027,890 | 1,055,837 | |||
Total liabilities and equity | 4,957,156 | $ 5,103,732 | |||
Revenues | 305,693 | 354,673 | |||
Net income (loss) | $ (18,619) | $ (8,616) | |||
[1] | Represents the consolidated assets and liabilities of NorthStar Healthcare Income Operating Partnership, LP (the “Operating Partnership”). The Operating Partnership is a consolidated variable interest entity (“VIE”), of which the Company is the sole general partner and owns approximately 99.99%. As of March 31, 2021, the Operating Partnership includes $0.5 billion and $0.5 billion of assets and liabilities, respectively, of certain VIEs that are consolidated by the Operating Partnership. Refer to Note 2, “Summary of Significant Accounting Policies.” |
Real Estate Debt Investments -
Real Estate Debt Investments - Schedule of the Company's Real Estate Debt Investment (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Carrying Value | $ 36,112,000 | $ 55,864,000 | |
Carrying value | 221,944,000 | 229,173,000 | |
Espresso | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Carrying value | 0 | 0 | |
Mezzanine loans | Espresso | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Principal Amount | 49,409,000 | 74,182,000 | |
Carrying Value | 36,112,000 | 55,864,000 | |
Carrying value | $ 0 | ||
Cumulative excess equity in losses included in mezzanine loan carrying value | $ 13,100,000 | $ 18,300,000 | |
Fixed interest rate | 14.00% | ||
Paid-in-kind interest, percent | 1.00% | ||
Mezzanine loans | Weighted Average | Espresso | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Effective Interest Rate | 15.00% |
Real Estate Debt Investments _2
Real Estate Debt Investments - Narrative (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021USD ($)Investment | Mar. 31, 2020USD ($) | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Repayment of real estate debt investment | $ 24,878 | $ 0 |
Mezzanine loans | ||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||
Number of debt instruments | Investment | 1 | |
Repayment of real estate debt investment | $ 24,900 | |
Percent of interest income contributed by investment | 100.00% |
Borrowings - Schedule of Borrow
Borrowings - Schedule of Borrowings (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2021USD ($) | Mar. 31, 2021USD ($)propertydebt_instrument | Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | |||
Carrying Value | $ 1,415,661 | ||
Watermark Fountains Portfolio | |||
Debt Instrument [Line Items] | |||
Number of healthcare real estate properties | property | 14 | ||
Winterfell | |||
Debt Instrument [Line Items] | |||
Number of healthcare real estate properties | property | 32 | ||
Mortgage notes payable, net | |||
Debt Instrument [Line Items] | |||
Principal Amount | $ 1,415,661 | $ 1,435,384 | |
Mortgage notes payable, net | Rochester Portfolio | |||
Debt Instrument [Line Items] | |||
Number of debt instruments | debt_instrument | 7 | ||
Number of healthcare real estate properties | property | 7 | ||
Mortgage notes payable, net | Arbors Portfolio | |||
Debt Instrument [Line Items] | |||
Number of debt instruments | debt_instrument | 4 | ||
Number of healthcare real estate properties | property | 4 | ||
Mortgage notes payable, net | Winterfell | |||
Debt Instrument [Line Items] | |||
Number of debt instruments | debt_instrument | 32 | ||
Mortgage notes payable, net | Avamere Portfolio | |||
Debt Instrument [Line Items] | |||
Number of debt instruments | debt_instrument | 5 | ||
Number of healthcare real estate properties | property | 5 | ||
Mortgage notes payable, net | Denver, CO Non-recourse | Denver, CO | |||
Debt Instrument [Line Items] | |||
Principal Amount | $ 0 | 20,189 | |
Carrying Value | $ 0 | 20,183 | |
Mortgage notes payable, net | Denver, CO Non-recourse | Denver, CO | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable interest rate | 2.92% | ||
Mortgage notes payable, net | Frisco, TX Non-recourse | Frisco, TX | |||
Debt Instrument [Line Items] | |||
Fixed interest rate | 3.00% | 3.00% | |
Principal Amount | $ 26,000 | $ 26,000 | 18,770 |
Carrying Value | 25,337 | 18,764 | |
Mortgage notes payable, net | Frisco, TX Non-recourse | Frisco, TX | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable interest rate | 2.80% | ||
Mortgage notes payable, net | Milford, OH Non-recourse | Milford, OH | |||
Debt Instrument [Line Items] | |||
Principal Amount | 18,760 | 18,760 | |
Carrying Value | $ 18,440 | 18,423 | |
Mortgage notes payable, net | Milford, OH Non-recourse | Milford, OH | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable interest rate | 2.68% | ||
Mortgage notes payable, net | Rochester, NY Non-recourse, February 2025 | Rochester, NY | |||
Debt Instrument [Line Items] | |||
Fixed interest rate | 4.25% | ||
Principal Amount | $ 19,662 | 19,907 | |
Carrying Value | 19,587 | 19,830 | |
Mortgage notes payable, net | Rochester, NY Non-recourse, August 2027 | Rochester, NY | |||
Debt Instrument [Line Items] | |||
Principal Amount | 101,224 | 101,224 | |
Carrying Value | $ 100,408 | 100,378 | |
Mortgage notes payable, net | Rochester, NY Non-recourse, August 2027 | Rochester, NY | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable interest rate | 2.34% | ||
Mortgage notes payable, net | Rochester, NY Non-recourse, August 2021 | Rochester Portfolio | |||
Debt Instrument [Line Items] | |||
Principal Amount | $ 12,800 | 12,800 | |
Carrying Value | $ 12,674 | 12,584 | |
Mortgage notes payable, net | Rochester, NY Non-recourse, August 2021 | Rochester Portfolio | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable interest rate | 2.90% | ||
Mortgage notes payable, net | Non-Recourse | |||
Debt Instrument [Line Items] | |||
Principal Amount | $ 1,411,747 | 1,431,470 | |
Carrying Value | $ 1,393,804 | 1,412,957 | |
Mortgage notes payable, net | Non-Recourse | Arbors Portfolio | |||
Debt Instrument [Line Items] | |||
Fixed interest rate | 3.99% | ||
Principal Amount | $ 86,838 | 87,302 | |
Carrying Value | $ 86,109 | 86,521 | |
Mortgage notes payable, net | Non-Recourse | Watermark Fountains Portfolio | |||
Debt Instrument [Line Items] | |||
Fixed interest rate | 3.92% | ||
Principal Amount | $ 384,221 | 386,607 | |
Carrying Value | $ 383,400 | 385,606 | |
Mortgage notes payable, net | Non-Recourse | Watermark Fountains Portfolio 2 | |||
Debt Instrument [Line Items] | |||
Fixed interest rate | 5.56% | ||
Principal Amount | $ 73,100 | 73,439 | |
Carrying Value | $ 72,887 | 73,180 | |
Number of healthcare real estate properties | property | 7 | ||
Mortgage notes payable, net | Non-Recourse | Winterfell | |||
Debt Instrument [Line Items] | |||
Fixed interest rate | 4.17% | ||
Principal Amount | $ 619,018 | 622,045 | |
Carrying Value | $ 605,284 | 607,526 | |
Mortgage notes payable, net | Non-Recourse | Avamere Portfolio | |||
Debt Instrument [Line Items] | |||
Fixed interest rate | 4.66% | ||
Principal Amount | $ 70,124 | 70,427 | |
Carrying Value | 69,678 | 69,962 | |
Mortgage notes payable, net | One-Month LIBOR | |||
Debt Instrument [Line Items] | |||
Principal Amount | 132,800 | ||
Other notes payable | Non-Recourse | |||
Debt Instrument [Line Items] | |||
Principal Amount | 3,914 | 3,914 | |
Carrying Value | $ 3,914 | 3,914 | |
Other notes payable | Non-Recourse | Oak Cottage | |||
Debt Instrument [Line Items] | |||
Fixed interest rate | 6.00% | ||
Principal Amount | $ 3,914 | 3,914 | |
Carrying Value | 3,914 | 3,914 | |
Mortgages and other notes payable | |||
Debt Instrument [Line Items] | |||
Principal Amount | 1,415,661 | 1,435,384 | |
Carrying Value | $ 1,397,718 | $ 1,416,871 |
Borrowings - Maturity Schedule
Borrowings - Maturity Schedule (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
April 1 to December 31, 2021 | $ 33,973 |
2022 | 467,008 |
2023 | 19,696 |
2024 | 20,406 |
2025 | 670,302 |
Thereafter | 204,276 |
Total | $ 1,415,661 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Line of Credit Facility [Line Items] | |||
Principal amount of debt deferred | $ 1,300,000 | ||
Interest expense | 16,025 | $ 16,679 | |
Colony NorthStar, Inc. | Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Current borrowing capacity | 35,000 | ||
Proceeds drawn under line of credit | $ 35,000 | ||
Interest expense | $ 300 | ||
LIBOR | Colony NorthStar, Inc. | Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable interest rate | 3.50% |
Borrowings - Schedule of Sponso
Borrowings - Schedule of Sponsor Line of Credit (Details) - Line of Credit - Colony NorthStar, Inc. | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Debt Instrument [Line Items] | |
Capacity | $ 35,000,000 |
Principal Outstanding | $ 35,000,000 |
LIBOR | |
Debt Instrument [Line Items] | |
Contractual Interest Rate | 3.50% |
Related Party Arrangements - Ad
Related Party Arrangements - Advisor (Narrative) (Details) | 1 Months Ended |
Jun. 30, 2020 | |
Advisor | |
Related Party Transaction [Line Items] | |
Term of renewal (in years) | 1 year |
Related Party Arrangements - Fe
Related Party Arrangements - Fees to Advisor (Narrative) (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Mar. 31, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | |||
Due to related party | $ 3,812 | $ 8,318 | |
Advisor | Asset Management Fees | |||
Related Party Transaction [Line Items] | |||
Monthly asset management fees as a percentage of investment amount | 0.125% | ||
Due to related party | $ 2,500 | ||
Share repurchase program period (in years) | 2 years | ||
Advisor | Incentive Fee | |||
Related Party Transaction [Line Items] | |||
Incentive fee distributions, percent of net cash flows | 15.00% | ||
Incentive fee distributions, minimum non-compounded annual pre-tax return on invested capital | 6.75% |
Related Party Arrangements - Re
Related Party Arrangements - Reimbursements to Advisor (Narrative) (Details) - Advisor - Operating Costs | 3 Months Ended |
Mar. 31, 2021USD ($)quarter | |
Related Party Transaction [Line Items] | |
Reimbursement of personnel costs related to executive officers and other personnel involved in activities for which the Advisor receives an acquisition fee or disposition fee | $ | $ 0 |
Number of preceding fiscal quarters | quarter | 4 |
Percentage of average invested assets reimbursable as operating costs | 2.00% |
Expense reimbursement period (months) | 12 months |
Maximum | |
Related Party Transaction [Line Items] | |
Percentage of net income, without reduction for any additions to reserves for depreciation, loan losses or other similar non-cash reserves and excluding any gain from the sale of the company's assets | 25.00% |
Related Party Arrangements - Su
Related Party Arrangements - Summary of Fees and Reimbursements (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Related Party Transaction, Due to Related Parties [Roll Forward] | |
Due to related party, beginning balance | $ 8,318 |
Incurred | 5,658 |
Paid | (10,164) |
Due to related party, ending balance | 3,812 |
Issuance of common stock as payment for asset management fees | 2,500 |
Advisor | Asset management | |
Related Party Transaction, Due to Related Parties [Roll Forward] | |
Due to related party, ending balance | 2,500 |
Advisor | Asset management | Asset management and other fees-related party | |
Related Party Transaction, Due to Related Parties [Roll Forward] | |
Due to related party, beginning balance | 923 |
Incurred | 2,769 |
Paid | (2,769) |
Due to related party, ending balance | 923 |
Advisor | Operating costs | General and administrative expenses | |
Related Party Transaction, Due to Related Parties [Roll Forward] | |
Due to related party, beginning balance | 7,395 |
Incurred | 2,889 |
Paid | (7,395) |
Due to related party, ending balance | $ 2,889 |
Related Party Arrangements - Is
Related Party Arrangements - Issuance of Common Stock to the Advisor (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Share-based payment of advisor asset management fees (in shares) | 600,000 | |
Issuance of common stock as payment for asset management fees | $ 2,500 | |
Common stock (in shares) | 191,052,014 | 190,409,341 |
Common stock | $ 1,910 | $ 1,904 |
The Advisor, the Sponsor, and affiliates | ||
Related Party Transaction [Line Items] | ||
Common stock (in shares) | 5,300,000 | |
Common stock | $ 20,800 | |
Common stock, outstanding (percentage) | 2.50% |
Related Party Arrangements - In
Related Party Arrangements - Investments in Joint Ventures (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Oct. 31, 2018 | Dec. 31, 2015 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Sep. 30, 2018 | |
Related Party Transaction [Line Items] | ||||||
Investment portfolio | $ 1,457,397 | $ 1,483,930 | ||||
Payments to acquire investment in unconsolidated VIE | $ 250 | $ 0 | ||||
American Healthcare Investors, LLC | Sponsor | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership interest (as a percentage) | 43.00% | |||||
The Trilogy Portfolio | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership interest (as a percentage) | 23.00% | 29.00% | 29.00% | |||
Investment portfolio | $ 1,200,000 | |||||
Payments to acquire investment in unconsolidated VIE | $ 201,700 | |||||
Ownership interest sold (as a percentage) | 20.00% | |||||
Sale of ownership interest in unconsolidated ventures | $ 48,000 | |||||
Solstice Senior Living | ||||||
Related Party Transaction [Line Items] | ||||||
Noncontrolling interest, ownership percentage by parent (as a percentage) | 80.00% | |||||
Winterfell | Solstice Senior Living | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership interest (as a percentage) | 20.00% | |||||
Winterfell | Solstice Senior Living | ||||||
Related Party Transaction [Line Items] | ||||||
Noncontrolling interest, ownership percentage by parent (as a percentage) | 80.00% | |||||
Property management fee expense paid to joint venture | $ 1,200 |
Related Party Arrangements - Sc
Related Party Arrangements - Schedule of Joint Ventures (Details) - Colony NorthStar, Inc. | Mar. 31, 2021 |
Eclipse | |
Related Party Transaction [Line Items] | |
Ownership interest (as a percentage) | 5.60% |
Diversified US/UK | |
Related Party Transaction [Line Items] | |
Ownership interest (as a percentage) | 14.30% |
Related Party Arrangements - Or
Related Party Arrangements - Origination of Mezzanine Loan (Narrative) (Details) $ in Millions | Jul. 31, 2015USD ($) |
Mezzanine loans | Variable Interest Entity, Not Primary Beneficiary | |
Related Party Transaction [Line Items] | |
VIE carrying value | $ 75 |
Related Party Arrangements - Li
Related Party Arrangements - Line of Credit - Related Party (Narrative) (Details) - Line of Credit - Colony NorthStar, Inc. | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Related Party Transaction [Line Items] | |
Maximum borrowing capacity | $ 35,000,000 |
LIBOR | |
Related Party Transaction [Line Items] | |
Basis spread on variable interest rate | 3.50% |
Equity-Based Compensation (Deta
Equity-Based Compensation (Details) - USD ($) | Dec. 31, 2014 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Equity-based compensation | ||||
Equity-based compensation expense | $ 45,625 | $ 38,125 | ||
Unrecognized equity-based compensation | $ 147,625 | $ 193,250 | ||
Restricted stock | ||||
Equity-based compensation | ||||
Number of shares authorized | 2,000,000 | |||
Restricted common shares grant vesting period | 4 years | 2 years | ||
Unvested shares (in shares) | 23,546 | 30,403 | ||
Independent Directors | Restricted stock | ||||
Equity-based compensation | ||||
Number of shares granted to independent directors (in shares) | 159,932 | |||
Aggregate value for restricted common shares granted to independent directors | $ 1,300,000 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) - USD ($) shares in Millions, $ in Billions | 1 Months Ended | 74 Months Ended |
Jan. 19, 2016 | Mar. 31, 2021 | |
Class of Stock [Line Items] | ||
Value of common stock issued | $ 2 | |
Common Stock | ||
Class of Stock [Line Items] | ||
Number of shares issued (in shares) | 173.4 | |
Value of common stock issued | $ 1.7 |
Stockholders' Equity - Distribu
Stockholders' Equity - Distribution Reinvestment Plan (Details) - USD ($) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | 63 Months Ended | 74 Months Ended | ||||||
Jan. 19, 2016 | Mar. 31, 2021 | Mar. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 30, 2016 | |
Class of Stock [Line Items] | ||||||||||
Value of common stock issued | $ 2,000,000,000 | |||||||||
Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued (in shares) | 173.4 | |||||||||
Value of common stock issued | $ 1,700,000,000 | |||||||||
Dividend Reinvestment Plan | ||||||||||
Class of Stock [Line Items] | ||||||||||
Share price (in dollars per share) | $ 3.89 | $ 6.25 | $ 7.10 | $ 8.50 | $ 9.10 | $ 8.63 | ||||
Selling commissions or dealer manager fees paid | $ 0 | |||||||||
Notice period served by board of directors to amend or terminate DRP (in days) | 10 days | |||||||||
Dividend Reinvestment Plan | Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued (in shares) | 25.7 | |||||||||
Value of common stock issued | $ 232,600,000 | |||||||||
Initial Distribution Support Agreement | Dividend Reinvestment Plan | ||||||||||
Class of Stock [Line Items] | ||||||||||
Share price (in dollars per share) | $ 9.50 | $ 9.50 | $ 9.50 | |||||||
Follow-on Distribution Reinvestment Plan | ||||||||||
Class of Stock [Line Items] | ||||||||||
Share price (in dollars per share) | $ 10.20 | $ 10.20 | $ 10.20 | |||||||
Percentage of offering price | 95.00% | 95.00% | 95.00% | |||||||
Follow-on Distribution Reinvestment Plan | Dividend Reinvestment Plan | ||||||||||
Class of Stock [Line Items] | ||||||||||
Share price (in dollars per share) | $ 9.69 | $ 9.69 | $ 9.69 |
Stockholders' Equity - Distri_2
Stockholders' Equity - Distributions (Details) $ in Millions | Dec. 31, 2019USD ($) |
Equity [Abstract] | |
Operating loss carryforwards | $ 86 |
Non-controlling Interests (Deta
Non-controlling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Noncontrolling Interest [Abstract] | ||
Net (income) loss attributable to non-controlling interests | $ (308) | $ 66 |
Fair Value - Schedule of the Pr
Fair Value - Schedule of the Principal Amount, Carrying Value and Fair Value of Certain Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Financial Assets | ||
Carrying Value | $ 36,112 | $ 55,864 |
Financial Liabilities | ||
Carrying Value | 1,397,718 | 1,416,871 |
Carrying Value | 3,812 | 8,318 |
Mortgage and other notes payable, net | ||
Financial Liabilities | ||
Principal Amount | 1,415,661 | 1,435,384 |
Carrying Value | 1,397,718 | 1,416,871 |
Fair Value | 1,342,460 | 1,354,832 |
Line of Credit | ||
Financial Liabilities | ||
Principal Amount | 35,000 | 35,000 |
Carrying Value | 35,000 | 35,000 |
Fair Value | 35,000 | 35,000 |
Real estate debt investments, net | ||
Financial Assets | ||
Principal Amount | 49,409 | 74,182 |
Carrying Value | 36,112 | 55,864 |
Fair Value | $ 49,409 | $ 74,182 |
Fair Value - Nonrecurring Fair
Fair Value - Nonrecurring Fair Value (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Operating real estate, net | $ 1,457,397,000 | $ 1,483,930,000 | |
Assets held for sale | 5,000,000 | 5,000,000 | |
Impairment loss | 800,000 | $ 0 | |
Nonrecurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Operating real estate, net | 1,900,000 | 234,650,000 | |
Assets held for sale | 0 | $ 5,000,000 | |
Nonrecurring | Level 3 | Operating Real Estate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment loss | 786,000 | 164,215,000 | |
Nonrecurring | Level 3 | Assets Held-For-Sale | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment loss | $ 0 | $ 1,753,000 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - Discounted cash flow method - Real estate investment - Nonrecurring | Mar. 31, 2021 |
Minimum | Terminal capitalization rate | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Measurement input (percentage) | 0.0600 |
Minimum | Discount rate | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Measurement input (percentage) | 0.070 |
Maximum | Terminal capitalization rate | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Measurement input (percentage) | 0.0775 |
Maximum | Discount rate | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Measurement input (percentage) | 0.0875 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 3 Months Ended |
Mar. 31, 2021segment | |
Segment Reporting [Abstract] | |
Number of segments | 5 |
Segment Reporting - Segment Sta
Segment Reporting - Segment Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Property and other revenues | $ 57,334 | $ 72,891 |
Interest income on debt investments | 2,213 | 1,905 |
Real estate properties - operating expenses | (45,618) | (45,701) |
Interest expense | (16,025) | (16,679) |
Transaction costs | (54) | (7) |
Asset management and other fees - related party | (2,769) | (4,431) |
General and administrative expenses | (3,033) | (3,029) |
Depreciation and amortization | (15,387) | (16,489) |
Impairment loss | (786) | 0 |
Other income | 7,360 | 0 |
Realized gain (loss) on investments and other | 7,515 | 0 |
Equity in earnings (losses) of unconsolidated ventures | (890) | (993) |
Income tax expense | (15) | (14) |
Net income (loss) | (10,155) | (12,547) |
Direct Investments - Net Lease Segment | ||
Segment Reporting Information [Line Items] | ||
Property and other revenues | (776) | 8,222 |
Interest income on debt investments | 0 | 0 |
Real estate properties - operating expenses | (25) | (13) |
Interest expense | (2,873) | (2,964) |
Transaction costs | 0 | 0 |
Asset management and other fees - related party | 0 | 0 |
General and administrative expenses | (41) | (44) |
Depreciation and amortization | (3,854) | (3,737) |
Impairment loss | (786) | 0 |
Other income | 0 | 0 |
Realized gain (loss) on investments and other | 0 | 0 |
Equity in earnings (losses) of unconsolidated ventures | 0 | 0 |
Income tax expense | 0 | 0 |
Net income (loss) | (8,355) | 1,464 |
Direct Investments - Operating Segment | ||
Segment Reporting Information [Line Items] | ||
Property and other revenues | 58,109 | 64,606 |
Interest income on debt investments | 0 | 0 |
Real estate properties - operating expenses | (45,593) | (45,688) |
Interest expense | (12,835) | (13,715) |
Transaction costs | (54) | (7) |
Asset management and other fees - related party | 0 | 0 |
General and administrative expenses | 0 | 14 |
Depreciation and amortization | (11,533) | (12,752) |
Impairment loss | 0 | 0 |
Other income | 7,360 | 0 |
Realized gain (loss) on investments and other | 7,515 | 0 |
Equity in earnings (losses) of unconsolidated ventures | 0 | 0 |
Income tax expense | (15) | (14) |
Net income (loss) | 2,954 | (7,556) |
Unconsolidated Investments | ||
Segment Reporting Information [Line Items] | ||
Property and other revenues | 0 | 0 |
Interest income on debt investments | 0 | 0 |
Real estate properties - operating expenses | 0 | 0 |
Interest expense | 0 | 0 |
Transaction costs | 0 | 0 |
Asset management and other fees - related party | 0 | 0 |
General and administrative expenses | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Impairment loss | 0 | 0 |
Other income | 0 | 0 |
Realized gain (loss) on investments and other | 0 | 0 |
Equity in earnings (losses) of unconsolidated ventures | (890) | (993) |
Income tax expense | 0 | 0 |
Net income (loss) | (890) | (993) |
Debt | ||
Segment Reporting Information [Line Items] | ||
Property and other revenues | 0 | 0 |
Interest income on debt investments | 2,213 | 1,905 |
Real estate properties - operating expenses | 0 | 0 |
Interest expense | 0 | 0 |
Transaction costs | 0 | 0 |
Asset management and other fees - related party | 0 | 0 |
General and administrative expenses | 0 | (9) |
Depreciation and amortization | 0 | 0 |
Impairment loss | 0 | 0 |
Other income | 0 | 0 |
Realized gain (loss) on investments and other | 0 | 0 |
Equity in earnings (losses) of unconsolidated ventures | 0 | 0 |
Income tax expense | 0 | 0 |
Net income (loss) | 2,213 | 1,896 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Property and other revenues | 1 | 63 |
Interest income on debt investments | 0 | 0 |
Real estate properties - operating expenses | 0 | 0 |
Interest expense | (317) | 0 |
Transaction costs | 0 | 0 |
Asset management and other fees - related party | (2,769) | (4,431) |
General and administrative expenses | (2,992) | (2,990) |
Depreciation and amortization | 0 | 0 |
Impairment loss | 0 | 0 |
Other income | 0 | 0 |
Realized gain (loss) on investments and other | 0 | 0 |
Equity in earnings (losses) of unconsolidated ventures | 0 | 0 |
Income tax expense | 0 | 0 |
Net income (loss) | $ (6,077) | $ (7,358) |
Segment Reporting - Summary of
Segment Reporting - Summary of Assets by Segment (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Assets | [1] | $ 1,882,355 | $ 1,918,436 |
Direct Investments - Net Lease Segment | |||
Segment Reporting Information [Line Items] | |||
Assets | 342,132 | 348,688 | |
Direct Investments - Operating Segment | |||
Segment Reporting Information [Line Items] | |||
Assets | 1,209,511 | 1,223,045 | |
Unconsolidated Investments | |||
Segment Reporting Information [Line Items] | |||
Assets | 221,941 | 229,170 | |
Debt | |||
Segment Reporting Information [Line Items] | |||
Assets | 36,749 | 56,502 | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Assets | $ 72,022 | $ 61,031 | |
[1] | Represents the consolidated assets and liabilities of NorthStar Healthcare Income Operating Partnership, LP (the “Operating Partnership”). The Operating Partnership is a consolidated variable interest entity (“VIE”), of which the Company is the sole general partner and owns approximately 99.99%. As of March 31, 2021, the Operating Partnership includes $0.5 billion and $0.5 billion of assets and liabilities, respectively, of certain VIEs that are consolidated by the Operating Partnership. Refer to Note 2, “Summary of Significant Accounting Policies.” |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Properties (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($)unitproperty | |
Real Estate Properties [Line Items] | |
Properties Under Management | property | 72 |
Units Under Management | unit | 10,181 |
Property and Other Revenues | $ 57,334 |
Arbors Portfolio | |
Real Estate Properties [Line Items] | |
Write-off of straight-line rent receivables | $ 7,400 |
Revenue | |
Real Estate Properties [Line Items] | |
Percentage of Total Property and Other Revenues | 100.00% |
Watermark Retirement Communities | |
Real Estate Properties [Line Items] | |
Properties Under Management | property | 29 |
Units Under Management | unit | 5,049 |
Property and Other Revenues | $ 33,365 |
Watermark Retirement Communities | Revenue | |
Real Estate Properties [Line Items] | |
Percentage of Total Property and Other Revenues | 58.20% |
Solstice Senior Living | |
Real Estate Properties [Line Items] | |
Properties Under Management | property | 32 |
Units Under Management | unit | 4,000 |
Property and Other Revenues | $ 24,079 |
Solstice Senior Living | Revenue | |
Real Estate Properties [Line Items] | |
Percentage of Total Property and Other Revenues | 42.00% |
Avamere Health Services | |
Real Estate Properties [Line Items] | |
Properties Under Management | property | 5 |
Units Under Management | unit | 453 |
Property and Other Revenues | $ 4,164 |
Avamere Health Services | Revenue | |
Real Estate Properties [Line Items] | |
Percentage of Total Property and Other Revenues | 7.30% |
Arcadia Management | |
Real Estate Properties [Line Items] | |
Properties Under Management | property | 4 |
Units Under Management | unit | 572 |
Property and Other Revenues | $ (6,351) |
Arcadia Management | Revenue | |
Real Estate Properties [Line Items] | |
Percentage of Total Property and Other Revenues | (11.10%) |
Integral Senior Living | |
Real Estate Properties [Line Items] | |
Properties Under Management | property | 1 |
Units Under Management | unit | 44 |
Property and Other Revenues | $ 2,077 |
Integral Senior Living | Revenue | |
Real Estate Properties [Line Items] | |
Percentage of Total Property and Other Revenues | 3.60% |
Senior Lifestyle Corporation | |
Real Estate Properties [Line Items] | |
Properties Under Management | property | 1 |
Units Under Management | unit | 63 |
Property and Other Revenues | $ 0 |
Senior Lifestyle Corporation | Revenue | |
Real Estate Properties [Line Items] | |
Percentage of Total Property and Other Revenues | 0.00% |
Solstice Senior Living | |
Real Estate Properties [Line Items] | |
Noncontrolling interest, ownership percentage by parent (as a percentage) | 80.00% |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) $ in Thousands | May 14, 2021 | May 13, 2021 | Apr. 30, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Apr. 15, 2021 |
Subsequent Event [Line Items] | ||||||
Repayment of real estate debt investment | $ 24,878 | $ 0 | ||||
Mezzanine loans | ||||||
Subsequent Event [Line Items] | ||||||
Repayment of real estate debt investment | $ 24,900 | |||||
Subsequent event | ||||||
Subsequent Event [Line Items] | ||||||
Purchase and sale agreement | $ 2,000 | |||||
Subsequent event | Mezzanine loans | ||||||
Subsequent Event [Line Items] | ||||||
Repayment of real estate debt investment | $ 21,800 | |||||
Subsequent event | Watermark Fountains Portfolio | ||||||
Subsequent Event [Line Items] | ||||||
Deferred rent | $ 3,000 | |||||
Subsequent event | Rochester NY Nonrecourse August 2022 | Mortgage notes payable, net | Rochester Portfolio | ||||||
Subsequent Event [Line Items] | ||||||
Repayments of long-term debt | $ 1,000 |