Audit Information |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Audit Information [Abstract] | |
| Auditor Name | DELOITTE & TOUCHE LLP |
| Auditor Location | Costa Mesa, California |
| Auditor Firm ID | 34 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
| Preferred stock, authorized (shares) | 100,000,000 | 100,000,000 |
| Preferred stock, issued (shares) | 0 | 0 |
| Preferred stock, outstanding (shares) | 0 | 0 |
| Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
| Common stock, authorized (shares) | 500,000,000 | 500,000,000 |
| Common stock, issued (shares) | 96,296,673 | 95,215,797 |
| Common stock, outstanding (shares) | 96,296,673 | 95,215,797 |
Consolidated Income Statements - USD ($) |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
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| Revenues: | |||
| Rental income | $ 190,195,000 | $ 173,612,000 | $ 155,667,000 |
| Independent living facilities | 0 | 2,077,000 | 3,389,000 |
| Interest and other income | 2,156,000 | 2,643,000 | 4,345,000 |
| Total revenues | 192,351,000 | 178,332,000 | 163,401,000 |
| Expenses: | |||
| Depreciation and amortization | 55,340,000 | 52,760,000 | 51,822,000 |
| Interest expense | 23,677,000 | 23,661,000 | 28,125,000 |
| Property taxes | 3,574,000 | 2,836,000 | 3,048,000 |
| Independent living facilities | 0 | 1,869,000 | 2,898,000 |
| Impairment of real estate investments | 0 | 0 | 16,692,000 |
| Provision for loan losses | 0 | 0 | 1,076,000 |
| General and administrative | 26,874,000 | 16,302,000 | 15,158,000 |
| Total expenses | 109,465,000 | 97,428,000 | 118,819,000 |
| Other (loss) income: | |||
| Loss on extinguishment of debt | (10,827,000) | 0 | 0 |
| (Loss) gain on sale of real estate | (77,000) | (37,000) | 1,777,000 |
| Total other (loss) income | (10,904,000) | (37,000) | 1,777,000 |
| Net income | $ 71,982,000 | $ 80,867,000 | $ 46,359,000 |
| Earnings per common share: | |||
| Basic (usd per share) | $ 0.74 | $ 0.85 | $ 0.49 |
| Diluted (usd per share) | $ 0.74 | $ 0.85 | $ 0.49 |
| Weighted-average number of common shares: | |||
| Basic (shares) | 96,017,000 | 95,200,000 | 93,088,000 |
| Diluted (shares) | 96,092,000 | 95,207,000 | 93,098,000 |
| Independent living facilities, revenue services | Health Care, Resident Service [Member] | Health Care, Resident Service [Member] | Health Care, Resident Service [Member] |
| Independent living facilities, cost of services | Health Care, Resident Service [Member] | Health Care, Resident Service [Member] | Health Care, Resident Service [Member] |
Consolidated Statements of Equity (Parenthetical) - $ / shares |
3 Months Ended | 12 Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
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| Statement of Stockholders' Equity [Abstract] | |||||||||||||||
| Common dividend (usd per share) | $ 0.265 | $ 0.265 | $ 0.265 | $ 0.265 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.225 | $ 1.06 | $ 1.00 | $ 0.90 |
Organization |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Organization | ORGANIZATION Description of Business—CareTrust REIT, Inc.’s (“CareTrust REIT” or the “Company”) primary business consists of acquiring, financing, developing and owning real property to be leased to third-party tenants in the healthcare sector. As of December 31, 2021, the Company owned and leased to independent operators, 227 skilled nursing, multi-service campuses, assisted living and independent living facilities consisting of 23,650 operational beds and units located in 29 states with the highest concentration of properties by rental income located in California, Texas, Louisiana, Idaho and Arizona. As of December 31, 2021, the Company also had other real estate investments consisting of one mezzanine loan receivable with a carrying value of $15.2 million. COVID-19—The COVID-19 pandemic led governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to reduce its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business limitations and closures (subject to exceptions for essential operations and businesses), quarantines and shelter-in-place orders. Although most of these governmental restrictions have since been lifted or scaled back, resurgences of COVID-19 and the emergence of new variants thereof have resulted in the reimposition of certain restrictions and requirements, including restrictions imposed on unvaccinated individuals and employee vaccine mandates, and may lead to other restrictions and requirements being reimplemented in response to efforts to reduce the spread of COVID-19. Given the dynamic nature of these circumstances and the related adverse impact these restrictions have had, and may continue to have, on the economy generally, the Company’s business, results of operations and financial condition may be adversely impacted by the COVID-19 pandemic. The duration and extent of the COVID-19 pandemic’s effect on the Company’s operational and financial performance, and the operational and financial performance of the Company’s tenants, will depend on future developments, which are highly uncertain and cannot be predicted at this time, including the rate of public acceptance and usage of vaccines and the effectiveness of vaccines in limiting the spread of COVID-19 and its variants, resurgences of COVID-19 and, in particular, new and more contagious and/or vaccine resistant variants, actions taken to contain the spread of COVID-19 and how quickly and to what extent normal economic and operating conditions can resume. The adverse impact of the COVID-19 pandemic on the Company’s business, results of operations and financial condition could be material.
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Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation—The accompanying consolidated financial statements of the Company reflect, for all periods presented, the historical financial position, results of operations and cash flows of the Company and its wholly-owned subsidiaries prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All intercompany transactions and account balances within the Company have been eliminated. Lessor Accounting—The Company recognizes lease revenue in accordance with Accounting Standards Codification (“ASC”) 842, Leases. The Company’s lease agreements typically contain annual escalators based on the percentage change in the Consumer Price Index which are accounted for as variable lease payments in the period in which the change occurs. For lease agreements that contain fixed rent escalators, the Company generally recognizes lease revenue on a straight-line basis of accounting. The Company generates revenues primarily by leasing healthcare-related properties to healthcare operators in triple-net lease arrangements, under which the tenant is solely responsible for the costs related to the property. Tenant reimbursements related to property taxes and insurance paid by the lessee directly to a third party on behalf of a lessor are required to be excluded from variable payments and from recognition in the lessor’s income statements. Otherwise, tenant recoveries for taxes and insurance are classified as additional rental revenues recognized by the lessor on a gross basis in its income statements. The Company’s assessment of collectibility of its tenant receivables includes a binary assessment of whether or not substantially all of the amounts due under a tenant’s lease agreement are probable of collection. The Company considers the operator’s performance and anticipated trends, payment history, and the existence and creditworthiness of guarantees, among other factors, in making this determination. For such leases that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term, if applicable. For such leases that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that has been received from the tenant, with any tenant and deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in the collectibility determination. Such write-offs and recoveries are recorded as decreases or increases through rental income on the Company’s consolidated income statements. For the year ended December 31, 2021, the Company did not record any recovery adjustments or write-off adjustments to rental income. For the year ended December 31, 2020, the Company recorded recovery adjustments of $1.0 million and did not recognize any write-off adjustments to rental income. For the year ended December 31, 2019, the Company recorded $11.8 million of write-off adjustments to rental income related to rental income recognized in prior periods. See Note 3, Real Estate Investments, Net for further detail. Estimates and Assumptions—The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that the assumptions and estimates used in preparation of the underlying consolidated financial statements are reasonable. Actual results, however, could differ from those estimates and assumptions. Real Estate Acquisition Valuation— In accordance with ASC 805, Business Combinations, the Company’s acquisitions of real estate investments generally do not meet the definition of a business, and are treated as asset acquisitions. The assets acquired and liabilities assumed are measured at their acquisition date relative fair values. Acquisition costs are capitalized as incurred. The Company allocates the acquisition costs to the tangible assets, identifiable intangible assets/liabilities and assumed liabilities on a relative fair value basis. The Company assesses fair value based on available market information, such as capitalization and discount rates, comparable sale transactions and relevant per square foot or unit cost information. A real estate asset’s fair value may be determined utilizing cash flow projections that incorporate such market information. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, as well as market and economic conditions. The fair value of tangible assets of an acquired property is based on the value of the property as if it is vacant. As part of the Company’s real estate acquisitions, the Company may commit to provide contingent payments to a seller or lessee (e.g., an earn-out payable upon the applicable property achieving certain financial metrics). Typically, when the contingent payments are funded, cash rent is increased by the amount funded multiplied by a rate stipulated in the agreement. Generally, if the contingent payment is an earn-out provided to the seller, the payment is capitalized to the property’s basis when earn-out becomes probable and estimable. If the contingent payment is an earn-out provided to the lessee, the payment is recorded as a lease incentive and is amortized as a yield adjustment over the life of the lease. Impairment of Long-Lived Assets—At each reporting period, the Company evaluates its real estate investments to be held and used for potential impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The judgment regarding the existence of impairment indicators, used to determine if an impairment assessment is necessary, is based on factors such as, but not limited to, market conditions, operator performance and legal structure. If indicators of impairment are present, the Company evaluates the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying facilities. The most significant inputs to the undiscounted cash flows include, but are not limited to, facility level financial results, a lease coverage ratio, the intended hold period by the Company, and a terminal capitalization rate. The analysis is also significantly impacted by determining the lowest level of cash flows, which generally would be at the master lease level of cash flows. Provisions for impairment losses related to long-lived assets are recognized when expected future undiscounted cash flows are determined to be less than the carrying values of the assets. The impairment is measured as the excess of carrying value over fair value. All impairments are taken as a period cost at that time, and depreciation is adjusted going forward to reflect the new value assigned to the asset. For the year ended December 31, 2019, the Company recorded an impairment expense of $16.7 million. See Note 3, Real Estate Investments, Net, for additional information. The Company classifies its real estate investments as held for sale when the applicable criteria have been met, which entails a formal plan to sell the properties that is expected to be completed within one year, among other criteria. Upon designation as held for sale, the Company writes down the excess of the carrying value over the estimated fair value less costs to sell, resulting in an impairment of the real estate investments, if necessary, and ceases depreciation. In the event of impairment, the fair value of the real estate investment is based on current market conditions and considers matters such as the forecasted operating cash flows, lease coverage ratios, capitalization rates, comparable sales data, and, where applicable, contracts or the results of negotiations with purchasers or prospective purchasers. The Company’s ability to accurately estimate future cash flows and estimate and allocate fair values impacts the timing and recognition of impairments. While the Company believes its assumptions are reasonable, changes in these assumptions may have a material impact on financial results. Other Real Estate Investments—Included in other real estate investments on the Company’s consolidated balance sheets at December 31, 2021 and 2020, is one mezzanine loan receivable for which the Company elected the fair value option. Instruments for which the fair value option has been elected are measured at fair value on a recurring basis with changes in fair value recognized in other income (loss) on the consolidated income statements. Fair value was estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements. Interest income is recognized as earned within interest and other income in the consolidated income statements. Prepaid expenses and other assets—Prepaid expenses and other assets consist of prepaid expenses, deposits, pre-acquisition costs and other loans receivable. During the year ended December 31, 2019, the Company determined that the remaining contractual obligations under one other loan receivable were not collectible and recorded a $1.1 million provision for loan losses in the Company’s consolidated income statements. The Company’s other loans receivable are reflected at amortized cost, net of an allowance for credit loss, on the accompanying consolidated balance sheets. The amortized cost of a loan receivable is the outstanding unpaid principal balance, net of unamortized discounts, costs and fees directly associated with the origination of the loan. Income Taxes—The Company has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). The Company believes it has been organized and has operated, and the Company intends to continue to operate, in a manner to qualify for taxation as a REIT under the Code. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute to its stockholders at least 90% of the Company’s annual REIT taxable income (computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax to the extent it distributes as qualifying dividends all of its REIT taxable income to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Real Estate Depreciation and Amortization—Real estate costs related to the acquisition and improvement of properties are capitalized and amortized over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows:
Cash and Cash Equivalents—Cash and cash equivalents consist of bank term deposits and money market funds with original maturities of three months or less at time of purchase and therefore approximate fair value. The fair value of these investments is determined based on “Level 1” inputs, which consist of unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets. The Company places its cash and short-term investments with high credit quality financial institutions. The Company’s cash and cash equivalents balance periodically exceeds federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. Deferred Financing Costs—External costs incurred from placement of the Company’s debt are capitalized and amortized on a straight-line basis over the terms of the related borrowings, which approximates the effective interest method. For senior unsecured notes payable and the senior unsecured term loan, deferred financing costs are netted against the outstanding debt amounts on the balance sheet. For the unsecured revolving credit facility, deferred financing costs are included in assets on the Company’s balance sheet. Amortization of deferred financing costs is classified as interest expense in the consolidated income statements. Accumulated amortization of deferred financing costs was $8.0 million and $9.0 million at December 31, 2021 and 2020, respectively. When financings are terminated, unamortized deferred financing costs, as well as charges incurred for the termination, are expensed at the time the termination is made. Gains and losses from the extinguishment of debt are presented within other income (loss) in the Company’s consolidated income statements. During the year ended December 31, 2021, the Company recorded a loss on extinguishment of debt of $10.8 million. See Note 6, Debt, for further detail. Stock-Based Compensation—The Company accounts for share-based payment awards in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). ASC 718 requires all entities to apply a fair value-based measurement method in accounting for share-based payment transactions with directors, officers and employees. The Company measures and recognizes compensation expense for all share-based payment awards made to directors, officers and employees based on the grant date fair value, amortized over the requisite service period of the award. Compensation expense for awards with performance-based vesting conditions is recognized based upon the probability that the performance target will be met. Compensation expense for awards with market-based vesting conditions is recognized based upon the estimated number of awards to be earned after considering the Company’s expectation of future performance and is recognized provided that the requisite service is rendered, regardless of when, if ever, the market condition is satisfied. Forfeitures of stock-based awards are recognized as they occur. Net income reflects stock-based compensation expense of $10.8 million, $3.8 million and $4.1 million for the years ended December 31, 2021, 2020 and 2019, respectively. Concentration of Credit Risk—The Company is subject to concentrations of credit risk consisting primarily of operating leases on its owned properties. See Note 11, Concentration of Risk, for a discussion of major operator concentration. Segment Disclosures —The Company is subject to disclosures about segments of an enterprise and related information in accordance with ASC Topic 280, Segment Reporting. The Company has one reportable segment consisting of investments in healthcare-related real estate assets. Earnings Per Share—The Company calculates earnings per share (“EPS”) in accordance with ASC 260, Earnings Per Share. Basic EPS is computed by dividing net income applicable to common stock by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution for all potentially-dilutive securities. Beds, Units, Occupancy and Other Measures—Beds, units, occupancy and other non-financial measures used to describe real estate investments included in these Notes to the consolidated financial statements are presented on an unaudited basis and are not subject to audit by the independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board. Recent Accounting Pronouncements— In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), that provides optional relief to applying reference rate reform to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”). For U.S. Dollar LIBOR, the overnight, one-month, three-month, six-month and one-year LIBOR rates will be discontinued in June 2023, while other U.S. Dollar LIBOR rates were discontinued at the end of 2021. The amendments in this update are effective immediately and may be applied through December 31, 2022. The Company does not expect the adoption of the standard to have a material impact on the Company’s consolidated financial statements.
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Real Estate Investments, Net |
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| Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate Investments, Net | REAL ESTATE INVESTMENTS, NET The following table summarizes the Company’s investment in owned properties at December 31, 2021 and 2020 (dollars in thousands):
As of December 31, 2021, 91 of the Company’s 227 facilities were leased to subsidiaries of The Ensign Group, Inc. (“Ensign”) on a triple-net basis under multiple long-term leases (each, an “Ensign Master Lease” and, collectively, the “Ensign Master Leases”) which commenced on June 1, 2014 and were subsequently modified (see “Pennant Spin” below for further information). The obligations under the Ensign Master Leases are guaranteed by Ensign. A default by any subsidiary of Ensign with regard to any facility leased pursuant to an Ensign Master Lease will result in a default under all of the Ensign Master Leases. As of December 31, 2021, annualized contractual rental income from the Ensign Master leases was $59.7 million and is escalated annually, in June, by an amount equal to the product of (1) the lesser of the percentage change in the Consumer Price Index (“CPI”) (but not less than zero) or 2.5%, and (2) the prior year’s rent. In addition to rent, the subsidiaries of Ensign that are tenants under the Ensign Master Leases are solely responsible for the costs related to the leased properties (including property taxes, insurance, and maintenance and repair costs). During the year ended December 31, 2020, the Company acquired four additional facilities leased to subsidiaries of Ensign on a triple-net basis under two separate master lease agreements, each of which contains a purchase option. As of December 31, 2021, annualized contractual rental income from the four additional Ensign facilities was $3.8 million and is escalated annually, in December, by an amount equal to the product of (1) the lesser of the percentage change in the CPI (but not less than zero) or 2.5%, and (2) the prior year’s rent. In addition to rent, the subsidiaries of Ensign that are tenants under the four additional facilities are solely responsible for the costs related to the leased properties (including property taxes, insurance, and maintenance and repair costs). The obligations under the lease agreements for the four additional facilities are guaranteed by Ensign but do not contain cross-default provisions with the Ensign Master Leases. See below under “Lease Amendments” for further detail on Ensign lease amendments. As of December 31, 2021, 15 of the Company’s facilities were leased to subsidiaries of Priority Management Group (“PMG”) on a triple-net basis under one long-term lease (the “PMG Master Lease”). The PMG Master Lease commenced on December 1, 2016, and provides an initial term of fifteen years, with two five-year renewal options. As of December 31, 2021, annualized contractual rental income from the PMG Master Lease was $28.9 million and is escalated annually by an amount equal to the product of (1) the lesser of the percentage change in the CPI (but not less than zero) or 3.0%, and (2) the prior year’s rent. In addition to rent, the subsidiaries of PMG that are tenants under the PMG Master Lease are solely responsible for the costs related to the leased properties (including property taxes, insurance, and maintenance and repair costs). As of December 31, 2021, 115 of the Company’s 227 facilities were leased to various other operators under triple-net leases. All of these leases contain annual escalators based on the percentage change in the CPI (but not less than zero), some of which are subject to a cap, or fixed rent escalators. Two of the Company’s 227 facilities are leased under a short-term lease with an expected term of less than one year as of December 31, 2021, as the Company is currently identifying a long-term operator for these properties. As of December 31, 2021, the Company’s total future contractual minimum rental income for all of its tenants, excluding operating expense reimbursements, was (dollars in thousands):
Tenant Purchase Options Certain of the Company’s operators hold purchase options allowing them to acquire properties they currently lease from the Company. A summary of these purchase options is presented below (dollars in thousands):
(1) Option type includes: A - Fixed base price plus a specified share on any appreciation. B - Fixed base price. C - Fixed capitalization rate on lease revenue. (2) Based on annualized cash revenue for contracts in place at December 31, 2021. (3) Option window is open for six months. (4) Purchase option reflects two option types. Rental Income The following table summarizes components of the Company’s rental income (dollars in thousands):
(1)Includes initial cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. (2)During the year ended December 31, 2019, and in accordance with ASC 842, the Company evaluated the collectibility of lease payments through maturity and determined that it was not probable that the Company would collect substantially all of the contractual obligations from five operators through maturity. As such, the Company reversed $7.8 million of contractual rent, $3.5 million of straight-line rent and $0.5 million of property tax reimbursements during the year ended December 31, 2019. (3)During the year ended December 31, 2020, the Company recovered $1.0 million in rental income related to affiliates of Metron Integrated Health Systems (“Metron”) that was previously written off. In addition, in connection with the agreement to terminate its lease agreements with Metron and to sell the facilities to a third-party, the Company received certain lease termination payments from Metron. During the years ended December 31, 2021 and 2020, the Company recognized approximately $0.1 million and $1.2 million in lease termination revenue, respectively. Recent Real Estate Acquisitions The following table summarizes the Company’s acquisitions for the years ended December 31, 2021, 2020 and 2019 (dollar amounts in thousands):
(1) Purchase price includes capitalized acquisition costs. (2) Initial annual cash rent excludes ground lease income. (3) The number of beds/units includes operating beds at acquisition date. (4) Initial annual cash rent represents initial cash rent for the first twelve months excluding any impact of straight-line rent. (5) Initial annual cash rent represents the first twelve months of rent upon commencement of the Company’s long-term net leases, which occurred during the three months ended June 30, 2021, upon the tenant’s receipt of licensing approval and increases to $9.4 million in the second year with CPI-based annual escalators thereafter. (6) Initial annual cash rent is zero until transfer of operations upon receipt of licensing approval. Lease Amendments Amended Noble Master Leases and New Noble NJ Master Lease. During the three months ended September 30, 2021, the Company did not collect a portion of rent from affiliates of Noble Senior Services and Noble VA Holdings, LLC (collectively, “Noble”). On September 23, 2021, the Company amended its two existing triple-net master leases with Noble. The lease amendment granted a deferral for a total of $1.8 million of unpaid base rent, which represented approximately 4% of the Company’s total contractual base rent for the three months ended September 30, 2021. In connection with its agreement to the rent deferral, the Company also entered into a purchase agreement with Noble to acquire two assisted living facilities owned by Noble. The lease amendment required the deferred rent, as well as all contractual rent for the fourth quarter of 2021, to be paid in full upon the closing of the purchase of the two facilities. The Company closed on the acquisition of the two facilities in December 2021 and the deferred rent, as well as all contractual rent for the fourth quarter of 2021, was paid in full. The two facilities are currently leased back to Noble under a short-term lease agreement while the Company pursues other tenants for the long-term. Amended Ensign Master Lease. On August 1, 2021, the Company acquired two skilled nursing facilities. The facilities were leased to affiliates of Ensign. In conjunction with the acquisition of the two facilities, the Company amended and extended the initial term of an existing triple-net master lease with Ensign to include the two skilled nursing facilities. The Ensign lease, as amended, has a remaining initial term of approximately 17 years, with three five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended lease increased by approximately $2.2 million, with GAAP rent increasing by $2.5 million due to a $5.0 million prepayment of rent made at closing, which is being amortized on a straight-line basis over the remaining lease term. Five Oaks Lease Termination and Amended Ensign Master Lease. On June 1, 2021, operating affiliates of Ensign acquired certain operations and assets of Five Oaks Healthcare, LLC (“Five Oaks”) under an agreement with Five Oaks. The agreement granted Ensign the right to occupy and operate four of the Company’s skilled nursing facilities in Washington that were previously being operated by Five Oaks. In conjunction with consenting to the transfer, the Company terminated the existing Five Oaks master lease, and amended and extended the term of an existing triple-net master lease with Ensign to include the four skilled nursing facilities. The Ensign lease, as amended, has a remaining term of approximately 15 years, with three five-year renewal options and CPI-based rent escalators. Annual cash rent under the terminated Five Oaks master lease was approximately $2.6 million, and annual cash rent under the amended Ensign lease increased by the same amount. Premier Partial Lease Termination and Amended Noble VA Master Lease. On March 10, 2021 and July 1, 2021, two assisted living facilities in Wisconsin operated by affiliates of Premier Senior Living, LLC (“Premier”) were transferred to affiliates of Noble VA Holdings, LLC (“Noble VA”). In connection with the transfer, the Company partially terminated the Premier master lease and amended the existing triple-net master lease with Noble VA to include the two assisted living facilities. The Noble VA master lease, as amended, has a remaining term of approximately 13 years, with two five-year renewal options and CPI-based rent escalators. Initial annual cash rent under the amended Noble VA master lease increased by approximately $1.3 million on March 10, 2021 and approximately $1.0 million on July 1, 2021 and annual cash rent under the partially terminated Premier master lease decreased by approximately the same amount. See above under “Amended Noble Master Leases and New Noble NJ Master Lease” for additional information regarding the Company’s leases with Noble. Twenty/20 Lease Termination and New Noble VA Master Lease. On December 1, 2020, five assisted living facilities in Virginia operated by Twenty/20 Management, Inc. (“Twenty/20”) were transferred to affiliates of Noble VA. In connection with the transfer, the Company entered into a new triple-net master lease with Noble VA. The lease had an initial term of approximately 14 years as of December 1, 2020, with two five-year renewal options and CPI-based rent escalators. Initial annual cash rent under the new lease is approximately $3.2 million. See above under “Amended Noble Master Leases and New Noble NJ Master Lease” for additional information regarding the Company’s leases with Noble. Pennant Spin. On October 1, 2019, Ensign completed its previously announced separation of its home health and hospice operations and substantially all of its senior living operations into a separate independent publicly traded company through the distribution of shares of common stock of The Pennant Group, Inc. (“Pennant”). As a result of the Pennant Spin, as of October 1, 2019, the Company amended the Ensign Master Leases to lease 85 facilities to subsidiaries of Ensign, which had a total of 8,908 operational beds, and entered into a new triple-net master lease with subsidiaries of Pennant (the “Pennant Master Lease”) to lease 11 facilities, which had a total of 1,151 operational beds. The contractual initial annual cash rent under the Pennant Master Lease was approximately $7.8 million. The Pennant Master Lease carried an initial term of 15 years, with two five-year renewal options and CPI-based rent escalators. The contractual annual cash rent under the amended Ensign Master Leases was reduced by approximately $7.8 million. Ensign continues to guarantee obligations under the Ensign Master Leases and the Pennant Master Lease. If Pennant achieves a specified portfolio coverage and continuously maintains it for a specified period, Ensign’s obligations under the guaranty with respect to the Pennant Master Lease would be released. Trillium Lease Termination and New Master Lease. On July 15, 2019, the Company terminated its existing master lease (the “Original Trillium Lease”) with affiliates of Trillium Healthcare Group, LLC (“Trillium”), which covered ten properties in Iowa, seven properties in Ohio and one property in Georgia. On August 16, 2019, the Company entered into a new master lease (the “New Trillium Lease”) with Trillium’s Iowa and Georgia affiliates covering the ten properties in Iowa and the one property in Georgia. The Company recorded an adjustment to reduce rental income recognized under the Original Trillium Lease for unpaid contractual rent, straight-line rent and property tax reimbursements by approximately $3.8 million in the three months ended September 30, 2019. On September 1, 2019, four of the seven skilled nursing properties in Ohio operated by Trillium under the Original Trillium Lease were transferred to affiliates of Providence Group, Inc. (“Providence”). In connection with the transfer, the Company amended its triple-net master lease with Providence. The amended lease had a remaining initial term of approximately 13 years as of September 1, 2019, and includes two five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended lease increased by approximately $2.1 million. Trio Lease Amendment. On November 4, 2019, the Company amended its existing master lease with affiliates of Trio Healthcare, Inc. (“Trio”), which covered seven facilities based in Dayton, Ohio. The amended lease had a remaining initial term of approximately 13 years as of November 4, 2019, with two five-year renewal options and CPI-based rent escalators. The annual base rent due under the amended lease with Trio was approximately $4.7 million and provides for payment of percentage rent if Trio achieves certain increases in portfolio revenue. Impairment of Real Estate Investments, Asset Sales and Assets Held for Sale On September 1, 2019, the Company sold three of the seven skilled nursing properties in Ohio operated by Trillium under the Original Trillium Lease for a purchase price of $28.0 million. During the three months ended September 30, 2019 and prior to the disposition, the Company recorded an impairment expense of approximately $7.8 million. In connection with the sale, the Company provided affiliates of CommuniCare Family of Companies (“CommuniCare”), the purchaser of the three Ohio properties, with a mortgage loan secured by the three Ohio properties for approximately $26.5 million. See Note 4, Other Real Estate Investments, for additional information. On February 14, 2020, the Company sold six skilled nursing properties in Michigan operated by affiliates of Metron for a purchase price of $36.0 million. During the three months ended September 30, 2019 and prior to the disposition, the Company recorded an impairment expense of approximately $8.8 million related to these properties. In connection with the sale for $36.0 million, the Company received $3.5 million in cash and provided subsidiaries of Cascade Capital Group, LLC (“Cascade”), the purchaser of the properties, with a short-term mortgage loan secured by these properties for $32.4 million. The mortgage loan bore interest at 7.5% and initially had a maturity date of March 31, 2020. In connection with the sale, the Company recognized a loss of approximately $0.1 million during the three months ended March 31, 2020. In April 2020, the mortgage loan was settled in connection with a new mortgage loan transaction between the Company and a third-party institutional lender as co-lenders, pursuant to which the Company received $18.9 million in cash and a new mortgage loan for $13.9 million. In July 2020, the Company received prepayment in full, including accrued interest, for the new $13.9 million mortgage loan. See Note 4, Other Real Estate Investments, for further detail on the mortgage loan. On February 1, 2021, the Company closed on the sale of one skilled nursing facility consisting of 90 beds located in Washington with a carrying value of $7.2 million, for net sales proceeds of $7.0 million. The Company recorded a loss of $0.2 million in connection with the sale. The facility was classified as held for sale as of December 31, 2020. On November 1, 2020, the Company sold its one remaining owned and operated independent living facility consisting of 168 units located in Texas with an aggregate carrying value of $4.2 million for net sales proceeds of $4.2 million. In connection with the sale, the Company recognized a gain of $20,000. On December 23, 2019, the Company sold one of its owned and operated independent living facilities consisting of 38 units located in Texas with an aggregate carrying value of $1.7 million for net proceeds of $3.3 million. In connection with the sale, the Company recognized a gain of $1.6 million. As of December 31, 2021, one assisted living facility was classified as held for sale, with a carrying value of $4.8 million, primarily comprised of real estate assets.
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Other Real Estate Investments |
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| Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Real Estate Investments | OTHER REAL ESTATE INVESTMENTS As of December 31, 2021 and 2020, the Company’s loans receivable and other investments consisted of the following (dollar amounts in thousands):
2020 Loans Receivable Transactions—In November 2020, the Company provided Next VA Star Realty Holdings, LLC a mezzanine loan for nine skilled nursing facilities secured by membership interests in affiliates of Next VA Star Realty Holdings, LLC for approximately $15.0 million, at an annual interest rate of 12%. The loan requires monthly interest payments, is set to mature on November 30, 2025, and may (subject to certain restrictions) be prepaid before the maturity date if paid in full and for an exit fee ranging from 1% to 3% of the loan plus unpaid interest payments equal to 24 months (less the amount of monthly interest payments made by the borrower through the date of prepayment). The following table summarizes the interest and other income recognized during the years ended December 31, 2021, 2020 and 2019 (dollar amounts in thousands):
(1) As of December 31, 2021 and 2020, the Company had no mortgage loans receivable or preferred equity investments. As of December 31, 2021 and 2020, the Company had no loan loss reserve and did not consider any loans receivable investments to be impaired.
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Fair Value Measurements |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. GAAP guidance defines three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and, depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. The Company does not expect that changes in classifications between levels will be frequent. Items Measured at Fair Value on a Recurring Basis The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2020, aggregated by the level in the fair value hierarchy within which those instruments fall (dollars in thousands):
Mezzanine loan receivable: The fair value of the mezzanine loan receivable was estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements. As such, the Company classifies the instrument as Level 3 due to the significant unobservable inputs used in determining market interest rates for investments with similar terms. Future changes in market interest rates could materially impact the estimated discounted cash flows. As of December 31, 2021 and 2020, the Company did not have any loans that were 90 days or more past due. For the year ended December 31, 2021, there were no classification changes in assets and liabilities with Level 3 inputs in the fair value hierarchy. Items Measured at Fair Value on a Non-Recurring Basis Real Estate Investments: The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of its real estate assets may not be recoverable. The Company estimates fair values using Level 3 inputs and uses a combined income and market approach. Specifically, the fair value of the real estate investment is based on current market conditions and considers matters such as the forecasted operating cash flows, lease coverage ratios, capitalization rates, comparable sales data, and, where applicable, contracts or the results of negotiations with purchasers or prospective purchasers. For the year ended December 31, 2021 and 2020, there were no real estate assets deemed to be impaired. For the year ended December 31, 2019, the Company recorded an impairment expense of $16.7 million. See Note 3, Real Estate Investments, Net, for additional information. Items Disclosed at Fair Value Considerable judgment is necessary to estimate the fair value disclosure of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the face values, carrying amounts and fair values of the Company’s financial instruments as of December 31, 2021 and 2020 using Level 2 inputs for the Notes and the 2025 Notes (each as defined in Note 6, Debt, below) is as follows (dollars in thousands):
Cash and cash equivalents, accounts and other receivables, other loans receivable, accounts payable, and accrued liabilities: These balances approximate their fair values due to the short-term nature of these instruments. Senior unsecured notes payable: The fair value of the Notes and the 2025 Notes (as defined in Note 6, Debt, below) were determined using third-party quotes derived from orderly trades. Unsecured revolving credit facility and senior unsecured term loan: The fair values approximate their carrying values as the interest rates are variable and approximate prevailing market interest rates for similar debt arrangements.
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Debt |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | DEBT The following table summarizes the balance of the Company’s indebtedness as of December 31, 2021 and 2020 (in thousands):
Senior Unsecured Notes Payable 2028 Senior Notes. On June 17, 2021, the Company’s wholly owned subsidiary, CTR Partnership, L.P. (the “Operating Partnership”), and its wholly owned subsidiary, CareTrust Capital Corp. (together with the Operating Partnership, the “Issuers”) completed a private offering of $400.0 million aggregate principal amount of 3.875% Senior Notes due 2028 (the “Notes”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act of 1933, as amended. The Notes were issued at par, resulting in gross proceeds of $400.0 million and net proceeds of approximately $393.8 million after deducting underwriting fees and other offering expenses. The Notes mature on June 30, 2028. The Notes accrue interest at a rate of 3.875% per annum payable semiannually in arrears on June 30 and December 30 of each year, commencing on December 30, 2021. The Issuers may redeem some or all of the Notes at any time prior to March 30, 2028 at a price equal to 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest on the Notes, if any, to, but not including, the redemption date, plus a “make-whole” premium. At any time on or after March 30, 2028, the Issuers may redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed plus accrued interest on the Notes, if any, to, but not including, the redemption date. In addition, at any time on or prior to June 30, 2024, up to 40% of the aggregate principal amount of the Notes may be redeemed with the net proceeds of certain equity offerings at a redemption price of 103.875% of the aggregate principal amount of Notes to be redeemed plus accrued and unpaid interest on the Notes, if any, to, but not including, the redemption date. If certain changes of control of the Company occur, the Issuers will be required to make an offer to holders of the Notes to repurchase their Notes at a price of 101% of their principal amount plus accrued and unpaid interest, if any, to, but not including, the repurchase date. The obligations under the Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by the Company and all of CareTrust’s existing and future subsidiaries (other than the Issuers) that guarantee obligations under the Amended Credit Facility (as defined below); provided, however, that such guarantees are subject to automatic release under certain customary circumstances. The indenture governing the Notes contains customary covenants such as limiting the ability of the Company and its restricted subsidiaries to: incur or guarantee additional indebtedness; incur or guarantee secured indebtedness; pay dividends or distributions on, or redeem or repurchase, capital stock; make certain investments or other restricted payments; sell assets; enter into transactions with affiliates; merge or consolidate or sell all or substantially all of their assets; and create restrictions on the ability of the Issuers and their restricted subsidiaries to pay dividends or other amounts to the Issuers. The indenture governing the Notes also requires the Company and its restricted subsidiaries to maintain a specified ratio of unencumbered assets to unsecured indebtedness. These covenants are subject to a number of important and significant limitations, qualifications and exceptions. The indenture governing the Notes also contains customary events of default. As of December 31, 2021, the Company was in compliance with all applicable financial covenants under the indenture governing the Notes. 2025 Senior Notes. On May 10, 2017, the Issuers completed an underwritten public offering of $300.0 million aggregate principal amount of 5.25% Senior Notes due 2025 (the “2025 Notes”). The 2025 Notes were issued at par, resulting in gross proceeds of $300.0 million and net proceeds of approximately $294.0 million after deducting underwriting fees and other offering expenses. The 2025 Notes were scheduled to mature on June 1, 2025 and bore interest at a rate of 5.25% per year. Interest on the 2025 Notes was payable on June 1 and December 1 of each year. On July 1, 2021 (the “Redemption Date”), the Issuers redeemed all $300.0 million aggregate principal amount of the 2025 Notes at a redemption price equal to 102.625% of the principal amount of the 2025 Notes, plus accrued and unpaid interest thereon up to, but not including, the Redemption Date. During the year ended December 31 2021, the Company recorded a loss on extinguishment of debt of $10.8 million in the consolidated income statements, including a prepayment penalty of $7.9 million and a $2.9 million write-off of deferred financing costs associated with the redemption of the 2025 Notes. Unsecured Revolving Credit Facility and Term Loan On February 8, 2019, the Operating Partnership, as the borrower, the Company, as guarantor, CareTrust GP, LLC, and certain of the Operating Partnership’s wholly owned subsidiaries entered into an amended and restated credit and guaranty agreement with KeyBank National Association, as administrative agent, an issuing bank and swingline lender, and the lenders party thereto (the “Amended Credit Agreement”). The Amended Credit Agreement, which amended and restated the Company’s prior credit agreement, provides for: (i) an unsecured revolving credit facility (the “Revolving Facility”) with revolving commitments in an aggregate principal amount of $600.0 million, including a letter of credit subfacility for 10% of the then available revolving commitments and a swingline loan subfacility for 10% of the then available revolving commitments and (ii) an unsecured term loan credit facility (the “Term Loan” and, together with the Revolving Facility, the “Amended Credit Facility”) in an aggregate principal amount of $200.0 million. Borrowing availability under the Revolving Facility is subject to no default or event of default under the Amended Credit Agreement having occurred at the time of borrowing. The proceeds of the Term Loan were used, in part, to repay in full all outstanding borrowings under the Company’s prior credit agreement. Future borrowings under the Amended Credit Facility will be used for working capital purposes, for capital expenditures, to fund acquisitions and for general corporate purposes. The interest rates applicable to loans under the Revolving Facility are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.10% to 0.55% per annum or LIBOR plus a margin ranging from 1.10% to 1.55% per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt). The interest rates applicable to loans under the Term Loan are, at the Operating Partnership’s option, equal to either a base rate plus a margin ranging from 0.50% to 1.20% per annum or LIBOR plus a margin ranging from 1.50% to 2.20% per annum based on the debt to asset value ratio of the Company and its consolidated subsidiaries (subject to decrease at the Operating Partnership’s election if the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt). In addition, the Operating Partnership will pay a facility fee on the revolving commitments under the Revolving Facility ranging from 0.15% to 0.35% per annum, based on the debt to asset value ratio of the Company and its consolidated subsidiaries (unless the Company obtains certain specified investment grade ratings on its senior long-term unsecured debt and the Operating Partnership elects to decrease the applicable margin as described above, in which case the Operating Partnership will pay a facility fee on the revolving commitments ranging from 0.125% to 0.30% per annum based on the credit ratings of the Company’s senior long-term unsecured debt). As of December 31, 2021, the Operating Partnership had $200.0 million of borrowings outstanding under the Term Loan and $80.0 million outstanding under the Revolving Facility. The Revolving Facility has a maturity date of February 8, 2023, and includes, at the sole discretion of the Operating Partnership, two, six-month extension options. The Term Loan has a maturity date of February 8, 2026. The Amended Credit Facility is guaranteed, jointly and severally, by the Company and its wholly owned subsidiaries that are party to the Amended Credit Agreement (other than the Operating Partnership). The Amended Credit Agreement contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, amend organizational documents and pay certain dividends and other restricted payments. The Amended Credit Agreement requires the Company to comply with financial maintenance covenants to be tested quarterly, consisting of a maximum debt to asset value ratio, a minimum fixed charge coverage ratio, a minimum tangible net worth, a maximum cash distributions to operating income ratio, a maximum secured debt to asset value ratio, a maximum secured recourse debt to asset value ratio, a maximum unsecured debt to unencumbered properties asset value ratio, a minimum unsecured interest coverage ratio and a minimum rent coverage ratio. The Amended Credit Agreement also contains certain customary events of default, including the failure to make timely payments under the Amended Credit Facility or other material indebtedness, the failure to satisfy certain covenants (including the financial maintenance covenants), the occurrence of change of control and specified events of bankruptcy and insolvency. As of December 31, 2021, the Company was in compliance with all applicable financial covenants under the Amended Credit Agreement. Schedule of Debt Maturities As of December 31, 2021, the Company’s debt maturities were (dollars in thousands):
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Equity |
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| Equity | EQUITY Common Stock Public Offering of Common Stock—On April 15, 2019, the Company completed an underwritten public offering of 6,641,250 shares of its common stock, par value $0.01 per share, at an initial price to the public of $23.35, including 866,250 shares of common stock sold pursuant to the full exercise of an option to purchase additional shares of common stock granted to the underwriters, resulting in approximately $149.0 million in net proceeds, after deducting the underwriting discount and offering expenses. The Company used the proceeds from the offering to repay a portion of the outstanding borrowings on its Revolving Facility, which had been used to fund a portion of the purchase price of acquisitions in the second quarter of 2019. At-The-Market Offering—On March 10, 2020, the Company entered into a new equity distribution agreement to issue and sell, from time to time, up to $500.0 million in aggregate offering price of its common stock through an “at-the-market” equity offering program (the “ATM Program”). In connection with the entry into the equity distribution agreement and the commencement of the ATM Program, the Company’s “at-the-market” equity offering program pursuant to the Company’s prior equity distribution agreement, dated as of March 4, 2019, was terminated. There was no ATM Program activity (or activity under any predecessor at-the-market equity offering programs) for the year ended December 31, 2020. The following table summarizes ATM Program activity and predecessor at-the-market equity offering program activity for the years ended December 31, 2021 and 2019 (in thousands, except per share amounts):
(1) Total gross proceeds is before $0.3 million and $0.6 million of commissions paid to the sales agents during the year ended December 31, 2021 and December 31, 2019 under the ATM Program and a predecessor at-the-market equity offering program. As of December 31, 2021, the Company had $476.5 million available for future issuances under the ATM Program. Share Repurchase Program — On March 20, 2020, the Company’s Board of Directors authorized a share repurchase program up to $150.0 million of outstanding shares of the Company’s common stock (the “Repurchase Program”). Repurchases under the Repurchase Program, which expires on March 31, 2023, may be made through open market purchases, privately negotiated transactions, structured or derivative transactions, including accelerated share repurchase transactions, or other methods of acquiring shares, in each case subject to market conditions and at such times as shall be permitted by applicable securities laws and determined by management. Repurchases under the Repurchase Program may also be made pursuant to a plan adopted under Rule 10b5-1 promulgated under the Exchange Act. The Company expects to finance any share repurchases under the Repurchase Program using available cash and may also use short-term borrowings under the Revolving Facility. The Company did not repurchase any shares of common stock under the Repurchase Program during the years ended December 31, 2021, and 2020. The Repurchase Program may be modified, discontinued or suspended at any time. Dividends on Common Stock — The following table summarizes the cash dividends per share of common stock declared by the Company’s Board of Directors for 2021, 2020 and 2019 (dollars in thousands, except per share amounts):
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| Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation | STOCK-BASED COMPENSATION All stock-based awards are subject to the terms of the CareTrust REIT, Inc. and CTR Partnership, L.P. Incentive Award Plan (the “Plan”). The Plan provides for the granting of stock-based compensation, including stock options, restricted stock, performance awards, restricted stock units, relative total stockholder return-based stock awards and other incentive awards to officers, employees and directors in connection with their employment with or services provided to the Company. Under the Plan, 5,000,000 shares have been authorized for awards. Under the Plan, restricted stock awards (“RSAs”) vest in equal annual installments beginning on the first anniversary of the grant date over a year period for the RSAs granted in 2021 and a year period for the RSAs granted in 2020 and 2019. RSAs granted to non-employee members of the Board of Directors (“Board Awards”) vest in full on the earlier to occur of the Company’s next Annual Meeting of Stockholders or one year. Performance stock awards (“PSA”) granted are subject to both time and performance based conditions and vest over a -to year period for PSAs granted in 2021 and over a -to- year period for PSAs granted in 2020 and 2019. The amount of such PSAs that will ultimately vest is dependent on the Company’s Normalized Funds from Operations (“NFFO”) per share, as defined by the Compensation Committee, meeting or exceeding a specified per share amount for the applicable vesting period. Relative total shareholder return awards (“TSR Awards”) granted in 2021 are subject to both time and market based conditions and cliff vest after a three-year period. The amount of such market awards that will ultimately vest is dependent on the Company’s total shareholder return (“TSR”) performance relative to a custom TSR peer group consisting of other publicly traded healthcare REITs and will range from 0% to 200% of the TSR Awards initially granted. The RSAs, PSAs, and Board Awards are valued on the date of grant based on the closing price of the Company’s common stock, while the TSR Awards are valued on the date of grant using a Monte Carlo valuation model. The vesting of certain awards may accelerate, as defined in the grant agreement, upon retirement, a change in control or other events. The following table summarizes the status of the restricted stock award and performance award activity for the year ended December 31, 2021:
As of December 31, 2021, the weighted-average remaining vesting period of such awards was 2.0 years. The following table summarizes the Company’s RSA, PSA and Board Award grants during the year ended December 31, 2021 (dollars in thousands, except per share amounts):
(1) In 2021, the Compensation Committee changed the structure of the grants that resulted in two long-term equity incentive awards being granted to the Company’s named executive officers in 2021. The Compensation Committee also granted annual awards for 2022 in December 2021. The following table summarizes the Company’s RSA, PSA and Board Award grants during the years ended December 31, 2020 and 2019 (dollars in thousands, except per share amounts):
The fair value of the TSR Awards is estimated on the date of the grant using a Monte Carlo valuation model. The risk-free rate is based on the U.S. Treasury yield curve in effect at the grant date for the expected performance period. Expected volatility is based on historical volatility for the most recent 2.93 year weighted average period ending on the grant date for the Company and the selected TSR peer group, and is calculated on a daily basis. The following table reflects the weighted-average key assumptions used in this valuation for awards granted during the year ended December 31, 2021:
The total fair value of the TSR Awards granted during the year ended December 31, 2021 was $5.3 million. The following table summarizes the stock-based compensation expense recognized (dollars in thousands):
The Company recorded a cumulative out of period adjustment in the fourth quarter of 2021 related to stock compensation of $3.5 million, of which $2.6 million related to the quarters of 2021 and $0.9 million related to earlier periods. The adjustment was not material to the previously issued financial statements. As of December 31, 2021, there was $11.5 million of unamortized stock-based compensation expense related to the unvested RSAs, PSAs, Board Awards, and TSR Awards.
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Earnings Per Common Share |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Common Share | EARNINGS PER COMMON SHARE The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the years ended December 31, 2021, 2020 and 2019, and reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the years ended December 31, 2021, 2020 and 2019 (amounts in thousands, except per share amounts):
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Commitments and Contingencies |
12 Months Ended |
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Dec. 31, 2021 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES The Company and its subsidiaries are and may become from time to time a party to various claims and lawsuits arising in the ordinary course of business, which are not individually or in the aggregate anticipated to have a material adverse effect on the Company’s results of operations, financial condition or cash flows. Claims and lawsuits may include matters involving general or professional liability asserted against the Company’s tenants, which are the responsibility of the Company’s tenants and for which the Company is entitled to be indemnified by its tenants under the insurance and indemnification provisions in the applicable leases.Capital expenditures for each property leased under the Company’s triple-net leases are generally the responsibility of the tenant, except that, for the facilities leased to subsidiaries of Ensign, under the Ensign Master Leases, and Pennant, the tenant will have an option to require the Company to finance certain capital expenditures up to an aggregate of 20% of its initial investment in such property, subject to a corresponding rent increase at the time of funding. For the Company’s other triple-net master leases, the tenants also have the option to request capital expenditure funding that would generally be subject to a corresponding rent increase at the time of funding, which are subject to tenant compliance with the conditions to the Company’s approval and funding of their requests. As of December 31, 2021, the Company had committed to fund expansions, construction and capital improvements at certain triple-net leased facilities totaling $7.3 million, of which $6.3 million is subject to rent increase at the time of funding. |
Concentration of Risk |
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| Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Concentration of Risk | CONCENTRATION OF RISKConcentrations of credit risk arise when one or more tenants, operators, or obligors related to the Company’s investments are engaged in similar business activities or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. Major operator concentration – The Company has operators from which it derived 10% or more of its rental revenue for the years ended December 31, 2021, 2020 and 2019. The following table sets forth information regarding the Company’s major operators as of December 31, 2021, 2020 and 2019:
(1) The Company’s rental income, exclusive of operating expense reimbursements. (2) See Note 3, Real Estate Investments, Net, for further information regarding Ensign and PMG. Ensign is subject to the registration and reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Ensign’s financial statements, as filed with the SEC, can be found at http://www.sec.gov. The Company has not verified this information through an independent investigation or otherwise. Major geographic concentration – The following table provides information regarding the Company’s concentrations with respect to certain states, from which the Company derived 10% or more of its rental revenue for the year ended December 31, 2021:
(1) The Company’s rental income, exclusive of operating expense reimbursements.
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Subsequent Events |
12 Months Ended |
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Dec. 31, 2021 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | SUBSEQUENT EVENTS The Company evaluates subsequent events in accordance with ASC 855, Subsequent Events. The Company evaluates subsequent events up until the date the consolidated financial statements are issued. Recent Acquisition and Amended Lease Agreement In February 2022, the Company acquired one skilled nursing facility for approximately $8.9 million, which includes estimated capitalized acquisition costs. The facilities were leased to affiliates of Eduro Healthcare, LLC (“Eduro”). In conjunction with the acquisition of the facility, the Company amended its existing triple-net master lease with Eduro to include the skilled nursing facility and extended the initial term of the lease. The Eduro lease, as amended, has a remaining initial term of approximately 12 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the amended lease increased by approximately $0.8 million. The acquisition was funded using cash on hand.
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Schedule III - Real Estate Assets and Accumulated Depreciation |
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| SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule III - Real Estate Assets and Accumulated Depreciation |
(1) The aggregate cost of real estate for federal income tax purposes was $1.9 billion.
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Schedule IV - Mortgage Loans on Real Estate |
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| SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule IV - Mortgage Loans on Real Estate |
(1) Interest is due monthly, and principal is due at the maturity date. (2) The aggregate cost of investments in real estate mortgage loans for federal income tax purposes was $15.0 million. (3) The first mortgage loans on these properties are not held by the Company. Accordingly, the amounts of the prior liens at December 31, 2021 are estimated. Changes in mortgage loans are summarized as follows (in thousands):
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Summary of Significant Accounting Policies (Policies) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation | Basis of Presentation—The accompanying consolidated financial statements of the Company reflect, for all periods presented, the historical financial position, results of operations and cash flows of the Company and its wholly-owned subsidiaries prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All intercompany transactions and account balances within the Company have been eliminated. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lessor Accounting | Lessor Accounting—The Company recognizes lease revenue in accordance with Accounting Standards Codification (“ASC”) 842, Leases. The Company’s lease agreements typically contain annual escalators based on the percentage change in the Consumer Price Index which are accounted for as variable lease payments in the period in which the change occurs. For lease agreements that contain fixed rent escalators, the Company generally recognizes lease revenue on a straight-line basis of accounting. The Company generates revenues primarily by leasing healthcare-related properties to healthcare operators in triple-net lease arrangements, under which the tenant is solely responsible for the costs related to the property. Tenant reimbursements related to property taxes and insurance paid by the lessee directly to a third party on behalf of a lessor are required to be excluded from variable payments and from recognition in the lessor’s income statements. Otherwise, tenant recoveries for taxes and insurance are classified as additional rental revenues recognized by the lessor on a gross basis in its income statements. The Company’s assessment of collectibility of its tenant receivables includes a binary assessment of whether or not substantially all of the amounts due under a tenant’s lease agreement are probable of collection. The Company considers the operator’s performance and anticipated trends, payment history, and the existence and creditworthiness of guarantees, among other factors, in making this determination. For such leases that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term, if applicable. For such leases that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that has been received from the tenant, with any tenant and deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in the collectibility determination. Such write-offs and recoveries are recorded as decreases or increases through rental income on the Company’s consolidated income statements. For the year ended December 31, 2021, the Company did not record any recovery adjustments or write-off adjustments to rental income. For the year ended December 31, 2020, the Company recorded recovery adjustments of $1.0 million and did not recognize any write-off adjustments to rental income. For the year ended December 31, 2019, the Company recorded $11.8 million of write-off adjustments to rental income related to rental income recognized in prior periods. See Note 3, Real Estate Investments, Net for further detail.
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| Estimates and Assumptions | Estimates and Assumptions—The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that the assumptions and estimates used in preparation of the underlying consolidated financial statements are reasonable. Actual results, however, could differ from those estimates and assumptions. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate Acquisition Valuation | Real Estate Acquisition Valuation— In accordance with ASC 805, Business Combinations, the Company’s acquisitions of real estate investments generally do not meet the definition of a business, and are treated as asset acquisitions. The assets acquired and liabilities assumed are measured at their acquisition date relative fair values. Acquisition costs are capitalized as incurred. The Company allocates the acquisition costs to the tangible assets, identifiable intangible assets/liabilities and assumed liabilities on a relative fair value basis. The Company assesses fair value based on available market information, such as capitalization and discount rates, comparable sale transactions and relevant per square foot or unit cost information. A real estate asset’s fair value may be determined utilizing cash flow projections that incorporate such market information. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, as well as market and economic conditions. The fair value of tangible assets of an acquired property is based on the value of the property as if it is vacant. As part of the Company’s real estate acquisitions, the Company may commit to provide contingent payments to a seller or lessee (e.g., an earn-out payable upon the applicable property achieving certain financial metrics). Typically, when the contingent payments are funded, cash rent is increased by the amount funded multiplied by a rate stipulated in the agreement. Generally, if the contingent payment is an earn-out provided to the seller, the payment is capitalized to the property’s basis when earn-out becomes probable and estimable. If the contingent payment is an earn-out provided to the lessee, the payment is recorded as a lease incentive and is amortized as a yield adjustment over the life of the lease.
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| Impairment of Long-Lived Assets | Impairment of Long-Lived Assets—At each reporting period, the Company evaluates its real estate investments to be held and used for potential impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The judgment regarding the existence of impairment indicators, used to determine if an impairment assessment is necessary, is based on factors such as, but not limited to, market conditions, operator performance and legal structure. If indicators of impairment are present, the Company evaluates the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying facilities. The most significant inputs to the undiscounted cash flows include, but are not limited to, facility level financial results, a lease coverage ratio, the intended hold period by the Company, and a terminal capitalization rate. The analysis is also significantly impacted by determining the lowest level of cash flows, which generally would be at the master lease level of cash flows. Provisions for impairment losses related to long-lived assets are recognized when expected future undiscounted cash flows are determined to be less than the carrying values of the assets. The impairment is measured as the excess of carrying value over fair value. All impairments are taken as a period cost at that time, and depreciation is adjusted going forward to reflect the new value assigned to the asset. For the year ended December 31, 2019, the Company recorded an impairment expense of $16.7 million. See Note 3, Real Estate Investments, Net, for additional information. The Company classifies its real estate investments as held for sale when the applicable criteria have been met, which entails a formal plan to sell the properties that is expected to be completed within one year, among other criteria. Upon designation as held for sale, the Company writes down the excess of the carrying value over the estimated fair value less costs to sell, resulting in an impairment of the real estate investments, if necessary, and ceases depreciation. In the event of impairment, the fair value of the real estate investment is based on current market conditions and considers matters such as the forecasted operating cash flows, lease coverage ratios, capitalization rates, comparable sales data, and, where applicable, contracts or the results of negotiations with purchasers or prospective purchasers. The Company’s ability to accurately estimate future cash flows and estimate and allocate fair values impacts the timing and recognition of impairments. While the Company believes its assumptions are reasonable, changes in these assumptions may have a material impact on financial results.
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| Other Real Estate Investments | Other Real Estate Investments—Included in other real estate investments on the Company’s consolidated balance sheets at December 31, 2021 and 2020, is one mezzanine loan receivable for which the Company elected the fair value option. Instruments for which the fair value option has been elected are measured at fair value on a recurring basis with changes in fair value recognized in other income (loss) on the consolidated income statements. Fair value was estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value, market interest rates and other credit enhancements. Interest income is recognized as earned within interest and other income in the consolidated income statements. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prepaid expenses and other assets | Prepaid expenses and other assets—Prepaid expenses and other assets consist of prepaid expenses, deposits, pre-acquisition costs and other loans receivable. During the year ended December 31, 2019, the Company determined that the remaining contractual obligations under one other loan receivable were not collectible and recorded a $1.1 million provision for loan losses in the Company’s consolidated income statements. The Company’s other loans receivable are reflected at amortized cost, net of an allowance for credit loss, on the accompanying consolidated balance sheets. The amortized cost of a loan receivable is the outstanding unpaid principal balance, net of unamortized discounts, costs and fees directly associated with the origination of the loan.
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| Income Taxes | Income Taxes—The Company has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). The Company believes it has been organized and has operated, and the Company intends to continue to operate, in a manner to qualify for taxation as a REIT under the Code. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute to its stockholders at least 90% of the Company’s annual REIT taxable income (computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax to the extent it distributes as qualifying dividends all of its REIT taxable income to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate Depreciation and Amortization | Real Estate Depreciation and Amortization—Real estate costs related to the acquisition and improvement of properties are capitalized and amortized over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows:
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| Cash and Cash Equivalents | Cash and Cash Equivalents—Cash and cash equivalents consist of bank term deposits and money market funds with original maturities of three months or less at time of purchase and therefore approximate fair value. The fair value of these investments is determined based on “Level 1” inputs, which consist of unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets. The Company places its cash and short-term investments with high credit quality financial institutions.The Company’s cash and cash equivalents balance periodically exceeds federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred Financing Costs | Deferred Financing Costs—External costs incurred from placement of the Company’s debt are capitalized and amortized on a straight-line basis over the terms of the related borrowings, which approximates the effective interest method. For senior unsecured notes payable and the senior unsecured term loan, deferred financing costs are netted against the outstanding debt amounts on the balance sheet. For the unsecured revolving credit facility, deferred financing costs are included in assets on the Company’s balance sheet. Amortization of deferred financing costs is classified as interest expense in the consolidated income statements. Accumulated amortization of deferred financing costs was $8.0 million and $9.0 million at December 31, 2021 and 2020, respectively. When financings are terminated, unamortized deferred financing costs, as well as charges incurred for the termination, are expensed at the time the termination is made. Gains and losses from the extinguishment of debt are presented within other income (loss) in the Company’s consolidated income statements. During the year ended December 31, 2021, the Company recorded a loss on extinguishment of debt of $10.8 million. See Note 6, Debt, for further detail.
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| Stock-Based Compensation | Stock-Based Compensation—The Company accounts for share-based payment awards in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). ASC 718 requires all entities to apply a fair value-based measurement method in accounting for share-based payment transactions with directors, officers and employees. The Company measures and recognizes compensation expense for all share-based payment awards made to directors, officers and employees based on the grant date fair value, amortized over the requisite service period of the award. Compensation expense for awards with performance-based vesting conditions is recognized based upon the probability that the performance target will be met. Compensation expense for awards with market-based vesting conditions is recognized based upon the estimated number of awards to be earned after considering the Company’s expectation of future performance and is recognized provided that the requisite service is rendered, regardless of when, if ever, the market condition is satisfied. Forfeitures of stock-based awards are recognized as they occur. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Concentration of Credit Risk | Concentration of Credit Risk—The Company is subject to concentrations of credit risk consisting primarily of operating leases on its owned properties. See Note 11, Concentration of Risk, for a discussion of major operator concentration. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Disclosures | Segment Disclosures —The Company is subject to disclosures about segments of an enterprise and related information in accordance with ASC Topic 280, Segment Reporting. The Company has one reportable segment consisting of investments in healthcare-related real estate assets. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share | Earnings Per Share—The Company calculates earnings per share (“EPS”) in accordance with ASC 260, Earnings Per Share. Basic EPS is computed by dividing net income applicable to common stock by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution for all potentially-dilutive securities. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Beds, Units, Occupancy and Other Measures | Beds, Units, Occupancy and Other Measures—Beds, units, occupancy and other non-financial measures used to describe real estate investments included in these Notes to the consolidated financial statements are presented on an unaudited basis and are not subject to audit by the independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Recent Accounting Pronouncements | Recent Accounting Pronouncements— In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), that provides optional relief to applying reference rate reform to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”). For U.S. Dollar LIBOR, the overnight, one-month, three-month, six-month and one-year LIBOR rates will be discontinued in June 2023, while other U.S. Dollar LIBOR rates were discontinued at the end of 2021. The amendments in this update are effective immediately and may be applied through December 31, 2022. The Company does not expect the adoption of the standard to have a material impact on the Company’s consolidated financial statements. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. GAAP guidance defines three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and, depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. The Company does not expect that changes in classifications between levels will be frequent.
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Summary of Significant Accounting Policies (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Estimated Useful Lives of Assets | The Company anticipates the estimated useful lives of its assets by class to be generally as follows:
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Real Estate Investments, Net (Tables) |
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| Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Investment in Owned Properties | The following table summarizes the Company’s investment in owned properties at December 31, 2021 and 2020 (dollars in thousands):
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| Schedule of Total Future Contractual Minimum Rental Income | As of December 31, 2021, the Company’s total future contractual minimum rental income for all of its tenants, excluding operating expense reimbursements, was (dollars in thousands):
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| Schedule of Tenant Purchase Options | Certain of the Company’s operators hold purchase options allowing them to acquire properties they currently lease from the Company. A summary of these purchase options is presented below (dollars in thousands):
(1) Option type includes: A - Fixed base price plus a specified share on any appreciation. B - Fixed base price. C - Fixed capitalization rate on lease revenue. (2) Based on annualized cash revenue for contracts in place at December 31, 2021. (3) Option window is open for six months. (4) Purchase option reflects two option types.
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| Schedule of Rental Income | The following table summarizes components of the Company’s rental income (dollars in thousands):
(1)Includes initial cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. (2)During the year ended December 31, 2019, and in accordance with ASC 842, the Company evaluated the collectibility of lease payments through maturity and determined that it was not probable that the Company would collect substantially all of the contractual obligations from five operators through maturity. As such, the Company reversed $7.8 million of contractual rent, $3.5 million of straight-line rent and $0.5 million of property tax reimbursements during the year ended December 31, 2019. (3)During the year ended December 31, 2020, the Company recovered $1.0 million in rental income related to affiliates of Metron Integrated Health Systems (“Metron”) that was previously written off. In addition, in connection with the agreement to terminate its lease agreements with Metron and to sell the facilities to a third-party, the Company received certain lease termination payments from Metron. During the years ended December 31, 2021 and 2020, the Company recognized approximately $0.1 million and $1.2 million in lease termination revenue, respectively.
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| Schedule of Real Estate Acquisitions | The following table summarizes the Company’s acquisitions for the years ended December 31, 2021, 2020 and 2019 (dollar amounts in thousands):
(1) Purchase price includes capitalized acquisition costs. (2) Initial annual cash rent excludes ground lease income. (3) The number of beds/units includes operating beds at acquisition date. (4) Initial annual cash rent represents initial cash rent for the first twelve months excluding any impact of straight-line rent. (5) Initial annual cash rent represents the first twelve months of rent upon commencement of the Company’s long-term net leases, which occurred during the three months ended June 30, 2021, upon the tenant’s receipt of licensing approval and increases to $9.4 million in the second year with CPI-based annual escalators thereafter. (6) Initial annual cash rent is zero until transfer of operations upon receipt of licensing approval.
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Other Real Estate Investments (Tables) |
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| Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Loans Receivable and Other Investments | As of December 31, 2021 and 2020, the Company’s loans receivable and other investments consisted of the following (dollar amounts in thousands):
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| Schedule of Interest and Other Income | The following table summarizes the interest and other income recognized during the years ended December 31, 2021, 2020 and 2019 (dollar amounts in thousands):
(1) As of December 31, 2021 and 2020, the Company had no mortgage loans receivable or preferred equity investments.
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Fair Value Measurements (Tables) |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2020, aggregated by the level in the fair value hierarchy within which those instruments fall (dollars in thousands):
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| Summary of Fair Value and Carrying Value of Financial Instruments | A summary of the face values, carrying amounts and fair values of the Company’s financial instruments as of December 31, 2021 and 2020 using Level 2 inputs for the Notes and the 2025 Notes (each as defined in Note 6, Debt, below) is as follows (dollars in thousands):
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Debt (Tables) |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Debt Instruments | The following table summarizes the balance of the Company’s indebtedness as of December 31, 2021 and 2020 (in thousands):
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| Schedule of Debt Maturities | As of December 31, 2021, the Company’s debt maturities were (dollars in thousands):
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Equity (Tables) |
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| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of the At-The-Market Equity Offering Program | The following table summarizes ATM Program activity and predecessor at-the-market equity offering program activity for the years ended December 31, 2021 and 2019 (in thousands, except per share amounts):
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| Summary of Dividends on Common Stock | The following table summarizes the cash dividends per share of common stock declared by the Company’s Board of Directors for 2021, 2020 and 2019 (dollars in thousands, except per share amounts):
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Restricted Stock Award and Performance Award Activity | The following table summarizes the status of the restricted stock award and performance award activity for the year ended December 31, 2021:
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| Summary of Award Grants | The following table summarizes the Company’s RSA, PSA and Board Award grants during the year ended December 31, 2021 (dollars in thousands, except per share amounts):
(1) In 2021, the Compensation Committee changed the structure of the grants that resulted in two long-term equity incentive awards being granted to the Company’s named executive officers in 2021. The Compensation Committee also granted annual awards for 2022 in December 2021. The following table summarizes the Company’s RSA, PSA and Board Award grants during the years ended December 31, 2020 and 2019 (dollars in thousands, except per share amounts):
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| Schedule of Key Valuation Assumptions Used in Valuation | The fair value of the TSR Awards is estimated on the date of the grant using a Monte Carlo valuation model. The risk-free rate is based on the U.S. Treasury yield curve in effect at the grant date for the expected performance period. Expected volatility is based on historical volatility for the most recent 2.93 year weighted average period ending on the grant date for the Company and the selected TSR peer group, and is calculated on a daily basis. The following table reflects the weighted-average key assumptions used in this valuation for awards granted during the year ended December 31, 2021:
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| Schedule of Stock-Based Compensation Expense | The following table summarizes the stock-based compensation expense recognized (dollars in thousands):
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Earnings Per Common Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Weighted-Average Common Shares Outstanding Used in Calculation of Basic EPS to Diluted EPS | The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the years ended December 31, 2021, 2020 and 2019, and reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for the years ended December 31, 2021, 2020 and 2019 (amounts in thousands, except per share amounts):
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Concentration of Risk (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedules of Concentration of Risk | Major operator concentration – The Company has operators from which it derived 10% or more of its rental revenue for the years ended December 31, 2021, 2020 and 2019. The following table sets forth information regarding the Company’s major operators as of December 31, 2021, 2020 and 2019:
(1) The Company’s rental income, exclusive of operating expense reimbursements. (2) See Note 3, Real Estate Investments, Net, for further information regarding Ensign and PMG. Ensign is subject to the registration and reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Ensign’s financial statements, as filed with the SEC, can be found at http://www.sec.gov. The Company has not verified this information through an independent investigation or otherwise. Major geographic concentration – The following table provides information regarding the Company’s concentrations with respect to certain states, from which the Company derived 10% or more of its rental revenue for the year ended December 31, 2021:
(1) The Company’s rental income, exclusive of operating expense reimbursements.
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Organization (Details) $ in Thousands |
12 Months Ended | |
|---|---|---|
|
Dec. 31, 2021
USD ($)
facility
state
bed
|
Dec. 31, 2020
USD ($)
|
|
| Real Estate Properties [Line Items] | ||
| Number of facilities | 227 | |
| Number of states with properties | state | 29 | |
| Other real estate investments | $ | $ 15,155 | $ 15,000 |
| Skilled nursing, assisted living and independent living facilities | ||
| Real Estate Properties [Line Items] | ||
| Number of facilities | 227 | |
| Number of operational beds and units in facilities | bed | 23,650 |
Summary of Significant Accounting Policies - Narrative (Details) |
12 Months Ended | ||
|---|---|---|---|
|
Dec. 31, 2021
USD ($)
segment
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
| Accounting Policies [Abstract] | |||
| Recovery of previously reserved rent | $ 0 | $ 1,047,000 | $ 0 |
| Adjustment for collectibility of rental income | 0 | 0 | 11,774,000 |
| Impairment of real estate investments | 0 | 0 | 16,692,000 |
| Accumulated amortization of deferred financing costs | 8,000,000 | 9,000,000 | |
| Loss on extinguishment of debt | (10,827,000) | 0 | 0 |
| Stock-based compensation expense | $ 10,832,000 | 3,790,000 | 4,104,000 |
| Number of reportable segments | segment | 1 | ||
| Accounting Policies [Line Items] | |||
| Provision for loan losses | $ 0 | $ 0 | 1,076,000 |
| Bridge loan | |||
| Accounting Policies [Line Items] | |||
| Provision for loan losses | $ 1,100,000 | ||
Summary of Significant Accounting Policies - Estimated Useful Lives of Assets (Details) |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Building | Minimum | |
| Property, Plant and Equipment [Line Items] | |
| Estimated useful life (in years) | 25 years |
| Building | Maximum | |
| Property, Plant and Equipment [Line Items] | |
| Estimated useful life (in years) | 40 years |
| Building improvements | Minimum | |
| Property, Plant and Equipment [Line Items] | |
| Estimated useful life (in years) | 10 years |
| Building improvements | Maximum | |
| Property, Plant and Equipment [Line Items] | |
| Estimated useful life (in years) | 25 years |
| Integral equipment, furniture and fixtures | |
| Property, Plant and Equipment [Line Items] | |
| Estimated useful life (in years) | 5 years |
Real Estate Investments, Net - Investment in Owned Properties (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Real Estate [Abstract] | ||
| Land | $ 251,787 | $ 205,356 |
| Buildings and improvements | 1,622,019 | 1,477,849 |
| Integral equipment, furniture and fixtures | 104,722 | 97,836 |
| Identified intangible assets | 1,257 | 2,352 |
| Real estate investments | 1,979,785 | 1,783,393 |
| Accumulated depreciation and amortization | (389,814) | (335,294) |
| Real estate investments, net | $ 1,589,971 | $ 1,448,099 |
Real Estate Investments, Net - Future Contractual Minimum Rental Income (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
|---|---|
| Future Contractual Minimum Rental Income | |
| 2022 | $ 192,897 |
| 2023 | 192,693 |
| 2024 | 191,347 |
| 2025 | 191,319 |
| 2026 | 191,424 |
| Thereafter | 1,138,179 |
| Total | $ 2,097,859 |
Real Estate Investments, Net - Rental Income (Details) |
12 Months Ended | ||
|---|---|---|---|
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
operator
|
|
| Lessor, Lease, Description [Line Items] | |||
| Contractual rent due | $ 190,100,000 | $ 171,309,000 | $ 166,056,000 |
| Straight-line rent | 32,000 | 77,000 | 1,385,000 |
| Adjustment for collectibility | 0 | 0 | (11,774,000) |
| Recovery of previously reserved rent | 0 | 1,047,000 | 0 |
| Lease termination revenue | 63,000 | 1,179,000 | 0 |
| Total | 190,195,000 | 173,612,000 | $ 155,667,000 |
| Number of operators for which collectability not probable | operator | 5 | ||
| Contractual rent | |||
| Lessor, Lease, Description [Line Items] | |||
| Adjustment for collectibility | $ (7,800,000) | ||
| Straight-line rent | |||
| Lessor, Lease, Description [Line Items] | |||
| Adjustment for collectibility | (3,500,000) | ||
| Property taxes | |||
| Lessor, Lease, Description [Line Items] | |||
| Adjustment for collectibility | $ (500,000) | ||
| Metron | |||
| Lessor, Lease, Description [Line Items] | |||
| Recovery of previously reserved rent | 1,000,000 | ||
| Lease termination revenue | $ 100,000 | $ 1,200,000 | |
Other Real Estate Investments - Loans Receivable and Other Investments (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Real Estate Properties [Line Items] | ||
| Principal Amount | $ 18,154 | |
| Book Value | 18,316 | $ 17,308 |
| Mezzanine loan receivable | ||
| Real Estate Properties [Line Items] | ||
| Principal Amount | 15,000 | |
| Book Value | $ 15,155 | 15,000 |
| Weighted Average Contractual Interest Rate | 12.00% | |
| Other | ||
| Real Estate Properties [Line Items] | ||
| Principal Amount | $ 3,154 | |
| Book Value | $ 3,161 | $ 2,308 |
| Weighted Average Contractual Interest Rate | 8.00% |
Other Real Estate Investments - Loans Receivable Narrative (Details) $ in Thousands |
1 Months Ended | |
|---|---|---|
|
Nov. 30, 2020
USD ($)
facility
|
Dec. 31, 2021
USD ($)
|
|
| Real Estate Properties [Line Items] | ||
| Loan principal | $ 18,154 | |
| Next VA Star Realty Holdings LLC | Mezzanine loan receivable | ||
| Real Estate Properties [Line Items] | ||
| Number of facilities in agreement secured by membership interests | facility | 9 | |
| Loan principal | $ 15,000 | |
| Loan receivable interest rate (percent) | 12.00% | |
| Period of unpaid interest payments due upon prepayment | 24 months | |
| Next VA Star Realty Holdings LLC | Mezzanine loan receivable | Minimum | ||
| Real Estate Properties [Line Items] | ||
| Loans receivable exit fee (percent) | 1.00% | |
| Next VA Star Realty Holdings LLC | Mezzanine loan receivable | Maximum | ||
| Real Estate Properties [Line Items] | ||
| Loans receivable exit fee (percent) | 3.00% |
Other Real Estate Investments - Interest and Other Income (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
| Real Estate Properties [Line Items] | |||
| Interest and other income | $ 2,156 | $ 2,643 | $ 4,345 |
| Mezzanine loan receivable | |||
| Real Estate Properties [Line Items] | |||
| Interest and other income | 1,825 | 305 | 0 |
| Mortgage loans receivable | |||
| Real Estate Properties [Line Items] | |||
| Interest and other income | 0 | 2,044 | 2,838 |
| Preferred equity investments | |||
| Real Estate Properties [Line Items] | |||
| Interest and other income | 0 | 24 | 1,343 |
| Other | |||
| Real Estate Properties [Line Items] | |||
| Interest and other income | $ 331 | $ 270 | $ 164 |
Fair Value Measurements - Assets and Liabilities at Fair Value on Recurring Basis (Details) - Recurring - Mezzanine loan receivable - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Assets: | ||
| Mezzanine loan receivable | $ 15,155 | $ 15,000 |
| Level 1 | ||
| Assets: | ||
| Mezzanine loan receivable | 0 | 0 |
| Level 2 | ||
| Assets: | ||
| Mezzanine loan receivable | 0 | 0 |
| Level 3 | ||
| Assets: | ||
| Mezzanine loan receivable | $ 15,155 | $ 15,000 |
Fair Value Measurements - Narrative (Details) - USD ($) |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
| Fair Value Disclosures [Abstract] | |||
| Impairment of real estate investments | $ 0 | $ 0 | $ 16,692,000 |
Fair Value Measurements - Fair Value and Carrying Value of Financial Instruments (Details) - Notes payable - USD ($) $ in Thousands |
Dec. 31, 2021 |
Jun. 17, 2021 |
Dec. 31, 2020 |
May 10, 2017 |
|---|---|---|---|---|
| 2028 Senior unsecured notes payable | ||||
| Financial liabilities: | ||||
| Senior unsecured notes payable, face value | $ 400,000 | $ 400,000 | $ 0 | |
| 2025 Senior unsecured notes payable | ||||
| Financial liabilities: | ||||
| Senior unsecured notes payable, face value | 0 | 300,000 | $ 300,000 | |
| Carrying Amount | 2028 Senior unsecured notes payable | Level 2 | ||||
| Financial liabilities: | ||||
| Senior unsecured notes payable, fair value | 394,262 | 0 | ||
| Carrying Amount | 2025 Senior unsecured notes payable | Level 2 | ||||
| Financial liabilities: | ||||
| Senior unsecured notes payable, fair value | 0 | 296,669 | ||
| Fair Value | 2028 Senior unsecured notes payable | Level 2 | ||||
| Financial liabilities: | ||||
| Senior unsecured notes payable, fair value | 410,500 | 0 | ||
| Fair Value | 2025 Senior unsecured notes payable | Level 2 | ||||
| Financial liabilities: | ||||
| Senior unsecured notes payable, fair value | $ 0 | $ 311,430 |
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Debt Instrument [Line Items] | ||
| Principal Amount | $ 680,000 | $ 550,000 |
| Deferred Loan Fees | (6,602) | (4,406) |
| Carrying Amount | 673,398 | 545,594 |
| Unsecured revolving credit facility | ||
| Debt Instrument [Line Items] | ||
| Principal Amount | 80,000 | 50,000 |
| Deferred Loan Fees | 0 | 0 |
| Carrying Amount | 80,000 | 50,000 |
| Notes payable | 2028 Senior unsecured notes payable | ||
| Debt Instrument [Line Items] | ||
| Principal Amount | 400,000 | 0 |
| Deferred Loan Fees | (5,738) | 0 |
| Carrying Amount | 394,262 | 0 |
| Notes payable | 2025 Senior unsecured notes payable | ||
| Debt Instrument [Line Items] | ||
| Principal Amount | 0 | 300,000 |
| Deferred Loan Fees | 0 | (3,331) |
| Carrying Amount | 0 | 296,669 |
| Term loan | Senior unsecured term loan | ||
| Debt Instrument [Line Items] | ||
| Principal Amount | 200,000 | 200,000 |
| Deferred Loan Fees | (864) | (1,075) |
| Carrying Amount | $ 199,136 | $ 198,925 |
Debt - Schedule of Debt Maturities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Debt, Fiscal Year Maturity [Abstract] | ||
| 2022 | $ 0 | |
| 2023 | 80,000 | |
| 2024 | 0 | |
| 2025 | 0 | |
| 2026 | 200,000 | |
| Thereafter | 400,000 | |
| Total debt | $ 680,000 | $ 550,000 |
Equity - Narrative (Details) - USD ($) |
12 Months Ended | |||||
|---|---|---|---|---|---|---|
Apr. 15, 2019 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Mar. 20, 2020 |
Mar. 10, 2020 |
|
| Class of Stock [Line Items] | ||||||
| Common stock, par value (usd per share) | $ 0.01 | $ 0.01 | ||||
| Gross proceeds | $ 22,946,000 | $ 195,924,000 | ||||
| Share repurchase program authorization | $ 150,000,000 | |||||
| Shares repurchased (shares) | 0 | 0 | ||||
| Underwritten public offering | ||||||
| Class of Stock [Line Items] | ||||||
| Issuance of common stock, net (shares) | 6,641,250 | |||||
| Common stock, par value (usd per share) | $ 0.01 | |||||
| Share price to the public (usd per share) | $ 23.35 | |||||
| Gross proceeds | $ 149,000,000 | |||||
| Underwriter option | ||||||
| Class of Stock [Line Items] | ||||||
| Issuance of common stock, net (shares) | 866,250 | |||||
| ATM Program | ||||||
| Class of Stock [Line Items] | ||||||
| Issuance of common stock, net (shares) | 0 | |||||
| Remaining offering amount available | $ 476,500,000 | |||||
| Maximum | ATM Program | ||||||
| Class of Stock [Line Items] | ||||||
| Authorized aggregate offering price of common stock | $ 500,000,000 | |||||
Equity - At-The-Market Offering (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
| ATM Program Activity | |||
| Gross proceeds | $ 22,946 | $ 195,924 | |
| Commissions paid on stock issuance | $ 404 | ||
| Prior ATM Program | |||
| ATM Program Activity | |||
| Number of shares | 990,000 | 2,459,000 | |
| Average sales price per share (usd per share) | $ 23.74 | $ 19.48 | |
| Gross proceeds | $ 23,505 | $ 47,893 | |
| Commissions paid on stock issuance | $ 300 | $ 600 | |
Equity - Dividends on Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
| Equity [Abstract] | |||||||||||||||
| Dividends declared (usd per share) | $ 0.265 | $ 0.265 | $ 0.265 | $ 0.265 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.225 | $ 0.225 | $ 0.225 | $ 0.225 | $ 1.06 | $ 1.00 | $ 0.90 |
| Dividends payment date | Jan. 14, 2022 | Oct. 15, 2021 | Jul. 15, 2021 | Apr. 15, 2021 | Jan. 15, 2021 | Oct. 15, 2020 | Jul. 15, 2020 | Apr. 15, 2020 | Jan. 15, 2020 | Oct. 15, 2019 | Jul. 15, 2019 | Apr. 15, 2019 | |||
| Dividends payable as of record date | $ 25,755 | $ 25,714 | $ 25,714 | $ 25,633 | $ 23,933 | $ 23,934 | $ 23,931 | $ 23,931 | $ 21,500 | $ 21,500 | $ 21,508 | $ 20,011 | $ 25,755 | $ 23,933 | $ 21,500 |
| Dividends record date | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | |||
Stock-Based Compensation - Restricted Stock and Performance Awards Activity (Details) - $ / shares |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
| RSAs and PSAs | |||
| Shares | |||
| Unvested, beginning balance (shares) | 517,686 | ||
| Vested (shares) | (147,646) | ||
| Forfeited (shares) | (2,250) | ||
| Unvested, ending balance (shares) | 891,333 | 517,686 | |
| Weighted Average Share Price | |||
| Unvested, beginning balance (usd per share) | $ 18.71 | ||
| Vested (usd per share) | 17.43 | ||
| Forfeited (usd per share) | 22.38 | ||
| Unvested, ending balance (usd per share) | $ 20.91 | $ 18.71 | |
| RSAs | |||
| Shares | |||
| Granted (shares) | 394,863 | 134,790 | 91,440 |
| Vested (shares) | (89,921) | ||
| Weighted Average Share Price | |||
| Granted (usd per share) | $ 21.92 | $ 19.68 | $ 22.00 |
| RSAs | Board Awards | |||
| Shares | |||
| Granted (shares) | 20,266 | 27,611 | 17,749 |
| Vested (shares) | (27,611) | ||
| Weighted Average Share Price | |||
| Granted (usd per share) | $ 24.18 | $ 16.48 | $ 24.23 |
| PSAs | |||
| Shares | |||
| Granted (shares) | 108,414 | 107,790 | 71,440 |
| Vested (shares) | (30,114) | ||
| Weighted Average Share Price | |||
| Granted (usd per share) | $ 22.48 | $ 19.06 | $ 22.00 |
Stock-Based Compensation - Grants During the Period (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
| RSAs | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Granted (shares) | 394,863 | 134,790 | 91,440 |
| Granted (usd per share) | $ 21.92 | $ 19.68 | $ 22.00 |
| Grant Date Fair Value | $ 8,654 | $ 2,653 | $ 2,012 |
| Vested (shares) | 89,921 | ||
| Vest Date Fair Value | $ 2,105 | ||
| RSAs | Board Awards | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Granted (shares) | 20,266 | 27,611 | 17,749 |
| Granted (usd per share) | $ 24.18 | $ 16.48 | $ 24.23 |
| Grant Date Fair Value | $ 490 | $ 455 | $ 430 |
| Vested (shares) | 27,611 | ||
| Vest Date Fair Value | $ 668 | ||
| PSAs | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Granted (shares) | 108,414 | 107,790 | 71,440 |
| Granted (usd per share) | $ 22.48 | $ 19.06 | $ 22.00 |
| Grant Date Fair Value | $ 2,437 | $ 2,054 | $ 1,572 |
| Vested (shares) | 30,114 | ||
| Vest Date Fair Value | $ 707 | ||
Stock-Based Compensation - Key Assumptions Used in Valuation (Details) - TSR Awards |
12 Months Ended |
|---|---|
|
Dec. 31, 2021
$ / shares
| |
| Key Assumptions Used in Valuation | |
| Risk-free interest rate | 0.60% |
| Expected stock price volatility | 52.42% |
| Expected service period | 2 years 11 months 4 days |
| Expected dividend yield (assuming full reinvestment) | 0.00% |
| Fair value per share at date of grant (usd per share) | $ 29.10 |
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
| Share-based Payment Arrangement [Abstract] | |||
| Stock-based compensation expense | $ 10,832 | $ 3,790 | $ 4,104 |
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
| Numerator: | |||
| Net income | $ 71,982 | $ 80,867 | $ 46,359 |
| Less: Net income allocated to participating securities | (507) | (298) | (296) |
| Numerator for basic earnings available to common stockholders | 71,475 | 80,569 | 46,063 |
| Numerator for diluted earnings available to common stockholders | $ 71,475 | $ 80,569 | $ 46,063 |
| Denominator: | |||
| Weighted-average basic common shares outstanding (shares) | 96,017,000 | 95,200,000 | 93,088,000 |
| Dilutive performance stock awards (shares) | 75,000 | 7,000 | 10,000 |
| Weighted-average diluted common shares outstanding (shares) | 96,092,000 | 95,207,000 | 93,098,000 |
| Earnings per common share, basic (usd per share) | $ 0.74 | $ 0.85 | $ 0.49 |
| Earnings per common share, diluted (usd per share) | $ 0.74 | $ 0.85 | $ 0.49 |
| Antidilutive unvested restricted stock awards and performance awards excluded from the computation | 591,000 | 296,000 | 292,000 |
Commitments and Contingencies (Details) $ in Millions |
Dec. 31, 2021
USD ($)
|
|---|---|
| Ensign and Pennant | |
| Other Commitments [Line Items] | |
| Aggregate required financing of capital expenditures as percentage of initial investment in property (percent) | 20.00% |
| Expansion, construction and capital improvements at triple-net leased facilities | |
| Other Commitments [Line Items] | |
| Funding commitment | $ 7.3 |
| Portion of funding commitments subject to rent increase at time of funding | $ 6.3 |
Subsequent Events (Details) $ in Thousands |
1 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|
|
Aug. 01, 2021
facility
|
Feb. 16, 2022
USD ($)
facility
extension_options
|
Dec. 31, 2021
USD ($)
property
|
Dec. 31, 2020
USD ($)
property
|
Dec. 31, 2019
USD ($)
property
|
|
| Subsequent Event [Line Items] | |||||
| Number of properties | property | 10 | 8 | 22 | ||
| Aggregate purchase price | $ 196,076 | $ 89,817 | $ 326,700 | ||
| Skilled nursing facility | |||||
| Subsequent Event [Line Items] | |||||
| Number of properties | facility | 2 | ||||
| Subsequent event | Skilled nursing facility | |||||
| Subsequent Event [Line Items] | |||||
| Number of properties | facility | 1 | ||||
| Aggregate purchase price | $ 8,900 | ||||
| Subsequent event | Eduro lease | |||||
| Subsequent Event [Line Items] | |||||
| Lease term (in years) | 12 years | ||||
| Number of renewal options | extension_options | 2 | ||||
| Lease renewal term (in years) | 5 years | ||||
| Annual cash rent increase under amended lease | $ 800 | ||||
Schedule III - Real Estate Assets and Accumulated Depreciation - Rollforward (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
| Real estate: | |||
| Balance at the beginning of the period | $ 1,683,205 | $ 1,605,081 | $ 1,368,157 |
| Acquisitions | 190,133 | 84,630 | 318,070 |
| Improvements | 4,521 | 7,223 | 3,103 |
| Impairment | 0 | 0 | (21,465) |
| Sales of real estate | (4,053) | (13,729) | (62,784) |
| Balance at the end of the period | 1,873,806 | 1,683,205 | 1,605,081 |
| Accumulated depreciation: | |||
| Balance at the beginning of the period | (259,803) | (220,359) | (185,926) |
| Depreciation expense | (45,498) | (41,914) | (40,373) |
| Impairment | 0 | 0 | 5,220 |
| Sales of real estate | 516 | 2,470 | 720 |
| Balance at the end of the period | $ (304,785) | $ (259,803) | $ (220,359) |
Schedule IV - Mortgage Loans on Real Estate - Mortgage Loan (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
| SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||||
| Prior Liens | $ 112,278 | |||
| Principal Balance | 15,000 | |||
| Book Value | 15,155 | $ 15,000 | $ 29,500 | $ 12,375 |
| Aggregate cost of investments in real estate mortgage loans for federal income tax purposes | $ 15,000 | |||
| Skilled nursing facility | Next Healthcare Inc - Virginia | ||||
| SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | ||||
| Contractual Interest Rate | 12.00% | |||
| Prior Liens | $ 112,278 | |||
| Principal Balance | 15,000 | |||
| Book Value | $ 15,155 |
Schedule IV - Mortgage Loan on Real Estate - Mortgage Loan Rollforward (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
| SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward] | |||
| Mortgage loans, beginning of period | $ 15,000 | $ 29,500 | $ 12,375 |
| Additions during period: | |||
| New mortgage loans | 0 | 61,258 | 40,889 |
| Interest income added to principal | 155 | 0 | 0 |
| Deductions during period: | |||
| Paydowns/Repayments | 0 | (75,758) | (23,764) |
| Mortgage loans, end of period | $ 15,155 | $ 15,000 | $ 29,500 |