CareTrust REIT Inc

Previous wording

Words such as “anticipate(s),” “expect(s),” “intend(s),” “plan(s),” “believe(s),” “may,” “will,” “would,” “could,” “should,” “seek(s)” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to: (i) the ability and willingness of our tenants to meet and/or perform their obligations under the triple-net leases we have entered into with them, including, without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (ii) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect; (iii) the impact of healthcare reform legislation, including minimum staffing level requirements, on the operating results and financial conditions of our tenants; (iv) the ability of our tenants to comply with applicable laws, rules and regulations in the operation of the properties we lease to them; (v) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant; (vi) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities, and the ability to acquire and lease the respective properties to such tenants on favorable terms; (vii) the ability to generate sufficient cash flows to service our outstanding indebtedness; (viii) access to debt and equity capital markets; (ix) fluctuating interest rates; (x) the impact of public health crises, including significant COVID-19 outbreaks as well as other pandemics or epidemics; (xi) the ability to retain our key management personnel; (xii) the ability to maintain our status as a real estate investment trust (“REIT”); (xiii) changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs; (xiv) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xv) any additi…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Words such as “anticipate(s),” “expect(s),” “intend(s),” “plan(s),” “believe(s),” “may,” “will,” “would,” “could,” “should,” “seek(s)” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to: (i) the ability and willingness of our tenants to meet and/or perform their obligations under the triple-net leases we have entered into with them, including, without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (ii) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect; (iii) the impact of healthcare reform legislation, including minimum staffing level requirements, on the operating results and financial conditions of our tenants; (iv) the ability of our tenants to comply with applicable laws, rules and regulations in the operation of the properties we lease to them; (v) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant; (vi) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities, and the ability to acquire and lease the respective properties to such tenants on favorable terms; (vii) the ability to generate sufficient cash flows to service our outstanding indebtedness; (viii) access to debt and equity capital markets; (ix) fluctuating interest rates; (x) the impact of public health crises, including significant COVID-19 outbreaks as well as other pandemics or epidemics; (xi) the ability to retain our key management personnel; (xii) the ability to maintain our status as a real estate investment trust (“REIT”); (xiii) changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs; (xiv) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xv) any additi…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

CareTrust REIT is a self-administered, publicly-traded REIT engaged in the ownership, acquisition, financing, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. As of June 30, 2024, we owned, directly or indirectly through joint ventures, and leased to independent operators 235 skilled nursing facilities (“SNFs”), multi-service campuses, assisted living facilities (“ALFs”) and independent living facilities (“ILFs”) consisting of 25,058 operational beds and units located in 30 states with the highest concentration of properties by rental income located in California and Texas. As of June 30, 2024, we also had other real estate related investments consisting of two preferred equity investments, 11 real estate secured loans receivable and four mezzanine loans receivable with a carrying value of $433.5 million.

Current wording

CareTrust REIT is a self-administered, publicly-traded REIT engaged in the ownership, acquisition, financing, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. As of September 30, 2024, we owned, directly or indirectly through joint ventures, and leased to independent operators 226 skilled nursing facilities (“SNFs”), multi-service campuses, assisted living facilities (“ALFs”) and independent living facilities (“ILFs”) consisting of 24,512 operational beds and units located in 31 states with the highest concentration of properties by rental income located in California and Texas. As of September 30, 2024, we also had other real estate related investments consisting of three preferred equity investments, 12 real estate secured loans receivable and four mezzanine loans receivable with a carrying value of $740.7 million.

Previous wording

Current macroeconomic conditions, particularly inflation (including higher wages and supply costs), elevated interest rates and related changes to consumer spending, including, but not limited to, causing individuals to delay or defer moves to seniors housing, has adversely impacted and could continue to adversely impact our tenants’ ability to meet some of their financial obligations to us. Higher interest rates also increase our costs of capital to finance acquisitions and increase our borrowing costs. In addition, current macroeconomic conditions and the resulting market volatility may adversely impact our ability to sell properties on acceptable terms, if at all, which could result in additional impairment charges.

Current wording

Recent macroeconomic conditions, particularly inflation (including higher supply costs), elevated interest rates and related changes to consumer spending, including, but not limited to, causing individuals to delay or defer moves to seniors housing, has adversely impacted and could continue to adversely impact our tenants’ ability to meet some of their financial obligations to us. Higher interest rates have also increased our costs of capital to finance acquisitions and increased our borrowing costs. We continue to monitor changes in the interest rate environment and the effect of changing rates on our business. In addition, current macroeconomic conditions and the resulting market volatility may adversely impact our ability to sell properties on acceptable terms, if at all, which could result in additional impairment charges.

Previous wording

As a result of the above factors, our tenants are continuing to experience increased operating costs at their facilities. Our tenants are also experiencing labor shortages resulting in higher operating costs. At a portfolio wide level, occupancy levels at our seniors housing facilities, comprising our ALFs and ILFs, continue to remain below occupancy levels at the onset of the COVID-19 pandemic. Within our SNFs, occupancy levels have continued to improve since their trough in January 2021 and remained stable for the three months ended March 31, 2024 compared to the three months ended December 31, 2023, for most of our tenants.

Current wording

As a result of the above factors, our tenants are continuing to experience elevated operating costs at their facilities. At a portfolio wide level, occupancy levels at our seniors housing facilities, comprising our ALFs and ILFs, continue to remain below occupancy levels at the onset of the COVID-19 pandemic. Within our SNFs, occupancy levels have continued to improve since their trough in January 2021 and have reached or exceeded occupancy levels prior to the onset of the COVID-19 pandemic, for most of our tenants.

Previous wording

As a result of impacts experienced by our operators since the onset of the COVID-19 pandemic, the ability of some of our tenants and borrowers to meet their financial obligations to us in full has been negatively impacted. From time to time in the past, we have taken actions to reposition one or more properties with a replacement tenant or sell the property and, in certain cases, we have also restructured tenants’ long-term obligations. See “Impairment of Real Estate Assets, Assets Held for Sale and Asset Sales” below. During the three months ended June 30, 2024, we collected 98.3% of contractual rents and interest due from our operators and borrowers excluding cash deposits. In the event our tenants or borrowers are unable to satisfy their obligations to us and we are unable to effect these actions on terms that are as favorable to us as those currently in place, our rental and interest income would be adversely impacted and we may incur additional expenses or obligations and be required to recognize additional impairment charges or fair value adjustments.

Current wording

As a result of impacts experienced by our operators since the onset of the COVID-19 pandemic and due to recent market trends and uncertainties, the ability of some of our tenants and borrowers to meet their financial obligations to us in full has been negatively impacted. From time to time in the past, we have taken actions to reposition one or more properties with a replacement tenant or sell the property and, in certain cases, we have also restructured tenants’ long-term obligations. See “Impairment of Real Estate Assets, Assets Held for Sale and Asset Sales” below. During the three months ended September 30, 2024, we collected 98.7% of contractual rents and interest due from our operators and borrowers excluding cash deposits. In the event our tenants or borrowers are unable to satisfy their obligations to us and we are unable to effect these actions on terms that are as favorable to us as those currently in place, our rental and interest income would be adversely impacted and we may incur additional expenses or obligations and be required to recognize additional impairment charges or fair value adjustments.

Previous wording

On October 13, 2023, California Senate Bill No. 525 (“SB 525”) was signed into law, requiring a substantial increase in the minimum wage for workers operating in certain health care facilities. As a result of SB 525, certain health care facilities (including licensed skilled nursing facilities) operating in California are required to increase the wages of their covered health care employees to at least $21 per hour, which was initially required to be effective from June 1, 2024 to May 31, 2026, $22 or $23 per hour (depending on facility type) from June 1, 2026 to May 31, 2028, and $25 per hour after June 1, 2028. On June 22, 2024, the Governor of California announced that the implementation of SB 525 will be delayed until October 15, 2024 at the earliest and no later than January 1, 2025.

Current wording

On October 13, 2023, California Senate Bill No. 525 (“SB 525”) was signed into law, requiring a substantial increase in the minimum wage for workers operating in certain health care facilities. As a result of SB 525, certain health care facilities (including licensed skilled nursing facilities) operating in California are required to increase the wages of their covered health care employees to at least $21 per hour, which was initially required to be effective from June 1, 2024 to May 31, 2026, $22 or $23 per hour (depending on facility type) from June 1, 2026 to May 31, 2028, and $25 per hour after June 1, 2028. After the initial implementation was delayed by the Governor of California in June 2024, SB 525 went into effect on October 16, 2024.

Previous wording

In March 2024, The Centers for Medicare and Medicaid Services (“CMS”) proposed a payment rate update to SNF reimbursements for fiscal 2025, which includes a net increase of 4.1%, or approximately $1.4 billion in Medicare Part A payments to SNFs. In July 2023, CMS approved its payment rate update to SNF reimbursements for fiscal 2024, which commenced October 1, 2023, and includes a net increase of 4.0%, or approximately $1.4 billion, in Medicare Part A payments to SNFs. These increases are expected to partially offset some of our tenants’ higher operating costs.

Current wording

The Centers for Medicare and Medicaid Services (“CMS”) issued a final rule on July 31, 2024, updating Medicare payment policies and rates for SNFs for fiscal year 2025. This update includes a 4.2% increase in Medicare Part A payments to SNFs, totaling approximately $1.4 billion. These increases are expected to partially offset some of our tenants’ higher operating costs.

Previous wording

(4)Includes one ALF held through a joint venture. See Note 3, Real Estate Investments, Net, and Note 11, Variable Interest Entities for additional information.

Current wording

(6)Includes one ALF held through a joint venture. See Note 3, Real Estate Investments, Net, and Note 11, Variable Interest Entities for additional information.

Previous wording

On July 30, 2024, we exercised the call option on the $75.0 million secured borrowing. See Note 14, Subsequent Events, for additional information.

Current wording

On July 30, 2024, we exercised the call option on the $75.0 million secured borrowing. See Note 7, Debt, for additional information.

Previous wording

On May 6, 2024, we 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 our common stock through an “at-the-market” equity offering program (the “New ATM Program”) and terminated our previous $500.0 million “at-the-market” equity offering program (the “Previous ATM Program” and together with the New ATM Program, the “ATM Program”). In addition to the issuance and sale of shares of our common stock, the ATM Program also provides for the ability to enter into one or more forward sales agreements (each, an “ATM forward contract”) with sales agents for the sale of our shares of common stock under the ATM Program.

Current wording

On August 29, 2024, we entered into a new equity distribution agreement to issue and sell, from time to time, up to $750.0 million in aggregate offering price of our common stock through an “at-the-market” equity offering program (the “New ATM Program”) and terminated our previous $500.0 million “at-the-market” equity offering program (together, with all previous at-the-market equity offering programs, the “Previous ATM Programs” and together with the New ATM Program, the “ATM Program”). In addition to the issuance and sale of shares of our common stock, the ATM Program also provides for the ability to enter into one or more forward sales agreements (each, an “ATM forward contract”) with sales agents for the sale of our shares of common stock under the ATM Program.

Previous wording

The following tables summarize the ATM Program activity for the three and six months ended June 30, 2024 (in thousands, except per share amounts).

Current wording

The following tables summarize the ATM Program activity for the three and nine months ended September 30, 2024 and 2023 (in thousands, except per share amounts).

Previous wording

(1) Total gross proceeds is before $3.8 million and $7.2 million of commissions paid to the sales agents during the three and six months ended June 30, 2024, respectively, under the ATM Program.

Current wording

(1) Total gross proceeds is before $6.2 million and $13.4 million of commissions paid to the sales agents during the three and nine months ended September 30, 2024, respectively, under the ATM Program. Total gross proceeds is before $4.0 million of commissions paid to the sales agents and forward adjustments during both the three and nine months ended September 30, 2023, respectively, under the ATM Program.

Previous wording

During the three and six months ended June 30, 2023, we executed forward equity sales under the ATM Program with a financial institution acting as a forward purchaser to sell 6,736,089 shares of common stock at a weighted average sales price of $19.71 per share before commissions and offering expenses. We did not receive any proceeds from the sales of our shares of common stock by the forward sellers. As of June 30, 2023, we had not settled any portion of these forward equity sales, which were subsequently settled during the second half of 2023. No forward equity sales were executed or settled under the ATM Program during the three and six months ended June 30, 2024, and there were no outstanding ATM forward contracts that had not settled as of June 30, 2024.

Current wording

During the three and nine months ended September 30, 2023, we entered into ATM forward contracts under the ATM Program with a financial institution acting as a forward purchaser to sell 9,058,140 and 15,794,229 shares of common stock, respectively, at a weighted average initial sales price of $19.99 and $19.87 per share, respectively, before commissions and offering expenses. During the three months ended September 30, 2023, we settled 10,893,229 shares outstanding under the ATM forward contracts at a weighted average sales price of $19.57 for net proceeds of $213.1 million. No forward equity sales were executed or settled under the ATM Program during the three and nine months ended September 30, 2024, and there were no outstanding ATM forward contracts that had not settled as of September 30, 2024.

Previous wording

As of June 30, 2024, we had $193.5 million available for future issuances under the New ATM Program.

Current wording

As of September 30, 2024, we had $440.1 million available for future issuances under the New ATM Program.

Previous wording

During the three months ended June 30, 2024, we determined that a portfolio of eight ALFs met the held for sale criteria and classified these properties as held for sale at June 30, 2024. During the three and six months ended June 30, 2024, we recognized an impairment charge of $25.7 million and $28.5 million, respectively, related to properties held for sale, which is reported in impairment of real estate investments in the condensed consolidated statements of operations.

Current wording

During the three months ended September 30, 2024, we determined that one ALF met the held for sale criteria and classified this property as held for sale as of September 30, 2024. During the three months ended September 30, 2024, we determined that two facilities held for sale no longer met the criteria to be held for sale and were reclassified as held for investment as of September 30, 2024. During the three and nine months ended September 30, 2024, we recognized an impairment charge of $8.4 million and $36.9 million, respectively, related to properties held for sale, which is reported in impairment of real estate investments in the condensed consolidated income statements.

Previous wording

The following table summarizes our dispositions for the three and six months ended June 30, 2024 and 2023 (dollars in thousands):

Current wording

The following table summarizes our dispositions for the three and nine months ended September 30, 2024 (dollars in thousands):

Previous wording

Rental income. Rental income increased by approximately $1.9 million as detailed below:

Current wording

Rental income. Rental income increased by approximately $1.7 million as detailed below:

Previous wording

Total contractual rent includes initial contractual 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. Total contractual cash rent increased by $1.9 million due to a $2.4 million increase in rental income from real estate investments made after January 1, 2024, a $0.4 million increase in rental rates for our existing tenants, and a $0.4 million increase in tenant reimbursements, partially offset by a $1.3 million decrease in rental income related to certain tenants on a cash basis method of accounting.

Current wording

Total contractual rent includes initial contractual 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. Total contractual rent increased by $1.5 million due to a $1.6 million increase in rental income from real estate investments made after March 31, 2024, a $0.9 million increase in rental rates for our existing tenants, and an increase of $0.1 million related to the transfer of one facility to a new operator, partially offset by a $0.9 million decrease in rental income related to certain tenants on a cash basis method of accounting and a decrease of $0.2 million in tenant reimbursements.

Previous wording

Interest and other income. The $3.9 million, or 41%, increase in interest and other income was primarily due to an increase of $2.3 million of interest income on new loan investments made after January 1, 2024, an increase of $1.5 million on money market funds and an increase of $0.2 million related to a loan origination fee received during the three months ended June 30, 2024.

Current wording

Interest and other income. The $6.7 million, or 50%, increase in interest and other income was primarily due to an increase of $7.6 million of interest income on new loan investments made after March 31, 2024, and an increase of $0.1 million of interest income due to a higher number of days during the three months ended September 30, 2024 compared to the three months ended June 30, 2024, partially offset by a decrease of $0.8 million of interest earned on money market funds and a decrease of $0.2 million related to a loan origination fee received during the three months ended June 30, 2024.

Previous wording

Depreciation and amortization. The $0.4 million, or 3%, increase in depreciation and amortization was primarily due to an increase of $0.7 million due to acquisitions and capital improvements made after January 1, 2024, partially offset by a decrease of $0.3 million due to assets becoming fully depreciated after January 1, 2024.

Current wording

Depreciation and amortization. The $0.1 million, or 1%, increase in depreciation and amortization was primarily due to an increase of $0.7 million due to acquisitions and capital improvements made after March 31, 2024, partially offset by a decrease of $0.4 million due to classifying assets as held for sale and a decrease of $0.2 million due to assets becoming fully depreciated after March 31, 2024.

Previous wording

Interest expense. Interest expense increased by approximately $0.5 million as detailed below:

Current wording

Interest expense. Interest expense decreased by approximately $0.4 million as detailed below:

Previous wording

Impairment of real estate investments. During the three months ended June 30, 2024, we recognized impairment charges of $25.7 million related to properties held for sale. See above under “Recent Developments — Impairment of Real Estate Assets, Assets Held for Sale, and Asset Sales” for additional information. During the three months ended March 31, 2024, we recognized an impairment charge of $2.7 million related to properties held for sale.

Current wording

Impairment of real estate investments. During the three months ended September 30, 2024, we recognized impairment charges of $8.4 million related to properties held for sale. See above under “Recent Developments — Impairment of Real Estate Assets, Assets Held for Sale, and Asset Sales” for additional information. During the three months ended June 30, 2024, we recognized impairment charges of $25.7 million primarily related to classifying eight properties as held for sale.

Previous wording

Property operating expenses. During the three months ended June 30, 2024 and March 31, 2024, we recognized $0.3 million and $0.7 million, respectively, of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold.

Current wording

Property operating expenses. During the three months ended September 30, 2024 and June 30, 2024, we recognized $3.5 million and $0.3 million, respectively, of property operating expenses related to assets we plan to sell or repurpose, re-tenant, or have sold.

Previous wording

General and administrative expense. General and administrative expense decreased by $0.7 million as detailed below:

Current wording

General and administrative expense. General and administrative expense increasedby $0.5 million as detailed below:

Previous wording

Gain on sale of real estate, net. During the three months ended June 30, 2024, we recorded a $21,000 gain on sale of real estate related to the sale of one SNF. During the three months ended March 31, 2024, we recorded an $11,000 gain on sale of real estate, net related to the sale of one SNF and one ALF.

Current wording

(Loss) gain on sale of real estate, net. During the three months ended September 30, 2024, we recorded a $2.3 million loss on sale of real estate related to the sale of 11 SNFs. During the three months ended June 30, 2024, we recorded a $21,000 gain on sale of real estate related to the sale of one SNF.

Previous wording

Unrealized loss on other real estate related investments, net. During the three months ended June 30, 2024, we recorded a $2.4 million unrealized loss on our secured and mezzanine loans receivable due to an increase in estimated credit spreads, partially offset by unrealized gains of $0.5 million due to an increase in expected cash flows on floating rate loans. During the three months ended March 31, 2024, we recorded an $0.8 million unrealized loss on our secured and mezzanine loans receivable due to an increase in interest rates, partially offset by unrealized gains of $0.2 million due to an increase in expected cash flows on floating rate loans.

Current wording

Unrealized gain (loss) on other real estate related investments, net. During the three months ended September 30, 2024, we recorded $5.9 million of unrealized gains on our secured and mezzanine loans receivable, partially offset by unrealized losses of $4.1 million, to bring the interest rates in line with market rates. During the three months ended June 30, 2024, we recorded a $2.4 million unrealized loss on our secured and mezzanine loans receivable due to an increase in estimated credit spreads, partially offset by unrealized gains of $0.5 million due to an increase in expected cash flows on floating rate loans.

Previous wording

Rental income. Rental income increased by $15.0 million as detailed below:

Current wording

Rental income. Rental income increased by $20.9 million as detailed below:

Previous wording

Total contractual rent includes initial contractual 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. Total contractual cash rent increased by $13.9 million due to a $9.8 million increase in rental income from real estate investments made after January 1, 2023, a $2.5 million increase in rental rates for our existing tenants, a $1.5 million increase in tenant reimbursements, and a $0.5 million increase in rental income related to certain tenants on a cash basis method of accounting, partially offset by a $0.4 million decrease in rental income related to dispositions made after January 1, 2023.

Current wording

Total contractual rent includes initial contractual 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. Total contractual rent increased by $19.0 million due to a $15.7 million increase in rental income from real estate investments made after December 31, 2022, a $3.9 million increase in rental rates for our existing tenants, a $1.2 million increase in tenant reimbursements, and a $0.5 million increase in rental income due to the transfer of facilities between operators, partially offset by a $1.9 million decrease in rental income related to certain tenants on a cash basis method of accounting, and a $0.4 million decrease in rental income related to dispositions made after December 31, 2022.

Previous wording

Interest and other income. The $14.8 million increase in interest and other income was primarily due to an increase of $8.3 million of interest income on money market funds, an increase of $7.4 million due to the origination of loans receivable after January 1, 2023, an increase of $0.4 million due to originations of other loans, and an increase of $0.2 million related to a loan origination fee received during the six months ended June 30, 2024, partially offset by a decrease of $1.0 million of interest income due to loan repayments and a decrease of $0.5 million related to a prepayment penalty on one mezzanine loan receivable during the six months ended June 30, 2023.

Current wording

Interest and other income. The $30.4 million increase in interest and other income was primarily due to an increase of $19.0 million due to the origination of loans receivable after December 31, 2022, an increase of $12.5 million of interest income on money market funds, an increase of $0.5 million due to originations of other loans, and an increase of $0.2 million related to a loan origination fee received during the nine months ended September 30, 2024, partially offset by a decrease of

Previous wording

Depreciation and amortization. The $2.4 million, or 9%, increase in depreciation and amortization was primarily due to an increase of $4.3 million related to acquisitions and capital improvements made after January 1, 2023, partially offset by a decrease of $1.2 million due to assets becoming fully depreciated after January 1, 2023 and a decrease of $0.7 million due to classifying assets as held for sale after January 1, 2023.

Current wording

Depreciation and amortization. The $3.3 million, or 9%, increase in depreciation and amortization was primarily due to an increase of $6.5 million related to acquisitions and capital improvements made after December 31, 2022, partially offset by a decrease of $2.1 million due to assets becoming fully depreciated after December 31, 2022 and a decrease of $1.1 million due to classifying assets as held for sale after December 31, 2022.

Previous wording

Interest expense. Interest expense decreased by $4.0 million as detailed below:

Current wording

Interest expense. Interest expense decreased by $7.4 million as detailed below:

Previous wording

Property taxes. The $1.5 million, or 66%, increase in property taxes was due to a $1.9 million increase related to acquisitions made after January 1, 2023, partially offset by $0.4 million of changes in estimates during the six months ended June 30, 2024 of property taxes paid directly by us as a result of certain assets being designated as held for sale.

Current wording

Property taxes. The $1.5 million, or 33%, increase in property taxes was due to a $2.5 million increase related to acquisitions made after December 31, 2022, partially offset by $1.0 million of changes in estimates during the nine months ended September 30, 2024 of property taxes paid directly by us as a result of certain assets being designated as held for sale and being disposed of.

Previous wording

Impairment of real estate investments. During the six months ended June 30, 2024, we recognized impairment charges of $28.5 million related to properties held for sale. See above under “Recent Developments — Impairment of Real Estate Assets, Assets Held for Sale, and Asset Sales” for additional information. During the six months ended June 30, 2023, we recognized an impairment charge of $23.3 million related to properties classified as held for sale.

Current wording

Impairment of real estate investments. During the nine months ended September 30, 2024, we recognized impairment charges of $30.4 million related to properties classified as held for sale, $4.4 million related to properties held for investment, and $2.1 million related to properties that were sold. See above under “Recent Developments — Impairment of Real Estate Assets, Assets Held for Sale, and Asset Sales” for additional information. During the nine months ended September 30, 2023, we recognized impairment charges of $23.1 million related to properties classified as held for sale, $8.0 million related to properties held for investment, and $0.4 million related to properties that were sold.

Previous wording

Property operating expenses. During the six months ended June 30, 2024 and 2023, we recognized $0.9 million and $1.6 million, respectively, of property operating expenses related to assets we plan to sell or repurpose, re-tenant or have sold.

Current wording

Property operating expenses. During the nine months ended September 30, 2024 and 2023, we recognized $4.4 million and $2.9 million, respectively, of property operating expenses related to assets we plan to sell or repurpose, re-tenant or have sold.

Previous wording

General and administrative expense. General and administrative expense increased by $3.2 million as detailed below:

Current wording

General and administrative expense. General and administrative expense increased by $4.3 million as detailed below:

Previous wording

Gain on sale of real estate, net. During the six months ended June 30, 2024, we recorded a $32,000 gain on sale of real estate, net related to the sale of two SNFs and one ALF. During the six months ended June 30, 2023, we recorded a $2.0 million gain on sale of real estate, net related to the sale of three ALFs and one SNF.

Current wording

(Loss) gain on sale of real estate, net. During the nine months ended September 30, 2024, we recorded a $2.3 million loss on sale of real estate, net related to the sale of 13 SNFs and one ALF. During the nine months ended September 30, 2023, we recorded a $2.1 million gain on sale of real estate related to the sale of one SNF and one ALF, partially offset by a $0.1 million loss on sale of real estate related to the sale of two ALFs.

Previous wording

Unrealized losses on other real estate related investments, net. During the six months ended June 30, 2024, we recorded a $3.2 million unrealized loss on our secured and mezzanine loans receivable due to an increase in interest rates, partially offset by unrealized gains of $0.7 million due to an increase in expected cash flows on floating rate loans due to an increase in projected forward interest rates. During the six months ended June 30, 2023, we recorded a $2.8 million unrealized loss on our secured and mezzanine loans receivable and a $0.3 million loss due to a loan origination fee paid, partially offset by a $0.5 million reversal of a previously recognized unrealized loss related to the prepayment of one mezzanine loan receivable.

Current wording

Unrealized loss on other real estate related investments, net. During the nine months ended September 30, 2024, we recorded a $7.3 million unrealized loss on our secured and mezzanine loans receivable due to an increase in interest rates during the first half of 2024, partially offset by unrealized gains of $6.6 million primarily due to a decrease in interest rates during the third quarter of 2024. During the nine months ended September 30, 2023, we recorded an unrealized loss of $8.1 million on our secured and mezzanine loans receivable due to rising interest rates and a $0.3 million loss due to a loan origination fee paid, partially offset by a reversal of a previously recognized unrealized loss of $0.5 million related to the repayment of one mezzanine loan receivable.

Previous wording

Net cash provided by operating activities increased for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Operating cash inflows are derived primarily from the rental payments received under our lease agreements, including as a result of new investments, and interest payments on our other real estate related investments. Operating cash outflows consist primarily of interest expense on our borrowings and general and administrative expenses. The net increase of $34.8 million in cash provided by operating activities for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 is primarily due to an increase in rental income received, an increase in interest income received on our other real estate related investments, and a decrease in cash paid for interest expense, partially offset by an increase in cash paid for general and administrative expense.

Current wording

Net cash provided by operating activities increased for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Operating cash inflows are derived primarily from the rental payments received under our lease agreements, including as a result of new investments, and interest payments on our other real estate related investments. Operating cash outflows consist primarily of interest expense on our borrowings and general and administrative expenses. The net increase of $56.9 million in cash provided by operating activities for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 is primarily due to an increase in rental income received, an increase in interest income received on our other real estate related investments, and a decrease in cash paid for interest expense, partially offset by an increase in cash paid for general and administrative expense.

Previous wording

Cash used in investing activities for the six months ended June 30, 2024 was primarily comprised of $458.5 million in acquisitions of real estate, investment in real estate related investments and other loans receivable and escrow deposits for potential acquisitions of real estate, $9.0 million in preferred equity investments and $1.3 million of purchases of equipment, furniture and fixtures and improvements to real estate. Cash used in investing activities for the six months ended June 30, 2023 was primarily comprised of $200.0 million in acquisitions of real estate, investment in real estate related investments and other loans receivable and escrow deposits for potential acquisitions of real estate and $6.4 million of purchases of equipment, furniture and fixtures and improvements to real estate, partially offset by $15.3 million of principal payments received from our other real estate related investments and other loans receivable and $14.5 million in net proceeds from real estate sales.

Current wording

Cash used in investing activities for the nine months ended September 30, 2024 was primarily comprised of $777.1 million in acquisitions of real estate, investment in real estate related investments and other loans receivable and escrow deposits for potential acquisitions of real estate, $52.0 million in preferred equity investments and $4.2 million of purchases of equipment, furniture and fixtures and improvements to real estate, partially offset by $5.1 million in net proceeds from the sale of real estate and $0.1 million in principal payments received on other loans receivable. Cash used in investing activities for the nine months ended September 30, 2023 was primarily comprised of $253.3 million in acquisitions of real estate, investment in real estate related investments and other loans receivable and escrow deposits for potential acquisitions of real estate and $9.1 million of purchases of equipment, furniture and fixtures and improvements to real estate, partially offset by $15.7 million of principal payments received from our other real estate related investments and other loans receivable and $14.5 million in net proceeds from real estate sales.

Previous wording

Our cash flows provided by financing activities for the six months ended June 30, 2024 were primarily comprised of $572.2 million in net proceeds from the issuance of common stock, $75.0 million in proceeds from a secured borrowing and $0.6 million in contributions from noncontrolling interests, partially offset by $77.7 million in dividends paid and a $2.5 million net settlement adjustment on restricted stock. Our cash flows provided by financing activities for the six months ended June 30, 2023 were primarily comprised of $155.0 million in borrowings under our Revolving Facility (as defined below), partially offset by $55.2 million in dividends paid, a $1.5 million net settlement adjustment on restricted stock and $0.6 million in costs paid for the issuance of common stock.

Current wording

Our cash flows provided by financing activities for the nine months ended September 30, 2024 were primarily comprised of $1.1 billion in net proceeds from the issuance of common stock, $75.0 million in proceeds from a secured borrowing and $1.2 million in contributions from noncontrolling interests, partially offset by a $200.0 million prepayment of the Term Loan, $122.4 million in dividends paid, a $75.0 million payment on the secured borrowing, a $2.5 million net settlement adjustment on restricted stock, and $0.4 million payment on extinguishment of debt and deferred financing costs. Our cash flows provided by financing activities for the nine months ended September 30, 2023 were primarily comprised of $319.0 million in net proceeds from the issuance of common stock and $1.1 million in contributions from noncontrolling interests, partially offset by $125.0 million in net payments under our Revolving Facility, $83.1 million in dividends paid and a $1.5 million net settlement adjustment on restricted stock.