0001628280-22-012634 | 10-Q | XBRL Viewer

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Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2022	May 04, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	001-36181
Entity Registrant Name	CareTrust REIT, Inc.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	46-3999490
Entity Address, Address Line One	905 Calle Amanecer
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	San Clemente
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92673
City Area Code	949
Local Phone Number	542-3130
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	CTRE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001590717
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		97,028,742

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Assets:
Real estate investments, net	$ 1,402,889	$ 1,589,971
Other real estate investments	15,155	15,155
Assets held for sale, net	141,716	4,835
Cash and cash equivalents	26,586	19,895
Accounts and other receivables	1,110	2,418
Prepaid expenses and other assets, net	5,668	7,512
Deferred financing costs, net	817	1,062
Total assets	1,593,941	1,640,848
Liabilities and Equity:
Senior unsecured notes payable, net	394,484	394,262
Senior unsecured term loan, net	199,189	199,136
Unsecured revolving credit facility	105,000	80,000
Accounts payable, accrued liabilities and deferred rent liabilities	23,785	25,408
Dividends payable	26,900	26,285
Total liabilities	749,358	725,091
Commitments and contingencies
Equity:
Preferred stock, $0.01 par value; 100,000,000 shares authorized, no shares issued and outstanding as of March 31, 2022 and December 31, 2021	0	0
Common stock, $0.01 par value; 500,000,000 shares authorized, 96,487,066 and 96,296,673 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively	965	963
Additional paid-in capital	1,195,586	1,196,839
Cumulative distributions in excess of earnings	(351,968)	(282,045)
Total equity	844,583	915,757
Total liabilities and equity	$ 1,593,941	$ 1,640,848

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value (in 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 (in usd per share)	$ 0.01	$ 0.01
Common stock, authorized (shares)	500,000,000	500,000,000
Common stock, issued (shares)	96,487,066	96,296,673
Common stock, outstanding (shares)	96,487,066	96,296,673

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues:
Rental income	$ 46,007	$ 45,246
Interest and other income	469	505
Total revenues	46,476	45,751
Expenses:
Depreciation and amortization	13,575	13,473
Interest expense	5,742	5,762
Property taxes	1,420	696
Impairment of real estate investments	59,683	0
Provision for loan losses, net	3,844	0
Property operating expenses	447	0
General and administrative	5,215	5,142
Total expenses	89,926	25,073
Other income (loss):
Gain (loss) on sale of real estate	186	(192)
Net (loss) income	$ (43,264)	$ 20,486
(Loss) earnings per common share:
Basic (in usd per share)	$ (0.45)	$ 0.21
Diluted (in usd per share)	$ (0.45)	$ 0.21
Weighted-average number of common shares:
Basic (in shares)	96,410	95,378
Diluted (in shares)	96,410	95,385

Condensed Consolidated Statements of Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Cumulative Distributions in Excess of Earnings
Beginning balance at Dec. 31, 2020	$ 914,142	$ 952	$ 1,164,402	$ (251,212)
Beginning balance (in shares) at Dec. 31, 2020		95,215,797
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock, net	16,191	$ 7	16,184
Issuance of common stock, net, (in shares)		702,000
Vesting of restricted common stock, net of shares withheld for employee taxes	(1,330)	$ 1	(1,331)
Vesting of restricted common stock, net of shares withheld for employee taxes (in shares)		63,265
Amortization of stock-based compensation	1,585		1,585
Common dividends	(25,633)			(25,633)
Net (loss) income	20,486			20,486
Ending balance at Mar. 31, 2021	925,441	$ 960	1,180,840	(256,359)
Ending balance (in shares) at Mar. 31, 2021		95,981,062
Beginning balance at Dec. 31, 2021	915,757	$ 963	1,196,839	(282,045)
Beginning balance (in shares) at Dec. 31, 2021		96,296,673
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of restricted common stock, net of shares withheld for employee taxes	(2,772)	$ 2	(2,774)
Vesting of restricted common stock, net of shares withheld for employee taxes (in shares)		190,393
Amortization of stock-based compensation	1,521		1,521
Common dividends	(26,659)			(26,659)
Net (loss) income	(43,264)			(43,264)
Ending balance at Mar. 31, 2022	$ 844,583	$ 965	$ 1,195,586	$ (351,968)
Ending balance (in shares) at Mar. 31, 2022		96,487,066

Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Stockholders' Equity [Abstract]
Common dividends (in usd per share)	$ 0.275	$ 0.265

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net (loss) income	$ (43,264)	$ 20,486
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization (including below-market ground leases)	13,594	13,486
Amortization of deferred financing costs	520	487
Amortization of stock-based compensation	1,521	1,585
Straight-line rental income	(6)	(12)
Adjustment for collectibility of rental income	977	0
(Gain) loss on sale of real estate	(186)	192
Impairment of real estate investments	59,683	0
Provision for loan losses, net	3,844	0
Change in operating assets and liabilities:
Accounts and other receivables	337	(100)
Prepaid expenses and other assets, net	(404)	278
Accounts payable, accrued liabilities and deferred rent liabilities	(2,037)	(2,453)
Net cash provided by operating activities	34,579	33,949
Cash flows from investing activities:
Acquisitions of real estate, net of deposits applied	(21,915)	(138,151)
Purchases of equipment, furniture and fixtures and improvements to real estate	(1,918)	(1,319)
Investment in other loans receivable	(2,086)	(700)
Principal payments received on real estate mortgage and other loans receivable	888	56
Net proceeds from sales of real estate	959	6,814
Net cash used in investing activities	(24,072)	(133,300)
Cash flows from financing activities:
Proceeds from the issuance of common stock, net	0	16,191
Borrowings under unsecured revolving credit facility	25,000	120,000
Net-settle adjustment on restricted stock	(2,772)	(1,330)
Dividends paid on common stock	(26,044)	(23,960)
Net cash (used in) provided by financing activities	(3,816)	110,901
Net increase in cash and cash equivalents	6,691	11,550
Cash and cash equivalents as of the beginning of period	19,895	18,919
Cash and cash equivalents as of the end of period	26,586	30,469
Supplemental disclosures of cash flow information:
Interest paid	1,355	1,325
Supplemental schedule of noncash investing and financing activities:
Increase in dividends payable	615	1,673
Transfer of pre-acquisition costs to acquired assets	$ 7	$ 358

Organization	3 Months Ended
Organization	Mar. 31, 2022
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 March 31, 2022, the Company owned and leased to independent operators, 228 skilled nursing facilities (“SNFs”), multi-service campuses, assisted living facilities (“ALFs”) and independent living facilities (“ILFs”) consisting of 23,834 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 March 31, 2022, 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 has had and may continue to have an adverse impact on the economy generally and the Company’s business, results of operations and financial condition. 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.

Summary of Significant Accounting Policies	3 Months Ended
Summary of Significant Accounting Policies	Mar. 31, 2022
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation—The accompanying condensed consolidated financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the disclosures required by GAAP for a complete set of annual audited financial statements. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. In the opinion of management, all adjustments which are of a normal and recurring nature and considered necessary for a fair presentation of the results of the interim periods presented have been included. The results of operations for the interim periods are not necessarily indicative of results for the full year. All intercompany transactions and account balances within the Company have been eliminated. Recent Accounting Pronouncements—In March 2020, the Financial Accounting Standards Board 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. Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

Real Estate Investments, Net

3 Months Ended

Mar. 31, 2022

Real Estate [Abstract]

Real Estate Investments, Net

REAL ESTATE INVESTMENTS, NET

The following table summarizes the Company’s real estate properties held for investment at March 31, 2022 and December 31, 2021 (dollars in thousands):


	March 31, 2022		December 31, 2021
Land	$	236,986	$	251,787
Buildings and improvements	1,431,631		1,622,019
Integral equipment, furniture and fixtures	95,997		104,722
Identified intangible assets	2,658		1,257

Real estate investments	1,767,272		1,979,785
Accumulated depreciation and amortization	(364,383)		(389,814)

Real estate investments, net	$	1,402,889	$	1,589,971

As of March 31, 2022, 226 of the Company’s 228 facilities were leased to various operators under triple-net leases. All of these leases contain annual escalators based on the percentage change in the Consumer Price Index (“CPI”) (but not less than zero), some of which are subject to a cap, or fixed rent escalators. Two of the Company’s 228 facilities are non-operational and are leased under a short term lease with an expected term of less than one year as of March 31, 2022. As of March 31, 2022, 27 facilities were held for sale.

As of March 31, 2022, the Company’s total future contractual minimum rental income for all of its tenants, excluding operating expense reimbursements, was (dollars in thousands):


Year	Amount
2022 (nine months)	$	146,848
2023	195,547
2024	194,202
2025	194,173
2026	194,278
2027	191,589
Thereafter	998,873
Total	$	2,115,510

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):

Asset Type

Properties

Lease Expiration

Next Option Open Date

Option Type(1)

Current Cash Rent(2)

ALF

October 2034

1/1/2022

(3)

3,383

SNF

November 2030

1/1/2022

(3)

4,944

SNF

March 2029

4/1/2022

(4)

B / C(5)

779

SNF / Campus

October 2032

1/1/2023

(3)

1,065

SNF

November 2034

12/1/2024

(4)

3,796

ALF

October 2034

1/1/2026

(3)

1,598

(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 as of March 31, 2022.

(3) Option window is open for six months.

(4) Option window is open until the expiration of the lease term.

(5) Purchase option reflects two option types.

Rental Income

The following table summarizes components of the Company’s rental income (dollars in thousands):


	For the Three Months Ended March 31,
Rental Income	2022		2021
Contractual rent due(1)	$	46,978	$	45,171
Straight-line rent	6		12
Adjustment for collectibility(2)	(977)		—

Lease termination revenue(3)	—		63
Total	$	46,007	$	45,246

(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 three months ended March 31, 2022, and in accordance with Accounting Standards Codification 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 four existing and former operators. As such, the Company reversed $0.7 million of operating expense reimbursements, $0.2 million of contractual rent and $0.1 million of straight-line rent during the three months ended March 31, 2022. If lease payments are subsequently deemed probable of collection, the Company will increase rental income for such recoveries.

(3) During the three months ended March 31, 2021, in connection with the agreement to terminate its lease agreements with Metron Integrated Health Systems (“Metron”) and to sell the facilities to a third party, the Company received approximately $0.1 million in lease termination revenue from Metron affiliates.

Recent Real Estate Acquisitions

The following table summarizes the Company’s acquisitions for the three months ended March 31, 2022 (dollars in thousands):


Type of Property	Purchase Price(1)		Initial Annual Cash Rent		Number of Properties	Number of Beds/Units(2)
Skilled nursing	$	8,918	$	815	1	135
Multi-service campuses	13,003		1,235		1	130

Total	$	21,921	$	2,050	2	265

(1) Purchase price includes capitalized acquisition costs.

(2) The number of beds/units includes operating beds at the acquisition date.

Lease Amendments

Pennant Partial Lease Termination and Amended Ensign Master Lease. On March 1, 2022, operations at one ALF in Arizona operated by affiliates of The Pennant Group, Inc. (“Pennant”) were transferred to affiliates of The Ensign Group, Inc. (“Ensign”). In connection with the transfer, the Company amended the Pennant master lease to reflect the removal of the ALF and amended an existing triple-net master lease with Ensign to include the one ALF. The applicable Ensign master lease has a remaining term of approximately 11 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the applicable Ensign master lease, as amended, increased by approximately $0.3 million and annual cash rent under the Pennant master lease, as amended, decreased by the same amount.

Amended Eduro Master Lease. On February 1, 2022, the Company acquired one SNF. In conjunction with the acquisition, the Company amended its existing triple-net master lease with affiliates of Eduro Healthcare, LLC (“Eduro”) to include the one SNF and extended the initial lease term. The Eduro master lease, as amended, has a remaining term of approximately 12 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the Eduro master lease, as amended, increased by approximately $0.8 million.

Amended WLC Master Lease. On March 1, 2022, the Company acquired one multi-service campus. In conjunction with the acquisition, the Company amended its existing triple-net master lease with affiliates of WLC Management Firm, LLC (“WLC”) to include the one multi-service campus. The WLC master lease, as amended, has a remaining term of approximately 12 years, with two five-year renewal options and CPI-based rent escalators. Annual cash rent under the WLC master lease, as amended, increased by approximately $1.2 million.

Impairment of Real Estate Investments, Assets Held for Sale, Net and Asset Sales	3 Months Ended
	Mar. 31, 2022
Discontinued Operations and Disposal Groups [Abstract]
Impairment of Real Estate Investments, Assets Held for Sale, Net and Asset Sales	IMPAIRMENT OF REAL ESTATE INVESTMENTS, ASSETS HELD FOR SALE, NET AND ASSET SALES In connection with the Company’s ongoing review and monitoring of its investment portfolio and the performance of its tenants, the Company determined to pursue the sale of 27 properties and repurposing three properties representing an aggregate of approximately 10% of contractual cash rent as of March 31, 2022. As of March 31, 2022, the Company determined that these 27 properties met the criteria to be classified as assets held for sale and, in connection with this determination, the Company recognized an aggregate impairment charge of $59.7 million related to 20 of the 27 held for sale properties, which is reported in impairment of real estate investments in the condensed consolidated statements of operations for the three months ended March 31, 2022. The impairment charge was recognized to write down the properties’ aggregate carrying value to their aggregate fair value, less estimated costs to sell. As of March 31, 2022, the net book value of these 27 properties was $141.7 million, which is comprised of the real estate assets. The fair value of the assets held for sale was based on estimated sales prices, which are considered to be Level 3 measurements within the fair value hierarchy. Estimated sales prices were determined using a market approach (comparable sales model), which relies on certain assumptions by management, including: (i) comparable market transactions, (ii) estimated prices per unit, and (iii) negotiations with prospective buyers. There are inherent uncertainties in making these assumptions. For the Company’s impairment calculations, the Company’s fair value estimates primarily relied on a market approach and utilized prices per unit ranging from $40,000 to $175,000, with a weighted average price per unit of $91,000. During the first quarter of 2022, the Company determined that one ALF that was classified as held for sale at December 31, 2021 no longer met the held for sale criteria. The Company reclassified this ALF’s carrying value of $4.8 million out of assets held for sale and recorded catch-up depreciation of approximately $0.1 million during the three months ended March 31, 2022. On February 22, 2022, the Company closed on the sale of one SNF, operated by affiliates of Cascadia Healthcare, LLC (“Cascadia”), consisting of 83 beds located in Washington with a carrying value of $0.8 million, for net sales proceeds of $1.0 million. During the three months ended March 31, 2022, the Company recorded a gain of $0.2 million in connection with the sale. There was no rent reduction under the Cascadia master lease in connection with the sale.

Other Real Estate Investments, Net

3 Months Ended

Mar. 31, 2022

Investments, All Other Investments [Abstract]

Other Real Estate Investments, Net

OTHER REAL ESTATE INVESTMENTS

As of March 31, 2022 and December 31, 2021, the Company’s loans receivable and other investments consisted of the following (dollars in thousands):


								As of March 31, 2022
Investment	Financial Statement Line Item	Principal Balance as of March 31, 2022		Book Value as of March 31, 2022		Book Value as of December 31, 2021		Weighted Average Contractual Interest Rate		Maturity Date
Mezzanine loan receivable	Other real estate investments	$	15,000	$	15,155	$	15,155	12.0	%	11/30/2025
Other loans receivable	Prepaid expenses and other assets, net	5,516		5,523		3,161		8.0	%	9/1/2023 - 12/31/2023
Expected credit loss	Prepaid expenses and other assets, net	(4,594)		(4,594)		—
Total		$	15,922	$	16,084	$	18,316

Expected credit losses and recoveries are recorded in provision for loan losses, net in the condensed consolidated statements of operations. During the three months ended March 31, 2022, the Company recorded a $4.6 million expected credit loss related to two other loans receivable that were placed on non-accrual status, including an unfunded loan commitment of $0.4 million, net of a loan loss recovery of $0.8 million related to a loan previously written-off. As of December 31, 2021, the Company had no expected credit loss and did not consider any loan receivable investments to be impaired.

The following table summarizes the interest and other income recognized from the Company’s loans receivable and other investments during the quarter ended March 31, 2022 and 2021 (dollars in thousands):


	For the Three Months Ended March 31,
Investment	2022		2021
Mezzanine loan receivable	$	450	$	450


Other	19		55
Total	$	469	$	505

Fair Value Measurements

3 Months Ended

Mar. 31, 2022

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 March 31, 2022 and December 31, 2021, aggregated by the level in the fair value hierarchy within which those instruments fall (dollars in thousands):


	Level 1		Level 2		Level 3		Balance as of March 31, 2022
Assets:
Mezzanine loan receivable	$	—	$	—	$	15,155	$	15,155


	Level 1		Level 2		Level 3		Balance as of December 31, 2021
Assets:
Mezzanine loan receivable	$	—	$	—	$	15,155	$	15,155

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 March 31, 2022 and December 31, 2021, the Company did not have any loans measured at fair value that were 90 days or more past due.

For the three months ended March 31, 2022, there were no classification changes in assets and liabilities with Level 3 inputs in the fair value hierarchy.

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 value, carrying amount and fair value of the Notes (as defined in Note 7, Debt, below) as of March 31, 2022 and December 31, 2021 using Level 2 inputs is as follows (dollars in thousands):


		March 31, 2022						December 31, 2021
	Level	Face Value		Carrying Amount		Fair Value		Face Value		Carrying Amount		Fair Value



Financial liabilities:
Senior unsecured notes payable	2	$	400,000	$	394,484	$	377,000	$	400,000	$	394,262	$	410,500

Cash and cash equivalents, accounts and other receivables, accounts payable, and accrued liabilities: The carrying value for these instruments approximate their fair values due to the short-term nature of these instruments.

Senior unsecured notes payable: The fair value of the Notes was 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.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Debt

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt

DEBT

The following table summarizes the balance of the Company’s indebtedness as of March 31, 2022 and December 31, 2021 (dollars in thousands):


	March 31, 2022						December 31, 2021
	Principal Amount		Deferred Loan Fees		Carrying Value		Principal Amount		Deferred Loan Fees		Carrying Value
Senior unsecured notes payable	$	400,000	$	(5,516)	$	394,484	$	400,000	$	(5,738)	$	394,262
Senior unsecured term loan	200,000		(811)		199,189		200,000		(864)		199,136
Unsecured revolving credit facility	105,000		—		105,000		80,000		—		80,000
	$	705,000	$	(6,327)	$	698,673	$	680,000	$	(6,602)	$	673,398

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 March 31, 2022, the Company was in compliance with all applicable financial covenants under the indenture governing the 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. 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 March 31, 2022, the Operating Partnership had $200.0 million of borrowings outstanding under the Term Loan and $105.0 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 March 31, 2022, the Company was in compliance with all applicable financial covenants under the Amended Credit Agreement.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

Equity

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Equity

EQUITY

Common Stock

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”).

There was no ATM Program activity for the three months ended March 31, 2022. The following table summarizes the ATM Program activity for the three months ended March 31, 2021 (in thousands, except per share amounts).


	For the Three Months Ended
	March 31, 2021
Number of shares	702
Average sales price per share	$	23.62
Gross proceeds(1)	$	16,579

(1) Total gross proceeds is before $0.2 million of commissions paid to the sales agents during the three months ended March 31, 2021 under the ATM Program.

As of March 31, 2022, 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 for 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 Securities Exchange Act of 1934, as amended. 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. Through March 31, 2022, the Company has not repurchased any shares of common stock under the Repurchase Program. As of March 31, 2022, $150.0 million remained available under the Repurchase Program. 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 the first quarter of 2022 (dollars in thousands, except per share amounts):


	For the Three Months Ended
	March 31, 2022
Dividends declared per share	$	0.275
Dividends payment date	April 15, 2022
Dividends payable as of record date	$	26,691
Dividends record date	March 31, 2022

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

Stock-Based Compensation

3 Months Ended

Mar. 31, 2022

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 (“TSR 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”) granted in fiscal 2022 vest in equal annual installments beginning on the first anniversary of the grant date over a three year period.

The following table summarizes the RSAs and performance award activity for the three months ended March 31, 2022:


	Shares	Weighted Average Share Price
Unvested balance at December 31, 2021	891,333	$	20.91
Granted:
RSAs	9,684	17.56


Vested	(329,080)	20.10
Forfeited	(1,900)	21.50
Unvested balance at March 31, 2022	570,037	$	21.32

As of March 31, 2022, the weighted-average remaining vesting period of such awards was 1.6 years.

The following table summarizes the stock-based compensation expense recognized (dollars in thousands):


	For the Three Months Ended March 31,
	2022		2021
Stock-based compensation expense	$	1,521	$	1,585

As of March 31, 2022, there was $10.0 million of unamortized stock-based compensation expense related to the unvested RSAs, performance stock awards and TSR Awards.

(Loss) Earnings Per Common Share

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

(Loss) Earnings Per Common Share

EARNINGS PER COMMON SHARE

The following table presents the calculation of basic and diluted (loss) earnings per common share (“EPS”) for the Company’s common stock for the three months ended March 31, 2022 and 2021, 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 (amounts in thousands, except per share amounts):


	For the Three Months Ended March 31,
	2022		2021
Numerator:
Net (loss) income	$	(43,264)	$	20,486
Less: Net income allocated to participating securities	(117)		(119)
Numerator for basic and diluted earnings available to common stockholders	$	(43,381)	$	20,367
Denominator:
Weighted-average basic common shares outstanding	96,410		95,378
Dilutive performance stock awards	—		7
Weighted-average diluted common shares outstanding	96,410		95,385

(Loss) earnings per common share, basic	$	(0.45)	$	0.21
(Loss) earnings per common share, diluted	$	(0.45)	$	0.21
Antidilutive unvested RSAs, performance awards and TSR Awards excluded from the computation	534		446

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2022
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 and Pennant, the tenant will have an option to require the Company to finance certain capital expenditures up to an aggregate of 20% of the Company’s 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 March 31, 2022, the Company had committed to fund expansions, construction and capital improvements at certain triple-net leased facilities totaling $5.5 million, of which $4.4 million is subject to rent increase at the time of funding.

Concentration of Risk

3 Months Ended

Mar. 31, 2022

Risks and Uncertainties [Abstract]

Concentration of Risk

CONCENTRATION OF RISK

Concentrations 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 three months ended March 31, 2022 and 2021. The following table sets forth information regarding the Company’s major operators as of March 31, 2022 and 2021:


	Number of Facilities			Number of Beds/Units			Percentage of Total Revenue(1)
Operator(2)	SNF	Campus	ALF/ILF	SNF	Campus	ALF/ILF
March 31, 2022
Ensign	83	8	5	8,756	997	495	34	%
Priority Management Group	13	2	—	1,742	402	—	16	%

March 31, 2021
Ensign	77	8	4	8,129	1,027	395	32	%
Priority Management Group	13	2	—	1,742	402	—	16	%

(1) The Company’s rental income, exclusive of operating expense reimbursements.

(2) 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 three months ended March 31, 2022:


	Number of Facilities			Number of Beds/Units			Percentage of Total Revenue(1)
State	SNF	Campus	ALF/ILF	SNF	Campus	ALF/ILF

CA	27	8	5	3,048	1,359	449	26	%
TX	38	3	3	4,829	536	242	22	%

(1) The Company’s rental income, exclusive of operating expense reimbursements.

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation—The accompanying condensed consolidated financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the disclosures required by GAAP for a complete set of annual audited financial statements. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. In the opinion of management, all adjustments which are of a normal and recurring nature and considered necessary for a fair presentation of the results of the interim periods presented have been included. The results of operations for the interim periods are not necessarily indicative of results for the full year. All intercompany transactions and account balances within the Company have been eliminated.
Recent Accounting Pronouncements	Recent Accounting Pronouncements—In March 2020, the Financial Accounting Standards Board 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. Adoption of this ASU did not 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.

Real Estate Investments, Net (Tables)

3 Months Ended

Mar. 31, 2022

Real Estate [Abstract]

Summary of Investment in Owned Properties

The following table summarizes the Company’s real estate properties held for investment at March 31, 2022 and December 31, 2021 (dollars in thousands):


	March 31, 2022		December 31, 2021
Land	$	236,986	$	251,787
Buildings and improvements	1,431,631		1,622,019
Integral equipment, furniture and fixtures	95,997		104,722
Identified intangible assets	2,658		1,257

Real estate investments	1,767,272		1,979,785
Accumulated depreciation and amortization	(364,383)		(389,814)

Real estate investments, net	$	1,402,889	$	1,589,971

Schedule of Total Future Contractual Minimum Rental Income

As of March 31, 2022, the Company’s total future contractual minimum rental income for all of its tenants, excluding operating expense reimbursements, was (dollars in thousands):


Year	Amount
2022 (nine months)	$	146,848
2023	195,547
2024	194,202
2025	194,173
2026	194,278
2027	191,589
Thereafter	998,873
Total	$	2,115,510

Schedule Of Tenant Purchase Options

Asset Type

Properties

Lease Expiration

Next Option Open Date

Option Type(1)

Current Cash Rent(2)

ALF

October 2034

1/1/2022

(3)

3,383

SNF

November 2030

1/1/2022

(3)

4,944

SNF

March 2029

4/1/2022

(4)

B / C(5)

779

SNF / Campus

October 2032

1/1/2023

(3)

1,065

SNF

November 2034

12/1/2024

(4)

3,796

ALF

October 2034

1/1/2026

(3)

1,598

(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 as of March 31, 2022.

(3) Option window is open for six months.

(4) Option window is open until the expiration of the lease term.

(5) Purchase option reflects two option types.

Schedule of Rental Income

The following table summarizes components of the Company’s rental income (dollars in thousands):


	For the Three Months Ended March 31,
Rental Income	2022		2021
Contractual rent due(1)	$	46,978	$	45,171
Straight-line rent	6		12
Adjustment for collectibility(2)	(977)		—

Lease termination revenue(3)	—		63
Total	$	46,007	$	45,246

Schedule of Real Estate Acquisitions

The following table summarizes the Company’s acquisitions for the three months ended March 31, 2022 (dollars in thousands):


Type of Property	Purchase Price(1)		Initial Annual Cash Rent		Number of Properties	Number of Beds/Units(2)
Skilled nursing	$	8,918	$	815	1	135
Multi-service campuses	13,003		1,235		1	130

Total	$	21,921	$	2,050	2	265

(1) Purchase price includes capitalized acquisition costs.

(2) The number of beds/units includes operating beds at the acquisition date.

Other Real Estate Investments, Net (Tables)

3 Months Ended

Mar. 31, 2022

Investments, All Other Investments [Abstract]

Schedule of Loans Receivable and Other Investments

As of March 31, 2022 and December 31, 2021, the Company’s loans receivable and other investments consisted of the following (dollars in thousands):


								As of March 31, 2022
Investment	Financial Statement Line Item	Principal Balance as of March 31, 2022		Book Value as of March 31, 2022		Book Value as of December 31, 2021		Weighted Average Contractual Interest Rate		Maturity Date
Mezzanine loan receivable	Other real estate investments	$	15,000	$	15,155	$	15,155	12.0	%	11/30/2025
Other loans receivable	Prepaid expenses and other assets, net	5,516		5,523		3,161		8.0	%	9/1/2023 - 12/31/2023
Expected credit loss	Prepaid expenses and other assets, net	(4,594)		(4,594)		—
Total		$	15,922	$	16,084	$	18,316

Schedule of Interest and Other Income


	For the Three Months Ended March 31,
Investment	2022		2021
Mezzanine loan receivable	$	450	$	450


Other	19		55
Total	$	469	$	505

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of Items Measured at Fair Value on a Recurring Basis


	Level 1		Level 2		Level 3		Balance as of March 31, 2022
Assets:
Mezzanine loan receivable	$	—	$	—	$	15,155	$	15,155


	Level 1		Level 2		Level 3		Balance as of December 31, 2021
Assets:
Mezzanine loan receivable	$	—	$	—	$	15,155	$	15,155

Summary of Face Value, Carrying Amount and Fair Value of Financial Instruments

A summary of the face value, carrying amount and fair value of the Notes (as defined in Note 7, Debt, below) as of March 31, 2022 and December 31, 2021 using Level 2 inputs is as follows (dollars in thousands):


		March 31, 2022						December 31, 2021
	Level	Face Value		Carrying Amount		Fair Value		Face Value		Carrying Amount		Fair Value



Financial liabilities:
Senior unsecured notes payable	2	$	400,000	$	394,484	$	377,000	$	400,000	$	394,262	$	410,500

Debt (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Schedule of Debt Instruments

The following table summarizes the balance of the Company’s indebtedness as of March 31, 2022 and December 31, 2021 (dollars in thousands):


	March 31, 2022						December 31, 2021
	Principal Amount		Deferred Loan Fees		Carrying Value		Principal Amount		Deferred Loan Fees		Carrying Value
Senior unsecured notes payable	$	400,000	$	(5,516)	$	394,484	$	400,000	$	(5,738)	$	394,262
Senior unsecured term loan	200,000		(811)		199,189		200,000		(864)		199,136
Unsecured revolving credit facility	105,000		—		105,000		80,000		—		80,000
	$	705,000	$	(6,327)	$	698,673	$	680,000	$	(6,602)	$	673,398

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

Equity (Tables)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Summary of the At-The-Market Offering Program

The following table summarizes the ATM Program activity for the three months ended March 31, 2021 (in thousands, except per share amounts).


	For the Three Months Ended
	March 31, 2021
Number of shares	702
Average sales price per share	$	23.62
Gross proceeds(1)	$	16,579

(1) Total gross proceeds is before $0.2 million of commissions paid to the sales agents during the three months ended March 31, 2021 under the ATM Program.

Schedule 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 the first quarter of 2022 (dollars in thousands, except per share amounts):


	For the Three Months Ended
	March 31, 2022
Dividends declared per share	$	0.275
Dividends payment date	April 15, 2022
Dividends payable as of record date	$	26,691
Dividends record date	March 31, 2022

- Definition

Tabular disclosure of an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation, and EPS information. Stock by class includes common, convertible, and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued, and outstanding.

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+ Details

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Summary of Restricted Stock Award and Performance Award Activity

The following table summarizes the RSAs and performance award activity for the three months ended March 31, 2022:


	Shares	Weighted Average Share Price
Unvested balance at December 31, 2021	891,333	$	20.91
Granted:
RSAs	9,684	17.56


Vested	(329,080)	20.10
Forfeited	(1,900)	21.50
Unvested balance at March 31, 2022	570,037	$	21.32

Schedule of Stock-Based Compensation Expense

The following table summarizes the stock-based compensation expense recognized (dollars in thousands):


	For the Three Months Ended March 31,
	2022		2021
Stock-based compensation expense	$	1,521	$	1,585

(Loss) Earnings Per Common Share (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Reconciliation of Weighted-Average Common Shares Outstanding Used in Calculation of Basic EPS to Diluted EPS


	For the Three Months Ended March 31,
	2022		2021
Numerator:
Net (loss) income	$	(43,264)	$	20,486
Less: Net income allocated to participating securities	(117)		(119)
Numerator for basic and diluted earnings available to common stockholders	$	(43,381)	$	20,367
Denominator:
Weighted-average basic common shares outstanding	96,410		95,378
Dilutive performance stock awards	—		7
Weighted-average diluted common shares outstanding	96,410		95,385

(Loss) earnings per common share, basic	$	(0.45)	$	0.21
(Loss) earnings per common share, diluted	$	(0.45)	$	0.21
Antidilutive unvested RSAs, performance awards and TSR Awards excluded from the computation	534		446

Concentration of Risk (Tables)

3 Months Ended

Mar. 31, 2022

Risks and Uncertainties [Abstract]

Schedules of Concentration of Risk


	Number of Facilities			Number of Beds/Units			Percentage of Total Revenue(1)
Operator(2)	SNF	Campus	ALF/ILF	SNF	Campus	ALF/ILF
March 31, 2022
Ensign	83	8	5	8,756	997	495	34	%
Priority Management Group	13	2	—	1,742	402	—	16	%

March 31, 2021
Ensign	77	8	4	8,129	1,027	395	32	%
Priority Management Group	13	2	—	1,742	402	—	16	%

(1) The Company’s rental income, exclusive of operating expense reimbursements.


	Number of Facilities			Number of Beds/Units			Percentage of Total Revenue(1)
State	SNF	Campus	ALF/ILF	SNF	Campus	ALF/ILF

CA	27	8	5	3,048	1,359	449	26	%
TX	38	3	3	4,829	536	242	22	%

(1) The Company’s rental income, exclusive of operating expense reimbursements.

Organization (Details) $ in Thousands	3 Months Ended
Organization (Details) $ in Thousands	Mar. 31, 2022 USD ($) facility bed state	Dec. 31, 2021 USD ($)
Real Estate Properties [Line Items]
Number of states with properties \| state	29
Other real estate investments \| $	$ 15,155	$ 15,155
Skilled nursing, multi-service campuses, assisted living and independent living facilities
Real Estate Properties [Line Items]
Number of facilities \| facility	228
Number of operational beds and units in facilities \| bed	23,834

Real Estate Investments, Net - Narrative (Details)	Mar. 31, 2022 facility
Skilled nursing, multi-service campuses, assisted living and independent living facilities
Real Estate [Line Items]
Number of facilities	228
Triple-net leases \| Various other operators \| Skilled nursing, multi-service campuses, assisted living and independent living facilities
Real Estate [Line Items]
Number of facilities	226
Short-term lease
Real Estate [Line Items]
Number of facilities	2
Held for sale
Real Estate [Line Items]
Number of facilities	27

Real Estate Investments, Net - Real Estate Properties Held for Investment (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Real Estate [Abstract]
Land	$ 236,986	$ 251,787
Buildings and improvements	1,431,631	1,622,019
Integral equipment, furniture and fixtures	95,997	104,722
Identified intangible assets	2,658	1,257
Real estate investments	1,767,272	1,979,785
Accumulated depreciation and amortization	(364,383)	(389,814)
Real estate investments, net	$ 1,402,889	$ 1,589,971

Real Estate Investments, Net - Future Contractual Minimum Rental Income (Details) $ in Thousands	Mar. 31, 2022 USD ($)
Future Contractual Minimum Rental Income
2022 (nine months)	$ 146,848
2023	195,547
2024	194,202
2025	194,173
2026	194,278
2027	191,589
Thereafter	998,873
Total	$ 2,115,510

Real Estate Investments, Net - Tenant Purchase Options (Details) $ in Thousands	Mar. 31, 2022 USD ($) property
ALF \| Lease Expiration October 2034, Next option 2022
Lessor, Lease, Description [Line Items]
Properties \| property	7
Current Cash Rent \| $	$ 3,383
ALF \| Lease Expiration October 2034, Next option 2026
Lessor, Lease, Description [Line Items]
Properties \| property	2
Current Cash Rent \| $	$ 1,598
SNF \| Lease Expiration November 2030, Next option 2022
Lessor, Lease, Description [Line Items]
Properties \| property	11
Current Cash Rent \| $	$ 4,944
SNF \| Lease Expiration March 2029, Next option 2022
Lessor, Lease, Description [Line Items]
Properties \| property	1
Current Cash Rent \| $	$ 779
SNF \| Lease Expiration November 2034, Next option 2024
Lessor, Lease, Description [Line Items]
Properties \| property	4
Current Cash Rent \| $	$ 3,796
SNF / Campus \| Lease Expiration October 2032, Next option 2023
Lessor, Lease, Description [Line Items]
Properties \| property	2
Current Cash Rent \| $	$ 1,065

Real Estate Investments, Net - Rental Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Rental Income
Contractual rent due	$ 46,978	$ 45,171
Straight-line rent	6	12
Adjustments for collectibility	(977)	0
Lease termination revenue	0	63
Total	46,007	45,246
Operating expense reimbursements
Rental Income
Adjustments for collectibility	(700)
Contractual rent
Rental Income
Adjustments for collectibility	(200)
Straight-line rent
Rental Income
Adjustments for collectibility	$ (100)
Metron
Rental Income
Lease termination revenue		$ 100

Real Estate Investments, Net - Tenant Purchase Options (Details) $ in Thousands	Mar. 31, 2022 USD ($) property
ALF \| Lease Expiration October 2034, Next option 2022
Lessor, Lease, Description [Line Items]
Properties \| property	7
Current Cash Rent \| $	$ 3,383
ALF \| Lease Expiration October 2034, Next option 2026
Lessor, Lease, Description [Line Items]
Properties \| property	2
Current Cash Rent \| $	$ 1,598
SNF \| Lease Expiration November 2030, Next option 2022
Lessor, Lease, Description [Line Items]
Properties \| property	11
Current Cash Rent \| $	$ 4,944
SNF \| Lease Expiration March 2029, Next option 2022
Lessor, Lease, Description [Line Items]
Properties \| property	1
Current Cash Rent \| $	$ 779
SNF \| Lease Expiration November 2034, Next option 2024
Lessor, Lease, Description [Line Items]
Properties \| property	4
Current Cash Rent \| $	$ 3,796
SNF / Campus \| Lease Expiration October 2032, Next option 2023
Lessor, Lease, Description [Line Items]
Properties \| property	2
Current Cash Rent \| $	$ 1,065

Real Estate Investments, Net - Recent Real Estate Acquisitions (Details) $ in Thousands		3 Months Ended
	Mar. 01, 2022 facility	Mar. 31, 2022 USD ($) property unit
Business Acquisition [Line Items]
Purchase Price		$ 21,921
Initial Annual Cash Rent		$ 2,050
Number of Properties \| property		2
Number of Beds/Units \| unit		265
Skilled nursing
Business Acquisition [Line Items]
Purchase Price		$ 8,918
Initial Annual Cash Rent		$ 815
Number of Properties \| property		1
Number of Beds/Units \| unit		135
Multi-service campuses
Business Acquisition [Line Items]