Item 2. Properties
Item 2. Properties.
As of December 31, 2023, our principal executive offices are located at 18191 Von Karman Avenue, Suite 300, Irvine, California 92612. We believe our existing leased facilities are in good condition and suitable for the conduct of our business.
Real Estate Investments
As of December 31, 2023, we operated through four reportable business segments: integrated senior health campuses, OM, triple-net leased properties and SHOP. We own and/or operate 100% of our properties as of December 31, 2023, with the exception of our investments through Trilogy, or Trilogy Portfolio, Lakeview IN Medical Plaza, Southlake TX Hospital, Pinnacle Beaumont ALF, Pinnacle Warrenton ALF and Louisiana Senior Housing Portfolio. See Note 12, Redeemable Noncontrolling Interests, and Note 13, Equity — Noncontrolling Interests in Total Equity, to the Consolidated Financial Statements that are part of this Annual Report on Form 10-K, for a further discussion of our noncontrolling interests. The following table presents certain additional information about our real estate investments as of December 31, 2023 (square feet and dollars in thousands):
Reportable Segment Number of
Buildings/
Campuses GLA
(Sq Ft) % of
GLA Aggregate
Contract
Purchase Price Annualized
Base
Rent/NOI(1) % of
Annualized
Base Rent/NOI Leased
Percentage(2)
Integrated senior health campuses 125 9,234 49.1 % $ 1,948,122 $ 176,314 51.0 % 85.5 %
OM 88 4,448 23.6 1,253,089 99,206 28.7 89.2 %
SHOP 55 3,716 19.7 802,367 30,495 8.8 81.2 %
Triple-net leased properties 28 1,424 7.6 469,965 39,526 11.5 100 %
Total/weighted average(3) 296 18,822 100 % $ 4,473,543 $ 345,541 100 % 91.3 %
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(1) With the exception of our SHOP and integrated senior health campuses, amount is based on annualized contractual base rent from leases as of December 31, 2023. For our SHOP and integrated senior health campuses, amount is based on annualized NOI, a non-GAAP financial measure, due to the characteristics of the RIDEA structure. See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Net Operating Income, for a further discussion of NOI.
(2) Leased percentage includes all third-party leased space at our non-RIDEA properties (including master leases), except for our SHOP and integrated senior health campuses where leased percentage represents resident occupancy on the available units/beds therein.
(3) Total portfolio weighted average leased percentage excludes our SHOP and integrated senior health campuses.
We own fee simple interests in all of our land, buildings and campuses, except for the following properties that are located on land that is subject to ground leases: (a) 19 OM buildings; (b) five integrated senior health campuses; and (c) one SNF, in each case, for which we own fee simple interests in the building and other improvements on such properties. Additionally, we operate 20 integrated senior health campuses that were leased to Trilogy by third parties.
The following information generally applies to our properties:
• we believe all of our properties are adequately covered by insurance and are suitable for their intended purposes;
• we have no plans for any material renovations, improvements or development with respect to any of our properties, except in accordance with planned budgets and within our Trilogy Portfolio;
• our properties are located in markets where we are subject to competition for attracting new tenants and residents, as well as retaining current tenants and residents; and
• depreciation is provided on a straight-line basis over the estimated useful lives of the buildings and capital improvements, up to 39 years, over the shorter of the lease term or useful lives of the tenant improvements, up to 34 years, and over the estimated useful life of furniture, fixtures and equipment, up to 28 years.
For additional information regarding our real estate investments, see Schedule III, Real Estate and Accumulated Depreciation, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
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Lease Expirations
Substantially all of our leases with residents at our SHOP and integrated senior health campuses are for a term of one year or less. The following table presents the sensitivity of our annual base rent due to lease expirations for the next 10 years and thereafter at our properties as of December 31, 2023, excluding our SHOP and integrated senior health campuses (square feet and dollars in thousands):
Year Number of
Expiring
Leases Total Sq.
Ft. of Expiring
Leases % of GLA
Represented by
Expiring Leases Annual Base Rent
of Expiring Leases(1) % of Total
Annual Base Rent
Represented by
Expiring Leases
2024 113 532 9.8 % $ 12,814 8.0 %
2025 75 577 10.7 15,782 10.0
2026 45 211 3.9 4,947 3.1
2027 57 402 7.4 11,036 6.9
2028 59 523 9.7 15,099 9.4
2029 43 423 7.8 12,160 7.6
2030 36 447 8.3 14,766 9.2
2031 18 295 5.5 7,380 4.6
2032 24 595 11.0 17,180 10.7
2033 21 644 11.9 18,193 11.4
Thereafter 35 760 14.0 30,566 19.1
Total 526 5,409 100 % $ 159,923 100 %
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(1) Amount is based on the total annual contractual base rent expiring in the applicable year, based on leases as of December 31, 2023.
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Geographic Diversification/Concentration Table
The following table lists our property locations and provides certain information regarding our portfolio’s geographic diversification/concentration as of December 31, 2023 (square feet and dollars in thousands):
State Number of
Buildings/
Campuses GLA (Sq Ft) % of GLA Annualized Base
Rent/NOI(1) % of Annualized
Base Rent/NOI
Alabama 5 290 1.5 % $ 4,550 1.3 %
Arkansas 1 51 0.3 534 0.2
Arizona 1 34 0.2 873 0.3
California 8 314 1.7 3,474 1.0
Colorado 6 287 1.5 6,793 2.0
Connecticut 3 109 0.6 2,291 0.7
District of Columbia 1 134 0.7 4,983 1.4
Florida 1 11 0.1 632 0.2
Georgia 11 420 2.1 9,636 2.7
Iowa 1 38 0.2 598 0.2
Illinois 10 330 1.8 5,668 1.6
Indiana 75 5,242 27.9 122,062 35.3
Kansas 2 116 0.6 3,085 0.9
Kentucky 17 1,504 8.0 (1,970) (0.6)
Louisiana 7 257 1.4 1,741 0.5
Massachusetts 7 513 2.7 13,330 3.9
Maryland 1 77 0.4 1,732 0.5
Michigan 28 1,588 8.4 36,065 10.4
Minnesota 1 46 0.2 1,091 0.3
Missouri 12 769 4.1 16,942 4.9
Mississippi 2 76 0.4 890 0.3
North Carolina 8 330 1.8 7,165 2.1
Nebraska 2 282 1.5 691 0.2
New Jersey 4 161 0.9 3,848 1.1
Nevada 1 191 1.0 4,974 1.4
New York 1 91 0.5 3,038 0.9
Ohio 32 2,468 13.1 32,060 9.3
Oregon 1 62 0.3 1,740 0.5
Pennsylvania 8 556 3.0 11,001 3.2
South Carolina 1 59 0.3 1,716 0.5
Tennessee 1 46 0.2 617 0.2
Texas 22 1,454 7.7 24,032 7.0
Utah 1 66 0.4 450 0.1
Virginia 2 284 1.5 4,643 1.3
Washington 2 77 0.4 2,171 0.6
Wisconsin 4 334 1.8 7,555 2.2
Total Domestic 290 18,667 99.2 $ 340,701 98.6
Isle of Man and UK 6 155 0.8 4,840 1.4
Total 296 18,822 100 % $ 345,541 100 %
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(1) Amount is based on contractual base rent from leases as of December 31, 2023, with the exception of our SHOP and integrated senior health campuses, which amount is based on annualized NOI due to the characteristics of the RIDEA structure. See Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Net Operating Income, for a further discussion of NOI.
Indebtedness
For a discussion of our indebtedness, see Note 8, Mortgage Loans Payable, Net, and Note 9, Lines of Credit and Term Loan, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
Item 3. Legal Proceedings.
For a discussion of our legal proceedings, see Note 11, Commitments and Contingencies — Litigation, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II