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Such consolidated financial statements and information have been prepared to reflect our financial position as of December 31, 2024 and 2023, together with our results of operations and cash flows for the years ended December 31, 2024, 2023 and 2022.
+Added: This section discusses the results of operations and cash flows for fiscal year 2024 compared to fiscal year 2023.
+Added: We have omitted the discussion related to the results of operations and changes in financial condition for fiscal year 2023 compared to fiscal year 2022 from this Annual Report on Form 10-K, but such discussion may be found in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our fiscal year 2023 Annual Report Form 10-K, which was filed with the U.S.
+Added: Securities and Exchange Commission, or the SEC, on March 22, 2024.
Forward-Looking Statements
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Such forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “can,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” “possible,” “initiatives,” “focus,” “seek,” “objective,” “goal,” “strategy,” “plan,” “potential,” “potentially,” “preparing,” “projected,” “future,” “long-term,” “once,” “should,” “could,” “would,” “might,” “uncertainty,” or other similar words.
−Removed: Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the SEC.
+Added: Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the United States Securities and Exchange Commission, or SEC.
Any such forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate, and beliefs of, and assumptions made by, our management and involve uncertainties that could significantly affect our financial results.
Such statements include, but are not limited to:
−Removed: (i) statements about our plans, strategies, initiatives and prospects, including any future capital-raising initiatives and planned or future acquisitions or dispositions of properties and other assets, including our option to purchase the minority membership interest in Trilogy REIT Holdings;
+Added: (i) statements about our plans, strategies, initiatives and prospects, including any future capital-raising initiatives and planned or future acquisitions or dispositions of properties and other assets;
and (ii) statements about our future results of operations, capital expenditures and liquidity.
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changes in economic conditions generally and the real estate market specifically;
−Removed: legislative and regulatory changes, including changes to laws governing the taxation of real estate investment trusts, or REITs;
+Added: legislative and regulatory changes, including changes to laws governing the taxation of real estate investment trusts, or REITs, and regulations or proposed regulations governing the operations and sales of health care properties;
the availability of capital;
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federal income tax purposes;
−Removed: changes in interest rates, including uncertainties about whether and when interest rates will continue to increase, and foreign currency risk;
+Added: changes in interest rates and foreign currency risk;
competition in the real estate industry;
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our ability to retain our executive officers and key employees;
−Removed: and unexpected labor costs and inflationary pressures.
+Added: unexpected labor costs and inflationary pressures;
+Added: and those risks identified in Item 1A, Risk Factors in this Annual Report on Form 10-K.
These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements.
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Overview and Background
−Removed: American Healthcare REIT, Inc., a Maryland corporation, is a self-managed REIT that acquires, owns and operates a diversified portfolio of clinical healthcare real estate properties, focusing primarily on outpatient medical buildings, senior housing, skilled nursing facilities, or SNFs, and other healthcare-related facilities.
+Added: American Healthcare REIT, Inc., a Maryland corporation, is a self-managed REIT that acquires, owns and operates a diversified portfolio of clinical healthcare real estate properties, focusing primarily on outpatient medical, or OM, buildings, senior housing, skilled nursing facilities, or SNFs, and other healthcare-related facilities.
We have built a fully-integrated management platform, with approximately 114 employees, that operates clinical healthcare properties throughout the United States, the United Kingdom and the Isle of Man .
−Removed: We also operate healthcare-related facilities utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure (the provisions of the Internal Revenue Code of 1986, as amended, or the Code, authorizing the RIDEA structure were enacted as part of the Housing and Economic Recovery Act of 2008).
−Removed: Our healthcare facilities operated under a RIDEA structure include our senior housing operating properties, or SHOP, and our integrated senior health campuses.
−Removed: We have originated and acquired secured loans and may also originate and acquire other real estate-related investments on an infrequent and opportunistic basis.
+Added: We own and operate our integrated senior health campuses and senior housing operating properties, or SHOP, utilizing the structure permitted by the REIT Investment Diversification and Empowerment Act of 2007, which is commonly referred to as a “RIDEA” structure.
+Added: We have also originated and acquired secured loans and may acquire other real estate-related investments in the future on an infrequent and opportunistic basis.
We generally seek investments that produce current income;
−Removed: however, we have selectively developed, and may continue to
−Removed: selectively develop, healthcare real estate properties.
+Added: however, we have selectively developed, and may continue to selectively develop, healthcare real estate properties.
We have elected to be taxed as a REIT for U.S.
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We believe that we have been organized and operated, and we intend to continue to operate, in conformity with the requirements for qualification and taxation as a REIT under the Code.
−Removed: On October 1, 2021, Griffin-American Healthcare REIT III, Inc., or GAHR III, merged with and into a wholly-owned subsidiary, or Merger Sub, of Griffin-American Healthcare REIT IV, Inc., or GAHR IV, with Merger Sub being the surviving company, which we refer to as the REIT Merger, and our operating partnership, Griffin-American Healthcare REIT IV Holdings, LP, merged with and into Griffin-American Healthcare REIT III Holdings, LP, or the Surviving Partnership, with the Surviving Partnership being the surviving entity, which we refer to as the Partnership Merger and, together with the REIT Merger, the Merger.
−Removed: Following the Merger on October 1, 2021, our company was renamed American Healthcare REIT, Inc., and the Surviving Partnership was renamed American Healthcare REIT Holdings, LP, or our operating partnership.
−Removed: Also on October 1, 2021, immediately prior to the consummation of the Merger, GAHR III acquired a newly formed entity, American Healthcare Opps Holdings, LLC, which we refer to as the AHI Acquisition, pursuant to a contribution and exchange agreement dated June 23, 2021.
−Removed: Following the Merger and the AHI Acquisition, our company became self-managed.
−Removed: See Note 1, Organization and Description of Business, and Note 4, Business Combinations — 2021 Business Combinations, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of the Merger and the AHI Acquisition.
Operating Partnership
−Removed: We conduct substantially all of our operations through our operating partnership, and we are the sole general partner of our operating partnership.
−Removed: As of both December 31, 2023 and 2022, we owned approximately 95.0% of the operating partnership units, or OP units, in our operating partnership, and the remaining 5.0% limited OP units were owned by the AHI Group Holdings, LLC, which is owned and controlled by Jeffrey T.
+Added: We conduct substantially all of our operations through American Healthcare REIT Holdings, LP, or our operating partnership, and we are the sole general partner of our operating partnership.
+Added: As of December 31, 2023, we owned 95.0% of the operating partnership units, or OP units, in our operating partnership, and the remaining 5.0% OP units were owned by the following limited partners:
+Added: (i) AHI Group Holdings, LLC, which is owned and controlled by Jeffrey T.
Hanson, the non-executive Chairman of our board of directors, or our board, Danny Prosky, our Chief Executive Officer, President and director, and Mathieu B.
−Removed: Streiff, one of our directors;
−Removed: Platform Healthcare Investor TII, LLC;
−Removed: Flaherty Trust;
−Removed: and a wholly-owned subsidiary of Griffin Capital Company, LLC.
+Added: Streiff, one of our non-executive directors;
+Added: (ii) Platform Healthcare Investor T-II, LLC;
+Added: (iii) Flaherty Trust;
+Added: and (iv) a wholly owned subsidiary of Griffin Capital Company, LLC, or Griffin Capital.
+Added: On August 19, 2024 and October 18, 2024, Platform Healthcare Investor T-II, LLC and Flaherty Trust, respectively, redeemed all of their OP units in exchange for 1,216,571 shares and 211,306 shares, respectively, of our Common Stock on a one-for-one basis and, as a result, are no longer limited partners of our operating partnership.
+Added: On December 6, 2024, Griffin Capital redeemed a portion of its OP units in exchange 69,882 shares of our Common Stock on a one-for-one basis.
+Added: As of December 31, 2024, we owned 98.7% of the OP units in our operating partnership, and the remaining 1.3% of the OP units were owned by the remaining limited partners.
See Note 12, Redeemable Noncontrolling Interests, and Note 13, Equity — Noncontrolling Interests in Total Equity, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of the ownership in our operating partnership.
−Removed: Public Offerings
−Removed: As of December 31, 2023, after taking into consideration the Merger and the impact of the reverse stock split as discussed below, we had issued 65,445,557 shares for a total of $2,737,716,000 of common stock since February 26, 2014 in our initial public offerings and our distribution reinvestment plan, or DRIP, offerings (including historical offering amounts sold by GAHR III and GAHR IV prior to the Merger).
−Removed: On November 10, 2022, our board approved charter amendments to effect, on November 15, 2022, a one-for-four reverse stock split of our common stock and a corresponding reverse split of the OP units, or the Reverse Splits.
−Removed: All numbers of common shares and per share data, as well as the OP units in this Annual Report on Form 10-K have been retroactively adjusted for all periods presented to give effect to the Reverse Splits.
+Added: Public Offerings and Listing
On February 9, 2024, pursuant to a Registration Statement filed with the SEC, on Form S-11 (File No.
−Removed: 333-267464), as amended, we closed our underwritten public offering through which we issued 64,400,000 shares of common stock, $0.01 par value per share, for a total of $772,800,000 in gross offering proceeds.
+Added: 333-267464), as amended, we closed our underwritten public offering, or the February 2024 Offering, through which we issued 64,400,000 shares of Common Stock, for a total of $772,800,000 in gross offering proceeds.
Such amounts include the exercise in full of the underwriters’ overallotment option to purchase up to an additional 8,400,000 shares of Common Stock.
−Removed: These shares are listed on the New York Stock Exchange under the trading symbol “AHR” and began trading on February 7, 2024.
−Removed: See Note 13, Equity, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of our public offerings.
+Added: We listed these shares of Common Stock on the New York Stock Exchange, or NYSE, under the trading symbol “AHR” and began trading on February 7, 2024.
+Added: Following the closing of the February 2024 Offering and until August 5, 2024, we presented our Common Stock, Class T common stock and Class I common stock, as separate classes of common stock within our consolidated balance sheets and consolidated statements of equity.
+Added: Any references to Common Stock in this Annual Report on Form 10-K refer to our NYSE-listed shares of common stock, whereas Class T common stock and Class I common stock refer to our historical non-listed shares of common stock.
+Added: This applies to all historical periods presented herein.
+Added: On August 5, 2024, 180 days after the listing of our Common Stock on the NYSE, each share of our Class T common stock and Class I common stock automatically converted into one share of our listed Common Stock.
+Added: On September 20, 2024, we closed our follow-on underwritten public offering, or the September 2024 Offering, under a prospectus supplement and related prospectus filed with the SEC pursuant to our effective shelf Registration Statement on Form S-3 (File No.
+Added: Through the September 2024 Offering, we issued 20,010,000 shares of Common Stock, for a total of $471,236,000 in gross offering proceeds.
+Added: Such amounts include the exercise in full of the underwriters’ overallotment option to purchase up to an additional 2,610,000 shares of Common Stock.
+Added: These shares are also listed on the NYSE under the trading symbol “AHR” and began trading on September 19, 2024.
+Added: On November 18, 2024, we entered into a sales agreement and established an at-the-market equity offering program, or ATM Offering, under a prospectus supplement and related prospectus filed with the SEC pursuant to our effective shelf Registration Statement on Form S-3 (File No.
+Added: 333-281488), pursuant to which we may, from time to time, offer and sell shares of Common Stock having an aggregate gross sales price of up to $500,000,000.
+Added: Shares sold through the ATM Offering may be
+Added: offered and sold in amounts to be determined by us from time to time, and are sold in negotiated transactions at market prices prevailing at the time of sale in accordance with Rule 415 under the Securities Act of 1933, as amended.
+Added: During the year ended December 31, 2024, we sold an aggregate of 4,285,531 shares of Common Stock under the ATM Offering for gross proceeds of $120,220,000 at an average gross price of $28.05 per share.
+Added: As of December 31, 2024, the remaining amount available under the ATM Offering for future sales of Common Stock was $379,780,000.
+Added: See Note 13, Equity — Common Stock, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of our public offerings.
Our Real Estate Investments Portfolio
−Removed: During the quarter ended December 31, 2023, we modified how we evaluate our business and make resource allocations, and therefore determined that we operate through four reportable business segments:
−Removed: integrated senior health campuses, outpatient medical, or OM, (which was formerly known as medical office buildings, or MOBs), triple-net leased properties and SHOP.
−Removed: All segment information included in this Annual Report on Form 10-K has been recast for all periods presented to reflect four reportable business segments and the change in segment name from MOBs to OM.
+Added: We currently operate through four reportable business segments:
+Added: integrated senior health campuses, OM, triple-net leased properties and SHOP.
See Note 18, Segment Reporting, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.
−Removed: As of December 31, 2023, we owned and/or operated 296 buildings and integrated senior health campuses including completed development and expansion projects, representing approximately 18,822,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $4,473,543,000.
+Added: As of December 31, 2024, we owned and/or operated 314 buildings and integrated senior health campuses representing approximately 19,155,000 square feet of gross leasable area, or GLA, for an aggregate contract purchase price of $4,533,212,000.
In addition, as of December 31, 2024, we also owned a real estate-related debt investment purchased for $60,429,000.
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These critical accounting estimates may require complex judgment in their application and are evaluated on an ongoing basis using information that is available as well as various other assumptions believed to be reasonable under the circumstances.
−Removed: However, if our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, we may have applied a different accounting treatment, resulting in a different presentation of our financial statements.
+Added: However, if our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, we may have applied a different accounting treatment, resulting in a material adverse impact to our consolidated financial condition and results of operations or a different presentation of our financial statements.
A discussion of our significant accounting policies is included within Note 2, Summary of Significant Accounting Policies, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
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The fair value measurement and its allocation require significant judgment and, in some cases, involve complex calculations.
−Removed: These allocation assessments directly impact our financial statements.
+Added: Significant assumptions used to determine such fair values include comparable market transactions, capitalization rates, discount rates, property operating data, among other assumptions, all of which can be impacted by expectations about future market or economic conditions.
+Added: These allocation assessments directly impact our financial statements, such as the amount of depreciation and amortization we record over the estimated useful life of the property or the term of the lease.
Impairment of Long-Lived Assets
−Removed: We periodically perform an analysis that requires us to judge whether indicators of impairment exist and to estimate likely future cash flows.
+Added: We periodically perform an analysis that requires us to judge whether indicators of impairment exist and to estimate likely future cash flows when a review for the recoverability of real estate assets is necessary.
Projections of expected future operating cash flows require that we estimate future revenue amounts, future property operating expenses and the number of years the property is held for investment, among other factors.
−Removed: The subjectivity of assumptions used in the future cash flow analysis, including capitalization and growth rates, where applicable, could result in an incorrect assessment of the recoverability of the carrying value of our real estate assets.
−Removed: In the event that an asset group fails its recoverability test and our carrying value exceeds our estimated fair value, the subjectivity of assumptions used could result in the misstatement of the adjusted carrying value of our real estate assets and net income (loss).
+Added: The subjectivity of assumptions used in the future cash flow
+Added: analysis, including capitalization and growth rates (for estimated future revenues and expenses), period of time we intend to hold and operate the property, general economic conditions and trends, or other available market data such as comparable sales, as applicable, could result in an incorrect assessment of the recoverability of the carrying value of our real estate assets.
+Added: In the event that a real estate investment fails its recoverability test and our carrying value exceeds our estimated fair value, we would record an impairment loss to the extent the carrying value exceeds the estimated fair value of our real estate investment.
+Added: Determining the fair value of real estate assets when measuring impairments involves significant judgment and generally utilizes comparable market transactions, negotiations with prospective buyers, or discounted future cash flow analyses subject to the capitalization and growth rates and other assumptions discussed above, as well the application of market discount rates to such cash flows.
+Added: Our ability to accurately predict future operating results and resulting cash flows, and estimate fair values, impacts the timing and recognition of impairments.
+Added: While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our consolidated financial statements.
Goodwill represents the excess of consideration paid over the fair value of underlying identifiable net assets of a business acquired.
This allocation is based upon our determination of the value of the acquired assets and assumed liabilities, which requires judgment and some of the estimates involve complex calculations.
−Removed: These allocation assessments have a direct impact
−Removed: on our financial statements.
+Added: These allocation assessments have a direct impact on our financial statements.
Our goodwill has an indeterminate life and is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired.
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Estimated settlements are adjusted in future periods as adjustments become known (that is, new information becomes available), or as years are settled or are no longer subject to such audits, reviews and investigations.
−Removed: Resident Receivable Allowances
−Removed: An allowance is maintained for estimated losses resulting from the inability of residents and payors to meet the contractual obligations under their lease or service agreements.
−Removed: Substantially all of such allowances are recorded as direct reductions of resident fees and services revenue as contractual adjustments provided to third-party payors or implicit price concessions in our accompanying consolidated statements of operations and comprehensive loss.
−Removed: Our determination of the adequacy of these allowances is based primarily upon evaluations of historical loss experience, the residents’ financial condition, security deposits, cash collection patterns by payor and by state, current economic conditions, future expectations in estimating credit losses and other relevant factors.
Recently Issued Accounting Pronouncements
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For a further discussion of these and other factors that could impact our future results or performance, see Part I, Item 1A, Risk Factors, of this Annual Report on Form 10-K.
−Removed: For the years ended December 31, 2023, 2022 and 2021 inflation has affected our operations.
−Removed: The annual rate of inflation in the United States was 3.2% in February 2024, as measured by the Consumer Price Index.
−Removed: We believe inflation has impacted our operations such that we have experienced, and continue to experience, increases in the cost of labor, services, energy and supplies, and therefore continued inflationary pressures on our integrated senior health campuses and SHOP could continue to impact our profitability in future periods.
+Added: During the years ended December 31, 2024, 2023 and 2022, inflation has affected our operations.
+Added: The annual rate of inflation in the United States was 3.0% in January 2025, as measured by the Consumer Price Index.
+Added: We believe inflation has impacted our operations such that we have experienced, and continue to experience, increases in the cost of labor, services,
+Added: energy and supplies, and therefore continued inflationary pressures on our integrated senior health campuses and SHOP could continue to impact our profitability in future periods.
To offset the impact of inflation on the cost of labor and services, we had our RIDEA managers bill higher than average annual rent and care fee increases for existing residents in 2023 and 2024, as compared to prior years, while adjusting market rates as frequently as needed based on competitor pricing and market conditions.
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However, due to the long-term nature of existing leases, among other factors, the leases may not reset frequently enough to cover inflation.
−Removed: In addition, inflation also caused, and may continue to cause, an increase in the cost of our variable-rate debt due to rising interest rates.
+Added: In addition, inflation has also caused an increase in the cost of our variable-rate debt due to historically rising interest rates.
See Item 7A, Quantitative and Qualitative Disclosures About Market Risk — Interest Rate Risk, for a further discussion.
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We segregate our operations into reporting segments in order to assess the performance of our business in the same way that management reviews our performance and makes operating decisions.
−Removed: During the quarter ended December 31, 2023, we modified how we evaluate our business and make resource allocations, and therefore determined that we operate through four reportable business segments:
−Removed: integrated senior health campuses, OM (which was formerly known as MOBs), triple-net leased properties and SHOP.
−Removed: All segment information included herein has been recast for all periods presented to reflect four reportable business segments and the change in segment name from MOBs to OM.
−Removed: The most significant drivers behind changes in our consolidated results of operations for the year ended 2023 compared to the corresponding period in 2022 were primarily due to the adverse effects of inflation, which resulted in increases in the cost of labor, services, energy and supplies;
+Added: As of December 31, 2024, we operated through four reportable business segments:
+Added: integrated senior health campuses, OM, SHOP and triple-net leased properties.
+Added: The most significant drivers behind changes in our consolidated results of operations for the year ended December 31, 2024, as compared to the year ended December 31, 2023, were primarily due to:
+Added: the increase in resident occupancies and billing rates, partially offset by the adverse effect of inflation, which resulted in increases in the cost of labor, services, energy and supplies;
our acquisitions and dispositions of investments subsequent to December 31, 2023;
−Removed: and the transitions of the operations of certain senior housing and skilled nursing facilities from triple-net leased properties to RIDEA structures.
−Removed: The changes in our consolidated results of operations for 2022 as compared to 2021 are primarily due to the acquisition of GAHR IV’s portfolio of 92 buildings, or approximately 4,799,000 square feet of GLA, as a result of the Merger on October 1, 2021;
−Removed: the disruption to our normal operations as a result of the COVID-19 pandemic;
−Removed: grant income received;
−Removed: and the adverse effect of inflation.
−Removed: Additional drivers behind the changes in our consolidated results of operations are discussed in more detail below.
−Removed: See Note 3, Real Estate Investments, Net and Note 4, Business Combinations, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of our acquisitions and dispositions during 2023, 2022 and 2021.
+Added: and the transition of the operations of certain leased senior housing and skilled nursing facilities from triple-net leased properties to a managed portfolio utilizing a RIDEA structure.
+Added: Additional information behind the changes in our consolidated results of operations is discussed in more detail below.
+Added: See Note 2, Summary of Significant Accounting Policies — Properties Held for Sale, Note 3, Real Estate Investments, Net, and Note 4, Business Combinations, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of our acquisitions and dispositions during 2024 and 2023.
As of December 31, 2024 and 2023, we owned and/or operated the following types of properties (dollars in thousands):
−Removed: 2023 2022 2021
Campuses Aggregate
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Purchase Price Leased
−Removed: Campuses Aggregate
−Removed: Purchase Price Leased
Integrated senior health campuses
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For the years ended December 31, 2024 and 2023, resident fees and services revenue primarily consisted of rental fees related to resident leases, extended health care fees and other ancillary services, and real estate revenue primarily consisted of base rent and expense recoveries.
−Removed: The amount of revenues generated by our RIDEA properties depends principally on our ability to maintain resident occupancy rates of currently leased space and to lease available space at the then existing rental rates.
−Removed: We also receive grant income.
−Removed: Revenues and grant income by reportable segment consisted of the following for the periods then ended (in thousands):
−Removed: Years Ended December 31,
−Removed: 2023 2022 2021
+Added: The amount of revenues generated by our RIDEA properties depends principally on our ability to maintain resident occupancy rates.
+Added: The amount of revenues generated by our non-RIDEA properties is dependent on our ability to maintain tenant occupancy rates of currently leased space and to lease available space at the then existing rental rates.
+Added: We also received grant income during 2023.
+Added: Revenues and grant income by reportable segment consisted of the following for the periods presented below (in thousands):
+Added: Year Ended December 31,
Resident Fees and Services Revenue
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Integrated senior health campuses — 7,475
−Removed: SHOP — 855 3,040
Total grant income — 7,475
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For our integrated senior health campuses segment, we increased resident fees and services revenue by $137,932,000 for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to:
−Removed: (i) improved resident occupancy and higher resident fees as a result of an increase in billing rates;
−Removed: (ii) an increase of $118,320,000 related to our acquisition of the remaining 50.0% interest in a privately held company, RHS Partners, LLC, or RHS, in August 2022, which owns and/or operates 16 integrated senior health campuses located in Indiana;
−Removed: and (iii) an increase of $41,121,000 due to the expansion of our customer base, expansion of services offered and increases in billing rates for such services at an ancillary business unit within Trilogy Investors, LLC, or Trilogy.
−Removed: Such amounts were partially offset by a decrease in total resident fees and services revenue of $11,888,000 due to dispositions within our integrated senior health campuses segment during the third and fourth quarters of 2022.
−Removed: For our integrated senior health campuses segment, we increased resident fees and services revenue by $69,992,000 for the year ended December 31, 2022, as compared to the year ended December 31, 2021, due to:
−Removed: (i) improved resident occupancy;
−Removed: (ii) our acquisition of the 50.0% controlling interest in RHS;
−Removed: and (iii) an increase of $11,480,000 due to our acquisition of an integrated senior health campus in Kentucky in January 2022.
+Added: (i) increased resident occupancy and higher resident fees as a result of an increase in billing rates and levels of care service provided;
+Added: and (ii) an increase of $24,531,000 due to the expansion of our customer base, expansion of services offered and increases in billing rates for such services at ancillary business units within Trilogy Investors, LLC, or Trilogy.
For our SHOP segment, we increased resident fees and services revenue by $77,124,000 for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to:
−Removed: (i) our acquisition of a portfolio of seven senior housing facilities in Texas within our SHOP segment in December 2022, which increased revenue by $25,375,000;
−Removed: (ii) an increase of $12,714,000 due to the transitioning of SNFs within the Central Wisconsin Senior Care Portfolio to a RIDEA structure in March 2023;
−Removed: and (iii) an increase of $2,817,000 due to the transitioning of senior housing facilities within the Michigan ALF Portfolio to a RIDEA structure in November 2023.
−Removed: The remaining increase in resident fees and services revenue for our SHOP segment was primarily attributable to improved resident occupancy and higher resident fees as a result of increases in billing rates.
−Removed: Such increases were partially offset by a decrease of $18,755,000 for the year ended December 31, 2023, as compared to the year ended December 31, 2022, due to real estate dispositions within our SHOP segment during the fourth quarter of 2022 and during the year ended December 31, 2023.
−Removed: For the year ended December 31, 2022, as compared to the year ended December 31, 2021, $43,582,000 in resident fees and services revenue for our SHOP segment was due to the increase in the size of our portfolio as a result of the Merger.
−Removed: The remaining increase in resident fees and services revenue for our SHOP segment for the year ended December 31, 2022, as compared to the year ended December 31, 2021, was primarily attributable to:
−Removed: (i) improved resident occupancy;
−Removed: (ii) higher resident move-in fees;
−Removed: (iii) an increase of $5,661,000 due to transitioning the leased senior housing facilities within Delta Valley ALF portfolio to a RIDEA structure and including such facilities within SHOP on December 2021;
−Removed: and (iv) an increase of $1,995,000 due to the acquisition of a portfolio of seven senior housing facilities in Texas in December 2022, which is included within our SHOP segment.
+Added: (i) an increase of $43,750,000 due to the acquisition of 14 senior housing properties in Oregon in February 2024;
+Added: (ii) an increase of $13,929,000 due to the transitioning of leased senior housing facilities in our Michigan ALF Portfolio to a managed portfolio utilizing a RIDEA structure in November 2023;
+Added: (iii) an increase of $6,389,000 due to the acquisition of five senior housing properties in Washington in September 2024;
+Added: (iv) an increase of $1,174,000 due to the acquisition of one senior housing property in Georgia in October 2024;
+Added: and (v) increased resident occupancy and higher resident fees as a result of an increase in billing rates.
+Added: Additionally, $6,026,000 of the increase in resident fees and services revenue for our SHOP segment for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to transitioning SNFs in our Central Wisconsin Senior Care Portfolio from triple-net leased properties to a managed portfolio utilizing a RIDEA structure in March 2023.
+Added: Such increases in resident fees and services revenue in our SHOP segment were partially offset by a decrease of $12,599,000 due to real estate dispositions within our SHOP segment in 2023 and 2024.
Real Estate Revenue
−Removed: For the year ended December 31, 2023, we experienced a decrease in real estate revenue within our triple-net leased properties segment of $12,294,000, as compared to the year ended December 31, 2022, primarily due to:
−Removed: (i) the transitioning of SNFs within the Central Wisconsin Senior Care Portfolio to a RIDEA structure in March 2023 and recording the full amortization of $8,073,000 of above-market leases;
−Removed: and (ii) the transitioning of senior housing facilities within Michigan ALF Portfolio to a RIDEA structure in November 2023 and recording the full amortization of $2,756,000 of above-market leases.
−Removed: We also experienced a decrease in real estate revenue for our OM segment for the year ended December 31, 2023 of $2,649,000, as compared to the year ended December 31, 2022, primarily due to a decrease of $4,948,000 related to OM building dispositions during the fourth quarter of 2022 and during the year ended December 31, 2023, and a decrease of $579,000 due to the early lease termination of Cullman AL OM III during the fourth quarter of 2023.
−Removed: Such decreases were partially offset by a $2,965,000 increase in real estate revenue for our OM segment due to the full amortization of below-market leases within Cullman AL OM III due to such lease termination during the fourth quarter of 2023.
−Removed: For the year ended December 31, 2022, as compared to the year ended December 31, 2021, $67,234,000 of real estate revenue was primarily due to the increase in the size of our portfolio as a result of the Merger.
−Removed: Such amounts were partially offset by a decrease in rental revenue for our senior housing — leased segment of $2,200,000 for the year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to transitioning the leased senior housing facilities within Delta Valley ALF portfolio to a RIDEA structure and including such facilities within SHOP in December 2021.
−Removed: In addition, for the year ended December 31, 2022, we experienced a decrease in rental revenue for our OM segment of $782,000, primarily due to a one-time lease termination fee recognized in June 2021 for Stockbridge GA OM III.
−Removed: For the years ended December 31, 2023, 2022 and 2021, we recognized $7,475,000, $25,675,000 and $16,951,000, respectively, of grant income at our integrated senior health campuses and SHOP primarily related to government grants received through Coronavirus Aid, Relief, and Economic Security Act economic stimulus programs.
−Removed: As of April 2023, the federal government’s coronavirus public health emergency declaration expired, and certain relief measures have been wound down, and others are being phased out.
+Added: For the year ended December 31, 2024, real estate revenue within our triple-net leased properties segment increased $7,797,000, as compared to the year ended December 31, 2023, primarily due to transitioning each of the leased SNFs in our Central Wisconsin Senior Care Portfolio to a managed portfolio utilizing a RIDEA structure in 2023 that resulted in the full amortization of an aggregate $8,073,000 of above-market leases recorded against real estate revenue in 2023, as well as a $1,966,000 increase in revenue due to the early extension of the lease at Crown Senior Care Portfolio located in the UK.
+Added: Such increase was partially offset by a $2,358,000 decrease in real estate revenue generated from our Michigan ALF Portfolio prior to such transition to a managed portfolio utilizing a RIDEA structure in November 2023.
+Added: Real estate revenue for our OM segment decreased $11,328,000 for year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to dispositions of OM buildings during 2023 and 2024 and a slight decrease in occupancy.
+Added: For the year ended December 31, 2024, we did not recognize any grant income.
+Added: For the year ended December 31, 2023, we recognized an aggregate $7,475,000 of grant income at our integrated senior health campuses and SHOP primarily related to government grants received through Coronavirus Aid, Relief, and Economic Security Act economic stimulus programs.
+Added: As of April 2023, the federal government’s coronavirus public health emergency declaration expired, and certain relief measures have been wound down, and others are phased out.
Property Operating Expenses and Rental Expenses
−Removed: Integrated senior health campuses and SHOP typically have a higher percentage of direct operating expenses to revenue than OM buildings and triple-net leased properties due to the nature of RIDEA-type facilities where we conduct day-to-day operations.
−Removed: Property operating expenses and property operating expenses as a percentage of resident fees and services revenue and grant income, as well as rental expenses and rental expenses as a percentage of real estate revenues, by reportable segment consisted of the following for the periods then ended (dollars in thousands):
−Removed: Years Ended December 31,
−Removed: 2023 2022 2021
+Added: Integrated senior health campuses and SHOP typically have a higher percentage of direct operating expenses to revenue and grant income than OM buildings and triple-net leased properties due to the nature of RIDEA-type facilities where we conduct day-to-day operations.
+Added: Property operating expenses and property operating expenses as a percentage of resident fees and services revenue and grant income, as well as rental expenses and rental expenses as a percentage of real estate revenue, by reportable segment consisted of the following for the periods presented below (dollars in thousands):
+Added: Year Ended December 31,
Property Operating Expenses
6 unchanged sentences
Total rental expenses $ 53,239 28.5 % $ 57,475 30.2 %
−Removed: For the year ended December 31, 2023, the increase in total property operating expenses for our integrated senior health campuses segment, as compared to the year ended December 31, 2022, was predominately due to (i) increased occupancy at the facilities within such segment;
−Removed: (ii) an increase of $97,515,000 attributable to our acquisition of the 50.0% controlling interest in RHS;
−Removed: and (iii) an increase of $43,202,000 within Trilogy’s ancillary business unit due to higher labor costs associated with the expansion of services offered and inflation impacting the costs.
−Removed: Such amounts were partially offset by a decrease in total property operating expenses of $9,282,000 due to real estate dispositions within our integrated senior health campuses segment during the third and fourth quarters of 2022.
−Removed: For the year ended December 31, 2022, the increase in total property operating expenses for our integrated senior health campuses segment, as compared to the year ended December 31, 2021, was predominately due to higher operating expenses as a result of increased occupancy, as well as $77,097,000 due to our acquisition of the 50.0% controlling interest in RHS and our acquisition of an integrated senior health campus in January 2022.
−Removed: For the year ended December 31, 2023, total property operating expenses for our SHOP segment primarily increased, as compared to the year ended December 31, 2022, due to:
−Removed: (i) an increase of $20,707,000 due to the acquisition of a portfolio of seven senior housing facilities within our SHOP segment in Texas in December 2022;
−Removed: (ii) an increase of $12,979,000 due to the transitioning of SNFs within the Central Wisconsin Senior Care Portfolio from triple-net leased properties to a RIDEA structure in March 2023;
−Removed: (iii) an increase of $3,847,000 due to the transitioning of senior housing facilities within the Michigan ALF Portfolio from triple-net leased properties to a RIDEA structure in November 2023;
−Removed: (iv) higher operating expenses as a result of increased occupancy;
−Removed: and (v) higher labor costs due to an increase in employee wages.
−Removed: Such amounts were partially offset by a decrease in total property operating expenses for the year ended December 31, 2023, as compared to the year ended December 31, 2022, of $22,047,000 due to real estate dispositions within our SHOP segment during the three months ended December 31, 2022 and during the year ended December 31, 2023.
−Removed: For the year ended December 31, 2022, as compared to the year ended December 31, 2021, rental expenses increased by $19,760,000 and property operating expenses increased by $46,897,000 for our SHOP due to the increase in the size of our portfolio as a result of the Merger.
−Removed: The remaining increase in total property operating expenses for our SHOP segment was due to:
−Removed: (i) higher operating expenses as a result of increased occupancy;
−Removed: (ii) an increase in labor costs, such as a significant increase in employee wages, agency fees and temporary labor expenses;
−Removed: (iii) an increase of $4,743,000 due to transitioning the leased senior housing facilities within Delta Valley ALF portfolio to a RIDEA structure and including such facilities within SHOP in December 2021;
−Removed: and (iv) an increase of $1,961,000 due to the acquisition of a portfolio of seven senior housing facilities in Texas within our SHOP segment in December 2022.
−Removed: General and Administrative
−Removed: For the year ended December 31, 2023, general and administrative expenses were $47,510,000, compared to $43,418,000 for the year ended December 31, 2022.
−Removed: The increase in general and administrative expenses of $4,092,000 was primarily the result of an increase of $1,712,000 in stock compensation expense and $1,694,000 in bad debt expense.
−Removed: For the year ended December 31, 2022, general and administrative expenses were $43,418,000 compared to $43,199,000 for the year ended December 31, 2021.
−Removed: The increase in general and administrative expenses of $219,000 was primarily the result of an increase of $17,638,000 in payroll and compensation costs for the personnel hired as a result of the AHI Acquisition, partially offset by a decrease in our asset management and property management oversight fees of $17,141,000 as a result of the AHI Acquisition.
+Added: For the year ended December 31, 2024, as compared to the year ended December 31, 2023, the increase in total property operating expenses for our integrated senior health campuses segment was predominately due to:
+Added: (i) increased resident occupancy at the facilities within such segment;
+Added: and (ii) an increase of $26,601,000 within Trilogy’s ancillary business units due to higher labor costs associated with the expansion of services offered and inflation’s impact on labor costs and other operating expenses.
+Added: For the year ended December 31, 2024, as compared to the year ended December 31, 2023, total property operating expenses for our SHOP segment increased primarily due to:
+Added: (i) an increase of $38,646,000 due to the acquisition of 14 senior housing properties in Oregon in February 2024;
+Added: (ii) an increase of $15,102,000 due to the transitioning of the senior housing facilities in our Michigan ALF Portfolio from triple-net leased properties to a managed portfolio utilizing a RIDEA structure in November 2023;
+Added: (iii) an increase of $4,536,000 due to the acquisition of five senior housing properties in Washington in September 2024;
+Added: (iv) an increase of $1,071,000 due to the acquisition of one senior housing property in Georgia in October 2024;
+Added: and (v) increased resident occupancy at the facilities within such segment.
+Added: Additionally, $5,165,000 of the increase in total property operating expenses for our SHOP segment for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to transitioning the SNFs in our Central Wisconsin Senior Care Portfolio from triple-net leased properties to a managed portfolio utilizing a RIDEA structure in March 2023.
+Added: Such increases in total property operating expenses for our SHOP segment were partially offset by a decrease of $14,285,000 due to real estate dispositions within our SHOP segment in 2023 and 2024.
+Added: Rental expenses for our OM segment decreased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to the dispositions of OM buildings in 2023 and 2024.
Business Acquisition Expenses
+Added: For the year ended December 31, 2024, we recorded business acquisition expenses of $7,141,000 primarily related to $5,122,000 in aggregate acquisition costs incurred for properties operated under a RIDEA structure and included in our SHOP segment and $1,040,000 in aggregate costs incurred to purchase the noncontrolling interests in our real estate investments previously held by joint venture partners.
For the year ended December 31, 2023, we recorded business acquisition expenses of $5,795,000 primarily due to:
2 unchanged sentences
and (iii) $1,260,000 in aggregate acquisition costs for properties operated under a RIDEA structure and included in our SHOP segment.
−Removed: For the year ended December 31, 2022, we recorded business acquisition expenses of $4,388,000 primarily incurred in connection with $1,895,000 in transaction costs incurred in December 2022 related to the acquisition of seven senior housing facilities in Texas, $938,000 in transaction costs related to the acquisition of a pharmaceutical business in April 2022, and $914,000 of costs incurred in the pursuit of real estate investments that did not close.
−Removed: For the year ended December 31, 2022, the decrease in business acquisition expenses, as compared to the year December 31, 2021, primarily related to a decrease of $12,599,000 in third-party legal costs and professional services incurred related to the Merger and the AHI Acquisition, partially offset by an increase of $3,158,000 in transaction costs related to our business combinations and an increase of $807,000 in dead-deal costs incurred in the pursuit of real estate investments that did not close.
Depreciation and Amortization
For the years ended December 31, 2024 and 2023, depreciation and amortization were $179,192,000 and $182,604,000, respectively, which primarily consisted of depreciation on our operating properties of $151,340,000 and $147,587,000, respectively, and amortization of our identified intangible assets of $25,186,000 and $32,323,000, respectively.
−Removed: For the year ended December 31, 2023, as compared to the year ended December 31, 2022, the increase in depreciation and amortization of $14,647,000 was primarily due to:
−Removed: (i) an increase in depreciation and amortization within our SHOP segment and our integrated senior health campuses segment as a result of acquisitions that occurred subsequent to December 31, 2022, as well as development and capital expenditures since December 31, 2022;
−Removed: (ii) the full amortization of an aggregate $6,635,000 of in-place leases related to the transition of SNFs within the Central Wisconsin Senior Care Portfolio to a RIDEA structure in March 2023 and the transition of senior housing facilities within the Michigan ALF Portfolio to a RIDEA structure in November 2023;
−Removed: (iii) the full amortization and depreciation of an aggregate $1,823,000 related to a lease termination within Cullman AL OM III;
−Removed: and (iv) the full depreciation of $1,157,000 of depreciable assets as a result of storm damage affecting our properties in Louisiana, Nebraska, North Carolina and Texas.
−Removed: Such amounts were partially offset by a decrease in depreciation and amortization as a result of real estate dispositions within our SHOP segment and our OM segment subsequent to December 31, 2022.
−Removed: For the year ended December 31, 2022, the increase in depreciation and amortization of $34,766,000, as compared to the year ended December 31, 2021, was primarily the result of the increase in depreciable assets in our portfolio as a result of the Merger resulting in depreciation and amortization expense of $27,280,000 as well as an increase in depreciable assets in our portfolio as a result of acquisitions within our integrated senior health campuses segment of $9,368,000.
−Removed: Such amounts were partially offset by a decrease of $1,979,000 in depreciable assets in our portfolio as a result of a real estate disposition within our OM segment during the year ended December 31, 2022.
+Added: For the year ended December 31, 2024, as compared to the year ended December 31, 2023, the decrease in depreciation and amortization of $3,412,000 was primarily due to the full amortization of an aggregate $6,635,000 of in-place leases related to the transition of the SNFs within our Central Wisconsin Senior Care Portfolio to a managed portfolio utilizing a RIDEA structure in March 2023 and the transition of the senior housing — leased facilities in our Michigan ALF Portfolio to a managed portfolio utilizing a RIDEA structure in November 2023.
+Added: Such amounts were partially offset by the write-off of the remaining customer relationship intangible assets totaling $1,831,000, which were associated with a closed pharmacy within our integrated senior health campuses segment.
Interest Expense
−Removed: Interest expense, including gain or loss in fair value of derivative financial instruments, consisted of the following for the periods then ended (in thousands):
−Removed: Years Ended December 31,
−Removed: 2023 2022 2021
+Added: Interest expense, including gain or loss in fair value of derivative financial instruments, consisted of the following for the periods presented below (in thousands):
+Added: Year Ended December 31,
Interest expense:
5 unchanged sentences
Amortization of debt discount/premium, net
−Removed: 3,549 827 773
−Removed: Loss (gain) in fair value of derivative financial instruments 926 (500) (8,200)
−Removed: Loss on extinguishment of debt 345 5,166 2,655
+Added: (Gain) loss in fair value of derivative financial instruments (1,030) 926
+Added: Loss on debt and derivative extinguishments 5,382 345
Interest on finance lease liabilities 567 353
Interest expense on financing obligations and other liabilities
−Removed: 1,599 946 1,377
Total $ 126,700 $ 164,117
−Removed: The increase in total interest expense for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to:
−Removed: (i) an increase in debt balances during 2023;
−Removed: (ii) a higher weighted average effective interest rate on our variable debt, which was 7.50% and 6.44% as of December 31, 2023 and 2022, respectively;
−Removed: (iii) a $2,722,000 increase in amortization of debt discount/premium, net;
−Removed: and (iv) a $1,426,000 change from gain to loss in fair value of our derivative financial instruments.
−Removed: Such increases in total interest expense for the year ended December 31, 2023, as compared to the year ended December 31, 2022, were primarily offset by $3,756,000 of net proceeds from our interest rate swaps and a $4,821,000 decrease in loss on extinguishments of debt.
−Removed: The increase in total interest expense for the year ended December 31, 2022, as compared to the year ended December 31, 2021, was primarily related to an increase in interest expense incurred on our lines of credit and term loans and mortgage loans payable due to:
−Removed: (i) a larger debt portfolio as a result of the Merger;
−Removed: (ii) an increase in variable interest rates;
−Removed: (iii) a decrease in the gain in fair value recognized on our derivative financial instruments of $7,700,000;
−Removed: and (iv) an increase in loss on debt extinguishment of $2,511,000.
−Removed: Such increase in total interest expense was partially offset by a decrease in amortization of deferred financing costs on our lines of credit and term loans of $1,261,000.
+Added: The decrease in total interest expense for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to:
+Added: (i) the payoff of $176,145,000 of variable-rate mortgage loans payable and paydown of $545,010,000 on our variable-rate lines of credit in February 2024 from the net proceeds received from the February 2024 Offering;
+Added: (ii) the paydown of $194,000,000 on our variable-rate lines of credit in September 2024 from the net proceeds received from the September 2024 Offering;
+Added: and (iii) the payoff of our remaining variable-rate mortgage loans payable and paydown of our variable-rate lines of credit in the fourth quarter of 2024 from the net proceeds received from the ATM Offering.
+Added: Such decrease in total interest expense for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was partially offset by the $1,956,000 change from loss to gain in fair value of derivative financial instruments.
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, for a further discussion of debt extinguishments.
Gain or Loss on Dispositions of Real Estate Investments
+Added: For the year ended December 31, 2024, we recognized an aggregate net gain on dispositions of our real estate investments of $5,213,000 primarily related to the sale of four OM buildings, one integrated senior health campus, eight triple-net leased properties and one land easement disposal on one of our OM properties.
For the year ended December 31, 2023, we recognized an aggregate net gain on dispositions of our real estate investments of $32,472,000 primarily related to the sale of six SHOP within our Central Florida Senior Housing Portfolio and 16 OM buildings.
−Removed: For the year ended December 31, 2022, we recognized an aggregate net gain on dispositions of our real estate investments of $5,481,000 related to the sale of one OM building, three senior housing facilities within our Central Florida Senior Housing Portfolio and two integrated senior health campuses.
−Removed: For the year ended December 31, 2021, we recognized an aggregate net loss on dispositions of our real estate investments of $100,000 related to the sale of one OM building, one SNF and two integrated senior health campuses.
See Note 2, Summary of Significant Accounting Policies — Properties Held for Sale, and Note 3, Real Estate Investments, Net, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
−Removed: For the year ended December 31, 2023, we recognized aggregate impairment charges of $13,899,000 for two of our SHOP within the Northern California Senior Housing Portfolio and for one of our OM buildings within the Homewood AL Portfolio.
−Removed: For the year ended December 31, 2022, we recognized aggregate impairment charges on our real estate investments of $54,579,000 related to our SHOP within the Central Florida Senior Housing Portfolio, Pinnacle Warrenton ALF and the Mountain Crest Senior Housing Portfolio.
−Removed: For the year ended December 31, 2021, we recognized an impairment charge of $3,335,000 on an OM building, Mount Dora Medical Center.
−Removed: See Note 3, Real Estate Investments, Net, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of impairments of such real estate investments.
+Added: For the year ended December 31, 2024, as we continued to evaluate our properties based on their historical operating performance and our expected holding period, we determined that six of our OM, two of our integrated senior health campuses and two of our SHOP were impaired and recognized aggregate impairment charge of $45,755,000.
+Added: For the year ended December 31, 2023, as we continued to evaluate additional non-strategic properties for sale, we recognized aggregate impairment charges of $13,899,000 for two of our SHOP within the Northern California Senior Housing Portfolio and for one of our OM buildings within the Homewood AL Portfolio.
+Added: See Note 3, Real Estate Investments, Net — Impairment of Real Estate Investments , to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of impairments of such real estate investments.
+Added: For the year ended December 31, 2024, we did not recognize impairment losses with respect to trade name intangible assets.
For the year ended December 31, 2023, we recognized an impairment loss of $10,520,000 related to the write-off of trade name intangible assets at ancillary business units within Trilogy.
−Removed: For the years ended December 31, 2022 and 2021, we did not recognize impairment losses with respect to trade name intangible assets.
−Removed: For the year ended December 31, 2023 and 2021, we did not recognize any goodwill impairment.
−Removed: For the year ended December 31, 2022, we determined that goodwill pertaining to our SHOP reporting segment was fully impaired and recognized an impairment loss of $23,277,000 in our accompanying consolidated statements of operations and comprehensive loss.
−Removed: See Note 18, Segment Reporting, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of such goodwill impairment.
+Added: See Note 6, Identified Intangible Assets and Liabilities, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of impairment of intangible assets.
Gain on Re-measurement of Previously Held Equity Interest
−Removed: For the year ended December 31, 2023, we recognized a $726,000 gain on re-measurement of the fair value of our previously held equity interest in Memory Care Partners, LLC.
−Removed: For the year ended December 31, 2022, we recognized $19,567,000 gain on re-measurement of the fair value of our previously held equity interest in RHS.
For the year ended December 31, 2024, we did not recognize any gain on re-measurement of any previously held equity interest.
+Added: For the year ended December 31, 2023, we recognized a $726,000 gain on re-measurement of the fair value of our previously held equity interest in Memory Care Partners, LLC.
See Note 4, Business Combinations, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of the acquisitions of previously held equity interests.
Liquidity and Capital Resources
−Removed: Our principal sources of liquidity are cash flows from operations, borrowings under our lines of credit and proceeds from dispositions of real estate investments.
+Added: Our principal sources of liquidity are cash flows from operations, net proceeds from the issuances of equity securities, including through our ATM Offering, borrowings under our lines of credit and proceeds from the dispositions of real estate investments.
For the next 12 months, our principal liquidity needs are to:
−Removed: (1) fund property operating expenses and general and administrative expenses;
−Removed: (2) meet our debt service requirements (including principal and interest);
−Removed: (3) fund development activities and capital expenditures;
−Removed: and (4) make distributions to our stockholders, as required for us to continue to qualify as a REIT.
+Added: (i) fund property operating expenses and general and administrative expenses;
+Added: (ii) meet our debt service requirements (including principal and interest);
+Added: (iii) fund development activities and capital expenditures;
+Added: and (iv) make distributions to our stockholders, as required for us to continue to qualify as a REIT.
We believe that the sources of liquidity described above will be sufficient to satisfy our cash requirements for the next 12 months and thereafter.
6 unchanged sentences
As of December 31, 2024, we had $14,804,000 of restricted cash in loan impounds and reserve accounts to fund a portion of such capital expenditures.
−Removed: Based on the budget for the properties we owned as of December 31, 2023, we estimated that unspent discretionary expenditures for capital and tenant improvements as of such date are equal to $76,082,000 for 2024, although actual expenditures are dependent on many factors which are not presently known.
+Added: Based on the budget for the properties we owned as of December 31, 2024, we estimated that expenditures for capital and tenant improvements as of such date are approximately $76,968,000 for 2025, although actual expenditures are predominantly discretionary and are dependent on many factors which are not presently known.
Contractual Obligations
22 unchanged sentences
Credit Facilities
−Removed: As of December 31, 2023, we were party to a credit agreement, as amended, with an aggregate maximum principal amount up to $1,050,000,000, or the 2022 Credit Facility.
+Added: As of December 31, 2024, we are party to a credit agreement, as amended, with an aggregate maximum principal amount up to $1,150,000,000, or the 2024 Credit Facility.
In addition, we are party to an agreement, as amended, regarding a senior secured revolving credit facility with an aggregate maximum principal amount of $400,000,000, or the Trilogy Credit Facility.
−Removed: On February 14, 2024, we, through our operating partnership, entered into an agreement that supersedes and replaces the 2022 Credit Facility with a credit facility with an aggregate maximum principal amount of up to $1,150,000,000, or the 2024 Credit Facility.
−Removed: See Note 9, Lines of Credit and Term Loan, and Note 21, Subsequent Events — 2024 Credit Facility, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion.
−Removed: As of December 31, 2023, our aggregate borrowing capacity under the 2022 Credit Facility and the 2019 Trilogy Credit Facility, as amended, was $1,450,000,000.
−Removed: As of December 31, 2023, our aggregate borrowings outstanding under our credit facilities was $1,224,723,000 and we had an aggregate of $225,277,000 available on such facilities.
−Removed: We believe that the resources described above will be sufficient to satisfy our cash requirements for the next 12 months and the longer term thereafter.
+Added: See 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, for a further discussion.
+Added: As of December 31, 2024, our borrowing capacity under the 2024 Credit Facility was $1,150,000,000.
+Added: As of December 31, 2024, our borrowings outstanding under such credit facility was $689,000,000 and we had $461,000,000 available on such facility.
+Added: We believe that such resource will be sufficient to satisfy our cash requirements for the next 12 months and the longer term thereafter.
The following table sets forth changes in cash flows (in thousands):
−Removed: Years Ended December 31,
−Removed: 2023 2022 2021
+Added: Year Ended December 31,
Cash, cash equivalents and restricted cash — beginning of period $ 90,782 $ 111,906
Net cash provided by operating activities 176,087 98,535
−Removed: Net cash provided by (used in) investing activities 9,396 (118,578) (138,652)
−Removed: Net cash (used in) provided by financing activities (129,062) (42,924) 94,109
+Added: Net cash (used in) provided by investing activities (8,734) 9,396
+Added: Net cash used in financing activities (134,743) (129,062)
Effect of foreign currency translation on cash, cash equivalents and restricted cash
3 unchanged sentences
For the years ended December 31, 2024 and 2023, cash flows provided by operating activities were primarily related to property operations, offset by payments of general and administrative expenses and interest payments on our outstanding indebtedness.
−Removed: In general, cash flows from operating activities are affected by the timing of cash receipts and payments, as well as the substantial increase in net operating income for properties within our integrated senior health campuses segment since 2021 due to improved resident occupancy and expense management.
−Removed: See the “Results of Operations” section above for a further discussion.
−Removed: In addition, the increase of $129,855,000 in net cash provided by operating activities during the year ended December 31, 2022, as compared to the year ended December 31, 2021, was due to the increase in the size of our portfolio as a result of the Merger on October 1, 2021, thereby increasing our net operating income.
+Added: In general, cash flows from operating activities are affected by the timing of cash receipts and payments, and have increased since 2022 primarily due to improved resident occupancy and expense management at our properties operated under a RIDEA structure.
+Added: The increase in net cash provided by operating activities for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily driven by the increase in operating performance of our real estate investments in our integrated senior health campuses and SHOP segments, as well as a decrease in interest paid on our outstanding indebtedness as a result of mortgage payoffs and paydowns on our lines of credit using net proceeds from the February 2024 Offering, September 2024 Offering and ATM Offering.
+Added: See the “Results of Operations” section above for further discussion.
Investing Activities
−Removed: For the year ended December 31, 2023, as compared to the year ended December 31, 2022, the change from net cash used in investing activities to net cash provided by investing activities was primarily due to a $136,235,000 increase in proceeds from dispositions of real estate investments and a $27,847,000 decrease in cash paid to acquire real estate investments.
−Removed: Such amounts were partially offset by a $28,271,000 increase in development and capital expenditures and an $17,962,000 increase in the issuance of real estate notes receivable.
−Removed: The decrease of $20,074,000 in net cash used in investing activities during the year ended December 31, 2022, as compared to the year ended December 31, 2021, was primarily due to a $43,798,000 increase in proceeds from dispositions of real estate, a $17,852,000 decrease in cash, cash equivalents and restricted cash acquired in connection with the Merger on October 1, 2021 and a $8,175,000 decrease in developments and capital expenditures.
−Removed: Such amounts were partially offset by a $13,714,000 payment to acquire the 50.0% controlling interest in RHS in August 2022.
+Added: For the year ended December 31, 2024, as compared to the year ended December 31, 2023, the change from net cash provided by investing activities to net cash used in investing activities was primarily due to a $43,260,000 decrease in proceeds from dispositions of real estate investments and a $14,970,000 increase in cash paid to acquire real estate investments, partially offset by a $16,765,000 change from net issuance of real estate notes receivable to net principal repayments on real estate notes receivable, a $12,357,000 decrease in investments in unconsolidated entities and a $7,851,000 decrease in developments and capital expenditures.
See Note 3, Real Estate Investments, Net and Note 4, Business Combinations, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K, for a further discussion of our acquisitions and dispositions.
Financing Activities
−Removed: For the year ended December 31, 2023, as compared to the year ended December 31, 2022, the increase in net cash used in financing activities was primarily due to the:
−Removed: (i) $113,911,000 change from net borrowings under our lines of credit to net payments on our lines of credit;
−Removed: (ii) $25,162,000 increase in distributions paid to common stockholders;
−Removed: and (iii) $21,266,000 increase in payments on financing and other obligations.
−Removed: Such increases were offset by the $64,382,000 change from net payments on mortgage loans payable to net borrowings under mortgage loans payable and $20,230,000 decrease in repurchases of common stock.
+Added: For the year ended December 31, 2024, as compared to the year ended December 31, 2023, the increase in net cash used in financing activities was primarily due to the closing of the February 2024 Offering and the September 2024 Offering, as well as the commencement of the ATM Offering, that resulted in an aggregate $1,364,256,000 in gross offering proceeds from the issuance of Common Stock and a decrease of $11,128,000 in net payments on financing and other obligations.
+Added: Such amounts were partially offset by:
+Added: (i) a $988,993,000 change from net borrowings to net payments on our lines of credit and mortgage loans payable, primarily using the net proceeds from the February 2024 Offering, the September 2024 Offering and the ATM
+Added: Offering for such payments;
+Added: (ii) a $258,001,000 in cash paid to purchase the noncontrolling interest in Trilogy REIT Holdings LLC held by a joint venture partner;
+Added: (iii) a $71,234,000 increase in the payment of offering costs primarily due to our equity offering activity in 2024 noted above;
+Added: (iv) a $44,611,000 increase in distributions paid to common stockholders resulting from the increase in shares issued during 2024;
+Added: and (v) a $18,933,000 increase in cash paid to redeem certain equity interests owned in Trilogy Investors, LLC.
During 2023, we repaid our lines of credits primarily from operating cash flows, net proceeds from dispositions and proceeds from long-term mortgage loans payable financed at lower interest rates.
−Removed: The increase in cash used to pay distributions to common stockholders was primarily due to our board’s suspension of our DRIP offering beginning with distributions declared for the quarter ending December 31, 2022.
+Added: The increase in cash used to pay distributions to common stockholders was primarily due to our board’s suspension of our distribution reinvestment plan, or DRIP, offering beginning with distributions declared for the quarter ending December 31, 2022.
The decrease in cash used to repurchase our common stock was primarily due to our board’s suspension of our share repurchase plan beginning with share repurchase requests for the quarter ending December 31, 2022.
−Removed: The decrease of $137,033,000 in net cash provided by financing activities during the year ended December 31, 2022, as compared to the year ended December 31, 2021, was primarily due to a decrease in net borrowings under our mortgage loans payable of $269,296,000, a $28,334,000 increase in distributions paid to our common stockholders and a $20,317,000 payment to repurchase our common stock.
−Removed: During the year ended December 31, 2022, we also paid $2,075,000 in offering costs in connection with the filing of our Registration Statement on Form S-11 for our underwritten public offering that closed in February 2024.
−Removed: No such costs were paid during the year ended December 31, 2021.
−Removed: Such amounts were partially offset by an increase in net borrowings under our lines of credit and term loans of $161,900,000 and borrowings under a financing obligation of $25,900,000.
−Removed: The change in distributions paid to common stockholders was due to the suspension of all stockholder distributions on May 29, 2020 in response to the impact of the COVID-19 pandemic, which the board of directors of GAHR III subsequently reinstated in June 2021.
−Removed: The change in share repurchases was due to the suspension of the GAHR III share repurchase plan from May 31, 2020 through October 4, 2021, when the partial reinstatement of our share repurchase plan was approved by our board.
+Added: In February 2025, our board approved the termination of our DRIP and our share purchase plan terminated pursuant to its own terms.
Distributions
−Removed: The income tax treatment for distributions reportable for the years ended December 31, 2023, 2022, and 2021 was as follows (dollars in thousands):
−Removed: Years Ended December 31,
−Removed: 2023 2022 2021
+Added: The following table reflects the income tax treatment for distributions reportable for the periods presented below (dollars in thousands):
+Added: Year Ended December 31,
Ordinary income $ 89,325 74.6 % $ 2,208 2.9 %
3 unchanged sentences
Amounts listed above do not include distributions paid on nonvested shares of our restricted common stock which have been separately reported.
−Removed: The following tables reflect distributions we paid for the years ended December 31, 2023, 2022 and 2021, along with the amount of distributions reinvested pursuant to our DRIP offering, as applicable, and the sources of distributions as compared to cash flows from operations or funds from operations attributable to controlling interest, or FFO, a non-GAAP financial measure (dollars in thousands):
−Removed: Years Ended December 31,
−Removed: 2023 2022 2021
+Added: The following tables reflect distributions we paid for the periods presented below, along with the amount of distributions reinvested pursuant to our DRIP offering, as applicable, and the sources of distributions as compared to cash flows from operations or funds from operations attributable to controlling interest, or FFO, a non-GAAP financial measure (dollars in thousands):
+Added: Year Ended December 31,
Distributions paid in cash $ 120,895 $ 76,284
5 unchanged sentences
$ 120,895 100 % $ 76,284 100 %
−Removed: Years Ended December 31,
−Removed: 2023 2022 2021
+Added: Year Ended December 31,
Distributions paid in cash $ 120,895 $ 76,284
11 unchanged sentences
Lines of Credit and Term Loan
−Removed: For a discussion of our lines of credit and term loan, see Note 9, Lines of Credit and Term Loan, and Note 21, Subsequent Events — 2024 Credit Facility, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
+Added: For a discussion of our lines of credit and term loan, see 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.
REIT Requirements
3 unchanged sentences
In general, to qualify under the safe harbor, each stockholder must elect to receive either cash or stock, and the aggregate cash component of the distribution to stockholders must represent at least 20.0% of the total distribution .
−Removed: In the event that there is a shortfall in net cash available due to factors including, without limitation, the timing of such distributions or the timing of the collection of receivables, we may seek to obtain capital to make distributions by means of secured and unsecured debt financing through one or more unaffiliated third parties.
+Added: In the event that there is a shortfall in net cash available due to factors including, without limitation, the timing of such distributions or the timing of the collection of receivables, we may seek to obtain capital to make distributions by means of unsecured and secured debt financing through one or more unaffiliated third parties.
We may also make distributions with cash from capital transactions including, without limitation, the sale of one or more of our properties.
43 unchanged sentences
In the future, the SEC, NAREIT or another regulatory body may decide to standardize the allowable adjustments across the REIT industry and we would have to adjust our calculation and characterization of FFO or Normalized FFO.
−Removed: The following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure, to FFO and Normalized FFO for the periods presented below (in thousands except for share and per share amounts):
−Removed: Years Ended December 31,
−Removed: 2023 2022 2021
+Added: The following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure, to FFO and Normalized FFO for the periods presented below (in thousands):
+Added: Year Ended December 31,
Net loss $ (35,600) $ (76,887)
Depreciation and amortization related to real estate — consolidated properties 179,040 182,452
−Removed: 182,452 167,860 133,191
Depreciation and amortization related to real estate — unconsolidated entities 1,186 401
Impairment of real estate investments — consolidated properties 45,755 13,899
−Removed: (Gain) loss on dispositions of real estate investments, net — consolidated properties (32,472) (5,481) 100
−Removed: Net loss (income) attributable to noncontrolling interests 5,418 (7,919) 5,475
−Removed: Gain on re-measurement of previously held equity interests (726) (19,567) —
+Added: Gain on dispositions of real estate investments, net — consolidated properties (5,213) (32,472)
+Added: Net (income) loss attributable to noncontrolling interests (2,212) 5,418
+Added: Gain on re-measurement of previously held equity interest — (726)
Depreciation, amortization, impairments, net gain/loss on dispositions and gain on re-measurements — noncontrolling interests (17,851) (26,518)
2 unchanged sentences
Amortization of above- and below-market leases 1,692 9,744
−Removed: Amortization of closing costs — debt security investments 278 237 201
+Added: Amortization of closing costs — debt security investment 324 278
Change in deferred rent (2,411) 1,149
1 unchanged sentence
Capitalized interest (334) (163)
−Removed: Loss on debt extinguishments 345 5,166 2,655
−Removed: Loss (gain) in fair value of derivative financial instruments 926 (500) (8,200)
−Removed: Foreign currency (gain) loss (2,307) 5,206 564
−Removed: Impairment of intangible assets and goodwill 10,520 23,277 —
+Added: Loss on debt and derivative extinguishments 5,382 345
+Added: (Gain) loss in fair value of derivative financial instruments (1,030) 926
+Added: Foreign currency loss (gain) 774 (2,307)
+Added: Impairment of intangible assets — 10,520
Adjustments for unconsolidated entities (320) (321)
1 unchanged sentence
Normalized FFO attributable to controlling interest $ 184,922 $ 92,368
−Removed: $ 92,368 $ 131,934 $ 78,153
−Removed: Weighted average Class T and Class I common shares outstanding — basic and diluted 66,047,114 65,807,868 50,081,140
−Removed: Net loss per Class T and Class I common share attributable to controlling interest — basic and diluted $ (1.08) $ (1.24) $ (0.95)
−Removed: NAREIT FFO per Class T and Class I common share attributable to controlling interest — basic and diluted $ 0.99 $ 1.44 $ 1.39
−Removed: Normalized FFO per Class T and Class I common share attributable to controlling interest — basic and diluted
−Removed: $ 1.40 $ 2.00 $ 1.56
Net Operating Income
−Removed: Net operating income, or NOI, is a non-GAAP financial measure that is defined as net income (loss), computed in accordance with GAAP, generated from properties before general and administrative expenses, business acquisition expenses, depreciation and amortization, interest expense, gain or loss on dispositions, impairment of real estate investments, impairment of intangible assets and goodwill, income or loss from unconsolidated entities, gain on re-measurement of previously held equity interests, foreign currency gain or loss, other income and income tax benefit or expense.
+Added: Net operating income, or NOI, is a non-GAAP financial measure that is defined as net income (loss), computed in accordance with GAAP, generated from properties before general and administrative expenses, business acquisition expenses, depreciation and amortization, interest expense, gain or loss in fair value of derivative financial instruments, gain or loss on dispositions of real estate investments, impairment of real estate investments, impairment of intangible assets and goodwill, income or loss from unconsolidated entities, gain on re-measurement of previously held equity interests, foreign currency gain or loss, other income or expense and income tax benefit or expense.
NOI is not equivalent to our net income (loss) as determined under GAAP and may not be a useful measure in measuring operational income or cash flows.
2 unchanged sentences
NOI should be reviewed in conjunction with other measurements as an indication of our performance.
−Removed: Investors are also cautioned that NOI should only be used to assess our operational performance in periods in which we have not incurred or accrued any business acquisition expenses.
We believe that NOI is an appropriate supplemental performance measure to reflect the performance of our operating assets because NOI excludes certain items that are not associated with the operations of the properties.
−Removed: We believe that NOI is a widely accepted measure of comparative operating performance in the real estate community.
+Added: We believe that NOI is a widely accepted measure of comparative operating performance in the real estate community and is useful to investors in understanding the profitability and operating performance of our property portfolio.
However, our use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount.
To facilitate understanding of this financial measure, the following is a reconciliation of net income or loss, which is the most directly comparable GAAP financial measure, to NOI for the periods presented below (in thousands):
−Removed: Years Ended December 31,
−Removed: 2023 2022 2021
+Added: Year Ended December 31,
Net loss $ (35,600) $ (76,887)
4 unchanged sentences
Interest expense 127,730 163,191
−Removed: (Gain) loss on dispositions of real estate investments, net (32,472) (5,481) 100
+Added: (Gain) loss in fair value of derivative financial instruments (1,030) 926
+Added: Gain on dispositions of real estate investments, net (5,213) (32,472)
Impairment of real estate investments 45,755 13,899
−Removed: Impairment of intangible assets and goodwill 10,520 23,277 —
−Removed: Loss (income) from unconsolidated entities 1,718 (1,407) 1,355
−Removed: Gain on re-measurement of previously held equity interests (726) (19,567) —
−Removed: Foreign currency (gain) loss (2,307) 5,206 564
−Removed: Other income (7,601) (3,064) (1,854)
+Added: Impairment of intangible assets — 10,520
+Added: Loss from unconsolidated entities 6,868 1,718
+Added: Gain on re-measurement of previously held equity interest — (726)
+Added: Foreign currency loss (gain) 774 (2,307)
+Added: Other income, net (11,353) (7,601)
Income tax expense 1,713 663
Net operating income $ 363,536 $ 306,833
−Removed: Subsequent Events
−Removed: For a discussion of subsequent events, see Note 21, Subsequent Events, to the Consolidated Financial Statements that are a part of this Annual Report on Form 10-K.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.