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What changed in Sabra Health Care REIT, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Sabra Health Care REIT, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+225 added−209 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-27)

Top changes in Sabra Health Care REIT, Inc.'s 2024 10-K

225 paragraphs added · 209 removed · 190 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

41 edited+5 added−4 removed92 unchanged
Biggest changeGeographic and Property Type Diversification The following tables display the geographic concentration by property type and by investment and the distribution of beds/units for our real estate held for investment as of December 31, 2023 and exclude our unconsolidated joint ventures which consist of 16 facilities and 1,256 units (pro rata) (dollars in thousands): Geographic Concentration — Property Type Location Skilled Nursing / Transitional Care Senior Housing - Leased Senior Housing - Managed Consolidated Behavioral Health Specialty Hospitals and Other Total % of Total Texas 34 5 5 — 13 57 15.1 % California 24 — 2 3 1 30 7.9 Kentucky 24 1 — 2 1 28 7.4 Indiana 14 4 1 2 — 21 5.6 Oregon 15 1 3 — — 19 5.0 North Carolina 13 — 2 — — 15 4.0 Missouri 12 — 1 1 — 14 3.7 Washington 12 — 2 — — 14 3.7 Massachusetts 12 — — — — 12 3.2 New York 9 — 1 — — 10 2.6 Other (29 states & Canada) 72 32 44 10 — 158 41.8 Total 241 43 61 18 15 378 100.0 % % of Total 63.7 % 11.4 % 16.1 % 4.8 % 4.0 % 100.0 % Distribution of Beds/Units Property Type Location Total Number of Properties Skilled Nursing / Transitional Care Senior Housing - Leased Senior Housing - Managed Consolidated Behavioral Health Specialty Hospitals and Other Total % of Total Texas 57 4,325 470 736 — 325 5,856 15.5 % Kentucky 28 2,486 142 — 172 40 2,840 7.5 California 30 2,058 — 160 313 27 2,558 6.8 Indiana 21 1,651 545 169 138 — 2,503 6.6 Oregon 19 1,520 215 162 — — 1,897 5.0 North Carolina 15 1,454 — 237 — — 1,691 4.5 New York 10 1,566 — 107 — — 1,673 4.4 Washington 14 1,309 — 165 — — 1,474 3.9 Massachusetts 12 1,469 — — — — 1,469 3.9 Virginia 10 894 60 186 — — 1,140 3.0 Other (29 states & Canada) 162 8,037 2,041 4,119 536 — 14,733 38.9 Total 378 26,769 3,473 6,041 1,159 392 37,834 100.0 % % of Total 70.7 % 9.2 % 16.0 % 3.1 % 1.0 % 100.0 % 7 Geographic Concentration — Investment (1) Property Type Location Total Number of Properties Skilled Nursing / Transitional Care Senior Housing - Leased Senior Housing - Managed Consolidated Behavioral Health Specialty Hospitals and Other Total % of Total Texas 57 $ 347,245 $ 55,818 $ 173,043 $ — $ 187,387 $ 763,493 13.5 % California 30 435,612 — 59,434 217,764 7,743 720,553 12.8 Indiana 21 196,544 120,197 47,861 12,155 — 376,757 6.7 Oregon 19 261,316 33,002 54,214 — — 348,532 6.2 New York 10 298,004 — 20,688 — — 318,692 5.8 Kentucky 28 244,385 23,668 — 15,165 30,313 313,531 5.6 Washington 14 158,674 — 41,142 — — 199,816 3.5 North Carolina 15 124,449 — 75,251 — — 199,700 3.5 Arizona 5 — 10,348 39,656 121,757 — 171,761 3.0 Canada (2) 9 — — 159,550 — — 159,550 2.8 Other (30 states) 170 984,632 330,241 618,646 129,896 — 2,063,415 36.6 Total 378 $ 3,050,861 $ 573,274 $ 1,289,485 $ 496,737 $ 225,443 $ 5,635,800 100.0 % % of Total 54.1 % 10.2 % 22.9 % 8.8 % 4.0 % 100.0 % (1) Represents the undepreciated book value of our real estate held for investment as of December 31, 2023.
Biggest changeOther facilities include facilities other than those described above that are not classified as skilled nursing/transitional care, senior housing or behavioral health. 6 Geographic and Property Type Diversification The following tables display the geographic concentration by property type and by investment and the distribution of beds/units for our real estate held for investment as of December 31, 2024 and exclude our unconsolidated joint ventures which consist of 16 facilities and 1,256 units (pro rata) (dollars in thousands): Geographic Concentration — Property Type Location Skilled Nursing / Transitional Care Senior Housing - Leased Senior Housing - Managed Consolidated Behavioral Health Specialty Hospitals and Other Total % of Total Texas 33 3 7 — 13 56 15.4 % California 23 — 2 3 1 29 8.0 Kentucky 24 2 — 1 1 28 7.7 Indiana 14 4 3 2 — 23 6.3 Oregon 15 1 3 — — 19 5.2 North Carolina 13 — 2 — — 15 4.1 Washington 10 — 2 — — 12 3.3 Missouri 10 — 1 1 — 12 3.3 Massachusetts 11 — — — — 11 3.0 New York 9 — 1 — — 10 2.8 Other (29 states & Canada) 62 29 48 10 — 149 40.9 Total 224 39 69 17 15 364 100.0 % % of Total 61.5 % 10.7 % 19.0 % 4.7 % 4.1 % 100.0 % Distribution of Beds/Units Property Type Location Total Number of Properties Skilled Nursing / Transitional Care Senior Housing - Leased Senior Housing - Managed Consolidated Behavioral Health Specialty Hospitals and Other Total % of Total Texas 56 4,211 350 856 — 325 5,742 15.5 % Kentucky 28 2,598 270 — 60 40 2,968 8.0 Indiana 23 1,559 563 391 138 — 2,651 7.1 California 29 1,924 — 160 313 27 2,424 6.5 Oregon 19 1,520 215 162 — — 1,897 5.1 North Carolina 15 1,454 — 237 — — 1,691 4.6 New York 10 1,566 — 107 — — 1,673 4.5 Massachusetts 11 1,469 — — — — 1,469 4.0 Washington 12 1,123 — 165 — — 1,288 3.5 Virginia 10 894 — 246 — — 1,140 3.1 Other (29 states & Canada) 151 7,174 1,921 4,356 653 — 14,104 38.1 Total 364 25,492 3,319 6,680 1,164 392 37,047 100.0 % % of Total 68.8 % 9.0 % 18.0 % 3.1 % 1.1 % 100.0 % 7 Geographic Concentration — Investment (1) Property Type Location Total Number of Properties Skilled Nursing / Transitional Care Senior Housing - Leased Senior Housing - Managed Consolidated Behavioral Health Specialty Hospitals and Other Total % of Total Texas 56 $ 340,716 $ 27,335 $ 201,436 $ — $ 187,387 $ 756,874 13.5 % California 29 411,326 — 58,767 217,699 7,798 695,590 12.4 Indiana 23 196,831 119,498 110,197 12,156 — 438,682 7.8 Oregon 19 261,316 33,002 56,905 — — 351,223 6.2 Kentucky 28 244,506 58,991 — 9,373 30,313 343,183 6.1 New York 10 298,639 — 22,123 — — 320,762 5.7 North Carolina 15 125,549 — 74,165 — — 199,714 3.6 Washington 12 137,166 — 40,775 — — 177,941 3.2 Arizona 5 — 10,348 37,885 121,757 — 169,990 3.0 Delaware 6 108,208 — 46,982 — — 155,190 2.8 Other (29 states & Canada) (2) 161 802,092 259,412 825,032 117,333 — 2,003,869 35.7 Total 364 $ 2,926,349 $ 508,586 $ 1,474,267 $ 478,318 $ 225,498 $ 5,613,018 100.0 % % of Total 52.1 % 9.1 % 26.3 % 8.5 % 4.0 % 100.0 % (1) Represents the undepreciated book value of our real estate held for investment as of December 31, 2024.
We also intend to achieve our objective of diversifying our portfolio by tenant and facility type through select asset sales and other arrangements with our tenants.
We also intend to achieve our objective of diversifying our portfolio by tenant and facility type through select asset sales and other arrangements with our tenants.
A key component of our development strategy related to loan originations and 10 preferred equity investments is having the option to purchase the underlying real estate that is owned by our borrowers (and that directly or indirectly secures our loan investments) or by the entity in which we have an investment.
A key component of our development strategy related to loan originations and preferred equity investments is having the option to purchase the underlying real estate that is owned by our borrowers (and that 10 directly or indirectly secures our loan investments) or by the entity in which we have an investment.
This focus on high acuity patients in skilled nursing facilities has resulted in the typical senior housing resident requiring more assistance with activities for daily living, such as assistance with bathing, grooming, dressing, eating, and medication management; however, many older senior housing communities were not built to accommodate a resident who has more needs as well as increased mobility and cognitive issues than in the past.
This focus on high acuity 4 patients in skilled nursing facilities has resulted in the typical senior housing resident requiring more assistance with activities for daily living, such as assistance with bathing, grooming, dressing, eating, and medication management; however, many older senior housing communities were not built to accommodate a resident who has more needs as well as increased mobility and cognitive issues than in the past.
Rehabilitation hospitals provide inpatient and outpatient care for patients who have sustained traumatic injuries or illnesses, such as spinal cord injuries, strokes, head injuries, orthopedic problems, work-related disabilities and neurological diseases. Residential services facilities. Residential services facilities provide services in home and community-based settings, which may include assistance with activities of daily living. 6 Other facilities.
Rehabilitation hospitals provide inpatient and outpatient care for patients who have sustained traumatic injuries or illnesses, such as spinal cord injuries, strokes, head injuries, orthopedic problems, work-related disabilities and neurological diseases. Residential services facilities. Residential services facilities provide services in home and community-based settings, which may include assistance with activities of daily living. Other facilities.
Challenging and appealing notices or allegations of noncompliance can require significant legal expenses and management attention. Various states in which our tenants operate our facilities have established minimum staffing requirements or may establish minimum staffing requirements in the future. Failure to comply with such minimum staffing requirements may result in the imposition of fines or other sanctions.
Challenging and appealing notices or allegations of noncompliance can require significant legal expenses and management attention. CMS and various states in which our tenants operate our facilities have established minimum staffing requirements or may establish minimum staffing requirements in the future. Failure to comply with such minimum staffing requirements may result in the imposition of fines or other sanctions.
These facilities tend to focus on delivering specialized treatment to patients with cardiac, neurological, pulmonary, orthopedic, and renal conditions. Length of service is typically 30 days or less with the majority of patients returning to prior living arrangements and functional abilities.
These facilities tend to focus on delivering specialized treatment to patients with cardiac, neurological, pulmonary, orthopedic, and renal conditions. Length of service is typically 30 days or less with the majority of 5 patients returning to prior living arrangements and functional abilities.
Our portfolio consisted of the following types of healthcare facilities as of December 31, 2023: • Skilled Nursing/Transitional Care Facilities Skilled nursing facilities. Skilled nursing facilities provide services that include daily nursing, therapeutic rehabilitation, social services, activities, housekeeping, nutrition, medication management and administrative services for individuals requiring certain assistance for activities in daily living.
Our portfolio consisted of the following types of healthcare facilities as of December 31, 2024: • Skilled Nursing/Transitional Care Facilities Skilled nursing facilities. Skilled nursing facilities provide services that include daily nursing, therapeutic rehabilitation, social services, activities, housekeeping, nutrition, medication management and administrative services for individuals requiring certain assistance for activities in daily living.
Our properties in any one state or province did not account for more than 16% of our total beds/units as of December 31, 2023. Our geographic diversification will limit the effect of a decline in any one regional market on our overall performance.
Our properties in any one state or province did not account for more than 16% of our total beds/units as of December 31, 2024. Our geographic diversification will limit the effect of a decline in any one regional market on our overall performance.
As of December 31, 2023, our subsidiaries owned eight healthcare facilities (five senior housing communities and three skilled nursing/transitional care facilities) with mortgage loans that are guaranteed by HUD.
As of December 31, 2024, our subsidiaries owned eight healthcare facilities (five senior housing communities and three skilled nursing/transitional care facilities) with mortgage loans that are guaranteed by HUD.
Through years of public company experience, our management team also has extensive experience accessing both debt and equity capital markets to fund growth and maintain a flexible capital structure. Teammates and Equal Opportunity As of December 31, 2023, we employed 48 full-time employees (our teammates), including our executive officers, none of whom is subject to a collective bargaining agreement.
Through years of public company experience, our management team also has extensive experience accessing both debt and equity capital markets to fund growth and maintain a flexible capital structure. Teammates and Equal Opportunity As of December 31, 2024, we employed 50 full-time employees (our teammates), including our executive officers, none of whom is subject to a collective bargaining agreement.
Long-Term, Triple-Net Lease Structure As of December 31, 2023, the substantial majority of our real estate properties held for investment (excluding 61 Senior Housing - Managed communities) were leased under triple-net operating leases with expirations ranging from one year to 19 years, pursuant to which the tenants are responsible for all facility maintenance, code compliance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.
Long-Term, Triple-Net Lease Structure As of December 31, 2024, the substantial majority of our real estate properties held for investment (excluding 69 Senior Housing - Managed communities) were leased under triple-net operating leases with expirations ranging from less than one year to 19 years, pursuant to which the tenants are responsible for all facility maintenance, code compliance, insurance required in connection with the leased properties and the business conducted on the leased properties, taxes levied on or with respect to the leased properties and all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties.
Significant Credit Concentrations For the year ended December 31, 2023, no tenant relationship represented 10% or more of our total revenues.
Significant Credit Concentrations For the year ended December 31, 2024, no tenant relationship represented 10% or more of our total revenues.
As of December 31, 2023, the leases had a weighted-average remaining term of eight years. The leases generally include provisions to extend the lease terms and other negotiated terms and conditions. We, through our subsidiaries, retain substantially all of the risks and benefits of ownership of the real estate assets leased to tenants.
As of December 31, 2024, the leases had a weighted-average remaining term of seven years. The leases generally include provisions to extend the lease terms and other negotiated terms and conditions. We, through our subsidiaries, retain substantially all of the risks and benefits of ownership of the real estate assets leased to tenants.
Senior Housing - Managed Structure As of December 31, 2023, our real estate properties held for investment included 61 Senior Housing - Managed communities operated by 11 third-party property managers pursuant to property management agreements. The Senior Housing - Managed structure gives us direct exposure to the risks and benefits of the operations of the communities.
Senior Housing - Managed Structure As of December 31, 2024, our real estate properties held for investment included 69 Senior Housing - Managed communities operated by 11 third-party property managers pursuant to property management agreements. The Senior Housing - Managed structure gives us direct exposure to the risks and benefits of the operations of the communities.
Develop New Investment Relationships We seek to cultivate our relationships with tenants and healthcare providers in order to expand the mix of tenants operating our properties and, in doing so, to reduce our dependence on any single tenant or operator. As of December 31, 2023, we had 63 relationships.
Develop New Investment Relationships We seek to cultivate our relationships with tenants and healthcare providers in order to expand the mix of tenants operating our properties and, in doing so, to reduce our dependence on any single tenant or operator. As of December 31, 2024, we had 60 relationships.
Competitive Strengths We believe the following competitive strengths contribute significantly to our success: Diverse Property Portfolio Our portfolio of 378 properties held for investment as of December 31, 2023 is broadly diversified by location across the U.S. and Canada.
Competitive Strengths We believe the following competitive strengths contribute significantly to our success: Diverse Property Portfolio Our portfolio of 364 properties held for investment as of December 31, 2024 is broadly diversified by location across the U.S. and Canada.
According to the 2022 National Survey on Drug Use and Health, addiction and mental illness are ongoing public health crises in the U.S. with approximately 55 million people classified as needing substance abuse treatment but more than 75% not receiving such treatment and approximately 15 million people identified with serious mental illness but more than 30% not receiving treatment, including inpatient or outpatient mental health services, prescription medication for a mental health issue or virtual (i.e., telehealth) services.
According to the 2023 National Survey on Drug Use and Health, addiction and mental illness are ongoing public health crises in the U.S. with approximately 54 million people classified as needing substance abuse treatment but more than 76% not receiving such treatment and approximately 15 million people identified with serious mental illness but almost 30% not receiving treatment, including inpatient or outpatient mental health services, prescription medication for a mental health issue or virtual (i.e., telehealth) services.
A typical skilled nursing facility includes mostly one and two bed units, each equipped with a private or shared bathroom and community dining facilities. 5 Transitional care facilities/units. Transitional care facilities/units are licensed nursing facilities or distinct units within a licensed nursing facility that provide short term, intensive, high acuity nursing and medical services.
A typical skilled nursing facility includes mostly one and two bed units, each equipped with a private or shared bathroom, therapy space, activity rooms and community dining facilities. Transitional care facilities/units. Transitional care facilities/units are licensed nursing facilities or distinct units within a licensed nursing facility that provide short term, intensive, high acuity nursing and medical services.
We commenced operations on November 15, 2010, and we elected to be treated as a REIT with the filing of our U.S. federal income tax return for the taxable year beginning January 1, 2011. We believe that we have been organized and have operated, and we intend to continue to operate, in a manner to qualify as a REIT.
We elected to be treated as a REIT with the filing of our U.S. federal income tax return for the taxable year beginning January 1, 2011. We believe that we have been organized and have operated, and we intend to continue to operate, in a manner to qualify as a REIT.
While the factors described above indicate projected growth for our industry, increases in interest rates, labor shortages, supply chain disruptions, high inflation and increased volatility in public equity and fixed income markets have led to increased costs and limited the availability of capital.
While the factors described above indicate projected growth for our industry, increases in interest rates, labor shortages, inflation and volatility in public equity and fixed income markets have led to increased costs and, at times, limited the availability of capital.
We expect to grow our portfolio primarily through the acquisition of assisted living, independent living and memory care communities in the U.S. and Canada and through the acquisition of skilled nursing/transitional care, addiction treatment centers and behavioral health facilities in the U.S.
We expect to grow our portfolio primarily through the acquisition of assisted living, independent living and memory care communities in the U.S. and Canada and through the acquisition of skilled nursing/transitional care facilities in the U.S.
According to the CMS National Health Expenditure Projections for 2022-2031, hospital care expenditures are projected to grow from approximately $1.3 trillion in 2022 to approximately $2.3 trillion in 2031, representing a compounded annual growth rate of 6.4%.
According to the CMS National Health Expenditure Projections for 2023-2032, hospital care expenditures are projected to grow from approximately $1.5 trillion in 2023 to approximately $2.4 trillion in 2032, representing a compounded annual growth rate of 5.3%.
As of December 31, 2023, our investment portfolio consisted of 378 real estate properties held for investment, 14 investments in loans receivable, five preferred equity investments and two investments in unconsolidated joint ventures. Of our 378 properties held for investment as of December 31, 2023, we owned fee title to 373 properties and title under ground leases for five properties.
As of December 31, 2024, our investment portfolio consisted of 364 real estate properties held for investment, 14 investments in loans receivable, five preferred equity investments and two investments in unconsolidated joint ventures. Of our 364 properties held for investment as of December 31, 2024, we owned fee title to 360 properties and title under ground leases for four properties.
(2) Investment balance in Canada is based on the exchange rate as of December 31, 2023 of 0.7546 per 1 CAD.
(2) Investment balance in Canada is based on the exchange rate as of December 31, 2024 of 0.6958 per 1 CAD.
As of December 31, 2023, women comprised 54% of our workforce and 67% of our management level/leadership roles. As of December 31, 2023, 31% of our teammates self-identified as being members of one or more ethnic minorities. We believe our ethnic diversity is higher than this reported percentage as another 15% of our teammates chose not to self-identify.
As of December 31, 2024, women comprised 56% of our workforce and 64% of our management level/leadership roles. As of December 31, 2024, 34% of our teammates self-identified as being members of one or more ethnic minorities. We believe our ethnic diversity is higher than this reported percentage as another 14% of our teammates chose not to self-identify.
According to the National Health Expenditure Projections for 2022-2031 published by the Centers for Medicare & Medicaid Services (“CMS”), nursing home expenditures are projected to grow from approximately $194 billion in 2022 to approximately 4 $283 billion in 2031, representing a compounded annual growth rate of 4.3%.
According to the National Health Expenditure Projections for 2023-2032 published by the Centers for Medicare & Medicaid Services (“CMS”), nursing home expenditures are projected to grow from approximately $209 billion in 2023 to approximately $337 billion in 2032, representing a compounded annual growth rate of 5.4%.
Various company events, including life event celebrations, dinners and other social outings, are held regularly throughout the year, as well as an annual all-teammate retreat. We believe that all of these activities increase job satisfaction and support collaboration and team bonding.
We support volunteerism and organize opportunities for our teammates as a group to volunteer within the community. Various company events, including life event celebrations, dinners and other social outings, are held regularly throughout the year, as well as an annual all-teammate retreat. We believe that all of these activities increase job satisfaction and support collaboration and team bonding.
Various healthcare reform measures became law upon the enactment of the Patient Protection and Affordable Care Act of 2010 (the “Affordable Care Act”) and the Tax Cuts and Jobs Act (the “2017 Tax Act”), which amends certain provisions of the Affordable Care Act. Future Presidential and Congressional elections in the U.S. could result in further changes.
Various healthcare reform measures became law upon the enactment of the Patient Protection and Affordable Care Act of 2010 (the “Affordable Care Act”) and the Tax Cuts and Jobs Act (the “2017 Tax Act”), which amends certain provisions of the Affordable Care Act.
Increased competition makes it more challenging to identify and successfully capitalize on acquisition opportunities that meet our investment objectives. Our ability to compete is also impacted by national and local economic trends, availability of investment alternatives, availability and cost of capital, construction and renovation costs, existing laws and regulations, new legislation and population trends.
Our ability to compete is also impacted by national and local economic trends, availability of investment alternatives, availability and cost of capital, construction and renovation costs, existing laws and regulations, new legislation and population trends.
Loans Receivable and Other Investments As of December 31, 2023 and 2022, our loans receivable and other investments consisted of the following (dollars in thousands): December 31, 2023 Investment Quantity as of December 31, 2023 Property Type Principal Balance as of December 31, 2023 (1) Book Value as of December 31, 2023 Book Value as of December 31, 2022 Weighted Average Contractual Interest Rate / Rate of Return Weighted Average Annualized Effective Interest Rate / Rate of Return Maturity Date as of December 31, 2023 Loans Receivable: Mortgage 2 Behavioral Health $ 319,000 $ 319,000 $ 319,000 7.6 % 7.6 % 11/01/26 - 01/31/27 Other 12 Multiple 53,873 50,440 47,936 7.7 % 7.4 % 10/01/23 - 05/01/29 14 372,873 369,440 366,936 7.7 % 7.6 % Allowance for loan losses — (6,665) (6,611) $ 372,873 $ 362,775 $ 360,325 Other Investments: Preferred Equity 5 Skilled Nursing / Senior Housing 57,681 57,849 51,071 11.0 % 11.0 % N/A Total 19 $ 430,554 $ 420,624 $ 411,396 8.1 % 8.1 % (1) Principal balance includes amounts funded and accrued unpaid interest / preferred return and excludes capitalizable fees.
Loans Receivable and Other Investments As of December 31, 2024 and 2023, our loans receivable and other investments consisted of the following (dollars in thousands): December 31, 2024 Investment Quantity as of December 31, 2024 Property Type Principal Balance as of December 31, 2024 (1) Book Value as of December 31, 2024 Book Value as of December 31, 2023 Weighted Average Contractual Interest Rate / Rate of Return Weighted Average Annualized Effective Interest Rate / Rate of Return Maturity Date as of December 31, 2024 Loans Receivable: Mortgage 3 Behavioral Health / Skilled Nursing $ 335,600 $ 335,600 $ 319,000 7.7 % 7.7 % 11/01/26 - 06/01/29 Other 11 Multiple 55,410 51,962 50,440 7.9 % 7.5 % 05/01/25 - 08/31/33 14 391,010 387,562 369,440 7.8 % 7.7 % Allowance for loan losses — (6,094) (6,665) $ 391,010 $ 381,468 $ 362,775 Other Investments: Preferred Equity 5 Skilled Nursing / Senior Housing 60,915 61,116 57,849 11.0 % 11.0 % N/A Total 19 $ 451,925 $ 442,584 $ 420,624 8.2 % 8.2 % (1) Principal balance includes amounts funded and accrued unpaid interest / preferred return and excludes capitalizable fees.
As a result, high acuity patients that previously would have been treated in long-term acute care hospitals and inpatient rehabilitation facilities are increasingly being treated in skilled nursing facilities.
Cost containment measures adopted by the federal government have encouraged patient treatment in more cost-effective settings, such as skilled nursing facilities. As a result, high acuity patients that previously would have been treated in acute care hospitals, long-term acute care hospitals and inpatient rehabilitation facilities are increasingly being treated in skilled nursing facilities.
Census Bureau, the number of Americans age 75 and older is projected to grow at a compounded annual growth rate of 10.1% between 2022 and 2035. Further, life expectancy is expected to increase to 85.6 years in 2060 from 79.7 years in 2017. In addition, the highly-fragmented nature of the skilled nursing and senior housing industries presents additional investment opportunities.
Census Bureau, the number of Americans age 75 and older is projected to grow at a compounded annual growth rate of 10.1% between 2022 and 2035. Further, according to the Congressional Budget Office, life expectancy is expected to increase to 82.2 years in 2054 from 78.7 years in 2024.
We promote a sustainable work-life balance and invest in our teammates’ well-being through high-quality benefits. We offer a hybrid work model and have strong IT support to enable our flexible working arrangements. We have fostered a collaborative culture and workplace that motivate and drive engagement. It is important that teammates feel valued and are committed to achieving goals.
Furthermore, we offer a hybrid work model supported by a cybersecurity-focused information technology (“IT”) team to enable our flexible and productive working arrangements. We foster a collaborative culture and workplace that motivate and drive engagement. It is important to us that teammates feel valued and are committed to achieving goals.
Demand for senior housing is expected to increase as a result of an aging population and an increase in acuity across the post-acute landscape. Cost containment measures adopted by the federal government have encouraged patient treatment in more cost-effective settings, such as skilled nursing facilities.
In addition, the highly-fragmented nature of the skilled nursing and senior housing industries presents additional investment opportunities. Demand for senior housing is expected to increase as a result of an aging population and an increase in acuity across the post-acute landscape.
As of December 31, 2023, we had approximately $946.9 million in liquidity, consisting of unrestricted cash and cash equivalents of $41.3 million and available borrowings under our Revolving Credit Facility (as defined below) of $905.6 million.
As of December 31, 2024, we had approximately $980.0 million in liquidity, consisting of unrestricted cash and cash equivalents of $60.5 million, available borrowings under our Revolving Credit Facility (as defined below) of $893.4 million and $26.1 million related to shares outstanding under forward sale agreements under our ATM Program (as defined below).
In addition, these factors, together with the impact of COVID-19, have resulted in decreased occupancy and increased operating costs for our tenants and borrowers, which have negatively impacted their operating results. It is difficult to predict the duration of the effects of these economic and market conditions and of COVID-19 on the industry.
These factors, together with the impact of COVID-19, have resulted in decreased occupancy and increased operating costs for our tenants and borrowers, which have negatively impacted their operating results. We compete for real property investments with other REITs, investment companies, private equity and hedge fund investors, sovereign funds, healthcare operators, lenders and other investors.
Our teammates’ development efforts are focused on aligning our talent strategy with our business strategy. We also connect our teammates with our accomplished board of directors through quarterly board of directors dinner events. We support volunteerism and organize opportunities for our teammates as a group to volunteer within the community.
We provide leadership coaching and training opportunities for management-level teammates to achieve professional goals and for ongoing development for future needs. In addition, our teammates’ development efforts are focused and aligned with our business goals. We also connect our teammates with our accomplished board of directors through quarterly board of directors dinner events.
And we have established a culture that promotes engagement, inclusion, equity and diversity for all teammates. We recognize that attracting and retaining talent at all levels is vital to our continued success. We ensure that all teammates receive competitive salaries and benefits, and we aim to attract professionals who will uphold our values of social and environmental stewardship.
We believe that an inclusive and diverse workforce is essential to our continued success. We continuously aim to provide a fair, transparent and safe work environment, fostering a culture that promotes engagement and inclusion for all teammates. We recognize that attracting and retaining talent at all levels is vital to our continued success.
In addition, company-wide subject-driven surveys are used to gauge levels of engagement and satisfaction. Based on feedback and suggestions received, we thoughtfully implement changes that will have the highest impact on engagement. To plan for the future, our performance management program proactively reviews our teammates’ evolving roles to address the current and future needs of our business.
To plan for the future, our performance management strategy proactively reviews evolving roles to address the current and future needs of our business as part of our talent pipeline development strategy. We invest in our teammates’ development so that we have the right people with the right skills at the right time.
We compete for real property investments with other REITs, investment companies, private equity and hedge fund investors, sovereign funds, healthcare operators, lenders and other investors. Some of our competitors are significantly larger and have greater financial resources and lower costs of capital than we do.
Some of our competitors are significantly larger and have greater financial resources and lower costs of capital than we do. Increased competition makes it more challenging to identify and successfully capitalize on acquisition opportunities that meet our investment objectives.
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Other facilities include facilities other than those described above that are not classified as skilled nursing/transitional care, senior housing or behavioral health.
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We create a competitive advantage as an employer of choice by reinforcing our value of work-life balance, resulting in increased engagement and retention. All teammates receive competitive salaries and attractive benefits. We take a holistic approach and are focused on empowering teammates by providing a positive and supportive work environment. We invest in our teammates’ well-being through high-quality benefits.
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We believe that a diverse workforce is essential to our continued success and gives us a competitive advantage. We take pride in having a diverse workforce in the real estate sector where women and minorities remain underrepresented. We sustain diversity by maintaining a fair, healthy and safe work environment.
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By focusing on the team’s output and deliverables, we establish a clear direction with purpose-driven motivation while building autonomy and trust through output-focused expectations. We create added value and engagement by providing the support and tools our teammates need to be successful in their roles.
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We create value by providing the tools and support each teammate needs to be successful in their roles. We also encourage team activities that create a sense of belonging and emotional well-being, which we know positively impact retention and engagement. To evaluate an individual teammates’ level of engagement, our management team and human resources department conduct periodic check-in meetings.
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We also provide opportunities and team activities that create a sense of belonging and emotional well-being, which we know positively impact retention and engagement. Company-wide internal surveys are used to gauge levels of engagement and satisfaction, and 98% of participants in our most recent survey would recommend Sabra as a great place to work.
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We invest in their development so that we have the right people with the right skills at the right time. The program provides leadership coaching for select management-level teammates with an external group of professionals and employs annual performance reviews that include self-assessments and 360-degree feedback.
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Further, effective January 16, 2024, Medicare and Medicaid nursing facilities are required to comply with new disclosure requirements relating to the facility’s ownership, management, and the owners of real property lessors upon initial enrollment and revalidation with CMS.
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This new disclosure requirement involves reporting extensive information and may complicate our tenants’ and operators’ efforts to comply with Medicare and Medicaid requirements. Future Presidential and Congressional elections in the U.S. could result in further changes.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

48 edited+11 added−2 removed185 unchanged
Biggest changeWe could fail to qualify as a REIT if income we receive is not treated as qualifying income, including as a result of one or more of the lease agreements we have entered into or assumed not being characterized as true leases for U.S. federal income tax purposes, which would subject us to U.S. federal income tax at corporate tax rates.
Biggest changeAdditionally, in the event that we have to declare dividends in-kind in order to satisfy the REIT annual distribution requirement, a holder of our common stock will be required to report dividend income as a result of such distributions even though we distributed no cash or only nominal amounts of cash to such stockholder. 25 We could fail to qualify as a REIT if income we receive is not treated as qualifying income, including as a result of one or more of the lease agreements we have entered into or assumed not being characterized as true leases for U.S. federal income tax purposes, which would subject us to U.S. federal income tax at corporate tax rates.
Our investments in unconsolidated joint ventures involve risks not present with respect to our wholly owned properties, including the following: • We may be unable to take specific major actions, or such actions may be delayed, if the counterparties to the joint ventures disagree with such action, due to arrangements that require us to share decision-making authority over major decisions affecting the ownership or operation of the joint ventures and any property owned by the joint ventures such as the sale or financing of the property or the making of additional capital contributions for the benefit of the property; • The counterparties to the joint ventures may take actions with which we disagree; • Our ability to sell or transfer our interest in the joint ventures on advantageous terms when we so desire may be limited or restricted under the terms of our agreements with the counterparties in the joint ventures; • We may be required to contribute additional capital if the counterparties in the joint ventures fail to fund their share of required capital contributions; • Our equity interest in the joint ventures will be adversely impacted if the joint ventures are not able to maintain compliance with the terms of the agreements underlying their indebtedness; • The counterparties to the joint ventures might have economic or other business interests or goals that are inconsistent with our business interests or goals, including with respect to the timing, terms and strategies for investment, which could increase the likelihood of disputes regarding the ownership, management or disposition of the properties owned by the joint ventures; • Disagreements with the counterparties to the joint ventures could result in litigation or arbitration that increases our expenses, distracts our officers and directors, and disrupts the day-to-day operations of the properties owned by the joint ventures, including by delaying important decisions until the dispute is resolved; and 16 • We may suffer losses to our investment in the joint ventures as a result of actions taken by the counterparties to the joint ventures.
Our investments in unconsolidated joint ventures involve risks not present with respect to our wholly owned properties, including the following: • We may be unable to take specific major actions, or such actions may be delayed, if the counterparties to the joint ventures disagree with such action, due to arrangements that require us to share decision-making authority over major decisions affecting the ownership or operation of the joint ventures and any property owned by the joint ventures such as the sale or financing of the property or the making of additional capital contributions for the benefit of the property; • The counterparties to the joint ventures may take actions with which we disagree; 16 • Our ability to sell or transfer our interest in the joint ventures on advantageous terms when we so desire may be limited or restricted under the terms of our agreements with the counterparties in the joint ventures; • We may be required to contribute additional capital if the counterparties in the joint ventures fail to fund their share of required capital contributions; • Our equity interest in the joint ventures will be adversely impacted if the joint ventures are not able to maintain compliance with the terms of the agreements underlying their indebtedness; • The counterparties to the joint ventures might have economic or other business interests or goals that are inconsistent with our business interests or goals, including with respect to the timing, terms and strategies for investment, which could increase the likelihood of disputes regarding the ownership, management or disposition of the properties owned by the joint ventures; • Disagreements with the counterparties to the joint ventures could result in litigation or arbitration that increases our expenses, distracts our officers and directors, and disrupts the day-to-day operations of the properties owned by the joint ventures, including by delaying important decisions until the dispute is resolved; and • We may suffer losses to our investment in the joint ventures as a result of actions taken by the counterparties to the joint ventures.
Our ability to raise capital through equity financings depends, in part, on the market price of our common stock, which in turn depends on fluctuating market conditions and other factors including the following: • The reputation of REITs and attractiveness of their equity securities in comparison with other equity securities, including securities issued by other real estate companies; • Our financial performance and that of our tenants and borrowers; • Concentrations in our investment portfolio by tenant and property type; • Concerns about our tenants’ or borrowers’ financial condition, including as a result of uncertainty regarding reimbursement from governmental and other third-party payor programs; • Our ability to meet or exceed investor expectations of prospective investment and earnings targets; • The contents of analyst reports about us and the REIT industry; • Changes in interest rates on fixed-income securities, which may lead prospective investors to demand a higher annual yield from investments in our common stock; • Maintaining or increasing our dividend, which is determined by our board of directors and depends on our financial position, results of operations, cash flows, capital requirements, debt covenants (which include limits on distributions by us), applicable law, and other factors as our board of directors deems relevant; and • Regulatory action and changes in REIT tax laws.
Our ability to raise capital through equity financings depends, in part, on the market price of our common stock, which in turn depends on fluctuating market conditions and other factors including the following: • The reputation of REITs and attractiveness of their equity securities in comparison with other equity securities, including securities issued by other real estate companies; • Our financial performance and that of our tenants and borrowers; 23 • Concentrations in our investment portfolio by tenant and property type; • Concerns about our tenants’ or borrowers’ financial condition, including as a result of uncertainty regarding reimbursement from governmental and other third-party payor programs; • Our ability to meet or exceed investor expectations of prospective investment and earnings targets; • The contents of analyst reports about us and the REIT industry; • Changes in interest rates on fixed-income securities, which may lead prospective investors to demand a higher annual yield from investments in our common stock; • Maintaining or increasing our dividend, which is determined by our board of directors and depends on our financial position, results of operations, cash flows, capital requirements, debt covenants (which include limits on distributions by us), applicable law, and other factors as our board of directors deems relevant; and • Regulatory action and changes in REIT tax laws.
Our high level of indebtedness may have the following important consequences to us: • It may increase our cost of borrowing; • It may limit our ability to obtain additional financing to fund future acquisitions, working capital, capital expenditures or other general corporate requirements; • It may expose us to the risk of increased interest rates under debt instruments subject to variable rates of interest, such as our Revolving Credit Facility; • It may adversely impact our credit ratings; • It may limit our ability to adjust rapidly to changing market conditions and we may be vulnerable in the event of a downturn in general economic conditions or in the real estate and/or healthcare sectors; 21 • It may place us at a competitive disadvantage against less leveraged competitors; • It may restrict the way in which we conduct our business because of financial and operating covenants in the agreements governing our existing and future indebtedness; • It may become more difficult for us to satisfy our obligations (including ongoing interest payments and, where applicable, scheduled amortization payments) with respect to the Senior Notes and our other debt; and • It may require us to sell assets and properties at an inopportune time.
Our high level of indebtedness may have the following important consequences to us: • It may increase our cost of borrowing; • It may limit our ability to obtain additional financing to fund future acquisitions, working capital, capital expenditures or other general corporate requirements; • It may expose us to the risk of increased interest rates under debt instruments subject to variable rates of interest, such as our Revolving Credit Facility; • It may adversely impact our credit ratings; • It may limit our ability to adjust rapidly to changing market conditions and we may be vulnerable in the event of a downturn in general economic conditions or in the real estate and/or healthcare sectors; • It may place us at a competitive disadvantage against less leveraged competitors; • It may restrict the way in which we conduct our business because of financial and operating covenants in the agreements governing our existing and future indebtedness; • It may become more difficult for us to satisfy our obligations (including ongoing interest payments and, where applicable, scheduled amortization payments) with respect to the Senior Notes and our other debt; and • It may require us to sell assets and properties at an inopportune time.
These risks are similar to the ones described above and below with respect to our tenants and include fluctuations in occupancy and private pay rates; economic conditions; competition; federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards; the availability and increases in cost of general and professional liability insurance coverage; lawsuits and other legal proceedings arising out of our alleged actions or the alleged actions of our operators; state regulation and rights of residents related to entrance fees; and the availability and increases in the cost of labor (as a result of a shortage of caregivers or other trained personnel, minimum staffing requirements or general inflationary pressures on wages or otherwise).
These risks are similar to the ones described above and below with respect to our tenants and include fluctuations in occupancy and private pay rates; economic conditions; competition; federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations, and standards; the availability and increases in cost of general and professional liability insurance coverage; lawsuits and other legal proceedings arising out of our alleged actions or the alleged actions of our operators; state regulation and rights of residents related to entrance fees; and the availability and increases in the cost of labor (as a result of a shortage of caregivers or other trained personnel, minimum staffing requirements, general inflationary pressures on wages, minimum wage laws or otherwise).
Our debt agreements, including the agreement governing our 2027 Notes (as defined below) and the Credit Agreement, contain various covenants that limit our ability and the ability of our subsidiaries to engage in various transactions including: • Incurring additional secured and unsecured debt; • Granting liens upon certain properties; • Paying dividends or making other distributions on, redeeming or repurchasing capital stock; • Entering into transactions with affiliates; • Issuing stock of or interests in subsidiaries; • Engaging in non-healthcare related business activities; • Creating restrictions on the ability of certain of our subsidiaries to pay dividends or other amounts to us; • Selling assets; or • Effecting a consolidation or merger or selling substantially all of our assets.
Our debt agreements, including the agreement governing our 2027 Notes (as defined below) and the Credit Agreement, contain various covenants that limit our ability and the ability of our subsidiaries to engage in various transactions including: • Incurring additional secured and unsecured debt; • Granting liens upon certain properties; • Paying dividends or making other distributions on, redeeming or repurchasing capital stock; 22 • Entering into transactions with affiliates; • Issuing stock of or interests in subsidiaries; • Engaging in non-healthcare related business activities; • Creating restrictions on the ability of certain of our subsidiaries to pay dividends or other amounts to us; • Selling assets; or • Effecting a consolidation or merger or selling substantially all of our assets.
While we and our tenants, borrowers and operators maintain various physical, cyber and data security controls, incidents or breaches resulting from technical failures, natural hazards, theft and unintentional or deliberate acts by third parties or insiders attempting to obtain 20 unauthorized access to information, destroy or manipulate data, or disrupt or sabotage information systems do occur and they may have a material impact on our business.
While we and our tenants, borrowers and operators maintain various physical, cyber and data security controls, incidents or breaches resulting from technical failures, natural hazards, theft and unintentional or deliberate acts by third parties or insiders attempting to obtain unauthorized access to information, destroy or manipulate data, or disrupt or sabotage information systems do occur and they may have a material impact on our business.
Accordingly, given the complex nature of the rules governing REITs, the ongoing importance of factual determinations, including the potential tax treatment of 24 investments we make, and the possibility of future changes in our circumstances, no assurance can be given that our actual results of operations for any particular taxable year will satisfy such requirements.
Accordingly, given the complex nature of the rules governing REITs, the ongoing importance of factual determinations, including the potential tax treatment of investments we make, and the possibility of future changes in our circumstances, no assurance can be given that our actual results of operations for any particular taxable year will satisfy such requirements.
In addition, some and potentially substantially all of our properties serve as collateral for our current and future secured debt obligations and cannot readily be sold unless the underlying secured indebtedness is concurrently repaid. We may not be able to vary our portfolio promptly in response to changes in the real estate market.
In addition, some and potentially substantially all of our properties serve as collateral for our current and future secured debt obligations and cannot readily be sold unless the 24 underlying secured indebtedness is concurrently repaid. We may not be able to vary our portfolio promptly in response to changes in the real estate market.
Matros, we may not be able to successfully manage our business or achieve our business objectives. Additionally, attracting and retaining talent at all levels is vital to our continuing success. If we are unable to provide competitive salaries, benefits, or a diverse and inclusive workplace for our personnel, our business may be adversely affected.
Matros, we may not be able to successfully manage our business or achieve our business objectives. 15 Additionally, attracting and retaining talent at all levels is vital to our continuing success. If we are unable to provide competitive salaries, benefits, or a diverse and inclusive workplace for our personnel, our business may be adversely affected.
Although moderate reimbursement rate reductions may not affect our tenants’ or borrowers’ ability to meet their financial obligations to us, significant limits on reimbursement rates or on the services reimbursed could have a material adverse effect on their business, financial position or results of operations, which could materially adversely affect their ability to meet their financial obligations to us.
Although moderate reimbursement rate reductions may not affect our tenants’ or borrowers’ 18 ability to meet their financial obligations to us, significant limits on reimbursement rates or on the services reimbursed could have a material adverse effect on their business, financial position or results of operations, which could materially adversely affect their ability to meet their financial obligations to us.
The indentures governing our 2026 Notes, our 2029 Notes and our 2031 Notes require us to comply with an unencumbered asset ratio, and the agreement governing our 2027 Notes requires us to comply with specified financial covenants, which include a maximum leverage ratio, a maximum secured debt leverage ratio, a maximum unsecured debt leverage ratio, a minimum fixed charge coverage ratio, a minimum net worth, a minimum unsecured interest coverage ratio 22 and a minimum unencumbered debt yield ratio.
The indentures governing our 2026 Notes, our 2029 Notes and our 2031 Notes require us to comply with an unencumbered asset ratio, and the agreement governing our 2027 Notes requires us to comply with specified financial covenants, which include a maximum leverage ratio, a maximum secured debt leverage ratio, a maximum unsecured debt leverage ratio, a minimum fixed charge coverage ratio, a minimum net worth, a minimum unsecured interest coverage ratio and a minimum unencumbered debt yield ratio.
Overall, no more than 20% of the value of a REIT’s total assets may consist of stock or securities of one or more TRSs. A domestic TRS will pay U.S. federal, state and local income tax at regular corporate rates on any income that it earns.
Overall, no more than 20% of the value of a REIT’s total assets may consist of stock or securities of one or more TRSs. A domestic TRS will pay U.S. federal, state and local income tax at regular corporate rates on 26 any income that it earns.
Under such circumstances, the insurance proceeds received might not be adequate to restore the economic position with respect to a damaged property. 15 Our assets, including our real estate and loans, are subject to impairment charges, and our valuation and reserve estimates are based on assumptions and may be subject to adjustment.
Under such circumstances, the insurance proceeds received might not be adequate to restore the economic position with respect to a damaged property. Our assets, including our real estate and loans, are subject to impairment charges, and our valuation and reserve estimates are based on assumptions and may be subject to adjustment.
Although our lease and lending agreements provide us with the right to exercise certain remedies in the event of default on the obligations 18 owing to us or upon the occurrence of certain insolvency events, the bankruptcy and insolvency laws afford certain rights to a party that has filed for bankruptcy or reorganization.
Although our lease and lending agreements provide us with the right to exercise certain remedies in the event of default on the obligations owing to us or upon the occurrence of certain insolvency events, the bankruptcy and insolvency laws afford certain rights to a party that has filed for bankruptcy or reorganization.
If a court were to find the exclusive forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we might incur additional costs associated with resolving such action in other jurisdictions. 27 ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.
If a court were to find the exclusive forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we might incur additional costs associated with resolving such action in other jurisdictions. ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.
The presence of contamination or the failure to remediate contamination may adversely affect our ability to sell or lease the real estate or to borrow using the real estate as collateral. A failure by our tenants, borrowers or operators to adhere to applicable privacy and data security laws could harm our business.
The presence of contamination or the failure to remediate contamination may adversely affect our ability to sell or lease the real estate or to borrow using the real estate as collateral. 20 A failure by our tenants, borrowers or operators to adhere to applicable privacy and data security laws could harm our business.
Specifically, a downturn in the healthcare property sector could negatively impact the ability of our tenants and borrowers to meet their obligations to us, as well as the ability to maintain rental and occupancy rates. This could adversely affect our business, financial condition and results of operations.
Specifically, a downturn in the healthcare property sector could negatively impact the ability of our tenants and borrowers to meet their obligations to us, as well as the ability to maintain rental and occupancy rates. This could adversely 21 affect our business, financial condition and results of operations.
Private, federal and state payment programs and the effect of other laws and 17 regulations may also have a significant impact on the ability of our tenants, borrowers and Senior Housing - Managed communities to compete successfully for residents and patients at the properties.
Private, federal and state payment programs and the effect of other laws and regulations may also have a significant impact on the ability of our tenants, borrowers and Senior Housing - Managed communities to compete successfully for residents and patients at the properties.
Furthermore, expenses for the facilities of our tenants, borrowers and Senior Housing - Managed communities are primarily driven by the costs of labor, food, utilities, taxes, insurance and rent, and these operating costs continue to increase for our tenants, borrowers and Senior Housing - Managed communities.
Furthermore, expenses for the facilities of our tenants, borrowers and Senior Housing - Managed communities are primarily driven by the costs of labor, food, utilities, taxes, 17 insurance and rent, and these operating costs continue to increase for our tenants, borrowers and Senior Housing - Managed communities.
In addition, stockholders who do bring a claim in the Circuit Court for Baltimore City, Maryland could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Maryland.
In addition, stockholders who do bring a claim in the Circuit Court for 27 Baltimore City, Maryland could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Maryland.
Prolonged deterioration in the operating results for these investments could result in the determination that the full amounts of our investments are not recoverable, which could result in an impairment charge.
Prolonged deterioration in the operating results for these 14 investments could result in the determination that the full amounts of our investments are not recoverable, which could result in an impairment charge.
While reimbursement rates have generally increased over the past few years, President Biden and members of the U.S. Congress may approve or propose new legislation, regulation changes and reform initiatives that could result in changes (including substantial reductions in funding) to Medicare, Medicaid or Medicare Advantage Plans.
While reimbursement rates have generally increased over the past few years, President Trump and members of the U.S. Congress may approve or propose new legislation, regulation changes and reform initiatives that could result in changes (including substantial reductions in funding) to Medicare, Medicaid or Medicare Advantage Plans.
This exclusive forum provision is intended to apply to claims arising under Maryland state law and would not apply to claims brought pursuant to the Exchange Act or the Securities Act of 1933, or any other claim for which the federal courts have exclusive jurisdiction.
This exclusive forum provision is intended to apply to claims arising under Maryland state law and would not apply to claims brought pursuant to the Exchange Act or the Securities Act of 1933, as amended, or any other claim for which the federal courts have exclusive jurisdiction.
While our lease agreements and property management agreements require that comprehensive insurance and hazard insurance be maintained by our tenants, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, as well as losses caused by health pandemics including the COVID-19 pandemic, that may be uninsurable or not economically insurable.
While our lease agreements and property management agreements require that comprehensive insurance and hazard insurance be maintained by our tenants, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, as well as losses caused by pandemics, including COVID-19, that may be uninsurable or not economically insurable.
We have engaged a third-party cybersecurity firm who serves as our dedicated information technology (“IT”) team and helps us oversee, implement and manage our processes and controls to assess, identify and manage risks from cybersecurity threats. It is possible that our processes and controls will not detect or protect against all cybersecurity threats or incidents.
We have engaged a third-party cybersecurity firm who serves as our dedicated IT team and helps us oversee, implement and manage our processes and controls to assess, identify and manage risks from cybersecurity threats. It is possible that our processes and controls will not detect or protect against all cybersecurity threats or incidents.
Our estimates of loan reserves, and other accounting estimates, are inherently uncertain and may be subject to future adjustment, leading potentially to an increase in reserves. Our reported rental and related revenues may be subject to increased variability as a result of Accounting Standards Update (“ASU”) 2016-02, Leases, as amended by subsequent ASUs (“Topic 842”).
Our estimates of loan reserves, and other accounting estimates, are inherently uncertain and may be subject to future adjustment, leading potentially to an increase in reserves. Our reported rental and related revenues may be subject to increased variability as a result of ASU 2016-02, Leases, as amended by subsequent ASUs (“Topic 842”).
Our ability to make required modifications and/or renovations may involve costs associated with volatility in materials and labor prices and approvals of authorities or compliance with governmental regulations, including the Americans with Disabilities Act, which could result in increased costs and delays in transitioning a facility to a new tenant.
Our ability to make required modifications and/or renovations may involve costs associated with volatility in materials, tariffs on imported materials and labor prices and approvals of authorities or compliance with governmental regulations, including the Americans with Disabilities Act, which could result in increased costs and delays 19 in transitioning a facility to a new tenant.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also harm our business. Risks Related to Our Business/Operations Increased labor costs and historically low unemployment may adversely affect our business, results of operations, cash flows and financial condition.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also harm our business. Risks Related to Our Business/Operations Increased labor costs and labor shortages may adversely affect our business, results of operations, cash flows and financial condition.
Our tenants and borrowers may be subject to, and the COVID-19 pandemic has increased the potential for, lawsuits filed by advocacy groups that monitor the quality of care at healthcare facilities or by patients, facility residents or their families. Significant damage awards are possible in cases where neglect has been found.
Our tenants and borrowers may be subject to lawsuits filed by advocacy groups that monitor the quality of care at healthcare facilities or by patients, facility residents or their families. Significant damage awards are possible in cases where neglect has been found.
Reduced or modified rental and debt service amounts could result in the determination that the full amounts of our investments are not recoverable, which could result in an impairment charge. The operating results of our Senior Housing - Managed portfolio and our unconsolidated joint ventures have been and may continue to be impacted as well.
Reduced or modified rental and debt service amounts could result in the determination that the full amounts of our investments are not recoverable, which could result in an impairment charge. Further, the operating results of our Senior Housing - Managed portfolio and our unconsolidated joint ventures have been impacted and may be impacted by future pandemics or epidemics as well.
Increased costs due to inflation may have material adverse effects on our operating expenses, as well as the operating expenses of our tenants and borrowers and their ability to meet their obligations to us. Inflation also increases the costs for us to make capital improvements to our facilities.
Increased costs due to real or anticipated inflation, and any responsive government policies, may have material adverse effects on our operating expenses, as well as the operating expenses of our tenants and borrowers and their ability to meet their obligations to us. Inflation also increases the costs for us to make capital improvements to our facilities.
As of December 31, 2023, we had outstanding indebtedness of $2.4 billion, which consisted of $1.8 billion of Senior Notes (as defined below), $543.2 million in Term Loans (as defined below), $94.4 million outstanding under our Revolving Credit Facility and aggregate secured indebtedness to third parties of $48.1 million on certain of our properties, and we had $905.6 million available for borrowing under our Revolving Credit Facility.
As of December 31, 2024, we had outstanding indebtedness of $2.4 billion, which consisted of $1.8 billion of Senior Notes (as defined below), $534.4 million in Term Loans (as defined below), $106.6 million outstanding under our Revolving Credit Facility and aggregate secured indebtedness to third parties of $46.1 million on certain of our properties, and we had $893.4 million available for borrowing under our Revolving Credit Facility.
Pandemics or epidemics, including COVID-19, may have a material adverse effect on our business, results of operations, cash flows and financial condition. The COVID-19 pandemic has negatively impacted us and our operations.
Pandemics or epidemics, such as COVID-19, may have a material adverse effect on our business, results of operations, cash flows and financial condition. The COVID-19 pandemic has negatively impacted us and our operations, and another pandemic or epidemic may materially negatively impact us and our operations in the future.
Certain provisions of Maryland law, our charter and our bylaws may have an anti-takeover effect. Sabra is subject to the Maryland business combination statute, which, subject to certain limitations, impose a moratorium on business combinations with “interested stockholders” or affiliates thereof for five years and thereafter impose additional requirements on such business combinations.
Sabra is subject to the Maryland business combination statute, which, subject to certain limitations, impose a moratorium on business combinations with “interested stockholders” or affiliates thereof for five years and thereafter impose additional requirements on such business combinations.
Further, significant disruption could cause us to reduce or suspend our dividend. The duration and extent of the effects of the COVID-19 pandemic, or a future pandemic or epidemic, on our operational and financial performance are uncertain and difficult to predict and we may experience adverse impacts to our business, financial condition, results of operations and prospects.
The duration and extent of the effects of a future pandemic or epidemic, such as we experienced with the COVID-19 pandemic, on our operational and financial performance are uncertain and difficult to predict and we may experience adverse impacts to our business, financial condition, results of operations and prospects.
As a result of decreased occupancy and increased operating costs for our tenants and borrowers, our tenants’ and borrowers’ ability to meet their obligations as they come due, including their obligation to make full and timely rental payments and debt service payments, respectively, to us has been and may continue to be impacted.
For example, as a result of decreased occupancy and increased operating costs for our tenants and borrowers due to the COVID-19 pandemic, our tenants’ and borrowers’ ability to meet their obligations as they came due, including their obligation to make full and timely rental payments and debt service payments, respectively, to us was adversely impacted and may in the future be adversely impacted by pandemics or epidemics.
An increase in market interest rates could increase our interest costs on borrowings on our Revolving Credit Facility and future debt and could adversely affect our stock price. Interest rates rose substantially in 2022 and 2023 and may continue to rise.
An increase in market interest rates could increase our interest costs on borrowings on our Revolving Credit Facility and future debt and could adversely affect our stock price. Interest rates have risen substantially since 2022 and although interest rates moderated during 2024, they may rise in the future.
Increases in interest rates could increase our interest costs for borrowings on our Revolving Credit Facility and any new debt we may incur. This increased cost could make the financing of any new investments more costly. Rising interest rates could limit our ability to refinance existing debt when it matures or cause us to pay higher interest rates upon refinancing.
Further, increases in interest rates could increase our interest costs for borrowings on our Revolving Credit Facility and any new debt we may incur. This increased cost could make the financing of any new investments more costly.
In some cases, we have had, and may in the future have, to restructure our tenants’ long-term rent obligations and may not be able to do so on terms that are as favorable to us as those currently in place.
Additionally, due to the COVID-19 pandemic in some cases, we had to restructure our tenants’ long-term rent obligations and may be required to restructure such obligations in the future due to other pandemics or epidemics, which may not be on terms that are as favorable to us as those currently in place.
If we fail to qualify as a REIT, we would be subject to U.S. federal income tax on our taxable income at corporate tax rates, which would decrease the amount of cash available for distribution to holders of our common stock. 25 Complying with REIT requirements may cause us to forego otherwise attractive acquisition opportunities or liquidate otherwise attractive investments, which could materially hinder our performance.
If we fail to qualify as a REIT, we would be subject to U.S. federal income tax on our taxable income at corporate tax rates, which would decrease the amount of cash available for distribution to holders of our common stock.
If we fail to meet the market’s expectation with regard to future earnings and cash distributions, the market price of our common stock could decline, and our ability to raise capital through equity financings could be materially adversely affected. 23 Changes and uncertainty in macroeconomic conditions and disruptions in the financial markets could adversely affect the value of our real estate investments and our business, results of operations, cash flows and financial condition.
If we fail to meet the market’s expectation with regard to future earnings and cash distributions, the market price of our common stock could decline, and our ability to raise capital through equity financings could be materially adversely affected.
We depend on third parties to operate these properties in a manner that complies with applicable law and regulation, minimizes legal risk and maximizes the value of our investment. The failure by these third parties to operate these properties efficiently and effectively and adequately manage the related risks could adversely affect our business, financial condition and results of operations.
The failure by these third parties to operate these properties efficiently and effectively and adequately manage the related risks could adversely affect our business, financial condition and results of operations.
We may experience these or other negative effects as the result of future pandemics or epidemics as well. 14 In addition, if there are significant disruptions to our business due to a future pandemic or epidemic, our credit ratings may be adversely impacted and we may breach covenants in our debt agreements and be unable to service our debt.
In addition, if there are significant disruptions to our business due to a future pandemic or epidemic, our credit ratings may be adversely impacted and we may breach covenants in our debt agreements and be unable to service our debt. Further, significant disruption could cause us to reduce or suspend our dividend.
Regulatory Risks Required regulatory approvals can delay or prohibit transfers of our healthcare properties, which could result in periods in which we are unable to receive rent for such properties.
Furthermore, negative publicity with respect to any lawsuits, claims or other legal or regulatory proceedings may also negatively impact our, our tenants’, our borrowers’ or our operators’ reputations. Regulatory Risks Required regulatory approvals can delay or prohibit transfers of our healthcare properties, which could result in periods in which we are unable to receive rent for such properties.
These increased costs may materially adversely affect our tenants’ and borrowers’ ability to obtain and maintain adequate liability and other insurance; manage related risk exposures; fulfill their insurance, indemnification and other obligations to us under their leases or loan agreements, as applicable; or make lease or loan payments to us, as applicable. 19 In addition, from time to time, we may be subject to claims brought against us in lawsuits and other legal proceedings arising out of our alleged actions or the alleged actions of our tenants and operators for which such tenants or operators may have agreed to indemnify, defend and hold us harmless.
These increased costs may materially adversely affect our tenants’ and borrowers’ ability to obtain and maintain adequate liability and other insurance; manage related risk exposures; fulfill their insurance, indemnification and other obligations to us under their leases or loan agreements, as applicable; or make lease or loan payments to us, as applicable.
We cannot predict with certainty whether, when, in what forms, or with what effective dates, the tax laws applicable to us or our stockholders may be changed. 26 Risks Related to Our Organization and Structure Provisions of the Maryland General Corporation Law (the “ MGCL ” ) and of our charter and bylaws could inhibit a change of control of Sabra or reduce the value of our stock.
Risks Related to Our Organization and Structure Provisions of the Maryland General Corporation Law (the “ MGCL ” ) and of our charter and bylaws could inhibit a change of control of Sabra or reduce the value of our stock. Certain provisions of Maryland law, our charter and our bylaws may have an anti-takeover effect.
Any one or a combination of these factors may adversely affect our business, financial position or results of operations. Further, our third-party operators are ultimately in control of the day-to-day business of the properties that they operate.
Further, our third-party operators are ultimately in control of the day-to-day business of the properties that they operate. We depend on third parties to operate these properties in a manner that complies with applicable law and regulation, minimizes legal risk and maximizes the value of our investment.
Removed
Furthermore, negative publicity, including the ongoing publicity related to the COVID-19 pandemic, with respect to any lawsuits, claims or other legal or regulatory proceedings may also negatively impact our, our tenants’, our borrowers’ or our operators’ reputations.
Added
Rising interest rates could limit our ability to refinance existing debt when it matures or cause us to pay higher interest rates upon refinancing.
Removed
Additionally, in the event that we have to declare dividends in-kind in order to satisfy the REIT annual distribution requirement, a holder of our common stock will be required to report dividend income as a result of such distributions even though we distributed no cash or only nominal amounts of cash to such stockholder.
Added
Any one or a combination of these factors may adversely affect our business, financial position or results of operations. Additionally, in April 2024, CMS issued a final rule that establishes minimum nurse staffing requirements for long-term care facilities (the “Minimum Staffing Standards”).
Added
The Minimum Staffing Standards require a total nurse staffing standard of 3.48 hours per resident day (“HPRD”), which must include at least 0.55 HPRD of direct registered nurse care and 2.45 HPRD of direct nurse aide care.
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Facilities may use any combination of nurse staff (registered nurse, licensed practical nurse and licensed vocational nurse, or nurse aide) to account for the additional 0.48 HPRD needed to comply with the total nurse staffing standard.
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The Minimum Staffing Standards also require facilities to meet new facility assessment requirements and have a registered nurse onsite 24 hours a day, seven days a week, to provide skilled nursing care.
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The Minimum Staffing Standards became effective on June 21, 2024, with a compliance deadline for the new facility assessment requirements of August 8, 2024 and a phase-in period consisting of three phases over three years for non-rural facilities and over five years for rural facilities for the staffing requirements.
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The Minimum Staffing Standards, as implemented in its current form, may exacerbate staffing challenges faced by our tenants, which could adversely affect our business, financial position or results of operations. The Minimum Staffing Standards are currently being challenged in federal court, however there can be no assurance that the outcome of such challenges will be favorable to us.
Added
In addition, from time to time, we may be subject to claims brought against us in lawsuits and other legal proceedings arising out of our alleged actions or the alleged actions of our tenants and operators for which such tenants or operators may have agreed to indemnify, defend and hold us harmless.
Added
Changes and uncertainty in macroeconomic conditions and disruptions in the financial markets could adversely affect the value of our real estate investments and our business, results of operations, cash flows and financial condition.
Added
Complying with REIT requirements may cause us to forego otherwise attractive acquisition opportunities or liquidate otherwise attractive investments, which could materially hinder our performance.
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We cannot predict with certainty whether, when, in what forms, or with what effective dates, the tax laws applicable to us or our stockholders may be changed. Investors are urged to consult their tax advisors regarding the effect of potential changes to the U.S. federal tax laws on an investment in our common stock.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Management and Strategy Our cybersecurity program includes the following key elements: • Continuous monitoring of our networks for any unusual activity by a dedicated, outsourced IT team. • Regular review by senior management of monitoring and logging across predefined metrics to identify suspicious activity. • Employment of technical safeguards including firewalls, switches and access controls, as well as full encryption of our server in transit and at rest, which is only accessible through our internal Virtual Private Network (VPN). • Use of preventative security measures for cloud and network security and end-user protection, including Multi-Factor Authentication (MFA), Intrusion Detection System (IDS), Intrusion Prevention System (IPS) and Advanced Threat Protection (ATP) functionality to protect against viruses, malware, ransomware and phishing attempts. • Review of applications from third-party service providers to ensure they meet the criteria of our security policies before implementation, and encryption of data that is transmitted over secured channels and ports from our application programming interfaces. • Education and awareness for Sabra teammates through communication of security and technology policies via the employee handbook, phishing campaigns and annual training on protecting data, phishing threats, cyber trends and other security measures. • Maintenance of cyber insurance and crime insurance policies for Sabra and requirements for certain of our tenants and operators to carry a specified dollar amount of cyber insurance coverage, including coverage for third parties. • Careful monitoring of emerging cybersecurity trends and developments. • Establishment and maintenance of a comprehensive incident response plan that guides our response to a cybersecurity incident based on established reporting categories and that is tested and evaluated on a periodic basis.
Biggest changeRisk Management and Strategy Our cybersecurity program includes the following key elements: • Continuous monitoring of our networks, systems and cloud environments for any unusual activity by a dedicated, outsourced IT team utilizing threat detection and response capabilities. • Regular review by senior management of monitoring and logging across predefined metrics to identify suspicious activity. • Employment of technical safeguards including firewalls, managed network switches and access controls. • Implementation of a zero-trust security architecture, including preventative security measures for cloud and network security and end-user protection, incorporating Microsoft Security Framework, Multi-Factor Authentication (MFA), Intrusion Detection System (IDS), Intrusion Prevention System (IPS) and Advanced Threat Protection (ATP) functionality to protect against viruses, malware, ransomware and phishing attempts. • Review of applications from third-party service providers to ensure they meet the criteria of our security policies before implementation, and encryption of data that is transmitted over secured channels and ports from our application programming interfaces. • Education and awareness for Sabra teammates through communication of security and technology policies via the employee handbook, monthly phishing campaigns and mandatory annual training on protecting data, phishing threats, cyber trends and other security measures. • Maintenance of cyber insurance and crime insurance policies for Sabra and requirements for certain of our tenants and operators to carry a specified dollar amount of cyber insurance coverage, including coverage for third parties. • Active monitoring of emerging cybersecurity trends and developments through our network of security partners. • Establishment and maintenance of a comprehensive incident response plan that guides our response to a cybersecurity incident based on established reporting categories and that is tested and evaluated on a periodic basis.
The results are reported to our board of directors, and our cybersecurity policies, standards, processes and practices are adjusted as necessary based on the information provided by these audits, testing and assessments. To date, cybersecurity incidents have not materially affected and are not reasonably likely to materially affect our Company.
The results are reported to our board of directors, and our cybersecurity policies, standards, processes and practices are adjusted as necessary based on the information provided by these audits, testing and assessments. 28 To date, cybersecurity incidents have not materially affected and are not reasonably likely to materially affect our Company.
At least annually, our board of directors receives a report on cybersecurity risks which addresses topics including current and emerging threat risks and our ability to mitigate such risks, recent developments, evolving standards, vulnerability assessments and third-party reviews. 28 Our cybersecurity risk management and strategy processes, which are discussed in greater detail above, are led by our Chief Executive Officer and Chief Financial Officer in conjunction with our dedicated, outsourced IT team led by our virtual Chief Information Officer who brings over 10 years of experience serving in various roles under information technology and holds a degree in computer science.
Our cybersecurity risk management and strategy processes, which are discussed in greater detail above, are led by our Chief Executive Officer and Chief Financial Officer in conjunction with our dedicated, outsourced IT team led by our virtual Chief Information Officer who brings over 10 years of experience serving in various roles under information technology and holds a degree in computer science.
Added
At least annually, our board of directors receives a report on cybersecurity risks which addresses topics including current and emerging threat risks and our ability to mitigate such risks, recent developments, evolving standards, vulnerability assessments and third-party reviews.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table displays the expiration of annualized contractual rental revenues under our lease agreements as of December 31, 2023, adjusted to reflect actual payments received related to the twelve months ended December 31, 2023 for leases no longer accounted for on an accrual basis, by year and property type (dollars in thousands) and, in each case, without giving effect to any renewal options: Skilled Nursing / Transitional Care Senior Housing - Leased Behavioral Health Specialty Hospitals and Other Total Annualized Revenues % of Total 2024 $ 6,276 $ — $ — $ — $ 6,276 1.8 % 2025 6,311 2,515 — 1,495 10,321 2.9 % 2026 16,834 1,242 — — 18,076 5.1 % 2027 24,308 4,237 — — 28,545 8.1 % 2028 20,964 6,205 — 3,490 30,659 8.7 % 2029 47,705 4,907 — 6,138 58,750 16.7 % 2030 — — — 3,158 3,158 0.9 % 2031 68,811 5,601 1,558 — 75,970 21.5 % 2032 5,785 1,667 32,821 3,749 44,022 12.5 % 2033 — 3,015 5,311 — 8,326 2.4 % Thereafter 52,121 12,472 3,071 746 68,410 19.4 % Total Annualized Revenues $ 249,115 $ 41,861 $ 42,761 $ 18,776 $ 352,513 100.0 % We believe that all of our properties are adequately covered by insurance and are suitable for their intended uses as described in “Business—Portfolio of Healthcare Investments” in Part I, Item 1. 29 Occupancy Trends The following table sets forth the occupancy percentages for our properties for the periods indicated: Occupancy Percentage (1) 2023 2022 2021 2020 2019 (2) Skilled Nursing/Transitional Care 76.4 % 73.5 % 71.4 % 77.3 % 82.1 % Senior Housing - Leased 90.0 % 84.4 % 78.1 % 83.1 % 87.0 % Behavioral Health 81.1 % 84.0 % 84.2 % 83.5 % 83.5 % Specialty Hospitals and Other 79.4 % 77.4 % 80.6 % 76.5 % 71.5 % Senior Housing - Managed 81.6 % 82.1 % 79.4 % 80.0 % 87.7 % (1) Occupancy percentage represents the facilities’ average operating occupancy for the period indicated and is calculated by dividing the actual census from the period presented by the available beds/units for the same period.
Biggest changeThe following table displays the expiration of annualized contractual rental revenues under our lease agreements as of December 31, 2024, adjusted to reflect actual payments received related to the twelve months ended December 31, 2024 for leases no longer accounted for on an accrual basis, by year and property type (dollars in thousands) and, in each case, without giving effect to any renewal options: Skilled Nursing / Transitional Care Senior Housing - Leased Behavioral Health Specialty Hospitals and Other Total Annualized Revenues % of Total 2025 $ 4,778 $ — $ — $ 1,532 $ 6,310 1.8 % 2026 12,183 719 — — 12,902 3.6 % 2027 24,065 4,279 — — 28,344 7.9 % 2028 22,172 2,150 — 3,595 27,917 7.8 % 2029 45,996 5,044 — 6,199 57,239 16.0 % 2030 — — — 3,221 3,221 0.9 % 2031 72,723 4,238 672 — 77,633 21.8 % 2032 6,077 1,726 33,334 3,842 44,979 12.6 % 2033 — 6,935 5,797 — 12,732 3.6 % 2034 6,073 3,585 — — 9,658 2.7 % Thereafter 55,570 16,604 3,121 765 76,060 21.3 % Total Annualized Revenues $ 249,637 $ 45,280 $ 42,924 $ 19,154 $ 356,995 100.0 % We believe that all of our properties are adequately covered by insurance and are suitable for their intended uses as described in “Business—Portfolio of Healthcare Investments” in Part I, Item 1. 29 Occupancy Trends The following table sets forth the occupancy percentages for our properties for the periods indicated: Occupancy Percentage (1) 2024 2023 2022 Skilled Nursing/Transitional Care 80.9 % 76.4 % 73.5 % Senior Housing - Leased 89.6 % 90.0 % 84.4 % Behavioral Health, Specialty Hospitals and Other 77.9 % 80.7 % 82.2 % Senior Housing - Managed 85.2 % 81.6 % 82.1 % (1) Occupancy percentage represents the facilities’ average operating occupancy for the period indicated and is calculated by dividing the actual census from the period presented by the available beds/units for the same period.
See “Business—Portfolio of Healthcare Investments” in Part I, Item 1 for further discussion regarding the ownership of our properties and the types of healthcare facilities that comprise our properties. Secured Indebtedness As of each of December 31, 2023 and 2022, eight of our properties held for investment were subject to secured indebtedness to third parties.
See “Business—Portfolio of Healthcare Investments” in Part I, Item 1 for further discussion regarding the ownership of our properties and the types of healthcare facilities that comprise our properties. Secured Indebtedness As of each of December 31, 2024 and 2023, eight of our properties held for investment were subject to secured indebtedness to third parties.
All facility financial performance information was provided by, or derived solely from information provided by, our tenants and operators without independent verification by us. (2) Reflects occupancy prior to the COVID-19 pandemic. You should not rely upon occupancy percentages, either individually or in the aggregate, to determine the performance of a facility.
All facility financial performance information was provided by, or derived solely from information provided by, our tenants and operators without independent verification by us. You should not rely upon occupancy percentages, either individually or in the aggregate, to determine the performance of a facility.
As of December 31, 2023, our real estate properties held for investment included 37,834 beds/units, spread across the U.S. and Canada. As of December 31, 2023, the substantial majority of our real estate properties (excluding 61 Senior Housing - Managed communities) were leased under triple-net operating leases with expirations ranging from one year to 19 years.
As of December 31, 2024, our real estate properties held for investment included 37,047 beds/units, spread across the U.S. and Canada. As of December 31, 2024, the substantial majority of our real estate properties (excluding 69 Senior Housing - Managed communities) were leased under triple-net operating leases with expirations ranging from less than one year to 19 years.
As of December 31, 2023 and 2022, our secured debt consisted of the following (dollars in thousands): Principal Balance as of December 31, (1) Weighted Average Effective Interest Rate at December 31, (2) Interest Rate Type 2023 2022 2023 2022 Maturity Date Fixed Rate $ 48,143 $ 50,123 3.34 % 3.33 % May 2031 - August 2051 (1) Principal balance does not include deferred financing costs, net of $0.8 million and $0.9 million as of December 31, 2023 and 2022, respectively.
As of December 31, 2024 and 2023, our secured debt consisted of the following (dollars in thousands): Principal Balance as of December 31, (1) Weighted Average Effective Interest Rate at December 31, (2) Interest Rate Type 2024 2023 2024 2023 Maturity Date Fixed Rate $ 46,110 $ 48,143 3.35 % 3.34 % May 2031 - August 2051 (1) Principal balance does not include deferred financing costs, net of $0.8 million as of each of December 31, 2024 and 2023.
PROPERTIES As of December 31, 2023, our investment portfolio consisted of 378 real estate properties held for investment (consisting of (i) 241 skilled nursing/transitional care facilities, (ii) 43 Senior Housing - Leased communities, (iii) 61 Senior Housing - Managed communities, (iv) 18 behavioral health facilities and (v) 15 specialty hospitals and other facilities), 14 investments in loans receivable (consisting of two mortgage loans and 12 other loans), five preferred equity investments and two investments in unconsolidated joint ventures.
PROPERTIES As of December 31, 2024, our investment portfolio consisted of 364 real estate properties held for investment (consisting of (i) 224 skilled nursing/transitional care facilities, (ii) 39 Senior Housing - Leased communities, (iii) 69 Senior Housing - Managed communities, (iv) 17 behavioral health facilities and (v) 15 specialty hospitals and other facilities), 14 investments in loans receivable (consisting of three mortgage loans and 11 other loans), five preferred equity investments and two investments in unconsolidated joint ventures.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS For a description of our legal proceedings, see Note 15, “Commitments and Contingencies—Legal Matters” in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K, which is incorporated by reference in response to this item. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 30 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS For a description of our legal proceedings, see Note 16, “Commitments and Contingencies—Legal Matters” in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K, which is incorporated by reference in response to this item. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 30 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFollowing is the characterization of our annual cash dividends on common stock per share: Year Ended December 31, Common Stock 2023 2022 2021 Non-qualified ordinary dividends $ 0.6837 $ 0.8742 $ 0.6250 Non-dividend distributions 0.5163 0.3258 0.5750 $ 1.2000 $ 1.2000 $ 1.2000 31 Stock Price Performance Graph The following graph compares the cumulative total stockholder return of our common stock for the five-year period ending December 31, 2023.
Biggest changeFollowing is the characterization of our annual cash dividends on common stock per share: Year Ended December 31, Common Stock 2024 2023 2022 Non-qualified ordinary dividends $ 1.0600 $ 0.6837 $ 0.8742 Non-dividend distributions 0.1400 0.5163 0.3258 $ 1.2000 $ 1.2000 $ 1.2000 31 Stock Price Performance Graph The following graph compares the cumulative total stockholder return of our common stock for the five-year period ending December 31, 2024.
The above performance graph shall not be deemed to be soliciting material or to be filed with the SEC under the Securities Act of 1933 or the Securities Exchange Act of 1934 or incorporated by reference in any document as filed. 32 ITEM 6. RESERVED
The above performance graph shall not be deemed to be soliciting material or to be filed with the SEC under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or incorporated by reference in any document as filed. 32 ITEM 6. RESERVED
The graph below assumes that $100 was invested at the close of market on December 31, 2018 in (i) our common stock, (ii) the Nasdaq Composite Index and (iii) the Nareit Health Care Property Sector Total Return Index and assumes the reinvestment of all dividends. Stock price performances shown in the graph are not necessarily indicative of future price performances.
The graph below assumes that $100 was invested at the close of market on December 31, 2019 in (i) our common stock, (ii) the Nasdaq Composite Index and (iii) the Nareit Health Care Property Sector Total Return Index and assumes the reinvestment of all dividends. Stock price performances shown in the graph are not necessarily indicative of future price performances.
We did not repurchase any shares of our common stock during the quarter ended December 31, 2023 or issue any shares of our common stock in a transaction that was not registered under the Securities Act of 1933.
We did not repurchase any shares of our common stock during the quarter ended December 31, 2024 or issue any shares of our common stock in a transaction that was not registered under the Securities Act of 1933, as amended.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stockholder Information Our common stock is listed on The Nasdaq Stock Market LLC and trades on the Nasdaq Global Select Market under the symbol “SBRA.” At February 20, 2024, we had approximately 4,044 stockholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stockholder Information Our common stock is listed on The Nasdaq Stock Market LLC and trades on the Nasdaq Global Select Market under the symbol “SBRA.” At February 12, 2025, we had approximately 3,797 stockholders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeA discussion of our results of operations for the year ended December 31, 2021 is included in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Comparison of results of operations for the years ended December 31, 2022 and 2021” section in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022. 39 Comparison of results of operations for the years ended December 31, 2023 and 2022 (dollars in thousands): For the Year Ended December 31, Increase / (Decrease) Percentage Difference Variance due to Acquisitions, Originations and Dispositions (1) Remaining Variance (2) 2023 2022 Revenues: Rental and related revenues $ 376,266 $ 400,586 $ (24,320) (6) % $ (17,315) $ (7,005) Resident fees and services 236,153 186,672 49,481 27 % 19,352 30,129 Interest and other income 35,095 37,553 (2,458) (7) % (3,508) 1,050 Expenses: Depreciation and amortization 183,087 187,782 (4,695) (3) % (6,647) 1,952 Interest 112,964 105,471 7,493 7 % — 7,493 Triple-net portfolio operating expenses 17,932 19,623 (1,691) (9) % (1,220) (471) Senior housing - managed portfolio operating expenses 177,313 142,990 34,323 24 % 11,266 23,057 General and administrative 47,472 39,574 7,898 20 % — 7,898 Provision for loan losses and other reserves 191 141 50 35 % 232 (182) Impairment of real estate 14,332 94,042 (79,710) (85) % (86,978) 7,268 Other (expense) income: Loss on extinguishment of debt (1,541) (411) (1,130) 275 % — (1,130) Other income (expense) 2,598 (1,097) 3,695 (337) % — 3,695 Net loss on sales of real estate (76,625) (12,011) (64,614) 538 % (64,614) — Loss from unconsolidated joint ventures (2,897) (98,032) 95,135 (97) % 95,135 — Income tax expense (2,002) (1,242) (760) 61 % — (760) (1) Represents the dollar amount increase (decrease) for the year ended December 31, 2023 compared to the year ended December 31, 2022 as a result of investments/dispositions made after January 1, 2022.
Biggest changeComparison of results of operations for the years ended December 31, 2024 and 2023 (dollars in thousands): For the Year Ended December 31, Increase / (Decrease) Percentage Difference Variance due to Acquisitions, Originations and Dispositions (1) Remaining Variance (2) 2024 2023 Revenues: Rental and related revenues $ 381,495 $ 376,266 $ 5,229 1 % $ (2,330) $ 7,559 Resident fees and services 284,581 236,153 48,428 21 % 11,524 36,904 Interest and other income 37,159 35,095 2,064 6 % 1,115 949 Expenses: Depreciation and amortization 169,623 183,087 (13,464) (7) % (1,042) (12,422) Interest 115,272 112,964 2,308 2 % — 2,308 Triple-net portfolio operating expenses 17,072 17,932 (860) (5) % (392) (468) Senior housing - managed portfolio operating expenses 210,016 177,313 32,703 18 % 6,469 26,234 General and administrative 50,067 47,472 2,595 5 % — 2,595 (Recovery of) provision for loan losses (571) 191 (762) (399) % (150) (612) Impairment of real estate 18,472 14,332 4,140 29 % (4,706) 8,846 Other income (expense): Loss on extinguishment of debt — (1,541) 1,541 (100) % — 1,541 Other income 2,735 2,598 137 5 % 82 55 Net gain (loss) on sales of real estate 2,095 (76,625) 78,720 (103) % 78,720 — Loss from unconsolidated joint ventures (397) (2,897) 2,500 (86) % 104 2,396 Income tax expense (1,005) (2,002) 997 (50) % — 997 (1) Represents the dollar amount increase (decrease) for the year ended December 31, 2024 compared to the year ended December 31, 2023 as a result of investments/dispositions made after January 1, 2023.
The assumptions are generally based on management’s experience in its local real estate markets, and the effects of current market conditions, which are subject to economic and market uncertainties.
The assumptions are generally based on management’s experience in its local real estate markets, and the effects of current market conditions, which are subject to economic and market uncertainties.
If at any time we cannot determine that it is probable that substantially all rents over the life of a lease are collectible, rental revenue will be recognized only to the extent of payments received and all receivables associated with the lease will be written off, irrespective of amounts expected to be collectible.
If at any time we cannot determine that it is probable that substantially all rents over the life of a lease are collectible, rental revenue will be recognized only to the extent of payments received and all receivables associated with the lease will be written off, irrespective of amounts expected to be collectible.
We consider the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a 38 significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with our estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market).
We consider the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with our estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market).
Other Income (Expense) During the year ended December 31, 2023, we recognized $2.6 million of other income related to (i) a $3.7 million gain on insurance proceeds received related to property damage incurred at a vacant facility, (ii) $0.5 million of business interruption insurance income related to one Senior Housing - Managed community that was closed due to a fire and (iii) $0.3 million of income related to the sale of licensed beds.
During the year ended December 31, 2023, we recognized $2.6 million of other income related to (i) a $3.7 million gain on insurance proceeds received related to property damage incurred at a vacant facility, (ii) $0.5 million of business interruption insurance income related to one Senior Housing - Managed community that was closed due to a fire and (iii) $0.3 million of income related to the sale of licensed beds.
Any recoveries of these amounts will be recorded in future periods upon receipt of payment. Write-offs of receivables and any recoveries of previously written-off receivables are recorded as adjustments to rental revenue. Revenue from resident fees and services is recorded monthly as services are provided and includes resident room and care charges, ancillary services charges and other resident charges.
Any recoveries of these amounts will be recorded in future periods upon receipt of payment. Write-offs of receivables and any recoveries of previously written-off receivables are recorded as adjustments to rental revenue. 35 Revenue from resident fees and services is recorded monthly as services are provided and includes resident room and care charges, ancillary services charges and other resident charges.
Credit Losses On a quarterly basis, we evaluate the collectability of our loan portfolio, including the portion of unfunded loan commitments expected to be funded, and establish an allowance for credit losses. The allowance for credit losses is calculated using the related amortization schedules, payment histories and loan-to-value ratios.
Credit Losses On a quarterly basis, we evaluate the collectability of our loan portfolio, including the portion of unfunded loan commitments expected to be funded, and establish an allowance for credit losses. The allowance for credit losses is calculated 36 using the related amortization schedules, payment histories and loan-to-value ratios.
We regularly monitor the effects of economic and market conditions on our operations and financial position, as well as on the operations and financial position of our tenants and borrowers, in order to respond and adapt to the ongoing changes in our operating environment.
We regularly monitor the effects of economic and market conditions on our operations and financial position, as well as on the operations and financial position of our tenants and borrowers, in order to respond and adapt to the ongoing changes in 33 our operating environment.
Loss on Extinguishment of Debt During the year ended December 31, 2023, we recognized a $1.5 million loss on extinguishment of debt related to write-offs of deferred financing costs in connection with amending and restating the fifth amended and restated unsecured credit agreement entered into by the Operating Partnership and Sabra Canadian Holdings, LLC and the other parties thereto on September 9, 2019 (“Prior Credit Agreement”).
During the year ended December 31, 2023, we recognized a $1.5 million loss on extinguishment of debt related to write-offs of deferred financing costs in connection with amending and restating the fifth amended and restated unsecured credit agreement entered into by the Operating Partnership and Sabra Canadian Holdings, LLC and the other parties thereto on September 9, 2019.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is organized as follows: • Overview • Critical Accounting Policies and Estimates • Recently Issued Accounting Standards Update • Results of Operations • Liquidity and Capital Resources • Concentration of Credit Risk • Skilled Nursing Facility Reimbursement Rates Overview We expect to grow our investment portfolio while diversifying our portfolio by tenant, facility type and geography within the healthcare sector.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations is organized as follows: • Overview • Critical Accounting Policies and Estimates • Recently Issued Accounting Standards Updates • Results of Operations • Liquidity and Capital Resources • Concentration of Credit Risk • Skilled Nursing Facility Reimbursement Rates Overview We expect to grow our investment portfolio while diversifying our portfolio by tenant, facility type and geography within the healthcare sector.
However, there can be no assurances regarding the timing and amount of these revenues. Amounts due under the terms of all of our lease agreements are subject to contractual increases, and contingent rental income may be derived from certain lease agreements. No material contingent rental income was derived during the years ended December 31, 2023 and 2022.
However, there can be no assurances regarding the timing and amount of these revenues. Amounts due under the terms of all of our lease agreements are subject to contractual increases, and contingent rental income may be derived from certain lease agreements. No material contingent rental income was derived during the years ended December 31, 2024 and 2023.
Results of Operations As of December 31, 2023, our investment portfolio consisted of 378 real estate properties held for investment, 14 investments in loans receivable, five preferred equity investments and two investments in unconsolidated joint ventures.
As of December 31, 2023, our investment portfolio consisted of 378 real estate properties held for investment, 14 investments in loans receivable, five preferred equity investments and two investments in unconsolidated joint ventures.
(2) Represents the dollar amount increase (decrease) for the year ended December 31, 2023 compared to the year ended December 31, 2022 that is not a direct result of investments/dispositions made after January 1, 2022.
(2) Represents the dollar amount increase (decrease) for the year ended December 31, 2024 compared to the year ended December 31, 2023 that is not a direct result of investments/dispositions made after January 1, 2023.
See Note 8, “Debt,” in the Notes to Consolidated Financial Statements and “Subsidiary Issuer and Guarantor Financial Information” below for additional information concerning the Senior Notes, including information regarding the indentures and agreements governing the Senior Notes (the “Senior Notes Indentures”). As of December 31, 2023, we were in compliance with all applicable covenants under the Senior Notes Indentures.
See Note 9, “Debt,” in the Notes to Consolidated Financial Statements and “Subsidiary Issuer and Guarantor Financial Information” below for additional information concerning the Senior Notes, including information regarding the indentures and agreements governing the Senior Notes (the “Senior Notes Indentures”). As of December 31, 2024, we were in compliance with all applicable covenants under the Senior Notes Indentures.
Our senior unsecured notes consisted of the following (collectively, the “Senior Notes”) as of December 31, 2023 (dollars in thousands): Title Maturity Date Principal Balance (1) 5.125% senior unsecured notes due 2026 (the “2026 Notes”) August 15, 2026 $ 500,000 5.88% senior unsecured notes due 2027 (the “2027 Notes”) May 17, 2027 100,000 3.90% senior unsecured notes due 2029 (the “2029 Notes”) October 15, 2029 350,000 3.20% senior unsecured notes due 2031 (the “2031 Notes”) December 1, 2031 800,000 $ 1,750,000 (1) Principal balance does not include discount, net of $4.3 million and deferred financing costs, net of $10.5 million as of December 31, 2023.
Our senior unsecured notes consisted of the following (collectively, the “Senior Notes”) as of December 31, 2024 (dollars in thousands): Title Maturity Date Principal Balance (1) 5.125% senior unsecured notes due 2026 (the “2026 Notes”) August 15, 2026 $ 500,000 5.88% senior unsecured notes due 2027 (the “2027 Notes”) May 17, 2027 100,000 3.90% senior unsecured notes due 2029 (the “2029 Notes”) October 15, 2029 350,000 3.20% senior unsecured notes due 2031 (the “2031 Notes”) December 1, 2031 800,000 $ 1,750,000 (1) Principal balance does not include discount, net of $5.0 million and deferred financing costs, net of $9.0 million as of December 31, 2024.
Market Trends and Uncertainties Our operations have been and are expected to continue to be impacted by economic and market conditions. Increases in interest rates, labor shortages, supply chain disruptions, high inflation and increased volatility in public equity and fixed income markets have led to increased costs and limited the availability of capital.
Market Trends and Uncertainties Our operations have been and are expected to continue to be impacted by economic and market conditions. Increases in interest rates, labor shortages, inflation and increased volatility in public equity and fixed income markets have led to increased costs and limited the availability of capital.
Net Loss on Sales of Real Estate During the year ended December 31, 2023, we recognized an aggregate net loss of $76.6 million related to the disposition of 24 skilled nursing/transitional care facilities, three Senior Housing - Leased communities and one Senior Housing - Managed community.
During the year ended December 31, 2023, we recognized an aggregate net loss of $76.6 million related to the disposition of 24 skilled nursing/transitional care facilities, three Senior Housing - Leased communities and one Senior Housing - Managed community.
As of December 31, 2023, eight of our properties held for investment were subject to secured indebtedness to third parties, and our secured debt consisted of the following (dollars in thousands): Interest Rate Type Principal Balance (1) Weighted Average Interest Rate Maturity Date Fixed Rate $ 48,143 2.85 % May 2031 - August 2051 (1) Principal balance does not include deferred financing costs, net of $0.8 million as of December 31, 2023.
As of December 31, 2024, eight of our properties held for investment were subject to secured indebtedness to third parties, and our secured debt consisted of the following (dollars in thousands): Interest Rate Type Principal Balance (1) Weighted Average Interest Rate Maturity Date Fixed Rate $ 46,110 2.85 % May 2031 - August 2051 (1) Principal balance does not include deferred financing costs, net of $0.8 million as of December 31, 2024.
Fair Value Measurements Under GAAP, we are required to measure certain financial instruments at fair value on a recurring basis. In addition, we are required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired loans receivable and long-lived assets).
In addition, we are required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired loans receivable and long-lived assets).
See “—Liquidity and Capital Resources.” Critical Accounting Policies and Estimates Below is a discussion of the accounting policies that management considers critical in that they involve significant management judgments and assumptions, require estimates about matters that are inherently uncertain and because they are important for understanding and evaluating our reported financial results.
Critical Accounting Policies and Estimates Below is a discussion of the accounting policies that management considers critical in that they involve significant management judgments and assumptions, require estimates about matters that are inherently uncertain and because they are important for understanding and evaluating our reported financial results.
For the years ended December 31, 2023 and 2022 and 2021, our aggregate capital expenditures were $84.9 million, $54.5 million and $42.7 million, respectively.
For the years ended December 31, 2024, 2023 and 2022, our aggregate capital expenditures were $54.7 million, $84.9 million and $54.5 million, respectively.
As of December 31, 2023, our aggregate commitment for future capital and other expenditures related to facilities leased under triple-net operating leases was approximately $27 million, of which $20 million will directly result in incremental rental income, and approximately $16 million will be spent over the next 12 months.
As of December 31, 2024, our aggregate commitment for future capital and other expenditures related to facilities leased under triple-net operating leases was approximately $16 million, of which $13 million will directly result in incremental rental income, and approximately $6 million will be spent over the next 12 months.
In addition, we may seek financing from U.S. government agencies, including through Fannie Mae, Freddie Mac and HUD, in appropriate circumstances in connection with acquisitions. Cash Flows from Operating Activities Net cash provided by operating activities was $300.6 million for the year ended December 31, 2023.
In addition, we may seek financing from U.S. government agencies, including through Fannie Mae, Freddie Mac and HUD, in appropriate circumstances in connection with acquisitions. Cash Flows from Operating Activities Net cash provided by operating activities was $310.5 million for the year ended December 31, 2024.
Our portfolio of 378 real estate properties held for investment as of December 31, 2023 is diversified by location across the U.S. and Canada.
Our portfolio of 364 real estate properties held for investment as of December 31, 2024 is diversified by location across the U.S. and Canada.
AFFO is defined as FFO excluding merger and acquisition costs, stock-based compensation expense, non-cash rental and related revenues, non-cash interest income, non-cash interest expense, non-cash portion of loss on extinguishment of debt, provision for loan losses and other reserves, non-cash lease termination income and deferred income taxes, as well as other non-cash revenue and expense items (including ineffectiveness gain/loss on derivative instruments, and non-cash revenue and expense amounts related to noncontrolling interests) and our share of non-cash adjustments related to our unconsolidated joint ventures.
AFFO is defined as FFO excluding stock-based compensation expense, non-cash rental and related revenues, non-cash interest income, non-cash interest expense, non-cash portion of loss on extinguishment of debt, provision for (recovery of) loan losses and other reserves, non-cash lease termination income and deferred income taxes, as well as other non-cash revenue and expense items (including noncapitalizable acquisition costs, transaction costs related to operator transitions and organizational or other restructuring activities, ineffectiveness gain/loss on derivative instruments, and non-cash revenue and expense amounts related to noncontrolling interests) and our share of non-cash adjustments related to our unconsolidated joint ventures.
The net decrease of $2.5 million is due to a $4.0 million decrease in income from investments repaid after January 1, 2022 and $2.5 million lease termination payments primarily related to one skilled nursing/transitional care facility that sold in 2022, partially offset by (i) a $2.8 million increase from investments made after January 1, 2022, (ii) a $0.6 million increase due to increased fundings for existing investments and (iii) a $0.6 million increase in bank interest income.
The net increase of $2.1 million is due to (i) a $1.5 million increase from investments made after January 1, 2023, (ii) a $0.7 million increase due to increased fundings for existing investments, (iii) a $0.4 million increase in bank interest income and (iv) a $0.2 million lease termination payment primarily related to one skilled nursing/transitional care facility that was sold during 2024, partially offset by a $0.7 million decrease in income from investments repaid after January 1, 2023.
The aggregate summarized balance sheet information as of December 31, 2023 and 2022 and aggregate summarized statement of loss information for the year ended December 31, 2023 is as follows (in thousands): As of December 31, 2023 2022 Total assets $ 72,730 $ 74,063 Total liabilities 2,272,119 2,275,511 Year Ended December 31, 2023 Total revenues $ 730 Total expenses 137,422 Net loss (139,639) Concentration of Credit Risk Concentrations of credit risk arise when a number of tenants or obligors related to our investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to us, to be similarly affected by changes in economic conditions.
The aggregate summarized balance sheet information as of December 31, 2024 and 2023 and aggregate summarized statement of loss information for the year ended December 31, 2024 is as follows (in thousands): As of December 31, 2024 2023 Total assets $ 92,968 $ 72,730 Total liabilities 2,295,145 2,272,119 Year Ended December 31, 2024 Total revenues $ 1,111 Total expenses 151,261 Net loss (150,199) Concentration of Credit Risk Concentrations of credit risk arise when a number of tenants or obligors related to our investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to us, to be similarly affected by changes in economic conditions.
For the year ended December 31, 2023, no tenant relationship represented 10% or more of our total revenues. 47 Skilled Nursing Facility Reimbursement Rates For the year ended December 31, 2023, 42.0% of our revenues was derived directly or indirectly from skilled nursing/transitional care facilities.
For the year ended December 31, 2024, no tenant relationship represented 10% or more of our total revenues. 46 Skilled Nursing Facility Reimbursement Rates For the year ended December 31, 2024, 39.2% of our revenues was derived directly or indirectly from skilled nursing/transitional care facilities.
Acquisitions During the year ended December 31, 2023, we acquired two skilled nursing/transitional care facilities, one Senior Housing - Leased community and one Senior Housing - Managed community for aggregate consideration of $90.4 million, including acquisition costs. See Note 3, “Recent Real Estate Acquisitions,” in the Notes to Consolidated Financial Statements for additional information regarding these acquisitions.
Acquisitions During the year ended December 31, 2024, we acquired three Senior Housing - Managed communities and one Senior Housing - Leased community for aggregate consideration of $136.4 million, including acquisition costs. See Note 3, “Recent Real Estate Acquisitions (Consolidated),” in the Notes to Consolidated Financial Statements for additional information regarding these acquisitions.
Rental and Related Revenues During the year ended December 31, 2023, we recognized $376.3 million of rental income compared to $400.6 million for the year ended December 31, 2022.
Rental and Related Revenues During the year ended December 31, 2024, we recognized $381.5 million of rental income compared to $376.3 million for the year ended December 31, 2023.
Depreciation and Amortization During the year ended December 31, 2023, we incurred $183.1 million of depreciation and amortization expense compared to $187.8 million for the year ended December 31, 2022.
Depreciation and Amortization During the year ended December 31, 2024, we incurred $169.6 million of depreciation and amortization expense compared to $183.1 million for the year ended December 31, 2023.
Under step two, the tax benefit is measured as the largest amount of benefit (determined on a cumulative probability basis) that is more likely than not to be realized upon ultimate settlement. We will recognize tax penalties relating to unrecognized tax benefits as additional tax expense.
Under step two, the tax benefit is measured as the largest amount of benefit (determined on a cumulative probability basis) that is more likely than not to be realized upon ultimate settlement.
However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT. 37 As a result of certain investments, we record income tax expense or benefit with respect to certain of our entities that are taxed as taxable REIT subsidiaries under provisions similar to those applicable to regular corporations and not under the REIT provisions.
As a result of certain investments, we record income tax expense or benefit with respect to certain of our entities that are taxed as taxable REIT subsidiaries under provisions similar to those applicable to regular corporations and not under the REIT provisions.
We also expect to fund capital expenditures related to our Senior Housing - Managed communities. In addition, as of December 31, 2023, we have committed to provide up to $0.5 million of future funding related to one loan receivable investment. Dividends.
We also expect to fund capital expenditures related to our Senior Housing - Managed communities. In addition, as of December 31, 2024, we have committed to provide up to $1.4 million of future funding related to two loan receivable investments. Dividends.
Income Tax Expense During the year ended December 31, 2023, we recognized $2.0 million of income tax expense compared to $1.2 million for the year ended December 31, 2022 .
Income Tax Expense During the year ended December 31, 2024, we recognized $1.0 million of income tax expense compared to $2.0 million for the year ended December 31, 2023 . The $1.0 million decrease is due to lower taxable income during the year ended December 31, 2024.
We paid dividends of $277.4 million on our common stock during the year ended December 31, 2023. On February 1, 2024, our board of directors declared a quarterly cash dividend of $0.30 per share of common stock. The dividend will be paid on February 29, 2024 to common stockholders of record as of February 13, 2024.
We paid dividends of $280.2 million on our common stock during the year ended December 31, 2024. On February 3, 2025, our board of directors declared a quarterly cash dividend of $0.30 per share of common stock. The dividend will be paid on February 28, 2025 to common stockholders of record as of February 14, 2025.
Please refer to “—Results of Operations” above for additional information regarding these items (in millions): Year Ended December 31, 2023 2022 2021 2023 2022 2021 2023 2022 2021 Net Income (Loss) FFO AFFO Rental and related revenues: Non-cash rental and related revenue write-offs / lease intangible amortization acceleration $ 2.5 $ 16.7 $ 44.0 $ 2.5 $ 16.7 $ 44.0 $ — $ — $ — Interest and other income: Lease termination income — 2.5 — — 2.5 — — 2.5 — Provision for loan losses and other reserves 0.2 0.1 3.9 0.2 0.1 3.9 — — — Loss on extinguishment of debt 1.5 0.4 34.6 1.5 0.4 34.6 — — 30.2 Other income (expense): Insurance income 4.2 — — 4.2 — — 4.2 — — Other (expense) income (1.6) (1.1) 0.4 (1.6) (1.1) 0.4 (1.6) 1.2 0.4 44 Liquidity and Capital Resources As of December 31, 2023, we had approximately $946.9 million in liquidity, consisting of unrestricted cash and cash equivalents of $41.3 million and available borrowings under our Revolving Credit Facility of $905.6 million.
Please refer to “—Results of Operations” above for additional information regarding these items (in millions): Year Ended December 31, 2024 2023 2022 2024 2023 2022 2024 2023 2022 Net Income (Loss) FFO AFFO Rental and related revenues: Rental and related revenue write-offs / lease intangible amortization acceleration $ 6.0 $ 2.5 $ 15.8 $ 6.0 $ 2.5 $ 15.8 $ 0.7 $ — $ 0.1 Interest and other income: Lease termination income 0.2 — 2.5 0.2 — 2.5 0.2 — 2.5 (Recovery of) provision for loan losses and other reserves (0.6) 0.2 0.1 (0.6) 0.2 0.1 — — — Loss on extinguishment of debt — 1.5 0.4 — 1.5 0.4 — — — Other income (expense): Insurance income 2.2 4.2 — 2.2 4.2 — 2.2 4.2 — Liquidity and Capital Resources As of December 31, 2024, we had approximately $980.0 million in liquidity, consisting of unrestricted cash and cash equivalents of $60.5 million, available borrowings under our Revolving Credit Facility of $893.4 million and $26.1 million 43 related to shares outstanding under forward sale agreements under our ATM Program.
Further, our computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other REITs that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define AFFO differently than we do. 43 The following table reconciles our calculations of FFO and AFFO for the years ended December 31, 2023, 2022 and 2021, to net income (loss), the most directly comparable GAAP financial measure, for the same periods (in thousands, except share and per share amounts): Year Ended December 31, 2023 2022 2021 Net income (loss) $ 13,756 $ (77,605) $ (113,256) Depreciation and amortization of real estate assets 183,087 187,782 178,991 Depreciation, amortization and impairment of real estate assets related to unconsolidated joint ventures 8,697 22,095 26,129 Net loss (gain) on sales of real estate 76,625 12,011 (12,301) Net (gain) loss on sales of real estate related to unconsolidated joint ventures — (220) 33 Impairment of real estate 14,332 94,042 9,499 Other-than-temporary impairment of unconsolidated joint ventures — 57,778 164,126 FFO 296,497 295,883 253,221 Stock-based compensation expense 7,917 7,453 7,914 Non-cash rental and related revenues (8,699) 2,183 25,823 Non-cash interest income (372) (2,285) (1,988) Non-cash interest expense 12,265 11,094 8,368 Non-cash portion of loss on extinguishment of debt 1,541 411 4,426 Provision for loan losses and other reserves 191 141 3,935 Deferred tax valuation allowance related to unconsolidated joint ventures — 19,613 — Other adjustments related to unconsolidated joint ventures 502 (5,155) (5,051) Other non-cash adjustments 365 2,474 492 AFFO $ 310,207 $ 331,812 $ 297,140 FFO per diluted common share $ 1.27 $ 1.28 $ 1.15 AFFO per diluted common share $ 1.33 $ 1.43 $ 1.35 Weighted average number of common shares outstanding, diluted: FFO 232,792,778 231,851,542 220,102,563 AFFO 233,883,279 232,784,543 220,526,512 The following table sets forth additional information related to certain other items included in net income (loss) above, and the portions of each that are included in FFO and AFFO, which may be helpful in assessing our operating results.
Further, our computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other REITs that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define AFFO differently than we do. 42 The following table reconciles our calculations of FFO and AFFO for the years ended December 31, 2024, 2023 and 2022, to net income (loss), the most directly comparable GAAP financial measure, for the same periods (in thousands, except share and per share amounts): Year Ended December 31, 2024 2023 2022 Net income (loss) $ 126,712 $ 13,756 $ (77,605) Depreciation and amortization of real estate assets 169,623 183,087 187,782 Depreciation, amortization and impairment of real estate assets related to unconsolidated joint ventures 8,893 8,697 22,095 Net (gain) loss on sales of real estate (2,095) 76,625 12,011 Net gain on sales of real estate related to unconsolidated joint ventures — — (220) Impairment of real estate 18,472 14,332 94,042 Other-than-temporary impairment of unconsolidated joint ventures — — 57,778 FFO 321,605 296,497 295,883 Stock-based compensation expense 8,987 7,917 7,453 Non-cash rental and related revenues (3,856) (8,699) 2,183 Non-cash interest income 29 (372) (2,285) Non-cash interest expense 10,479 12,265 11,094 Non-cash portion of loss on extinguishment of debt — 1,541 411 (Recovery of) provision for loan losses and other reserves (571) 191 141 Deferred tax valuation allowance related to unconsolidated joint ventures — — 19,613 Other adjustments related to unconsolidated joint ventures 472 502 (5,155) Other adjustments 1,043 1,491 3,686 AFFO $ 338,188 $ 311,333 $ 333,024 FFO per diluted common share $ 1.36 $ 1.27 $ 1.28 AFFO per diluted common share $ 1.43 $ 1.33 $ 1.43 Weighted average number of common shares outstanding, diluted: FFO 236,045,862 232,792,778 231,851,542 AFFO 237,116,036 233,883,279 232,784,543 The following table sets forth additional information related to certain other items included in net income (loss) above, and the portions of each that are included in FFO and AFFO, which may be helpful in assessing our operating results.
Our estimated interest and facility fee payments based on principal amounts of debt outstanding as of December 31, 2023, applicable interest rates in effect as of December 31, 2023, and including the impact of interest rate swaps and collars are $102.2 million in 2024, $103.5 million in 2025, $103.5 million in 2026, $66.1 million in 2027, $40.6 million in 2028 and $100.9 million thereafter. 46 Capital Expenditures and Other Expenditures and Funding Commitments.
Our estimated interest and facility fee payments based on principal amounts of debt outstanding as of December 31, 2024, applicable interest rates in effect as of December 31, 2024, and including the impact of interest rate swaps are $102.8 million in 2025, $102.7 million in 2026, $65.8 million in 2027, $40.6 million in 2028, $40.3 million in 2029 and $60.6 million thereafter. 45 Capital and Other Expenditures and Funding Commitments.
Any unamortized balances are immediately recognized in income if the loan is repaid before its contractual maturity. 36 Interest income on our loans receivable is recognized on an accrual basis over the life of the investment using the interest method. Direct loan origination costs are amortized over the term of the loan as an adjustment to interest income.
Interest income on our loans receivable is recognized on an accrual basis over the life of the investment using the interest method. Direct loan origination costs are amortized over the term of the loan as an adjustment to interest income.
The $0.8 million increase is due to higher taxable income. 42 Funds from Operations and Adjusted Funds from Operations We believe that net income as defined by GAAP is the most appropriate earnings measure.
Funds from Operations and Adjusted Funds from Operations We believe that net income as defined by GAAP is the most appropriate earnings measure.
The difference between the acquisition date fair value and the total expected cash flows is recognized as interest income using the effective interest method over the life of the applicable loan.
The difference between the acquisition date fair value and the total expected cash flows is recognized as interest income using the effective interest method over the life of the applicable loan. Any unamortized balances are immediately recognized in income if the loan is repaid before its contractual maturity.
The $49.5 million increase is due to (i) a $23.6 million increase related to nine facilities that were transitioned to Senior Housing - Managed communities after January 1, 2022 , (ii) a $20.9 million increase from four Senior Housing - Managed communities acquired after January 1, 2022 and (iii) a $10.3 million increase related to increased occupancy and an increase in rates.
The $48.4 million net increase is due to (i) a $21.8 million increase related to seven facilities that were transitioned to Senior Housing - Managed communities after January 1, 2023 , (ii) a $15.1 million increase related to increased occupancy and an increase in rates and (iii) an $11.9 million increase from four Senior Housing - Managed communities acquired after January 1, 2023 .
The $1.7 million net decrease is related to a $1.2 million decrease due to properties disposed of after January 1, 2022, a $0.8 million net decrease due to facilities that have since transitioned to new operators who are now paying the property taxes directly and the remaining change is due to adjusting our estimate s related to property taxes.
The $0.9 million net decrease is primarily due to a $1.3 million decrease due to facilities that have since transitioned to new operators who are now paying the property taxes directly and a $0.4 million decrease from properties disposed of after January 1, 2023.
Provision for Loan Losses and Other Reserves During the years ended December 31, 2023 and 2022, we recognized a $0.2 million and $0.1 million provision for loan losses and other reserves, respectively, associated with our loans receivable investments and sales-type lease that was terminated in March 2023.
(Recovery of) Provision for Loan Losses During the years ended December 31, 2024 and 2023, we recognized a $0.6 million recovery of and a $0.2 million provision for loan losses, respectively, associated with our loans receivable investments.
We may change our original assessment of a VIE due to events such as modifications of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposal of all or a portion of an interest held by the primary beneficiary. 34 We identify the primary beneficiary of a VIE as the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity.
We may change our original assessment of a VIE due to events such as modifications of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposal of all or a portion of an interest held by the primary beneficiary.
The $34.3 million net increase is due to (i) a $22.3 million increase related to nine facilities that were transitioned to Senior Housing - Managed communities after January 1, 2022, (ii) a $12.9 million increase related to four Senior Housing - Managed communities acquired after January 1, 2022, (iii) a $1.5 million increase in employee compensation primarily due to incre ased labor rates and staffing and (iv) a $0.6 million increase in dining expenses primarily due to increased occupancy.
The $32.7 million net increase is due to (i) a $19.1 million increase related to seven facilities that were transitioned to Senior Housing - Managed communities after January 1, 2023, (ii) a $6.9 million increase related to four Senior Housing - Managed communities acquired after January 1, 2023, (iii) a $3.1 million increase in employee compensation primarily due to increased labor rates and staffing, (iv) a $2.1 million increase in management fees, dining expenses and housekeeping costs due to increased occupancy, (v) a $1.4 million increase in marketing, administrative and corporate overhead expenses and (vi) a $0.4 million increase in taxes primarily due to changes in estimates.
On July 29, 2022, CMS issued a final rule regarding fiscal year 2023 Medicare rates for skilled nursing facilities providing an estimated net increase of 2.7% compared to fiscal year 2022 comprised of an increase as a result of an update to the payment rates of 5.1% (which is based on (i) a market basket increase of 3.9% plus (ii) a market basket forecast error adjustment of 1.5% and less (iii) a productivity adjustment of 0.3%), partially offset by the recalibrated PDPM parity adjustment of 2.3% (the total PDPM parity adjustment is 4.6%, and it is being phased in over a two-year period).
On July 31, 2024, CMS issued a final rule regarding fiscal year 2025 Medicare rates for skilled nursing facilities providing an estimated net increase of 4.2% compared to fiscal year 2024 (comprised of (i) a market basket increase of 3.0% plus (ii) a market basket forecast error adjustment of 1.7% and less (iii) a productivity adjustment of 0.5%).
We reassess our determination of which entity controls the joint venture if: there is a change to the terms or in the exercisability of the rights of any partners or members, the general partner or managing member increases or decreases its ownership interests, or there is an increase or decrease in the number of outstanding ownership interests.
We reassess our determination of which entity controls the joint venture if: there is a change to the terms or in the exercisability of the rights of any partners or members, the general partner or managing member increases or decreases its ownership interests, or there is an increase or decrease in the number of outstanding ownership interests. 34 Real Estate Investments and Rental Revenue Recognition Real Estate Acquisition Valuation All assets acquired and liabilities assumed in an acquisition of real estate accounted for as a business combination are measured at their acquisition date fair values.
Interest and Other Income Interest and other income primarily consists of income earned on our loans receivable investments and preferred returns earned on our preferred equity investments. During the year ended December 31, 2023, we recognized $35.1 million of interest and other income compared to $37.6 million for the year ended December 31, 2022.
During the year ended December 31, 2024, we recognized $37.2 million of interest and other income compared to $35.1 million for the year ended December 31, 2023.
The $24.3 million net decrease in rental income is related to (i) a $19.5 million decrease from properties disposed of after January 1, 2022 , (ii) a $10.1 million decrease from properties that were transitioned to new operators, (iii) a $7.9 million decrease in earned cash rents and operating expense recoveries related to leases that are no longer accounted for on an accrual basis, (iv) a $7.4 million decrease in Genesis excess rents in accordance with the terms of the memorandum of understanding entered into in 2017 and (v) a $1.3 million decrease from facilities transitioned from triple-net lease to Senior Housing - Managed communities.
These increases are partially offset by (i) an $8.5 million decrease from properties disposed of after January 1, 2023, (ii) a $2.9 million increase in cash and non-cash rent receivable write-offs related to leases that are no longer accounted for on an accr ual basis, (iii) a $1.1 million decrease in Genesis excess rents in accordance with the terms of the memorandum of understanding entered into with 39 Genesis in 2017 and (iv) a $1.1 million decrease from facilities transitioned from triple-net leases to Senior Housing - Managed communities.
These figures do not incorporate any of the estimated value-based purchasing reductions for skilled nursing facilities. The new payment rates became effective on October 1, 2023.
These figures do not incorporate any of the estimated value-based purchasing reductions for skilled nursing facilities. The new payment rates became effective on October 1, 2023. On April 22, 2024, CMS issued a final rule that establishes minimum nurse staffing requirements for long-term care facilities (the “Minimum Staffing Standards”).
Certain of our lease agreements provide for an annual rent escalator based on the percentage change in the Consumer Price Index (but not less than zero), subject to minimum or maximum fixed percentages that range from 1.0% to 5.0%. 40 Resident Fees and Services During the year ended December 31, 2023, we recognized $236.2 million of resident fees and services compared to $186.7 million for the year ended December 31, 2022.
Our rental income in future years will be impacted by changes in inflation. Certain of our lease agreements provide for an annual rent escalator based on the percentage change in the Consumer Price Index (but not less than zero), subject to minimum or maximum fixed percentages that range from 1.0% to 5.0%.
The $4.7 million net decrease is due to a $12.9 million decrease from properties disposed of after January 1, 2022 and an $8.8 million decrease due to assets that have been fully depreciated.
The net decrease of $13.5 million is due to (i) an $8.1 million decrease due to accelerating the remaining useful life of a facility that was demolished in 2023, (ii) a $6.3 million decrease due to assets that have been fully depreciated and (iii) a $5.9 million decrease from properties disposed of after January 1, 2023.
Impairment of Real Estate During the year ended December 31, 2023, we recognized $14.3 million of impairment of real estate related to three skilled nursing/transitional care facilities that have either sold or are closed. During the year ended December 31, 2022, we recognized $94.0 million of impairment of real estate related to ten skilled nursing/transitional care facilities that have sold.
Impairment of Real Estate During the year ended December 31, 2024, we recognized an $18.5 million impairment of real estate primarily related to six facilities that were sold or are expected to be sold. During the year ended December 31, 2023, we recognized a $14.3 million impairment of real estate related to three facilities that have sold.
We determine estimated fair value based primarily upon (i) estimated sale prices from signed contracts or letters of intent from third-party offers, (ii) discounted cash flow models of the investment over its remaining hold period, (iii) third-party appraisals and (iv) recent sales data for comparable properties. 35 Revenue Recognition We recognize rental revenue from tenants, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when it is probable that substantially all rents over the life of a lease are collectible.
We determine estimated fair value based primarily upon (i) estimated sale prices from signed contracts or letters of intent from third-party offers, (ii) discounted cash flow models of the investment over its remaining hold period, (iii) third-party appraisals and (iv) recent sales data for comparable properties.
Such an event could materially and adversely affect our net income and net cash available for distribution to stockholders.
Such an event could materially and adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT.
Senior Housing - Managed Portfolio Operating Expenses During the year ended December 31, 2023, we recognized $177.3 million of Senior Housing - Managed portfolio operating expenses compared to $143.0 million for the year ended December 31, 2022.
Triple-Net Portfolio Operating Expenses During the year ended December 31, 2024, we recognized $17.1 million of triple-net portfolio operating expenses compared to $17.9 million for the year ended December 31, 2023.
The $7.9 million net increase is related to (i) a $6.7 million increase in compensation, including a $0.5 increase in stock-based compensation, for our teammates as a result of changes in performance-based payout assumptions on management 41 compensation, increased staffing and annual salary adjustments, (ii) a $0.7 million increase in insurance premiums and (iii) a $0.4 million increase in conference and travel expenses primarily related to the 2023 Sabra o perator conference.
The $2.6 million net increase is related to a $3.2 million increase in compensation, including a $1.0 million increase in stock-based compensation, for our teammates as a result of changes in performance-based payout assumptions on compensation and annual salary adjustments, partially offset by a $0.5 million decrease in insurance expense.
Cash Flows from Financing Activities During the year ended December 31, 2023, net cash used in financing activities was $410.3 million and included $277.4 million of dividends paid to stockholders, $104.3 million of net repayments of our Revolving Credit Facility, $18.1 million of payments of deferred financing costs related to the Credit Agreement, $17.9 million of payments of contingent consideration, 45 $2.7 million of net costs related to payroll tax payments related to the issuance of common stock pursuant to equity compensation arrangements and our ATM Program and $2.0 million of principal repayments on secured debt, partially offset by $12.2 million of proceeds from Term Loans.
Cash Flows from Investing Activities During the year ended December 31, 2024, net cash used in investing activities was $109.0 million and included $136.4 million used for the acquisition of four facilities, $54.7 million used for additions to real estate, $21.6 million used to provide funding for loans receivable, $2.8 million used to provide funding for a preferred equity investment and $1.3 million used for the investment in an unconsolidated joint venture, partially offset by $96.0 million of net proceeds from the sales of real estate, $5.9 million in repayments of preferred equity investments, $3.6 million in repayments of loans receivable and $2.4 million in insurance proceeds. 44 Cash Flows from Financing Activities During the year ended December 31, 2024, net cash used in financing activities was $181.6 million and included $280.2 million of dividends paid to stockholders, $2.0 million of principal repayments on secured debt and $0.1 million of payments of deferred financing costs related to the Credit Agreement, partially offset by $86.1 million of proceeds from shares sold through our ATM Program, net of related costs and payroll costs related to the issuance of common stock pursuant to equity compensation arrangements, and $14.6 million of net proceeds from our Revolving Credit Facility.
These figures do not incorporate any of the estimated value-based purchasing reductions for skilled nursing facilities. The new payment rates became effective on October 1, 2022.
These figures do not incorporate any of the estimated value-based purchasing reductions for skilled nursing facilities. The new payment rates became effective on October 1, 2024. Additionally, the proposed rule expands the civil monetary penalties (“CMP”) that can be imposed for noncompliance to allow for more CMPs per instance and per day.
Interest Expense We incur interest expense comprised of costs of borrowings plus the amortization of deferred financing costs related to our indebtedness. During the year ended December 31, 2023, we incurred $113.0 million of interest expense compared to $105.5 million for the year ended December 31, 2022.
During the year ended December 31, 2024, we incurred $115.3 million of interest expense compared to $113.0 million for the year ended December 31, 2023.
These decreases are partially offset by (i) a $15.6 million decrease in straight-line rental income receivabl e write-offs primarily due to the termination of the North American leases in 2022, (ii) a $3.5 million increase due to lease amendments and annual rental increases based on changes in the Consumer Price Index, (iii) a $2.2 million increase from properties acquired after January 1, 2022 and (iv) a $1.1 million increase due to incremental revenue related to capital expenditures.
The $5.2 million net increase in rental income is related to (i) a $6.8 million net increase in rental and related revenues related to leases that are no longer accounted for on an accrual basis, (ii) a $6.2 million increase from properties acquired after January 1, 2023, (iii) a $2.4 million increase due to incremental revenue related to capital expenditures, (iv) a $2.2 million increase due to lease amendments and annual rental increases based on changes in the Consumer Price Index and (v) a $1.6 million increase from properties that were transitioned to new operators.
See Note 8, “Debt,” in the Notes to Consolidated Financial Statements for additional information concerning the Credit Agreement, including information regarding covenants contained in the Credit Agreement. As of December 31, 2023, we were in compliance with all applicable covenants under the Credit Agreement. Secured Indebtedness.
The obligations of the Borrowers under the Credit Agreement are guaranteed by us and certain of our subsidiaries. See Note 9, “Debt,” in the Notes to Consolidated Financial Statements for additional information concerning the Credit Agreement, including information regarding covenants contained in the Credit Agreement.
During the year ended December 31, 2022, we recognized an aggregate net loss of $12.0 million related to the disposition of 13 skilled nursing/transition care facilities and five Senior Housing - Leased communities.
Net Gain (Loss) on Sales of Real Estate During the year ended December 31, 2024, we recognized an aggregate net gain of $2.1 million related to the disposition of 17 skilled nursing/transitional care facilities and one behavioral health facility.
The net carrying value of the assets and liabilities of these facilities was $357.8 million, which resulted in an aggregate $76.6 million net loss on sale. We continue to evaluate additional assets for sale as part of our initiative to recycle capital and further improve our portfolio.
We continue to evaluate additional assets for sale as part of our initiative to recycle capital and further improve our portfolio quality.
See Part I, Item 1A, “Risk Factors” for additional discussion of these risks, as well as the uncertainties we and our tenants and borrowers may face as a result. 33 Investment in Unconsolidated Joint Venture During the year ended December 31, 2023, our joint venture with Marlin Spring (the “Marlin Spring Joint Venture”) completed the acquisition of one additional senior housing community with a gross investment of CAD $30.0 million, excluding acquisition costs.
See Part I, Item 1A, “Risk Factors” for additional discussion of these risks, as well as the uncertainties we and our tenants and borrowers may face as a result.
These increases are partially offset by a $3.8 million decrease related to one community that was closed due to a fire and a $1.5 million decrease related to one Senior Housing - Managed community disposed of after January 1, 2022.
These increases are partially offset by a $0.4 million decrease related to one Senior Housing - Managed community disposed of after January 1, 2023. Interest and Other Income Interest and other income primarily consists of income earned on our loans receivable investments and preferred returns earned on our preferred equity investments.
Similarly, while our tenants, borrowers and Senior Housing - Managed portfolio have more recently experienced small, incremental improvements in both labor availability and overall labor costs, labor supply remains lower and costs remain higher than pre-pandemic levels.
On the labor front, our tenants, borrowers and Senior Housing - Managed portfolio have significantly reduced their reliance on agency staffing, which was a mainstay in the wake of COVID-19, and while they continue to experience improvements in both permanent labor availability and overall costs from the worst point of the pandemic, permanent labor supply remains lower and costs remain higher than pre-pandemic levels.
Recently Issued Accounting Standards Update See Note 2, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements for information concerning recently issued accounting standards updates.
Recently Issued Accounting Standards Updates See Note 2, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements for information concerning recently issued accounting standards updates. 38 Results of Operations As of December 31, 2024, our investment portfolio consisted of 364 real estate properties held for investment, 14 investments in loans receivable, five preferred equity investments and two investments in unconsolidated joint ventures.
These increases are partially offset by a $2.2 million decrease in operating expenses related to one community that was closed due to a fire and a $1.7 million decrease related to one Senior Housing - Managed community disposed of after January 1, 2022 .
These increases are partially offset by a $0.4 million decrease related to one Senior Housing - Managed community disposed of after January 1, 2023. General and Administrative Expenses General and administrative expenses include compensation-related expenses as well as professional services, office costs, other costs associated with asset management, and acquisition costs.
General and Administrative Expenses General and administrative expenses include compensation-related expenses as well as professional services, office costs, other costs associated with asset management, and merger and acquisition costs. During the year ended December 31, 2023, general and administrative expenses were $47.5 million compared to $39.6 million during the year ended December 31, 2022.
During the year ended December 31, 2024, general and administrative expenses were $50.1 million compared to $47.5 million during the year ended December 31, 2023.
Loss from Unconsolidated Joint Ventures During the year ended December 31, 2023, we recognized $2.9 million of loss, including $8.7 million of depreciation expense and $3.9 million of interest expense, related to 16 senior housing communities acquired by two joint ventures after January 1, 2022.
Loss from Unconsolidated Joint Ventures During the year ended December 31, 2024, we recognized $0.4 million of loss from our unconsolidated joint ventures compared to $2.9 million of loss for the year ended December 31, 2023.
Dispositions During the year ended December 31, 2023, we completed the sale of 25 skilled nursing/transitional care facilities (including one leased to a tenant under a sales-type lease) and four senior housing communities for aggregate consideration, net of closing costs, of $281.2 million.
Dispositions During the year ended December 31, 2024, we completed the sale of 17 skilled nursing/transitional care facilities and one behavioral health facility for aggregate consideration, net of closing costs, of $96.0 million. The net carrying value of the assets and liabilities of these facilities was $93.9 million, which resulted in an aggregate $2.1 million net gain on sale.
During the year ended December 31, 2023, no shares were sold under the ATM Program and we did not utilize the forward feature of the ATM Program. As of December 31, 2023, we had $500.0 million available under the ATM Program.
As of December 31, 2024, 1.5 million shares remained outstanding under the forward sale agreements, with an initial weighted average price of $17.33 per share, net of commissions. No other shares were sold under the ATM Program during the year ended December 31, 2024. As of December 31, 2024, we had $382.8 million available under the ATM Program.
Effective January 1, 2023, we discontinued applying the equity method of accounting to the Enlivant Joint Venture and no loss was recognized during the year ended December 31, 2023.
Loss on Extinguishment of Debt No loss on extinguishment of debt was recognized during the year ended December 31, 2024.
The decreases are offset by (i) a $7.7 million increase due to accelerating the remaining useful life of a facility that was demolished, (ii) a $6.3 million increase from properties acquired after January 1, 2022 and (iii) a $3.0 million increase from additions to real estate.
These decreases are partially offset by a $4.9 million increase from properties acquired after January 1, 2023 and a $1.9 million increase from additions to real estate. Interest Expense We incur interest expense comprised of costs of borrowings plus the amortization of deferred financing costs related to our indebtedness.
Removed
In addition, the Marlin Spring Joint Venture assumed and financed an aggregate CAD $23.6 million of debt associated with the additional acquisition. Our equity investment in the additional acquisition was CAD $6.1 million. See Note 4, “Investment in Real Estate Properties—Investment in Unconsolidated Joint Ventures,” in the Notes to Consolidated Financial Statements for additional information regarding this investment.
Added
We are, however, encouraged by increases our tenants are receiving in reimbursement rates in our skilled nursing/transitional care portfolio, as those increases have led to margin recovery despite occupancy being below pre-pandemic levels.
Removed
Credit Agreement Effective on January 4, 2023, we and certain of our subsidiaries entered into the Credit Agreement.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2023, we had interest rate swaps that fix and interest rate collars that set a cap and floor for the Secured Overnight Financing Rate (“SOFR”) portion of the interest rate for $430.0 million of SOFR-based borrowings under the U.S. dollar Term Loan at a weighted average rate of 2.69% and interest rate swaps that fix the Canadian Dollar Offered Rate (“CDOR”) portion of the interest rate for CAD $150.0 million of CDOR-based borrowings under the Canadian dollar Term Loan at 1.63%.
Biggest changeAs of December 31, 2024, we had interest rate swaps that fix the Secured Overnight Financing Rate (“SOFR”) portion of the interest rate for $430.0 million of SOFR-based borrowings under the U.S. dollar Term Loan at a weighted 47 average rate of 2.93% and interest rate swaps that fix the Canadian Overnight Repo Rate (“CORRA”) portion of the interest rate for CAD $150.0 million of CORRA-based borrowings under the Canadian dollar Term Loan at 2.59%.
An increase in interest rates could make the financing of any investment by us more costly. Rising interest rates could also limit 48 our ability to refinance our debt when it matures or cause us to pay higher interest rates upon refinancing and increase interest expense on refinanced indebtedness.
An increase in interest rates could make the financing of any investment by us more costly. Rising interest rates could also limit our ability to refinance our debt when it matures or cause us to pay higher interest rates upon refinancing and increase interest expense on refinanced indebtedness.
Because borrowings under the Revolving Credit Facility bear interest on the outstanding principal amount at a rate equal to a ratings-based applicable interest margin plus, CDOR for Canadian dollar borrowings, or at the Operating Partnership’s option for U.S. dollar borrowings, either (a) Daily Simple SOFR, as defined in the Credit Agreement, or (b) a base rate determined as the greater of (i) the federal funds rate plus 0.5%, (ii) the prime rate, (iii) Term SOFR, as defined in the Credit Agreement, plus 1.0%, and (iv) 1.00%, the interest rate we will be required to pay on any such borrowings will depend on then applicable rates and may vary.
Because borrowings under the Revolving Credit Facility bear interest on the outstanding principal amount at a rate equal to a ratings-based applicable interest margin plus, Daily Simple CORRA plus the CORRA Adjustment, each as defined in the Credit Agreement, for Canadian dollar borrowings, or at the Operating Partnership’s option for U.S. dollar borrowings, either (a) Daily Simple SOFR, as defined in the Credit Agreement, or (b) a base rate determined as the greater of (i) the federal funds rate plus 0.5%, (ii) the prime rate, (iii) Term SOFR, as defined in the Credit Agreement, plus 1.0%, and (iv) 1.00%, the interest rate we will be required to pay on any such borrowings will depend on then applicable rates and may vary.
We do not use derivative financial instruments for speculative or trading purposes. See Note 9, “Derivative and Hedging Instruments,” in the Notes to Consolidated Financial Statements for further discussion of our derivative instruments. Interest rate risk.
We do not use derivative financial instruments for speculative or trading purposes. See Note 10, “Derivative and Hedging Instruments,” in the Notes to Consolidated Financial Statements for further discussion of our derivative instruments. Interest rate risk.
Based on our operating results for the three months ended December 31, 2023, if the value of the Canadian dollar relative to the U.S. dollar were to increase or decrease by 10% compared to the average exchange rate during the three months ended December 31, 2023, our cash flows would have decreased or increased, as applicable, by $0.2 million.
Based on our operating results for the three months ended December 31, 2024, if the value of the Canadian dollar relative to the U.S. dollar were to increase or decrease by 10% compared to the average exchange rate during the three months ended December 31, 2024, our cash flows would have decreased or increased, as applicable, by $0.5 million.
Assuming a 100 basis point increase or decrease in the index underlying our variable rate debt, and after giving effect to the impact of interest rate derivative instruments, interest expense would increase or decrease by $0.9 million, for the twelve months following December 31, 2023.
Assuming a 100 basis point increase or decrease in the index underlying our variable rate debt, and after giving effect to the impact of interest rate derivative instruments, interest expense would increase or decrease by $1.1 million, for the twelve months following December 31, 2024.
Our foreign currency exposure is partially mitigated through the use of Canadian dollar denominated debt totaling CAD $194.3 million as of December 31, 2023 and cross currency swap instruments.
Our foreign currency exposure is partially mitigated through the use of Canadian dollar denominated debt totaling CAD $189.6 million as of December 31, 2024 and cross currency swap instruments.
As of December 31, 2023, our indebtedness included $1.8 billion aggregate principal amount of Senior Notes outstanding, $543.2 million in Term Loans, $94.4 million outstanding under the Revolving Credit Facility and $48.1 million of secured indebtedness to third parties on certain of the properties that our subsidiaries own.
As of December 31, 2024, our indebtedness included $1.8 billion aggregate principal amount of Senior Notes outstanding, $534.4 million in Term Loans, $106.6 million outstanding under the Revolving Credit Facility and $46.1 million of secured indebtedness to third parties on certain of the properties that our subsidiaries own.
As of December 31, 2023, we had $637.6 million of outstanding variable rate indebtedness and $905.6 million available for borrowing under our Revolving Credit Facility. We expect to manage our exposure to interest rate risk by maintaining a mix of fixed and variable rates for our indebtedness.
As of December 31, 2024, we had $640.9 million of outstanding variable rate indebtedness and $893.4 million available for borrowing under our Revolving Credit Facility. We expect to manage our exposure to interest rate risk by maintaining a mix of fixed and variable rates for our indebtedness.

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