| Segment Information |
We use the management approach in determining the reportable operating segments. The management approach considers the internal organization and reporting used by our chief operating decision maker (“CODM”) for making operating decisions, allocating resources and assessing performance as the source for determining our reportable segments. In making this determination, we: | ii. | identify and analyze our potential business components; |
| iii. | identify our operating segments; and |
| iv. | determine whether there are multiple operating segments requiring presentation as separate reportable segments. |
During the three months ended March 31, 2026 and 2025, the CODM has been collectively identified as our Executive Chairman and Co-CEOs, who share the responsibility for allocating resources and assessing segment performance. During the second quarter of 2025, we began utilizing the RIDEA structure and established our SHOP segment. Accordingly, we conduct and manage our business as two operating segments: real estate investments and SHOP and our CODM evaluated the performance of our investments based on net operating income (“NOI”). For more information and reconciliation of NOI see Item 2. Non-GAAP Financial Measures. Summary information by reportable segment for the three months ended March 31, 2026 is as follows (unaudited, in thousands): | | | | | | | | | | | | | | | Three Months Ended March 31, 2026 | | | Real estate | | | | | Non-segment | | | | | | investment portfolio | | SHOP | | /corporate | | Total | Revenues: | | | | | | | | | | | | | Rental income | | $ | 26,339 | | $ | — | | $ | — | | $ | 26,339 | Resident fees and services | | | — | | | 49,585 | | | — | | | 49,585 | Interest income from financing receivables | | | 8,255 | | | — | | | — | | | 8,255 | Interest income from mortgage loans | | | 10,229 | | | — | | | — | | | 10,229 | Interest and other income | | | 639 | | | — | | | 364 | | | 1,003 | Total revenues | | | 45,462 | | | 49,585 | | | 364 | | | 95,411 | | | | | | | | | | | | | | Income from unconsolidated joint ventures | | | 295 | | | — | | | — | | | 295 | Property level expenses | | | (2,394) | | | (36,889) | | | — | | | (39,283) | NOI | | | 43,363 | | | 12,696 | | | 364 | | | 56,423 | Interest expense | | | | | | | | | | | | (10,782) | Depreciation and amortization | | | | | | | | | | | | (11,979) | Recovery for credit losses | | | | | | | | | | | | 684 | Transaction costs | | | | | | | | | | | | (688) | General and administrative expenses | | | | | | | | | | | | (8,582) | Loss on sale of real estate, net | | | | | | | | | | | | (10) | Income tax provision | | | | | | | | | | | | (110) | Net income | | | | | | | | | | | $ | 24,956 |
During the three months ended March 31, 2025, we operated under one reportable segment. Summary information by reportable segment for the three months ended March 31, 2025 is as follows (unaudited, in thousands): | | | | | | | | | | | | | | | Three Months Ended March 31, 2025 | | | Real estate | | | | | Non-segment | | | | | | investment portfolio | | SHOP | | /corporate | | Total | Revenues: | | | | | | | | | | | | | Rental income | | $ | 31,444 | | $ | — | | $ | — | | $ | 31,444 | Resident fees and services | | | — | | | — | | | — | | | — | Interest income from financing receivables | | | 7,002 | | | — | | | — | | | 7,002 | Interest income from mortgage loans | | | 9,179 | | | — | | | — | | | 9,179 | Interest and other income | | | 1,227 | | | — | | | 179 | | | 1,406 | Total revenues | | | 48,852 | | | — | | | 179 | | | 49,031 | | | | | | | | | | | | | | Income from unconsolidated joint ventures | | | 3,665 | | | — | | | — | | | 3,665 | Property level expenses | | | (3,107) | | | — | | | — | | | (3,107) | NOI | | | 49,410 | | | — | | | 179 | | | 49,589 | Expenses: | | | | | | | | | | | | | Interest expense | | | | | | | | | | | | (7,913) | Depreciation and amortization | | | | | | | | | | | | (9,162) | Transaction costs | | | | | | | | | | | | (441) | Provision for credit losses | | | | | | | | | | | | (3,052) | General and administrative expenses | | | | | | | | | | | | (6,971) | Gain on sale of real estate, net | | | | | | | | | | | | 171 | Income tax benefit | | | | | | | | | | | | — | Net income | | | | | | | | | | | $ | 22,221 |
Total assets by reportable business segment and segment-level significant expense categories are not disclosed as our CODM is not provided with such information to evaluate business performance and allocate resources.
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