ALLOWANCE FOR CREDIT LOSSES

6 Months Ended

Jun. 30, 2026

NOTE 7 – ALLOWANCE FOR CREDIT LOSSES

A rollforward of our allowance for credit losses for the six months ended June 30, 2026 is as follows:


Rating	Financial Statement Line Item	Allowance for Credit Loss as of December 31, 2025		Provision (Recovery) for Credit Loss for the six months ended June 30, 2026 ⁽¹⁾			Write-offs charged against allowance for the six months ended June 30, 2026		Allowance for Credit Loss as of June 30, 2026
		(in thousands)
1	Real estate loan receivable	$	214	$	(214)		$	—	$	—
2	Real estate loans receivable		180		(87)			—		93
3	Real estate loans receivable		9,972		(2,437)			—		7,535
4	Real estate loans receivable		19,097		(280)			—		18,817
5	Real estate loans receivable		35,153		1,890			—		37,043
6	Real estate loans receivable		10,220		(779)			(4,905)		4,536
	Sub-total		74,836		(1,907)	⁽²⁾		(4,905)		68,024

2	Non-real estate loans receivable		39		(39)			—		—
3	Non-real estate loans receivable		1,042		(665)			—		377
4	Non-real estate loans receivable		906		(421)			—		485
5	Non-real estate loans receivable		41,128		(1,949)			—		39,179
6	Non-real estate loans receivable		57,147		(1,506)			—		55,641
	Sub-total		100,262		(4,580)	⁽²⁾		—		95,682

3	Unfunded real estate loan commitments		409		(69)			—		340
4	Unfunded real estate loan commitments		4,600		(1,500)			—		3,100
2	Unfunded non-real estate loan commitments		6		(6)			—		—
3	Unfunded non-real estate loan commitments		76		(31)			—		45
4	Unfunded non-real estate loan commitments		279		(91)			—		188
5	Unfunded non-real estate loan commitments		—		71			—		71
	Sub-total		5,370		(1,626)			—		3,744

	Total	$	180,468	$	(8,113)		$	(4,905)	$	167,450

(1)	The provision (recovery) amounts in the rollforward do not reflect $0.2 million of aggregate cash recoveries received during the six months ended June 30, 2026 on loans that were previously written off.

(2)

These amounts include cash recoveries of $2.7 million related to interest payments received on loans that are written down to fair value and are being accounted for under the cost recovery method in which any payments received are applied directly against the principal balance outstanding. This amount also includes $4.8 million related to principal payments received on loans that were fully reserved.

A rollforward of our allowance for credit losses for the six months ended June 30, 2025 is as follows:


Rating	Financial Statement Line Item	Allowance for Credit Loss as of December 31, 2024		Provision (Recovery) for Credit Loss for the six months ended June 30, 2025 ⁽¹⁾			Write-offs charged against allowance for the six months ended June 30, 2025			Other reductions to the allowance for the six months ended June 30, 2025			Allowance for Credit Loss as of June 30, 2025
		(in thousands)
1	Real estate loans receivable	$	312	$	(47)		$	—		$	—		$	265
2	Real estate loans receivable		492		(155)			—			—			337
3	Real estate loans receivable		10,991		(57)			—			—			10,934
4	Real estate loans receivable		22,528		(2,695)			—			—			19,833
5	Real estate loans receivable		25,476		4,408			—			—			29,884
6	Real estate loans receivable		11,450		(426)			—			—			11,024
	Sub-total		71,249		1,028	⁽²⁾		—			—			72,277

5	Investment in direct financing leases		1,605		—			—			(1,605)	⁽³⁾		—
	Sub-total		1,605		—			—			(1,605)			—

2	Non-real estate loans receivable		37		6			—			—			43
3	Non-real estate loans receivable		1,868		(412)			—			—			1,456
4	Non-real estate loans receivable		2,268		(1,001)			—			—			1,267
5	Non-real estate loans receivable		43,287		(701)			—			—			42,586
6	Non-real estate loans receivable		75,335		4,285			(17,851)	⁽⁴⁾		—			61,769
	Sub-total		122,795		2,177	⁽²⁾		(17,851)			—			107,121

2	Unfunded real estate loan commitments		1		1			—			—			2
3	Unfunded real estate loan commitments		461		18			—			—			479
4	Unfunded real estate loan commitments		40		140			—			—			180
5	Unfunded real estate loan commitments		1,767		(924)			—			—			843
2	Unfunded non-real estate loan commitments		13		(7)			—			—			6
3	Unfunded non-real estate loan commitments		183		(77)			—			—			106
4	Unfunded non-real estate loan commitments		433		(18)			—			—			415
6	Unfunded non-real estate loan commitments		65		(65)			—			—			—
	Sub-total		2,963		(932)			—			—			2,031

		$	198,612	$	2,273		$	(17,851)		$	(1,605)		$	181,429

(1)	The provision (recovery) amounts in the rollforward do not reflect $2.0 million of aggregate cash recoveries received during the six months ended June 30, 2025 on loans that were previously written off.

(2)

The amount includes cash recoveries of $2.9 million related to interest payments received on loans that are written down to fair value and are being accounted for under the cost recovery method, in which any payments received are applied directly against the principal balance outstanding. This amount also includes $1.8 million related to principal payments received on loans that were fully reserved.

(3)	Represents the allowance for credit losses related to an investment in a direct financing lease that was reclassified to real estate assets in connection with the termination of the lease in the first quarter of 2025.

(4)	Amount reflects the write-off of the reserves associated with two loans to LaVie Care Centers, LLC (“LaVie”) (which were both previously fully reserved) that were discharged as part of the LaVie plan of reorganization effective as of June 1, 2025.

A summary of our amortized cost basis by year of origination and credit quality indicator is as follows:


Rating	Financial Statement Line Item	2026		2025		2024		2023		2022		2021		2020 & older		Revolving Loans		Balance as of June 30, 2026
		(in thousands)
2	Real estate loans receivable	$	—	$	—	$	29,700	$	—	$	—	$	—	$	—	$	—	$	29,700
3	Real estate loans receivable		27,739		34,886		163,221		91,548		29,100		72,420		—		—		418,914
4	Real estate loans receivable		69,900		51,100		93,691		89,442		—		31,679		378,829		—		714,641
5	Real estate loans receivable		—		—		3,397		—		—		—		—		263,580		266,977
6	Real estate loans receivable		—		—		—		—		—		—		4,536		—		4,536
	Sub-total		97,639		85,986		290,009		180,990		29,100		104,099		383,365		263,580		1,434,768

3	Non-real estate loans receivable		8,481		—		2,693		10,625		12,337		—		2,968		30,580		67,684
4	Non-real estate loans receivable		—		3,036		4,411		—		—		—		580		41,479		49,506
5	Non-real estate loans receivable		4,000		—		6,000		—		—		—		177,101		5,916		193,017
6	Non-real estate loans receivable		—		—		6,386		1,500		24,457		—		23,298		—		55,641
	Sub-total		12,481		3,036		19,490		12,125		36,794		—		203,947		77,975		365,848

	Total	$	110,120	$	89,022	$	309,499	$	193,115	$	65,894	$	104,099	$	587,312	$	341,555	$	1,800,616

	Year to date gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	(4,905)	$	—	$	(4,905)

Interest Receivable on Real Estate Loans and Non-Real Estate Loans

We have elected the practical expedient to exclude interest receivable from our allowance for credit losses. As of June 30, 2026 and December 31, 2025, we have excluded $11.5 million and $9.7 million, respectively, of contractual interest receivables from our allowance for credit losses. We write off contractual interest receivables to provision for credit losses in the period we determine the interest is no longer considered collectible.

During the three and six months ended June 30, 2026, we recognized $1.1 million and $2.2 million, respectively, of interest income related to loans on non-accrual status as of June 30, 2026. During the three and six months ended June 30, 2025, we recognized $0.1 million and $0.6 million, respectively, of interest income related to loans on non-accrual status as of June 30, 2026.