6. | Investment in Unconsolidated Joint Ventures |
We had a $12,700,000 acquisition, development and construction (“ADC”) mortgage loan with a carrying value of $12,558,000. The ADC mortgage loan, secured by a 104-bed skilled nursing center in Texas, met the accounting criteria to be considered a variable interest entity (“VIE”). We were not the primary beneficiary of the VIE as we did not have both: 1) the power to direct the activities that most significantly affect the VIE’s economic performance, and 2) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. However, we had significant influence over the VIE. Therefore, we accounted for the investment as a joint venture using the equity method of accounting. During the three months ended June 30, 2026, the mortgage loan was paid off. Additionally, we had two preferred equity investments that also met the accounting criteria to be considered a VIE based on the same factors discussed above for the ADC loan. During 2025, both preferred equity investments were redeemed. The following table summarizes income recognized, and cash interest received related to our investments in unconsolidated joint ventures during the six months ended June 30, 2026 and 2025 (in thousands): | | | | | | | | | | | | | | | Type | | | | | | | | | | | | | of | | | Income | | | Cash Income | | | Non-cash | | Year | | Properties | | | Recognized | | | Earned | | | Income Accrued | | 2026 | | SNF (1) | | $ | 494 | (1) | $ | 396 | (1) | $ | — | | | | | | | | | | | | | | | 2025 | | SNF (1) | | $ | 589 | (1) | $ | 589 | (1) | $ | — | | | | SH (2) | | | 289 | (2) | | 289 | (2) | | — | | | | SH (3) | | | 3,226 | (3) | | 3,172 | (3) | | 54 | | Total | | | | $ | 4,104 | | $ | 4,050 | | $ | 54 | |
| (1) | During the second quarter of 2026, the mortgage loan was paid off. |
| (2) | During the fourth quarter of 2025, our preferred equity investment in the JV that owns a 109-unit SH in Washington was redeemed for $8,140, which included a 12.0% exit IRR of $1,800. |
| (3) | During the first quarter of 2025, our preferred equity investment in the JV that owns a 267-unit SH in Washington was redeemed for $15,962, which included a 13% exit IRR of $2,962. |
|