# LTC Properties Inc: Form 10-K for the period ended Dec 31, 2022

- Company: [LTC Properties Inc](/companies/ltc.md) (CIK 887905)
- Form: 10-K
- Filed: 2023-02-16
- Accepted by EDGAR: Feb 16, 2023, 09:11 ET
- Period: 2022-12-31
- Accession: 0001558370-23-001423
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/887905/000155837023001423/ltc-20221231x10k.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/887905/000155837023001423/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2022-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2022-10-01 to 2022-12-31 | $47.8m | us-gaap:Revenues |
| Revenue | 12 months, 2022-01-01 to 2022-12-31 | $175.2m | us-gaap:Revenues |
| Operating income | 12 months, 2022-01-01 to 2022-12-31 | $99.1m | us-gaap:OperatingIncomeLoss |
| Interest expense | 12 months, 2022-01-01 to 2022-12-31 | $31.4m | us-gaap:InterestExpense |
| Income tax | 12 months, 2022-01-01 to 2022-12-31 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 12 months, 2022-01-01 to 2022-12-31 | $100.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2022-10-01 to 2022-12-31 | $0.44 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 12 months, 2022-01-01 to 2022-12-31 | $2.48 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2022-10-01 to 2022-12-31 | $0.44 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 12 months, 2022-01-01 to 2022-12-31 | $2.49 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 12 months, 2022-01-01 to 2022-12-31 | 40,067,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 12 months, 2022-01-01 to 2022-12-31 | $105.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 12 months, 2022-01-01 to 2022-12-31 | $91.5m | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2022-12-31 | $10.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2022-12-31 | $1.66bn | us-gaap:Assets |
| Total liabilities | at 2022-12-31 | $805.8m | us-gaap:Liabilities |
| Long-term debt | at 2022-12-31 | $767.9m | us-gaap:LongTermDebt |
| Shareholders' equity | at 2022-12-31 | $828.4m | us-gaap:StockholdersEquity |

## Business

As filed, 62,847 characters.

### General

LTC Properties, Inc. is a real estate investment trust (“REIT”) that invests in seniors housing and health care properties through sale-leasebacks, mortgage financing, joint ventures, construction financing and structured finance solutions including preferred equity and mezzanine lending. Our investments in owned properties, mortgage loans, mezzanine loans and preferred equity investments represent our primary source of income. We depend upon the performance of our operators with respect to the daily management and marketing of long-term health care services offered at our properties.

Our real estate investments include the following types of properties:

- *Skilled nursing centers (“SNF”)* provide restorative, rehabilitative and nursing care for people not requiring the extensive treatment available at acute care hospitals. Many skilled nursing facilities provide ancillary services that include occupational, speech, physical, respiratory and medical therapies, as well as sub-acute care services which are paid either by the patient, the patient’s family, private health insurance, or through the federal Medicare or state Medicaid programs.
- *Assisted living communities (“ALF”)* serve people who require assistance with activities of daily living, but do not require the degree of supervision that skilled nursing facilities provide. Services are usually available 24 hours a day and include personal supervision and assistance with eating, bathing, grooming and administering medication. Many assisted living facilities provide a combination of housing, supportive services, personalized assistance and health care designed to respond to individual needs.
- *Independent living communities (“ILF”)*, also known as retirement communities or senior apartments, offer a sense of community and numerous levels of service, such as laundry, housekeeping, dining options/meal plans, exercise and wellness programs, transportation, social, cultural and recreational activities, on-site security and emergency response programs. Many independent living communities offer on-site conveniences like beauty/barber shops, fitness facilities, game rooms, libraries and activity centers.
- *Memory care communities (“MC”)* offer specialized options for people with Alzheimer’s disease and other forms of dementia. These purpose built, free-standing facilities offer an alternative for private-pay residents affected by memory loss in comparison to other accommodations that typically have been provided within a secured unit of an assisted living or skilled nursing facility. Memory care facilities offer dedicated care, with staff usually available 24 hours a day, and specialized programming for various conditions relating to memory loss in an environment that is typically smaller in scale and more residential in nature than traditional assisted living and skilled nursing facilities.
- *Other property types (“OTH”)* we also invest in other types of properties such as land parcels, projects under development (“*UDP”*) and behavioral health care hospitals.

We include independent living facilities and memory care as part of the assisted living property classification in some parts of this Annual Report on Form 10-K. Unless otherwise expressly stated or the context otherwise requires, when we refer to “we,” “our,” “us,” “registrant,” “the company,” or similar terms in this Annual Report on Form 10-K, we mean LTC Properties, Inc. and its consolidated subsidiaries.

### Portfolio

The following table summarizes our real estate investment portfolio as of December 31, 2022 *(dollar amounts in thousands):*

| ​ ​ ​ ​ ​ Owned Properties | ​ ​ ​ ​ ​ ​ | ​ ​ ​ ​ Number of Properties (1) | ​ ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of SNF ​ ALF Beds (2) ​ Units (2) | ​ ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross ​ Investments ​ | ​ ​ ​ ​ ​ ​ Percentage ​ of ​ Investments ​ | ​ ​ ​ ​ ​ ​ | ​ ​ Twelve Months Ended December 31, 2022 ​ ​ Rental Revenue | ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Percentage ​ of Total ​ Revenues ​ | ​ ​ ​ ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | --- | ---: | --- | --- | --- | --- | ---: | --- |
| Assisted Living | ​ | 99 | ​ | — ​ 5,497 | ​ | $797,813 ​ | 40.7% | ​ | $53,923 | ​ | ​ | 34.1% | ​ |
| Skilled Nursing | ​ | 52 | ​ | 6,348 ​ 236 | ​ | ​ 600,974 ​ | 30.7% | ​ | ​ 55,126 | ​ | ​ | 34.8% | ​ |
| Other (3) | ​ | 1 | ​ | 118 ​ — | ​ | ​ 11,918 ​ | 0.6% | ​ | ​ 991 | ​ | ​ | 0.6% | ​ |
| **Total Owned Properties** | ​ | 152 | ​ | 6,466 ​ 5,733 | ​ | ​ 1,410,705 ​ | 72.0% | ​ | ​ 110,040 | (5)​ | ​ | 69.5% | ​ |
| **​** | ​ | ​ | ​ | ​ ​ ​ | ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ | ​ |
| **​** | ​ | ​ | ​ | **Number of** | ​ | ​ ​ ​ | **Percentage** ​ | ​ | **Interest Income** | ​ | ​ | **Percentage** ​ | ​ |
| **​** | ​ | **Number of** | ​ | **SNF** ​ **ALF** | ​ | ​ **Gross** **​** | **of** ​ | ​ | **from Financing** | ​ | ​ | **of Total** ​ | ​ |
| **Financing Receivable** | ​ | **Properties (1)** | ​ | **Beds** **​** **Units** | ​ | ​ **Investments** **​** | **Investments** ​ | ​ | **Receivable** | ​ | ​ | **Revenues** ​ | ​ |
| Skilled Nursing | ​ | 3 | ​ | 299 ​ — | ​ | ​ 76,767 ​ | 3.9% | ​ | ​ 1,762 | ​ | ​ | 1.1% | ​ |
| **Total Financing Receivable** | ​ | 3 | ​ | 299 ​ — | ​ | ​ 76,767 ​ | 3.9% | ​ | ​ 1,762 | ​ | ​ | 1.1% | ​ |
| **​** | ​ | ​ | ​ | ​ ​ ​ | ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ | ​ |
| **​** | ​ | ​ | ​ | **Number of** | ​ | ​ ​ ​ | **Percentage** ​ | ​ | **Interest Income** | ​ | ​ | **Percentage** ​ | ​ |
| ​ | ​ | **Number of** | ​ | **SNF** ​ **ALF** | ​ | ​ **Gross** **​** | **of** ​ | ​ | **from Mortgage** | ​ | ​ | **of Total** ​ | ​ |
| **Mortgage Loans** | ​ | **Properties (1)** | ​ | **Beds** **​** **Units** | ​ | ​ **Investments** **​** | **Investments** ​ | ​ | **Loans** | ​ | ​ | **Revenues** ​ | ​ |
| Assisted Living | ​ | 18 | ​ | — ​ 808 | ​ | ​ 103,626 ​ | 5.4% | ​ | ​ 6,730 | ​ | ​ | 4.3% | ​ |
| Skilled Nursing | ​ | 23 | ​ | 2,891 ​ — | ​ | ​ 287,349 ​ | 14.6% | ​ | ​ 33,692 | ​ | ​ | 21.3% | ​ |
| Other (4) | ​ | — | ​ | — ​ — | ​ | ​ 2,683 ​ | 0.1% | ​ | ​ 178 | ​ | ​ | 0.1% | ​ |
| **Total Mortgage Loans** | ​ | 41 | ​ | 2,891 ​ 808 | ​ | ​ 393,658 ​ | 20.1% | ​ | ​ 40,600 | ​ | ​ | 25.7% | ​ |
| **​** | ​ | ​ | ​ | ​ ​ ​ | ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ | ​ |
| **​** | ​ | ​ | ​ | **Number of** | ​ | ​ ​ ​ | **Percentage** ​ | ​ | **Interest** | ​ | ​ | **Percentage** ​ | ​ |
| **​** | ​ | **Number of** | ​ | **SNF** ​ **ALF** | ​ | ​ **Gross** **​** | **of** ​ | ​ | **and other** | ​ | ​ | **of Total** ​ | ​ |
| **Notes Receivable** | ​ | **Properties (1)** | ​ | **Beds** **​** **Units** | ​ | ​ **Investments** **​** | **Investments** ​ | ​ | **Income** | ​ | ​ | **Revenues** ​ | ​ |
| Assisted Living | ​ | 7 | ​ | — ​ 961 | ​ | ​ 43,662 ​ | 2.2% | ​ | ​ 3,590 | ​ | ​ | 2.3% | ​ |
| Skilled Nursing | ​ | — | ​ | — ​ — | ​ | ​ 15,311 ​ | 0.8% | ​ | ​ 720 | ​ | ​ | 0.4% | ​ |
| **Total Notes Receivable** | ​ | 7 | ​ | — ​ 961 | ​ | ​ 58,973 ​ | 3.0% | ​ | ​ 4,310 | ​ | ​ | 2.7% | ​ |
| **​** | ​ | ​ | ​ | ​ ​ ​ | ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ | ​ |
| **​** | ​ | ​ | ​ | **Number of** | ​ | ​ ​ ​ | **Percentage** ​ | ​ | **Income from** | ​ | ​ | **Percentage** ​ | ​ |
| **​** | ​ | **Number of** | ​ | **SNF** ​ **ALF** | ​ | ​ **Gross** | **of** ​ | ​ | **Unconsolidated** | ​ | ​ | **of Total** ​ | ​ |
| **Unconsolidated Joint Ventures** | ​ | **Properties (1)** | ​ | **Beds** **​** **Units** | ​ | ​ **Investments** | **Investments** ​ | ​ | **Joint Ventures** | ​ | ​ | **Revenues** ​ | ​ |
| Assisted Living | ​ | 1 | ​ | — ​ 95 | ​ | ​ 6,340 ​ | 0.3% | ​ | ​ 450 | ​ | ​ | 0.3% | ​ |
| Under Development | ​ | — | ​ | — ​ — | ​ | ​ 13,000 ​ | 0.7% | ​ | ​ 1,054 | ​ | ​ | 0.7% | ​ |
| **Total Unconsolidated Joint Ventures** | ​ | 1 | ​ | — ​ 95 | ​ | ​ 19,340 ​ | 1.0% | ​ | ​ 1,504 | ​ | ​ | 1.0% | ​ |
| **​** | ​ | ​ | ​ | ​ ​ ​ | ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ | ​ |
| **Total Portfolio** | ​ | 204 | ​ | 9,656 ​ 7,597 | ​ | $1,959,443 ​ | 100.0% | ​ | $158,216 | ​ | ​ | 100.0% | ​ |

| ​ ​ ​ Summary of Properties by Type | ​ ​ ​ ​ | ​ Number of Properties (1) | ​ ​ ​ ​ | ​ Number of SNF Beds (2) | ​ ​ ​ | ​ ALF Units (2) | ​ ​ ​ ​ | ​ ​ ​ ​ Gross Investments | ​ ​ ​ ​ | ​ ​ Percentage ​ of ​ Investments ​ | ​ ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | --- | --- | ---: | --- |
| Skilled Nursing | ​ | 78 | ​ | 9,538 | ​ | 236 | ​ | $980,401 | ​ | 50.0% | ​ |
| Assisted Living | ​ | 125 | ​ | — | ​ | 7,361 | ​ | ​ 951,441 | ​ | 48.6% | ​ |
| Under Development | ​ | — | ​ | — | ​ | — | ​ | ​ 13,000 | ​ | 0.7% | ​ |
| Other (3) (4) | ​ | 1 | ​ | 118 | ​ | — | ​ | ​ 14,601 | ​ | 0.7% | ​ |
| **Total Portfolio** | ​ | 204 | ​ | 9,656 | ​ | 7,597 | ​ | $1,959,443 | ​ | 100.0% | ​ |

(1) We have investments in owned properties, financing receivable, mortgage loans, notes receivable and unconsolidated joint ventures in 29 states to 32 different operators.

(2) See *Item 2. Properties* for discussion of bed/unit count.

(3) Includes three parcels of land held-for-use and one behavioral health care hospital.

(4) Includes one parcel of land in Missouri securing a first mortgage held for future development of a post-acute SNF and one parcel of land in North Carolina securing a first mortgage held for future development of a seniors housing community.

(5) Excludes $15,459 variable rental income from lessee reimbursement of our real estate taxes and $2,745 rental income from sold properties.

As of December 31, 2022, our total investment portfolio included $1.6 billion in carrying value of net investments consisting of $1.0 billion or 65.2% invested in owned and leased properties, $76.0 million or 4.9% invested in financing receivable, $0.4 billion or 24.9% invested in mortgage loans secured by first mortgages, $58.4 million or 3.7% in notes receivable and $19.3 million or 1.3% in unconsolidated joint ventures.

*Owned Properties.* The following table summarizes our investment in owned properties at December 31, 2022 *(dollar amounts in thousands):*

| ​ ​ ​ ​ Type of Property | ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ Gross Investment | ​ ​ ​ ​ ​ | ​ ​ ​ ​ Percentage ​ of ​ Investment ​ | ​ ​ Number of Properties (1) | ​ ​ ​ ​ ​ | ​ ​ Number of SNF Beds (2) | ​ ​ ​ ​ | ​ ​ ALF Units (2) | ​ ​ ​ ​ ​ | ​ ​ Average Investment per Bed/Unit | ​ |
| --- | --- | ---: | --- | ---: | ---: | --- | ---: | --- | ---: | --- | ---: | --- |
| Assisted Living | ​ | $797,813 | ​ | 56.6% | 99 | ​ | — | ​ | 5,497 | ​ | $145.14 | ​ |
| Skilled Nursing | ​ | ​ 600,974 | ​ | 42.6% | 52 | ​ | 6,348 | ​ | 236 | ​ | $91.28 | ​ |
| Other (3) | ​ | ​ 11,918 | ​ | 0.8% | 1 | ​ | 118 | ​ | — | ​ | ​ — | ​ |
| Total | ​ | $1,410,705 | ​ | 100.0% | 152 | ​ | 6,466 | ​ | 5,733 | ​ | ​ ​ | ​ |

(1) We have investments in 26 states leased to 24 different operators.

(2) See *Item 2. Properties* for discussion of bed/unit count.

(3) Includes three parcels of land held-for-use and one behavioral health care hospital.

Owned properties are leased pursuant to non-cancelable operating leases generally with an initial term of 2 to 15 years. Many of the leases contain renewal options. Each lease is a triple net lease which requires the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities. Many of the leases contain renewal options and provide for fixed minimum base rent during the initial and renewal periods. The majority of our leases contain provisions for specified annual increases over the rents of the prior year and that increase is generally computed in one of four ways depending on specific provisions of each lease:

(i) a specified percentage increase over the prior year’s rent, generally between 2.0% and 3.0%;

(ii) a calculation based on the Consumer Price Index or Medicare Market Basket Rate;

(iii) as a percentage of facility revenues in excess of base amounts; or

(iv) specific dollar increases.

Our leases that contain fixed annual rental escalations and/or have annual rental escalations that are contingent upon changes in the Consumer Price Index or the Medicare Market Basket Rate, are generally recognized on a straight-line basis over the minimum lease period. Certain leases have annual rental escalations that are contingent upon changes in the gross operating revenues of the property. This revenue is not recognized until the appropriate contingencies have been resolved.

Generally, our leases provide for one or more of the following: security deposits, property tax impounds, repair and maintenance, escrows and credit enhancements such as corporate or personal guarantees or letters of credit. In addition, our leases are typically structured as master leases and multiple master leases with one operator, and are generally cross defaulted.

The following table summarizes the concentration of our top ten operators of owned properties for 2022 and percentage of rental revenue, excluding rental income from properties sold, variable rental income due to lessee reimbursement of our real estate taxes, and adjustment for collectability of rental income for those operators for 2022 and 2021:

| ​ ​ ​ Lessee | ​ ​ ​ ​ | ​ ​ ​ Property Type | ​ ​ ​ | ​ ​ Percent of Rental Revenue 2022 | ​ ​ 2021 |
| --- | --- | --- | --- | ---: | ---: |
| Brookdale Senior Living Communities, Inc. | ​ | ALF/MC | ​ | 13.5% | 13.4% |
| Carespring Healthcare Management, LLC | ​ | SNF | ​ | 10.2% | 10.4% |
| Anthem Memory Care | ​ | MC | ​ | 9.8% | 10.1% |
| Genesis Healthcare | ​ | ALF/SNF | ​ | 7.9% | 7.8% |
| Fundamental Long Term Care Company | ​ | SNF/OTH | ​ | 7.7% | 7.8% |
| Ark Post Acute Network | ​ | ILF/ALF/SNF | ​ | 7.5% | 7.7% |
| HMG Partners | ​ | SNF | ​ | 7.2% | 1.8% |
| Juniper Communities, LLC | ​ | ALF/MC | ​ | 5.9% | 6.1% |
| Ignite | ​ | SNF | ​ | 4.9% | 3.0% |
| Randall Residence | ​ | ILF/ALF/MC | ​ | 4.6% | 4.0% |
| ​ | ​ | ​ | ​ | ​ ​ | ​ ​ |

*Financing Receivable.* During 2022, we entered into a joint venture and contributed $61.7 million into the JV that purchased three skilled nursing centers located in Florida for $75.8 million. Our JV partner contributed the remaining $14.3 million of equity. The JV leased the centers back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year. Accordingly, the transaction has been accounted for as a *Financing receivable* on our *Consolidated Balance Sheets.* During 2022, we recognized $1.8 million of *Interest income from financing receivable* on our *Consolidated Statements of Income*. Additionally, in conjunction with the origination of this investment, we recorded $0.8 million provision for expected loan losses.

Subsequent to December 31, 2022, we entered into a $121.3 million JV with an affiliate of an existing operator and contributed $117.9 million into the JV that purchased 11 assisted living and memory care communities from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit Internal Rate of Return (“IRR”) of 9.0%. In accordance with GAAP, the communities acquired by the JV are required to be presented as a *Financing receivable* on our *Consolidated Balance Sheets.*

*Mortgage Loans.* As part of our strategy of making investments in properties used in the provision of long-term health care services, we provide mortgage financing on such properties based on our established investment underwriting criteria. We have also provided construction loans that by their terms convert into purchase/lease transactions or permanent financing mortgage loans upon completion of construction. The following table summarizes our investments in mortgage loans secured by first mortgages at December 31, 2022 *(dollar amounts in thousands):*

| ​ ​ ​ Interest Rate | ​ ​ ​ ​ | ​ ​ ​ Maturity (1) | ​ ​ ​ ​ | ​ ​ ​ State | ​ ​ ​ ​ | ​ ​ ​ ​ Gross Investment | ​ ​ ​ ​ | ​ Type of Property | ​ ​ ​ ​ | ​ ​ Percentage ​ of ​ Investment ​ | ​ Number of ​ Loans (2) | ​ ​ ​ | ​ ​ Properties (3) | ​ ​ ​ | ​ SNF Beds | ​ ​ ​ | ​ ALF Units | ​ ​ ​ ​ | ​ ​ Investment per Bed/Unit |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ---: | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| 7.5% | **​** | 2023 | ​ | MO | ​ | $1,886 | **​** | OTH | ​ | 0.5% | 1 | ​ | — | (4)​ | — | ​ | — | ​ | $n/a |
| 7.5% | **​** | 2024 | ​ | LA | ​ | ​ 29,347 | **​** | SNF | ​ | 7.5% | 1 | ​ | 1 | ​ | 189 | ​ | — | ​ | $155.28 |
| 7.8% | **​** | 2025 | ​ | FL | ​ | ​ 14,308 | **​** | ALF | ​ | 3.6% | 1 | ​ | 1 | ​ | — | ​ | 68 | ​ | $210.41 |
| 7.3% (5) | **​** | 2025 | ​ | NC/SC | ​ | ​ 56,317 | **​** | ALF | ​ | 14.3% | 1 | ​ | 13 | ​ | — | ​ | 523 | ​ | $107.68 |
| 7.3% | **​** | 2026 | ​ | NC | ​ | ​ 33,001 | **​** | ALF | ​ | 8.4% | 1 | ​ | 4 | ​ | — | ​ | 217 | ​ | $152.08 |
| 7.3% | **​** | 2026 | ​ | NC | ​ | ​ 797 | **​** | OTH | ​ | 0.2% | 1 | ​ | — | (6)​ | — | ​ | — | ​ | $— |
| 10.4% (7) | ​ | 2043 | ​ | MI | ​ | ​ 184,351 | ​ | SNF | ​ | 46.8% | 1 | ​ | 15 | ​ | 1,875 | ​ | — | ​ | $98.32 |
| 9.5% (7) | ​ | 2045 | ​ | MI | ​ | ​ 39,026 | ​ | SNF | ​ | 9.9% | 1 | ​ | 4 | ​ | 480 |  | — | ​ | $81.30 |
| 9.9% (7) | ​ | 2045 | ​ | MI | ​ | 19,750 | ​ | SNF | ​ | 5.0% | 1 | ​ | 2 | ​ | 201 |  | — | ​ | $98.26 |
| 10% (7) | ​ | 2045 | ​ | MI | ​ | ​ 14,875 | ​ | SNF | ​ | 3.8% | 1 | ​ | 1 | ​ | 146 | ​ | — | ​ | $101.88 |
| Total | ​ | ​ | ​ | ​ | ​ | $393,658 | ​ | ​ | ​ | 100.0% | 10 | ​ | 41 | ​ | 2,891 |  | 808 | ​ | $106.42 |

(1) Subsequent to December 31, 2022, we originated a $10,750 mortgage loan secured by a MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%.

(2) Some loans contain certain guarantees and/or provide for certain facility fees.

(3) Our mortgage loans are secured by properties located in six states with five borrowers.

(4) Represents a mortgage loan secured by a parcel of land for the future development of a 91-bed post-acute SNF.

(5) Represents the initial rate. This loan has an IRR of 8%.

(6) Represents a mortgage loan secured by a parcel of land in North Carolina held for future development of a seniors housing community.

(7) Mortgage loans provide for 2.25% annual increases in the interest rate after a certain time period.

In general, the mortgage loans may not be prepaid except in the event of the sale of the collateral property to a third-party that is not affiliated with the borrower, although partial prepayments (including any prepayment premium) are often permitted where a mortgage loan is secured by more than one property upon a sale of one or more, but not all, of the collateral properties to a third-party which is not an affiliate of the borrower. The terms of the mortgage loans generally impose a premium upon prepayment of the loans depending upon the period in which the prepayment occurs, whether such prepayment was permitted or required, and certain other conditions such as upon the sale of the property under a pre-existing purchase option, destruction or condemnation, or other circumstances as approved by us. The prepayment premium is based on a yield maintenance formula. In addition to a lien on the mortgaged property, the loans are generally secured by certain non-real estate assets of the properties and contain certain other security provisions in the form of letters of credit and/or security deposits.

*Notes Receivable.* Our investment in notes receivable consists of mezzanine loans and other loan arrangements. The following table summarizes our investments in notes receivable at December 31, 2022 (*dollar amounts in thousands):*

| ​ Interest Rate | ​ ​ ​ | ​ ​ IRR | ​ ​ ​ | ​ ​ Maturity | ​ ​ ​ | ​ Type of Loan | ​ ​ ​ | ​ ​ Gross Investment | ​ ​ ​ | ​ ​ ​ | ​ ​ # of loans | ​ ​ ​ | ​ Type of Property | ​ ​ ​ |
| ---: | --- | ---: | --- | --- | --- | --- | --- | --- | --- | --- | ---: | --- | --- | --- |
| 5.0% | ​ | — | ​ | 2023 | ​ | Working capital | ​ | $380 | ​ | ​ | 1 | ​ | ALF | ​ |
| 7.0% | ​ | — | ​ | 2023 | ​ | Working capital | ​ | ​ 500 | ​ | ​ | 1 | ​ | ALF | ​ |
| 8.0% | ​ | 12.0% | ​ | 2023 | ​ | Mezzanine | ​ | ​ 7,460 | ​ | ​ | 1 | ​ | ALF | ​ |
| 5.0% | ​ | — | ​ | 2024 | ​ | Working capital | ​ | ​ 184 | ​ | ​ | 1 | ​ | ALF | ​ |
| 8.0% | ​ | 10.5% | ​ | 2024 | ​ | Mezzanine | ​ | ​ 4,355 | (1)​ | ​ | 1 | ​ | ILF | ​ |
| 4.0% | ​ | — | ​ | 2024 | ​ | Working capital | ​ | ​ 13,531 | ​ | ​ | 1 | ​ | SNF |  |
| 5.0% | ​ | — | ​ | 2025 | ​ | Working capital | ​ | ​ 932 | ​ | ​ | 1 | ​ | ALF | ​ |
| 7.5% | ​ | — | ​ | 2027 | ​ | Working capital | ​ | ​ 550 | ​ | ​ | 1 | ​ | ALF | ​ |
| 8.0% | ​ | 11.0% | ​ | 2027 | ​ | Mezzanine | ​ | ​ 25,000 | ​ | ​ | 1 | ​ | ALF | ​ |
| 6.5% | ​ | — | ​ | 2030 | ​ | Working capital | ​ | ​ 138 | ​ | ​ | 1 | ​ | SNF | ​ |
| 7.1% | ​ | — | ​ | 2030 | ​ | Working capital | ​ | ​ 1,607 | ​ | ​ | 2 | ​ | ALF | ​ |
| 7.0% | ​ | — | ​ | 2031 | ​ | Working capital | ​ | ​ 2,693 | ​ | ​ | 1 | ​ | ALF | ​ |
| 8.0% | ​ | — | ​ | 2032 | ​ | Working capital | ​ | ​ 1,642 | ​ | ​ | 1 | ​ | SNF | ​ |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $58,972 | ​ | ​ | 14 | ​ | ​ | ​ |

(1) Subsequent to December 31, 2022, we received $4,545 which includes a prepayment fee and the exit IRR totaling $190, from a mezzanine loan early payoff. The mezzanine loan was on a 136-unit in Oregon.

*Unconsolidated Joint Ventures.* From time to time, we provide funding to third-party operators for the acquisition, development and construction (“ADC”) of a property. If the ADC arrangement characteristics are more similar to a jointly-owned investment or partnership, we account for the ADC arrangement as an investment in an unconsolidated joint venture under the equity method of accounting. The following table summarizes our investment in unconsolidated joint ventures at December 31, 2022 *(dollar amounts in thousands):*

| ​ Total Preferred Return | ​ | ​ ​ ​ ​ | ​ Contractual Cash Portion | ​ | ​ ​ ​ ​ | ​ ​ ​ State | ​ ​ ​ ​ | ​ Type of Investment | ​ ​ ​ ​ | ​ Number of Beds/Units | ​ ​ ​ ​ | ​ ​ ​ ​ Carrying Value | ​ ​ ​ ​ | ​ ​ Type of Property |
| ---: | --- | --- | ---: | --- | --- | --- | --- | --- | --- | ---: | --- | ---: | --- | --- |
| 12% | ​ | ​ | 7% | ​ | ​ | WA | ​ | Preferred Equity | ​ | 95 | ​ | $6,340 | ​ | ALF/MC |
| 12% | ​ | ​ | 8% | ​ | ​ | WA | ​ | Preferred Equity | ​ | — | ​ | ​ 13,000 | (1)​ | UDP |
| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 95 | ​ | $19,340 | ​ | ​ |

(1) Subsequent to December 31, 2022, we received a notice of intent to redeem our $13,000 preferred equity investment in a joint venture to develop a 267-unit ILF and ALF in Washington. We anticipate receiving $1,675 of additional income in 2023 associated with the redemption representing the 14% exit IRR.

### Investment Policies and Strategies

Our investment policy is to invest primarily in seniors housing and health care properties. Over the past three years, we have underwritten investments in seniors housing communities and health care centers for a total of approximately $320.7 million. Additionally, during the past three years, we have disposed of properties for a total sales price of $194.7 million.

Historically our investments have consisted of:

- fee ownership of seniors housing and skilled nursing properties that are leased to operators;
- mortgage loans secured by seniors housing and skilled nursing properties; or
- participation in such investments indirectly through investments in mezzanine loans and real estate partnerships or other entities that themselves make direct investments in such loans or properties.

In evaluating potential investments, we consider factors such as:

- type of property;
- location;
- competition within the local market and evaluation of the impact resulting from any potential new development projects in construction or anticipated to be approved by local authorities;
- construction quality, condition and design of the property;
- current and anticipated cash flow of the property and its adequacy to meet operational needs and lease obligations or debt service obligations;
- experience, reputation and solvency of the operating companies providing services;
- payor mix of private, managed care, Medicare and Medicaid patients;
- growth, tax and regulatory environments of the communities in which the properties are located;
- occupancy and demand for similar properties in the area surrounding the property; and
- Medicaid reimbursement policies and plans of the state in which the property is located.

Prior to an investment, we conduct a property site review to assess the general physical condition of the property and the potential of additional services. In addition, we review third-party environmental reports, land surveys, and market studies (if applicable) as well as conduct a financial due diligence review of the property before the investment is made.

We seek to diversify our portfolio by operator, by property type, and geographically. Our primary marketing and business development strategy is to increase awareness of our presence and build long-term relationships in the seniors housing and health care industry by supporting targeted industry trade organizations, attending industry specific conferences and events attended by seniors housing and care providers, and seeking out speaking engagements at industry related events as well as interviews in industry publications. We believe this targeted marketing and business development effort has provided deal flow opportunities and will continue to provide opportunities for new investments in 2023. Since competition from investors as well as other capital providers for large transactions consisting of fully-marketed, multi-property portfolios generally result in valuations above our targeted investment criteria, our marketing and business development efforts focus on sourcing relationships with regionally based operating companies to execute on single property transactions (for acquisition, mortgage or structured financing or development), or smaller multi-property portfolios that are not broadly marketed by third-party intermediaries which complement our historic investment execution and are priced at yields that are accretive to our stockholders.

It is our current policy, and we intend to continue this policy, that all borrowers of funds from us and lessees of any of our properties secure adequate comprehensive property and general and professional liability insurance that covers us as well as the borrower and/or lessee. Although we actively monitor and seek to ensure compliance with our policies, we may be subject to loss for any number of reasons, such as, noncompliance on the part of our lessees/borrowers, losses that exceed covered limits or that are not covered, inability of lessees/borrowers to obtain insurance on commercially reasonable terms, bankruptcy of a carrier, or insufficient tail coverage. For investments in which we own fee simple title to the property and lease it to a third-party tenant, we are a non-possessory landlord and are not responsible for what takes place on such property. Nonetheless, claims including those pertaining to general and professional liability may be asserted against us which may result in costs and exposure for which insurance is not available.

### Competition

In the health care industry, we compete for real property investments with health care providers, other health care related REITs, real estate partnerships, banks, private equity funds, venture capital funds and other investors. Many of our competitors are significantly larger and have greater financial resources and lower cost of capital than we have available to us. Our ability to compete successfully for real property investments will be determined by numerous factors, including our ability to identify suitable acquisition targets, our ability to negotiate acceptable terms for any such acquisition and the availability and our cost of capital.

The lessees and borrowers of our properties compete on a local, regional and, in some instances, national basis with other health care providers. The ability of the lessee or borrower to compete successfully for patients or residents at our properties depends upon several factors, including the levels of care and services provided by the lessees or borrowers, the reputation of the providers, physician referral patterns, physical appearances of the properties, family preferences, financial condition of the operator and other competitive systems of health care delivery within the community, population and demographics.

### REIT Tax Status

We have elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, or the Code. To maintain our qualification as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we annually distribute to our shareholders at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains. As a REIT, we generally are not subject to U.S. federal income tax on the taxable income we distribute to our shareholders. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax at the generally applicable corporate tax rate. Even if we qualify for taxation as a REIT, we may be subject to U.S. federal income tax provisions on certain specific transactions and property, as well as certain state and local taxes on our income, property or net worth and U.S. federal income and excise taxes on our undistributed income.

### Health Care Regulation

#### Overview

The health care industry is heavily regulated by the government. Our borrowers and lessees who operate health care facilities are subject to extensive regulation by federal, state and local governments. These laws and regulations are subject to frequent and substantial changes resulting from legislation, adoption of rules and regulations, and administrative and judicial interpretations of existing law. These changes may have a dramatic effect on the definition of permissible or impermissible activities, the relative costs associated with doing business and the amount of reimbursement by both government and other third-party payors. These changes may be applied retroactively. The ultimate timing or effect of these changes cannot be predicted. The failure of any borrower of funds from us or lessee of any of our properties to comply with such laws, requirements and regulations could result in sanctions or remedies such as denials of payment for new Medicare and Medicaid admissions, civil monetary penalties, state oversight and loss of Medicare and Medicaid participation or licensure. Such action could affect our borrower’s or lessee’s ability to operate its facility or facilities and could adversely affect such borrower’s or lessee’s ability to make debt or lease payments to us.

The properties we own and the manner in which they are operated are affected by changes in the reimbursement, licensing and certification policies of federal, state and local governments. Properties may also be affected by changes in accreditation standards or procedures of accrediting agencies. In addition, expansion (including the addition of new beds or services or acquisition of medical equipment) and occasionally the discontinuation of services of health care facilities are, in some states, subjected to state and regulatory approval through “certificate of need” laws and regulations.

#### Health Care Reform and Other Legislative Developments

Federal health care reform, including the Patient Protection and Affordable Care Act, as amended (the “Affordable Care Act”), has expanded access to health insurance, reduced health care costs, and instituted various health policy reforms. Among other things, the Affordable Care Act: reduced Medicare skilled nursing facility reimbursement by a so-called “productivity adjustment” based on economy-wide productivity gains; required the development of a value-based purchasing program for Medicare skilled nursing facility services; authorized bundled payment programs, which can include post-acute services; and provided incentives to state Medicaid programs to promote community-based care as an alternative to institutional long-term care services. In addition, the Affordable Care Act impacts both us and our lessees and borrowers as employers, including requirements related to the health insurance we offer to our respective employees. Many aspects of the Affordable Care Act have been implemented through regulations and sub-regulatory guidance. In December 2017, President Trump signed into law a tax reform bill that repeals the Affordable Care Act’s penalty for individuals who fail to maintain health coverage meeting certain minimum standards. While there have been efforts to repeal the law and enact alternative reforms, the Biden Administration has indicated it will support and expand upon the Affordable Care Act. Additional revisions of the Affordable Care Act could be made in future, although the details and timing of any such actions are unknown at this time. There can be no assurance that the implementation of the Affordable Care Act or any subsequent modifications or related legal challenges will not adversely impact the operations, cash flows or financial condition of our lessees and borrowers, which subsequently could materially adversely impact our revenue and operations.

The Protecting Access to Medicare Act of 2014 required the Secretary of the Department of Health and Human Services to develop a skilled nursing facility “value-based purchasing program” tying Medicare payments to skilled nursing facilities to their performance on certain new readmissions measures, applicable to services furnished beginning October 1, 2018. The Medicare Access and CHIP Reauthorization Act of 2015 set the annual skilled nursing facility prospective payment system update for fiscal year 2018 at 1%, and the Bipartisan Budget Act of 2018 established an update of 2.4% for fiscal year 2019. Additional reforms affecting the payment for and availability of health care services have been proposed at the state level and adopted by certain states.

President Biden, Congress and state legislatures can be expected to continue to review and assess alternative health care delivery systems and payment methodologies, including potential changes in Medicare and Medicaid payment policy for skilled nursing facility services and other types of post-acute care. Additional changes in laws, new interpretations of existing laws, or other changes in payment methodologies may have a dramatic effect on the definition of permissible or impermissible activities, the relative costs associated with doing business and the amount of reimbursement by the government and other third-party payors. There can be no assurances that enacted or future legislation will not have an adverse impact on the financial condition of our borrowers and lessees, which subsequently could materially adversely impact our company.

#### Reimbursement

The ability of our borrowers and lessees to generate revenue and profit determines the underlying value of that property to us. Revenues of our borrowers and lessees of skilled nursing centers are generally derived from payments for patient care. Sources of such payments for skilled nursing facilities include the federal Medicare program, state Medicaid programs, private insurance carriers, managed care organizations, preferred provider arrangements, and self-insured employers, as well as the patients themselves.

A significant portion of the revenue of our skilled nursing center borrowers and lessees is derived from governmentally-funded reimbursement programs, such as Medicare and Medicaid. Because of significant health care costs paid by such government programs, both federal and state governments have adopted and continue to consider various health care reform proposals to control health care costs. In many instances, revenues from Medicaid programs are insufficient to cover the actual costs incurred in providing care to Medicaid patients. In addition, all states have been making changes to their long-term care delivery systems that emphasize home and community-based long-term care services, in some cases coupled with cost-controls for institutional providers. Increasingly, state Medicaid programs are providing coverage through managed care programs under contracts with private health plans, which is intended to decrease state Medicaid costs. The federal government also has adopted various policies to promote community-based alternatives to institutional services. The Trump Administration and Congress considered revising federal payments to state Medicaid programs to establish block grants or impose per capita limits on federal Medicaid payments to states. On January 30, 2020, the Trump Administration announced that states could apply to participate in a new Medicaid “Healthy Adult Opportunity” (“HAO”) Demonstration project, which would reimburse participating states under a capped aggregate or per-capita federal financial participation financing model in exchange for the states gaining greater flexibility in the scope and administration of their Medicaid programs for certain beneficiary populations (individuals qualifying for Medicaid based on need for long-term care services and supports would be exempt). As states and the federal government continue to respond to budget pressures, future reduction in Medicaid payments for skilled nursing facility services could have an adverse effect on the financial condition of our borrowers and lessees which could, in turn, adversely impact the timing or level of their payments to us.

With regard to the Medicare program, over the years there have been efforts to contain Medicare fee-for-service spending, promote Medicare managed care, and, more recently, tie reimbursement to quality and value of care. CMS annually updates Medicare skilled nursing facility prospective payment system rates and other policies. On July 31, 2018, CMS issued a final rule updating skilled nursing facility rates and policies for fiscal year 2019. The final rule includes a 2.4% payment increase, which CMS projected will increase overall payments to skilled nursing facilities by $820 million in fiscal year 2019 compared with fiscal year 2018 levels. The final rule also replaced the existing Resource Utilization Groups, Version IV (“RUG–IV”) case mix classification system with a new model beginning in fiscal year 2020, which began October 1, 2019. The new case mix classification system, called the “Patient-Driven Payment Model,” bases Medicare payment on resident needs rather than the amount of therapy a resident receives. On July 30, 2019, CMS issued its final fiscal year 2020 Medicare skilled nursing facility update. Under the final rule, CMS projected Medicare aggregate payments to skilled nursing facilities would increase by $851 million, or 2.4%, for fiscal year 2020 compared with fiscal year 2019. The final rule also addressed implementation of the Patient-Driven Payment Model case mix classification system that became effective on October 1, 2019, changes to the group therapy definition in the skilled nursing facility setting, and various skilled nursing facility Value-Based Purchasing (“VBP”) and quality reporting program policies.

On April 10, 2020, CMS issued a proposed rule to update SNF rates and policies for fiscal year 2021, which started October 1, 2020, and issued the final rule on July 31, 2020. CMS estimates that payments to SNFs would increase by $750 million, or 2.2%, for fiscal year 2021 compared to fiscal year 2020. CMS also adopted revised geographic delineations to identify a provider’s status as an urban or rural facility and to calculate the wage index, applying a 5% cap on any decreases in a provider’s wage index from fiscal year 2020 to fiscal year 2021. Finally, CMS also finalized updates to the SNF value-based purchasing program to reflect previously finalized policies, updated the 30-day phase one review and correction deadline for the baseline period quality measure quarterly report, and announced performance periods and performance standards for the fiscal year 2023 program year. On April 8, 2021, CMS issued a proposed rule to update SNF rates and policies for fiscal year 2022, which started October 1, 2021, and issued the final rule on July 29, 2021. CMS estimated that the aggregate impact of the payment policies in the final rule would result in an increase of approximately $410 million in Medicare Part A payments to SNFs in fiscal year 2022. The final rule also includes several policies that update the SNF Quality Reporting Program and the SNF Value-Based Program for fiscal year 2022. On April 11, 2022, CMS issued a proposed rule to update SNF rates and policies for fiscal year 2023. CMS estimated that the aggregate impact of the payment policies in the proposed rule would result in a decrease of approximately $320 million in Medicare Part A payments to SNFs in fiscal year 2023 compared to fiscal year 2022. CMS also sought input on the effects of direct care staffing requirements to improve long-term care requirements for participation and promote thoughtful, informed staffing plans and decisions within facilities to meet residents’ needs, including maintaining or improving resident function and quality of life. Specifically, CMS sought input on establishing minimum staffing requirements for long-term care facilities. On June 29, 2022, CMS issued updates to guidance on minimum health and safety standards that long-term care facilities must meet to participate in Medicare and Medicaid and updated and developed new guidance in the State Operations Manual to address issues that significantly affect residents of long-term care facilities. On July 29, 2022, CMS issued a final rule to update SNF rates and policies for fiscal year 2023. CMS estimated that the aggregate impact of the payment policies in the final rule would result in an increase of 2.7%, or approximately $904 million, in Medicare Part A payments to SNFs in fiscal year 2023 compared to fiscal year 2022. CMS also finalized a permanent 5% cap on annual wage index decreases to smooth year-to-year changes in providers’ wage index payments. In addition, CMS indicated that it would continue to review the comments it received in response to its request for information on establishing minimum staffing requirements for long-term care facilities, and that it intends to issue proposed rules on a minimum staffing level measure within one year.

There can be no assurance that these rules or future regulations modifying Medicare skilled nursing facility payment rates or other requirements for Medicare and/or Medicaid participation will not have an adverse effect on the financial condition of our borrowers and lessees which could, in turn, adversely impact the timing or level of their payments to us.

Since the announcement of the COVID-19 pandemic and beginning as of March 13, 2020, CMS has issued numerous temporary regulatory waivers and new rules to assist health care providers, including SNFs, in response to the COVID-19 pandemic. These include, waiving the SNFs 3-day qualifying inpatient hospital stay requirement, flexibility in calculating a new Medicare benefit period, waiving timing for completing functional assessments, waiving requirements for health care professional licensure, survey and certification, provider enrollment, and reimbursement for services performed by telehealth, among many others. CMS also announced a temporary expansion of its Accelerated and Advance Payment Program to allow SNFs and certain other Medicare providers to request accelerated or advance payments in an amount up to 100% of the Medicare Part A payments they received from October–December 2019; this expansion was suspended April 26, 2020 in light of other CARES Act funding relief. The Continuing Appropriations Acts, 2021 and Other Extensions Act, enacted on October 1, 2020, amended the repayment terms for all providers and suppliers that requested and received accelerated and advance payments during the COVID-19 public health emergency. Specifically, Congress gave providers and suppliers that received Medicare accelerated and advance payment(s) one year from when the first loan payment was made to begin making repayments. In addition, CMS enhanced requirements for nursing facilities to report COVID-19 infections to local, state and federal authorities. On January 11, 2023, Department of Health and Human Services (“HHS”) Secretary Becerra announced that he had renewed, effective January 16, 2022, the declared public health emergency for an additional 90-day period.

On March 26, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), sweeping legislation intended to bolster the nation’s response to the COVID-19 pandemic. In addition to offering economic relief to individuals and impacted businesses, the law expands coverage of COVID-19 testing and preventative services, addresses health care workforce needs, eases restrictions on telehealth services during the crisis, and increases Medicare regulatory flexibility, among many other provisions. Notably, the CARES Act temporarily suspended the 2% across-the-board “sequestration” reduction of all Medicare Fee-For-Service (“FFS”) payments under the Medicare program that had previously been in effect since April 1, 2013, for the period May 1, 2020 through December 31, 2020, and extended the current Medicare sequester requirement through fiscal year 2030. In addition, the law provides $100 billion in grants to eligible health care providers for health care related expenses or lost revenues that are attributable to COVID-19. On April 10, 2020, CMS announced the distribution of $30 billion in funds to Medicare providers based upon their 2019 Medicare fee for service revenues. Eligible providers were required to agree to certain terms and conditions in receiving these grants. In addition, HHS authorized $20 billion of additional funding for providers that have already received funds from the initial distribution of $30 billion. Unlike the first round of funds, which came automatically, providers were required to apply for these additional funds and submit the required supporting documentation, using the online portal provided by HHS. Providers were required to attest to and agree to specific terms and conditions for the use of such funds. HHS expressed a goal of allocating the whole $50 billion proportionally across all providers based on those providers’ proportional share of 2018 net Medicare fee-for-service revenue, so that some providers would not be eligible for additional funds. On May 22, 2020, HHS announced that it had begun distributing $4.9 billion in additional relief funds to SNFs to offset revenue losses and assist nursing homes with additional costs related to responding to the COVID-19 public health emergency and the shipments of personal protective equipment provided to nursing homes by the Federal Emergency Management Agency. On June 9, 2020, HHS announced that it expected to distribute approximately $15 billion to eligible providers that participate in state Medicaid and Children’s Health Insurance Program (“CHIP”) programs and have not received a payment from the Provider Relief Fund General Allocation. On July 22, 2020, President Trump announced that HHS would devote $5 billion in Provider Relief Funds to Medicare-certified long-term care facilities and state veterans’ homes to build nursing home skills and enhance nursing homes’ response to COVID-19, including enhanced infection control. Nursing homes must participate in the Nursing Home COVID-19 training to be qualified to receive this funding. On August 27, 2020, HHS announced that it had distributed almost $2.5 billion to nursing homes to support increased testing, staffing, and personal protective equipment needs. On September 3, 2020, HHS announced a $2 billion performance-based incentive payment distribution to nursing homes and SNFs. Finally, on October 1, 2020, HHS announced $20 billion in new funding for several types of providers, including those who previously received, rejected, or accepted a general distribution provider relief fund payment. The application deadline for these Phase 3 funds was November 6, 2020.

On December 27, 2020, President Trump signed the Consolidated Appropriations Act, 2021 (H.R. 133). The $1.4 trillion omnibus appropriations legislation funds the government through September 30, 2021 and was attached to a $900 billion COVID-19 relief package. Of the $900 billion in COVID-19 relief, $73 billion was allocated to HHS. Notably, the bill adds an additional $3 billion to the Provider Relief Fund, includes language specific to reporting requirements, and allows providers to use any reasonable method to calculate lost revenue, including the difference between such provider’s budgeted and actual revenue budget if such budget had been established and approved prior to March 27, 2020. This change reverts to HHS’ previous guidance from June 2020 on how to calculate lost revenues. In addition, the Consolidated Appropriations Act, 2021 also extended the CARES Act’s sequestration suspension to March 31, 2021. On January 15, 2021, HHS announced that it would be amending the reporting timeline for Provider Relief Funds and indicated that it was working to update the Provider Relief Fund requirements to be consistent with the passage of the Consolidated Appropriations Act, 2021.

On June 11, 2021, HHS issued revised reporting requirements for recipients of Provider Relief Fund payments. The announcement included expanding the amount of time providers would have to report information, aimed to reduce burdens on smaller providers, and extended key deadlines for expending Provider Relief Fund payments for recipients who received payments after June 30, 2020. The revised reporting requirements are applicable to providers who received one or more payments exceeding, in the aggregate, $10,000 during a single Payment Received Period from the PRF General Distributions, Targeted Distributions, and/or Skilled Nursing Facility and Nursing Home Infection Control Distributions. On July 1, 2021, HHS, through the Health Resources and Services Administration (“HRSA”), notified recipients of Provider Relief Fund payments by e-mail that the Provider Relief Fund Reporting Portal was open for recipients who were required to report on the use of funds in Reporting Period 1, as described by HHS’s June 11, 2021 update to the reporting requirements. On September 10, 2021, HHS announced a final 60-day grace period of the September 30, 2021 reporting deadline for Provider Relief Funds exceeding $10,000 in aggregate payments received from April 10, 2020 to June 30, 2020. Although the September 30, 2021 reporting deadline remained in place, HHS explained that recoupment or other enforcement actions would not be initiated during the 60-day grace period, which began on October 1, 2021 and ended on November 30, 2021.

Reporting Period 2, for providers who received one or more payments exceeding $10,000, in the aggregate, from July 1, 2020, to December 31, 2020, was from January 1, 2022, to March 31, 2022. Reporting Period 3, for providers who received one or more payments exceeding $10,000, in the aggregate, from January 1, 2021, to June 30, 2021, was from July 1, 2022, to September 30, 2022. Reporting Period 4, for providers who received one or more payments exceeding $10,000, in the aggregate, from July 1, 2021, to December 31, 2021, opened on January 1, 2023, and extends to March 31, 2023. Reporting Period 5, for providers who received one or more payments exceeding $10,000, in the aggregate, from January 1, 2022, to June 30, 2022, opens on July 1, 2023.

On September 10, 2021, the Biden Administration announced $25.5 billion in new funding for health care providers affected by the COVID-19 pandemic, including $8.5 billion in American Rescue Plan (“ARP”) resources for providers who serve rural Medicaid, CHIP, or Medicare patients, and an additional $17 billion for Phase 4 Provider Relief Funds for a broad range of providers who could document revenue loss and expenses associated with the pandemic, including assisted living facilities that were state-licensed/certified on or before December 31, 2020. Approximately 25% of the Phase 4 allocation was for bonus payments based on the amount and type of services provided to Medicaid, CHIP, and Medicare beneficiaries from January 1, 2019 through September 30, 2020. On December 14, 2021, HHS announced the distribution of approximately $9 billion in Provider Relief Fund Phase 4 payments to health care providers who have experienced revenue losses and expenses related to the COVID-19 pandemic. Further, on January 25, 2022, HHS announced that it would be making more than $2 billion in Provider Relief Fund Phase 4 General Distribution payments to more than 7,600 providers across the country that same week. On March 22, 2022, HHS announced more than $413 million in Provider Relief Fund Phase 4 payments to more than 3,600 providers across the country. On April 13, 2022, HRSA announced the disbursement of more than $1.75 billion in Provider Relief Fund payments to 3,680 providers across the country.

Following prior legislation in 2021 suspending sequestration, on December 10, 2021, President Biden signed the Protecting Medicare and American Farmers from Sequester Cuts Act, which suspended the Medicare 2% sequestration reduction through March 31, 2022, and then reduced the sequestration cuts to 1% from April through June 2022. As of July 1, 2022, cuts of 2% were re-imposed.

CMS also has implemented a variety of Medicare bundled payment programs that seek to promote greater care coordination and more efficient use of resources. Certain of these models, such as the Medicare Comprehensive Care for Joint Replacement and Bundled Payments for Care Improvement Advanced models, have impacted post-acute care, including skilled nursing facility services. There can be no assurances that new Medicare payment models will not adversely affect revenues of our skilled nursing center borrowers and lessees and thereby adversely affect those borrowers’ and lessees’ abilities to make their debt or lease payments to us.

Moreover, health care facilities continue to experience pressures from private payors attempting to control costs; reimbursement from private payors has in some cases fallen relative to government payors. Governmental and public concern regarding health care costs may result in significant reductions in payment to health care facilities, and there can be no assurance that future payment rates for either governmental or private payors will be sufficient to cover cost increases in providing services to patients. Any changes in reimbursement policies which reduce reimbursement to levels that are insufficient to cover the cost of providing patient care could adversely affect revenues of our skilled nursing center borrowers and lessees and to a much lesser extent our assisted living community borrowers and lessees and thereby adversely affect those borrowers’ and lessees’ abilities to make their debt or lease payments to us. Failure of the borrowers or lessees to make their debt or lease payments would have a direct and material adverse impact on us.

#### Fraud and Abuse Enforcement

Various federal and state laws govern financial and other arrangements between health care providers that participate in, receive payments from, or make or receive referrals for work in connection with government funded health care programs, including Medicare and Medicaid. These laws, known as the fraud and abuse laws, include the federal anti-kickback statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration directly or indirectly in return for, or to induce, the referral, or arrange for the referral, of an individual to a person for the furnishing of an item or service for which payment may be made under federal health care programs. In addition, the federal physician self-referral law, commonly known as the Stark Law, prohibits physicians and certain other types of practitioners from making referrals for certain designated health services paid in whole or in part by Medicare and Medicaid to entities with which the practitioner or a member of the practitioner’s immediate family has a financial relationship, unless the financial relationship fits within an applicable exception to the Stark Law. The Stark Law also prohibits the entity receiving the referral from seeking payment under the Medicare program for services rendered pursuant to a prohibited referral. Sanctions for violating the Stark Law include civil monetary penalties of up to $25,820 per prohibited service provided, assessments equal to three times the dollar value of each such service provided and exclusion from the Medicare and Medicaid programs. Many states have enacted similar fraud and abuse laws which are not necessarily limited to items and services for which payment is made by federal health care programs. Violations of these laws may result in fines, imprisonment, denial of payment for services, and exclusion from federal and/or other state-funded programs. Other federal and state laws authorize the imposition of penalties, including criminal and civil fines and exclusion from participation in federal health care programs for submitting false claims, improper billing and other offenses. Federal and state government agencies have continued rigorous enforcement of criminal and civil fraud and abuse laws in the health care arena. Our borrowers and lessees are subject to many of these laws, and some of them could in the future become the subject of a governmental enforcement action.

### Environmental Regulation

Under various federal, state and local environmental laws, ordinances and regulations, an owner of real property or a secured lender (such as us) may be liable for the costs of removal or remediation of hazardous or toxic substances at, under or disposed of in connection with such property, as well as other potential costs relating to hazardous or toxic substances (including government fines and damages for injuries to persons and adjacent property). Such laws often impose such liability without regard to whether the owner or secured lender knew of, or was responsible for, the presence or disposal of such substances and may be imposed on the owner or secured lender in connection with the activities of an operator of the property. The cost of any required remediation, removal, fines or personal or property damages and the owner’s or secured lender’s liability therefore could exceed the value of the property, and/or the assets of the owner or secured lender. In addition, the presence of such substances, or the failure to properly dispose of or remediate such substances, may adversely affect the owner’s ability to sell or rent such property or to borrow using such property as collateral which, in turn, would reduce our revenues.

Although the mortgage loans that we provide and leases covering our properties require the borrower and the lessee to indemnify us for certain environmental liabilities, the scope of such obligations may be limited and we cannot assure that any such borrower or lessee would be able to fulfill its indemnification obligations.

### Human Capital

LTC recognizes the value of our employees and strives to cultivate a cohesive company culture. We are committed to being a workplace that encourages respect, collaboration, communication, transparency, and integrity. We seek to hire employees with diverse backgrounds and perspectives.

Our success starts and ends with having the best talent, and as a result, we are focused on attracting, developing and retaining our employees. The average tenure of our employees is more than 10 years with LTC.

We offer employees a competitive and comprehensive benefits package that we believe meets or exceeds market standards. LTC fully pays heath care premiums for employees and all eligible dependents. For qualified employees, we offer a 401(k) retirement plan with an employer contribution matching program.

We support employees attending industry conferences. For employees with at least one year of service, we grant up to three days leave to take professional licensing examinations. We also pay their annual renewal fees for professional licenses.

As of December 31, 2022, we employed 24 people. Our employees are not members of any labor union, and we consider our relations with our employees to be excellent.

### Investor Information

We make available to the public free of charge through our internet website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the Securities and Exchange Commission (“SEC”). Our internet website address is *www.LTCreit.com.* We are not including the information contained on our website as part of, or incorporating it by reference into, this Annual Report on Form 10-K.

The SEC also maintains an internet website that contains reports, proxy statements and other information we file. The internet address of the SEC website is *www.sec.gov.*

You may contact our Investor Relations Department at:

LTC Properties, Inc.

2829 Townsgate Road, Suite 350

Westlake Village, California 91361

Attn: Investor Relations

(805) 981-8655

## Risk factors

As filed, 40,790 characters.

This section discusses risk factors that could affect our business, operations, and financial condition. If any of these risks, as well as other risks and uncertainties that we have not yet identified or that we currently believe are not material, actually occur, we could be materially adversely affected and the value of our securities could decline. In addition, these risk factors contain “forward-looking statements” as discussed above under the “Cautionary Statement on Forward-Looking Statements.” The following information should be read in conjunction with Management’s Discussion and Analysis, and the consolidated financial statements and related notes in this Annual Report on Form 10-K.

### Risks Related to Our Business and Industry

### We are dependent on our operators for revenue and cash flow.

Substantially all of our revenue and sources of cash flows are derived from operating lease rentals and interest earned on outstanding financing receivables, loans receivable and income from our preferred equity investments in unconsolidated joint ventures. Our investments in owned properties, mortgage loans, mezzanine loans, financing receivables and preferred equity investments represent our primary source of liquidity to fund distributions. We do not implement operational decisions with respect to the daily management and marketing of care services offered at our properties. We therefore are dependent upon the performance of our operators and the income and rates we earn on leases and loans. A decrease in occupancy and/or increase in operating costs could have an adverse effect on our lessees and borrowers. For example, due to the COVID-19 pandemic and related public health measures, our lessees and borrowers have experienced a decrease in occupancy and an increase in operating costs. There can be no assurance that our lessees and borrowers will have sufficient assets, income, and access to financing to enable them to satisfy, in full, their respective obligations to us. Our financial condition and ability to pay dividends could be adversely affected by financial difficulties experienced by any of our lessees or borrowers, or in the event any such operator does not renew and/or extend its relationship with us at similar or better financial terms.

***The duration and extent of the effects of the COVID-19 pandemic remains uncertain.***

The COVID-19 pandemic and related public health measures have adversely affected our operations through the affect it has had on the financial results of our operators. The operations and occupancy levels at the seniors housing and health care facilities of our lessees and borrowers have been adversely affected by COVID-19 and could be further adversely affected by COVID-19 or another pandemic especially if there are infections on a large scale at our properties. The impact of COVID-19 has included, and another pandemic could include early resident move-outs, our operators delaying accepting new residents due to quarantines, potential occupants postponing moves to our operators’ facilities, and/or hospitals cancelling or significantly reducing elective surgeries thereby reducing the number of people in need of skilled nursing care. Operating costs of our lessees and borrowers also have risen due to the impact of COVID-19, including cost increases in staffing and pay, purchases of additional personal protective equipment (“PPE”), and implementation of additional safety protocols and higher than normal inflationary pressures.

Additionally, health orders, rent moratoriums, and other initiatives by federal, state, and local authorities could affect our operators and our ability to collect rent and/or enforce remedies for the failure to pay rent. The extent to which COVID-19 or another pandemic could impact our operations and those of our operators will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration, spread and severity of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures. Further, if COVID-19 results in an extended adverse trend away from seniors housing and health care facilities to at-home and alternative care services, the occupancy rates of our operators and the value of our real estate investments could be negatively impacted.

### The health care industry is heavily regulated by the government.

Our borrowers and lessees who operate health care facilities are subject to extensive regulation by federal, state and local governments. These laws and regulations are subject to frequent and substantial changes resulting from legislation, adoption of rules and regulations, and administrative and judicial interpretations of existing law. These changes may have a dramatic effect on the definition of permissible or impermissible activities, the relative costs associated with doing business and the amount of reimbursement by both government and other third-party payors. These changes may be applied retroactively. The ultimate timing or effect of these changes cannot be predicted. For instance, the Patient Protection and Affordable Care Act, as amended (the “Affordable Care Act”) may be subject to revision, replacement, repeal or expansion. In addition, CMS has adopted regulations that impose new standards for long-term care facilities participating in the Medicare and Medicaid programs. See *Item 1. Business—Health Care Regulation*. The failure of any borrower of funds from us or lessee of any of our properties to comply with such laws, requirements and regulations could affect its ability to operate its facility or facilities and could adversely affect such lessee’s or borrower’s ability to make lease or debt payments to us.

***Federal and state health care cost containment measures including reductions in reimbursement from third-party payors such as Medicare and Medicaid could adversely affect us and the ability of our operators to make payments to us.***

The ability of our borrowers and lessees to generate revenue and profit determines the underlying value of that property to us. Revenues of our borrowers and skilled nursing center lessees are generally derived from payments for patient care. Sources of such payments include the federal Medicare program, state Medicaid programs, private insurance carriers, health care service plans, health maintenance organizations, preferred provider arrangements, self-insured employers, as well as the patients themselves.

The health care industry continues to face increased government and private payor pressure on health care providers to control costs. Federal legislative and regulatory policies have been adopted and may continue to be proposed that would reduce Medicare and/or Medicaid payments to nursing facilities. Moreover, state budget pressures continue to result in adoption of Medicaid provider payment reductions in some states. Increasingly, state Medicaid programs are providing coverage through managed care programs under contracts with private health plans, which is intended to decrease state Medicaid costs. In light of continuing federal and state Medicaid program reforms, budget cuts, and regulatory initiatives, no assurance can be given that the implementation of such regulations and reforms will not have an adverse effect on the financial condition or results of operations of our lessees and/or borrowers which, in turn, could affect their ability to meet their contractual obligations to us.

### Required regulatory approvals could delay operation of health care facilities.

Operators of skilled nursing and other health care facilities must be licensed under applicable state law and, depending upon the type of facility, certified or approved under the Medicare and/or Medicaid programs. A new operator in certain states also must receive change-of-ownership approvals under certificate of need laws. Delays in an operator receiving regulatory approvals from the applicable federal, state, or local government agencies, or the inability of an operator to receive such approvals, could prolong the period during which we are unable to receive lease or loan payments. We also could incur expenses in connection with any licensing, certification, or change-of-ownership proceedings.

***Failure to comply with federal, state, or local regulations could prohibit operation of health care facilities.***

The failure of our operators to comply with federal, state, or local regulations could result in penalties which could include loss or restriction of license, loss of accreditation, denial of reimbursement, imposition of fines, suspension or decertification from federal and state health care programs, or closure of the facility. These regulations have increased in response to COVID-19. The loss or imposition of restrictions on any required license, registration, certificate of need, provider agreement or certification would prevent a facility from operating in the manner intended by the operator. Additionally, failure by any of our operators to comply with applicable laws and regulations could result in adverse publicity and reputational harm, and therefore could harm our business.

***Insurance coverage maintained by our operators could be inadequate to protect against contingencies.***

Operators of health care facilities may become subject to claims that their services have resulted in injury or other adverse effects. For example, due to the enhanced danger to senior citizens, COVID-19 infections at our properties could lead to increased legal claims against our operators. As a non-possessory landlord, we contend we are not generally responsible for what takes place at properties we do not possess. Although we require our operators to secure adequate comprehensive liability insurance that covers us as well as the operator, we could be subject to losses due to noncompliance or insufficient coverage. In addition, certain risks could be uninsurable or unavailable. There can be no assurance that we or our operators will have adequate insurance or funds to cover all contingencies. If an uninsured loss occurs or a loss exceeds policy limits, we could lose both invested capital and anticipated revenue from a property.

### We rely on a few major operators.

During the year ended December 31, 2022, approximately 33.4% of our revenues from leases and interest income from real estate investments were generated from three operators. The failure, inability, or unwillingness of any of these operators to meet their obligations to us could materially reduce our cash flow as well as our results of operations.

### Inflation could adversely impact the operating expenses of our tenants.

Inflation, both real or anticipated as well as any resulting governmental policies, could adversely affect the economy and the costs of labor, goods and services to our tenants. Because tenants are typically required to pay all property operating expenses, increases in property-level expenses at our leased properties generally do not directly affect us. Increased operating costs could have an adverse impact on our tenants if increases in their operating expenses exceed increases in their revenue, which may adversely affect our tenants’ ability to pay rent owed to us. An increase in our tenants’ expenses and a failure of their revenues to increase at least with inflation could adversely impact our tenants’ and our financial condition and our results of operations.

***Inflation could rise at rates that outpace contractual or actual increases in rental income.***

Our long-term leases and loans typically contain provisions, such as rent escalators, designed to mitigate the adverse impact of inflation. However, in 2021 we provided deferred and abated rent to certain operators and reduced 2021 rent and interest escalations by 50% to support eligible operators during the continuing COVID-19 crisis. If the contractual or actual increases in rental income we receive from our operators do not keep pace with a rise in inflation, our financial condition and our results of operations could be adversely impacted.

***We may be unable to renew leases, or the terms of renewals or new leases could be less favorable than current leases.***

Approximately 73.2% of our revenue for the year ended December 31, 2022, was derived from operating lease rentals. There can be no assurance that a lessee will operate its lease through expiration or that a lessee will exercise an option to renew its lease upon expiration. In such scenarios, there can be no assurance that we would be able to find a suitable replacement operator, re-lease the property on substantially equivalent or better terms than the prior lease, if at all. Additionally, to retain current or attract new operators, we could be asked to provide rent concessions or undertake capital expenditures to improve properties.

***Operator financial or legal difficulties could delay or prevent collection of rent.***

If a lessee experiences financial or legal difficulties, it could fail to pay us rent when due, assert counterclaims, or seek bankruptcy protection. In the case of a master lease, this risk is magnified, as a default could reduce or eliminate rental revenue from several properties. Over the past three years, five of our operators have had or continue to have financial or legal difficulties resulting in non-payment of rent or bankruptcy. See *Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview—Portfolio Overview—Update on Certain Operators* for further discussion. Additionally, the COVID-19 pandemic has caused, and depending on its scope and duration could continue to cause, financial and legal difficulties for certain of our lessees. If an operator is unable to comply with the terms of its leases, we could be asked to defer rent or be forced to modify the leases in ways that are unfavorable to us. Alternatively, the failure of an operator to perform its obligations under a lease or other agreements with us could force us to declare a default and terminate the lease. There can be no assurance that we would be able to find a suitable replacement operator, re-lease the property on substantially equivalent or better terms than the prior lease, if at all. If a lessee seeks bankruptcy protection, it could delay our efforts to collect past due amounts owed to us under the applicable lease and ultimately preclude collection of all or a portion of those amounts.

### Collateral securing mortgage loans could be insufficient.

If a borrower defaults under a mortgage loan, we could be obligated to foreclose on or otherwise protect our investment by acquiring title to the property. In such a scenario, the borrower could contest enforcement of foreclosure, assert counterclaims, or seek bankruptcy protection. This could limit or delay our ability to recover unpaid principal and/or interest and exercise other rights and remedies. Declines in the value of the property could prevent us from realizing an amount equal to our investment. Additionally, it could be difficult to expeditiously find a suitable replacement operator, if at all, or otherwise successfully operate or occupy the property, which could adversely affect our ability to recover our investment.

### Our real estate investments could become impaired.

We periodically, but not less than quarterly, evaluate our real estate investments and other assets for impairment indicators. The judgment regarding the existence of impairment indicators is based on factors such as market conditions, operator performance, and legal structure. If we determine that an impairment has occurred, we would be required to make an adjustment to the net carrying value of the asset which could have an adverse effect on our results of operations in the period in which the write-off occurs.

***Our real estate investments are relatively illiquid and could be difficult to sell for book value.***

Real estate investments are relatively illiquid and therefore tend to limit our ability to vary our portfolio promptly in response to changes in economic or other conditions. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates, and other factors, including supply and demand, that are beyond our control. All of our real estate investments are special purpose properties that cannot be readily converted to other health care related services, general residential, retail, or office use. Transfers of operations of health care facilities are subject to regulatory approvals not required for transfers of other types of commercial operations and other types of real estate. If the operation of any of our properties becomes unprofitable or a lessee or borrower becomes unable to meet its obligations on the lease or mortgage loan, the liquidation value of the property could be substantially less than the net book value or the amount owing on any related mortgage loan than would be the case if the property were readily adaptable to other uses.

***Development and construction risks could affect the profitability and completion of properties.***

Our business includes development and construction of seniors housing and health care properties. Construction and development projects involve risks such as the following:

- development of a project could be abandoned after expending significant resources resulting in the loss of deposits or failure to recover expenses already incurred;
- development and construction costs of a project could exceed original estimates due to increased interest rates and higher materials, transportation, labor, leasing, or other costs, which could make completion less profitable;
- financing for a project could be unavailable on favorable terms or at all;
- project delays could result in increases in construction costs and debt service expenses as a result of a variety of factors that are beyond our control, including natural disasters, labor conditions, material shortages, and regulatory hurdles; and
- occupancy rates and rents at a newly completed property could fail to meet expected levels and could be insufficient to make the property profitable.

***We may be unable to invest cash proceeds due to competition for health care properties.***

From time to time, we will have cash available from the sale of equity and debt capital, sale of properties, and funds from operations. With these cash proceeds, we may seek to invest in health care properties as part of our business and growth strategy. We compete for health care property investments with developers, public and private REITs, and other investors, some of whom may have greater financial resources than us. The competition for health care properties could affect our ability to make timely investments on acceptable terms, which could adversely affect our ability to grow or acquire properties profitably or with attractive return.

***Our operators face competition providing seniors housing and health care services.***

The business of providing seniors housing and health care is highly competitive. Our operators compete with other companies providing similar care services or alternatives such as home health agencies, hospices, life care at home, community-based service programs, retirement communities, and convalescent centers. Additionally, our operators are sensitive to changes in the labor market and wages and benefits offered to their employees, which can impact their ability to remain competitive. There can be no assurance that our operators will not encounter increased competition in the future which could limit their ability to attract residents or expand their businesses and therefore affect their ability to make their lease or loan payments to us.

### Risks Related to Our Status as a REIT

***Our failure to qualify as a REIT would have serious adverse consequences to our stockholders.***

We intend to operate so as to qualify as a REIT under the Internal Revenue Code of 1986, as amended, or the Code. We believe that we have been organized and have operated in a manner which would allow us to qualify as a REIT under the Code beginning with our taxable year ended December 31, 1992. However, it is possible that we have been organized or have operated in a manner which would not allow us to qualify as a REIT, or that our future operations could cause us to fail to qualify. Qualification as a REIT requires us to satisfy numerous requirements (some on an annual and quarterly basis) established under highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations, and involves the determination of various factual matters and circumstances not entirely within our control. For example, in order to qualify as a REIT, at least 95% of our gross income in any year must be derived from qualifying sources, and we must pay dividends to stockholders aggregating annually at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and by excluding capital gains). Legislation, new regulations, administrative interpretations or court decisions could significantly change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification.

If we fail to qualify as a REIT in any taxable year, we will be subject to federal and state income tax (including any applicable alternative minimum tax for taxable years ending prior to January 1, 2018) on our taxable income at regular corporate rates. We note that REITs are specifically excluded from the application of the corporate alternative minimum tax that was enacted as part of the Inflation Reduction Act of 2022 (H.R. 5376). Unless we are entitled to relief under statutory provisions, we would be disqualified from treatment as a REIT for the four taxable years following the year during which we lost qualification. If we lose our REIT status, our net earnings available for investment or distribution to stockholders would be significantly reduced for each of the years involved. In addition, we would no longer be required to make distributions to stockholders.

Legislation, new regulations, administrative interpretations and/or court decisions could occur at any time and significantly change the tax laws with respect to our qualification as a REIT or the federal income tax consequences of such qualification. We cannot predict if or when any new or amended law, regulation, administrative interpretation, or case will be adopted, promulgated, decided or become effective, and any such change may apply retroactively. The last significant legislation affecting REITs was The Tax Cuts and Jobs Act, effective for tax years beginning in 2018. We and our security holders may be adversely affected by any new or amended law, regulation, administrative interpretation, or case law.

Prospective investors are urged to consult with their tax advisors with respect to the impact of the Tax Cuts and Jobs Act and any other regulatory, administrative or judicial developments and proposals and their potential effect on an investment in our securities.

### Risks Related to Our Capital Structure

### Limited access to capital could affect our growth.

As a REIT, we are required to distribute at least 90% of our taxable income. Our growth therefore is generally through the investment of new capital in real estate assets. As of December 31, 2022, we had $10.4 million of cash on hand and $270.0 million available under our unsecured revolving line of credit. We also have the ability to access the capital markets through the issuance of $130.6 million of common stock under our equity distribution agreements and an indeterminate amount through the issuance of debt and/or equity securities under an automatic shelf registration statement. We currently believe our liquidity and various sources of available capital are sufficient to fund operations and development commitments, meet debt service obligations, make dividend distributions, and finance potential investments. In the future, however, our ability to access the equity and/or debt markets could be limited. During such times, most of our available capital would be required to meet existing commitments. Limited access to the equity and/or debt markets could negatively impact our growth if we are unable to obtain additional capital, dispose of assets on favorable terms, or acquire health care properties on a competitive basis.

### We could incur more debt.

We operate with a policy of incurring debt when it is advisable in the opinion of our Board of Directors. As of December 31, 2022, our indebtedness represented approximately 37.4% of our gross assets. We could incur additional debt by borrowing under our unsecured revolving line of credit, mortgaging properties we own, and/or issuing debt securities in public offerings or private transactions. The degree of indebtedness could affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, or other corporate purposes and make us more vulnerable to a downturn in business or the economy generally.

### Covenants related to our indebtedness could limit our operations.

The terms of our current indebtedness as well as debt instruments that we enter into in the future are subject to customary financial and operational covenants. These include requiring us to maintain debt service coverage, leverage ratios, and minimum net worth requirements. We may be unable to maintain compliance with these covenants and, if we fail to do so, we may be unable to obtain waivers and/or amend the covenants. If some or all of our debt is accelerated and becomes immediately due and payable, we may be unable repay or refinance the debt. Our continued ability to incur debt and operate our business is subject to compliance with these covenants, which could limit operational flexibility.

***An increase in market interest rates could increase our debt cost and impact our stock price.***

We have entered into debt obligations, such as our unsecured revolving line of credit and term loans, with interest and related payments that vary with the movement of certain indices. In the future, we could incur additional indebtedness in connection with the entry into new credit facilities or the financing of acquisitions or development activity. If market interest rates increase, so could our interest costs. This could make the financing of any acquisition 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, the dividend yield on our common stock will influence its price. An increase in market interest rates could lead prospective purchasers of our common stock to expect a higher dividend yield, which could adversely affect the market price of our common stock.

***Ownership through partnerships and joint ventures could limit property performance.***

We have in the past and may in the future develop and/or acquire properties in partnerships and similar joint ventures, including those in which we own a preferred interest, when we believe circumstances warrant this type of investment. Our organizational documents do not limit the amount of available funds that we can invest in partnerships or other joint venture structures. As of December 31, 2022, we had six active joint ventures with a total LTC equity investment of $141.0 million. Investments in partnerships and joint ventures, including limited liability companies, involve risks such as the following:

- our partners could become bankrupt, in which event we and any other remaining partners would generally remain liable for the liabilities of the venture;
- our partners could have economic or other business interests or goals which are inconsistent with our business objectives;
- our partners or co-members could be in a position to take action contrary to our instructions, requests or objectives, including our policy with respect to maintaining our qualification as a REIT; and
- governing agreements often contain restrictions on the transfer of an interest or “buy-sell” or other provisions which could result in a purchase or sale of the interest at a disadvantageous time or on disadvantageous terms.

We generally will seek to maintain sufficient control of a partnerships or joint venture to permit us to achieve our business objectives. However, in the event that it fails to meet expectations or becomes insolvent, we could lose our investment in the partnership or joint venture.

### Risks Related to Our Stock

***A failure to maintain or increase our dividend could reduce the market price of our common stock.***

The decision to declare and pay dividends on our common stock, as well as the timing, amount, and composition of any future dividends, will be at the sole discretion of our Board of Directors. The ability to maintain or raise the dividend on our common stock is dependent, to a large part, on growth of funds available for distribution. This growth in turn depends upon increased revenues from additional investments and loans, rental increases, and mortgage rate increases. Any change in our dividend policy could have an adverse effect on the market price of our common stock.

### Your ownership percentage in our common stock could be diluted.

From time to time, we could issue additional shares of our common stock in connection with sales under our equity distribution agreement or other capital market transactions. These issuances could cause your percentage ownership in our common stock to be diluted in the future and could have a dilutive effect on our earnings per share and reduce the value of our common stock. Additionally, our charter authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, powers, privileges, preferences, including preferences over our common stock respecting dividends and distributions, terms of redemption and relative participation, optional or other rights, if any, of the shares of each such series of preferred stock and any qualifications, limitations or restrictions thereof, as our Board of Directors determines. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock.

### Provisions in our charter limit ownership of shares of our stock.

No more than 50% in value of the outstanding shares of a REIT can be beneficially owned, directly or indirectly, by five or fewer individuals at any time during the last half of each taxable year. To ensure qualification under this test, our charter provide that, subject to exceptions, no person is permitted to beneficially own more than 9.8% of outstanding shares of any class or series of our stock, including our common stock. Our Board of Directors could decide to exempt a person from the 9.8% ownership limit unless doing so would result in the termination of our status as a REIT. Shares of our stock in excess of the 9.8% ownership limitation that lack an applicable exemption may lose rights to dividends and voting, and may be subject to redemption. Additionally, acquisition of any shares of our stock that would result in our disqualification as a REIT may be limited or void. The 9.8% ownership limitation also could have the effect of delaying, deferring, or preventing a change in control of us, including a merger or acquisition or tender offer that might provide a premium price for holders of our stock.

### Maryland law could increase the difficulty of acquiring us.

Provisions of Maryland law, our charter, and our bylaws could have the effect of discouraging, delaying, or preventing transactions that involve an actual or threatened change in control. These provisions include the following:

- The Maryland Business Combination Act provides that unless exempted, a Maryland corporation may not engage in business combinations, including mergers, dispositions of 10% or more of its assets, certain issuances of shares of stock, and other specified transactions, with an “interested stockholder” or an affiliate of an interested stockholder for five years after the most recent date on which the interested stockholder became an interested stockholder, and thereafter unless specified criteria are met. An interested stockholder is generally a person owning or controlling, directly or indirectly, 10% or more of the voting power of the outstanding stock of a Maryland corporation. Our Board of Directors has not exempted us from this statute.
- The Maryland Control Share Acquisition Act provides that “control shares” of a corporation acquired in a control share acquisition shall have no voting rights except to the extent approved by the stockholders by a vote of two-thirds of the votes eligible to be cast on the matter under the Maryland Control Share Acquisition Act. “Control Shares” means shares of stock that, if aggregated with all other shares of stock previously acquired by the acquiror, would entitle the acquiror to exercise voting power in electing directors within certain ranges. If voting rights of control shares are not approved at a stockholder’s meeting, then subject to certain conditions and limitations, the issuer may redeem any or all of the control shares for fair value. Our bylaws contain a provision by which we have opted-out of the Maryland Control Share Acquisition Act. However, we could, by resolutions adopted by our Board of Directors and without stockholder approval, elect to become subject to the Maryland Control Share Acquisition Act.

These and other provisions of Maryland law could increase the difficulty of acquiring us, even if the acquisition would be in the best interests of our stockholders.

### General Risk Factors

### We are dependent on key personnel.

Our three executive officers and other senior officers have a significant role in our success. Our ability to retain our management group or to attract suitable replacements should any member of the management group leave is dependent on the competitive nature of the employment market. The loss of services from key members of the management group or a limitation in their availability could adversely affect our business and could be negatively perceived in the capital markets.

### Our investments are concentrated in a single sector.

Our investments are concentrated in health care properties. A downturn in the health care property sector could have a greater adverse effect on our business and financial condition than if we had investments in multiple industries and sectors. A downturn in the health care property sector also could adversely impact the ability of our operators to meet their obligations to us and maintain residents and occupancy rates. Additionally, a downturn in the health care property sector could adversely affect the value of our properties and our ability to sell properties at prices or on terms acceptable to us.

***Disruptions in the capital markets could affect the price of our common stock and our ability to obtain financing.***

The United States capital markets could experience significant price volatility, dislocations, and liquidity disruptions, due to global economic impact and infectious disease outbreaks. This has caused market prices of many securities, including our common stock, to fluctuate substantially. Uncertainty in the stock and credit markets could negatively impact our ability to access financing at reasonable terms, which could negatively impact our ability to acquire properties and otherwise pursue our investment strategy. A prolonged downturn in the stock or credit markets could cause other unknown negative impacts on us and the economy.

### Catastrophic weather and natural disasters could affect our properties.

Some of our properties are located in areas susceptible to catastrophic weather and natural disasters, including fires, snow or ice storms, windstorms or hurricanes, earthquakes, flooding, or other severe conditions. Adverse weather and natural events could cause damage to our properties. If our operators suffer losses from catastrophic weather or natural disasters, we could lose our invested capital and anticipated future revenue from the property.

### We could incur costs associated with hazardous substances and contamination.

Under various federal, state, and local environmental laws, owners or operators of real estate could be required to investigate and remediate the effects of contamination of currently or formerly owned real estate by hazardous substances, often regardless of knowledge of or responsibility for the contamination. Although our operators are primarily responsible for the condition of the property they occupy, we also could be held liable to a governmental authority or to third parties for property damage, personal injuries, and for investigation and clean-up costs incurred in connection with the contamination or we could be required to incur additional costs to change how the property is constructed or operated due to presence of such substances. The presence of hazardous substances or a failure to properly remediate any resulting contamination could adversely affect our ability to lease, mortgage, or sell an affected property.

### Information technology failures or data breaches could harm our business.

We and our operators rely on information technology systems to process, transmit, and store financial transactions and records, operator and lease data, and other confidential information. We are not aware of any material losses to our business or results of operations due to information technology failures, data breaches, or cyber-attacks. However, information technology systems are vulnerable to failure, breaches, or attacks due to improper functioning and unauthorized access from physical or electronic break-ins, computer viruses, and similar disruptions, including by hackers, foreign governments, and cyber terrorists. This risk has increased since the outbreak of the COVID-19 pandemic as we and our operators have increased reliance on information technology. We and our operators also rely on numerous third-party providers for information technology services, and we and our operators face similar risks relating to these providers. We cannot be certain that their information security protocols are sufficient to withstand a data breach or cyber-attack. The inability to maintain proper function, security, and availability of our and our operators’ information systems and the data maintained in those systems could interrupt our operations, damage our reputation, harm our business relationships, or increase our security and insurance costs. Further, an information technology failure, data breach, or cyber-attack on an operator could impact their operations and ability to perform under the terms of their lease with us. While we maintain insurance coverage that may, subject to policy terms and conditions including deductibles, cover specific aspects of information security risks, such insurance coverage may be insufficient to cover all losses. As information security risks continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and to investigate and remediate any information security vulnerabilities.

***Data privacy security failures or breaches could expose us to regulatory and other liability.***

We and our operators are subject to various federal and state laws governing privacy and security of personally identifiable information. Despite safeguards by us and our operators, a data privacy security failure or breach could occur as a result of unintentional or deliberate acts to obtain unauthorized access to information, or to destroy, manipulate, or sabotage data. Information technology failures or data breaches also could result in the loss or release of personally identifiable information. A privacy or security failure or breach could cause a loss of business, regulatory enforcement, substantial legal liability, and reputational harm. Where the failure or breach affects an operator, this could jeopardize the operator’s ability to fulfill its obligations to us. Further, the adoption of new privacy and security laws at the federal and state level could require us and our operators to incur significant compliance costs.

## Properties

As filed, 7,681 characters.

*Here and throughout this Annual Report on Form 10-K wherever we provide details of our properties’ bed/unit count, the number of beds/units applies to skilled nursing, assisted living, independent living, memory care and behavioral health care properties only. This number is based upon unit/bed counts shown on operating licenses provided to us by lessees/borrowers or units/beds as stipulated by lease/mortgage documents. These numbers often differ, usually not materially by property, from units/beds in operation at any point in time. The differences are caused by such things as operators converting a patient/resident room for alternative uses, such as offices or storage, or converting a multi-patient room/unit into a single patient room/unit. We monitor our properties on a routine basis through site visits and reviews of current licenses. In an instance where such change would cause a de-licensing of beds or in our opinion impact the value of the property, we may take action against the lessee/borrower to preserve the value of the property/collateral.*

*Owned Properties.* The following table sets forth certain information regarding our owned properties as of December 31, 2022 (*dollars amounts in thousands):*

| ​ ​ ​ Location | ​ ​ ​ | ​ ​ No. of ALFs | ​ ​ ​ | ​ ​ No. of SNFs | ​ ​ ​ | ​ ​ No. of Others | ​ ​ ​ | ​ ​ No. of Beds/Units | ​ ​ ​ | ​ ​ ​ ​ ​ ​ Encumbrances | ​ ​ ​ | ​ Remaining Lease Term (1) | ​ ​ ​ | ​ ​ ​ ​ Gross Investments | ​ ​ ​ ​ | ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | --- |
| Alabama |  | — |  | 1 | ​ | — | ​ | 174 | ​ | $— | ​ | 40 | ​ | $9,734 | ​ | ​ |
| Arizona |  | — |  | 3 | ​ | — | ​ | 613 | ​ | — | ​ | 20 | ​ | 28,496 | ​ | ​ |
| California |  | 3 |  | 1 | ​ | — | ​ | 402 | ​ | — | ​ | 70 | ​ | 69,685 | ​ | ​ |
| Colorado |  | 13 |  | — | ​ | — | ​ | 705 | ​ | — | ​ | 58 | ​ | 104,795 | ​ | ​ |
| Florida |  | 6 |  | 4 | ​ | — | ​ | 762 | ​ | — | ​ | 36 | ​ | 67,816 | ​ | ​ |
| Georgia |  | 1 |  | — | ​ | — | ​ | 70 | ​ | — | ​ | 18 | ​ | 14,493 | ​ | ​ |
| Illinois |  | 5 |  | — | ​ | — | ​ | 418 | ​ | — | ​ | 101 | ​ | 88,347 | ​ | ​ |
| Kansas |  | 8 |  | — | ​ | — | ​ | 431 | ​ | — | ​ | 72 | ​ | 57,928 | ​ | ​ |
| Kentucky |  | 1 |  | 2 | ​ | — | ​ | 346 | ​ | — | ​ | 105 | ​ | 61,731 | ​ | ​ |
| Michigan |  | 2 |  | — | ​ | — | (2)​ | 156 | ​ | — | ​ | 92 | ​ | 22,387 | ​ | ​ |
| Mississippi |  | 1 |  | — | ​ | — | ​ | 67 | ​ | — | ​ | 18 | ​ | 9,452 | ​ | ​ |
| Missouri | ​ | 1 | ​ | 2 | ​ | — | ​ | 253 | ​ | ​ — | ​ | 90 | ​ | ​ 52,952 | ​ | ​ |
| Nebraska |  | 3 |  | — | ​ | — | ​ | 117 | ​ | — | ​ | 7 | ​ | 7,633 | ​ | ​ |
| Nevada | ​ | — | ​ | — | ​ | 1 | ​ | 118 | ​ | ​ — | ​ | 26 | ​ | ​ 10,975 | ​ | ​ |
| New Jersey |  | 4 |  | — | ​ | — | ​ | 205 | ​ | — | ​ | 57 | ​ | 62,832 | ​ | ​ |
| New Mexico |  | — |  | 7 | ​ | — | ​ | 843 | ​ | — | ​ | 37 | ​ | 50,912 | ​ | ​ |
| N. Carolina |  | 5 |  | — | ​ | — | ​ | 210 | ​ | — | ​ | 12 | ​ | 14,318 | ​ | ​ |
| Ohio |  | 7 |  | 2 | ​ | — | ​ | 580 | ​ | — | ​ | 99 | ​ | 87,569 | ​ | ​ |
| Oklahoma |  | 6 |  | — | ​ | — | ​ | 219 | ​ | — | ​ | 12 | ​ | 13,080 | ​ | ​ |
| Oregon |  | 2 |  | 1 | ​ | — | ​ | 266 | ​ | — | ​ | 77 | ​ | 38,279 | ​ | ​ |
| Pennsylvania |  | 2 |  | — | ​ | — | ​ | 130 | ​ | — | ​ | 7 | ​ | 9,744 | ​ | ​ |
| S. Carolina |  | 5 |  | 2 | ​ | — | ​ | 515 | ​ | — | ​ | 32 | ​ | 49,735 | ​ | ​ |
| Tennessee |  | — |  | 2 | ​ | — | ​ | 141 | ​ | — | ​ | 12 | ​ | 5,275 | ​ | ​ |
| Texas |  | 17 |  | 20 | ​ | — | ​ | 3,268 | ​ | — | ​ | 36 | ​ | 327,490 | ​ | ​ |
| Virginia |  | — |  | 4 | ​ | — | ​ | 500 | ​ | — | ​ | 37 | ​ | 30,209 | ​ | ​ |
| Wisconsin |  | 7 |  | 1 | ​ | — | ​ | 690 | ​ | — | ​ | 86 | ​ | 114,838 | ​ | ​ |
| **TOTAL** |  | 99 |  | 52 | ​ | 1 | ​ | 12,199 | ​ | $— | ​ | 59 | ​ | $1,410,705 | ​ | ​ |

(1) Weighted average remaining months in lease term as of December 31, 2022.

(2) Includes three parcels of land held-for-use.

The following chart represents the 10 states with the highest percentage of gross investment for our owned properties as of December 31, 2022:

The following table sets forth certain information regarding our lease expirations for our owned properties as of December 31, 2022 *(dollars amounts in thousands):*

| ​ ​ ​ ​ ​ Year ​ | ​ ​ No. of SNFs | ​ ​ ​ | ​ ​ No. of ALFs | ​ ​ ​ | ​ ​ ​ No. of ​ Others ​ | ​ ​ No. of Beds/Units | ​ ​ ​ | ​ ​ No. of Operators | ​ ​ ​ | ​ ​ Annualized Rental Income (1) | ​ ​ ​ | ​ ​ % of Annualized Rental Income Expiring |
| --- | ---: | --- | ---: | --- | ---: | ---: | --- | ---: | --- | --- | --- | ---: |
| 2023 (2) | 4 |  | 43 |  | — | 2,234 |  | 6 | ​ | $19,143 |  | 16.4% |
| 2024 | 14 |  | 14 |  | — | 2,775 |  | 4 | ​ | ​ 8,359 |  | 7.2% |
| 2025 | 6 |  | 1 |  | 1 | 981 |  | 2 | ​ | ​ 9,120 |  | 7.8% |
| 2026 | 15 |  | — |  | — | 1,889 |  | 3 | ​ | ​ 18,072 |  | 15.5% |
| 2027 | — |  | 9 |  | — | 611 |  | 3 | ​ | ​ 11,341 |  | 9.8% |
| 2028 | 1 |  | 1 |  | — | 188 |  | 2 | ​ | ​ 1,965 |  | 1.7% |
| 2029 | 2 |  | 4 |  | — | 656 |  | 4 | ​ | ​ 7,311 |  | 6.3% |
| 2030 | 1 |  | 9 |  | — | 668 |  | 3 | ​ | ​ 8,715 |  | 7.5% |
| 2031 | — |  | 17 |  | — | 1,146 |  | 3 | ​ | ​ 15,316 |  | 13.2% |
| 2032 | 5 |  | — |  | — | 429 |  | 2 | ​ | ​ 5,843 |  | 5.0% |
| Thereafter | 4 |  | — |  | — | 574 |  | 1 | ​ | ​ 11,195 |  | 9.6% |
| **TOTAL** | 52 | ​ | 98 | (3)​ | 1 | 12,151 | (3)​ | ​ | ​ | $116,380 | ​ | 100.0% |

(1) Represents annualized contractual GAAP rent for leased properties, excluding variable rental income from lessee reimbursement of our real estate taxes for investments as of December 31, 2022.

(2) Subsequent to December 31, 2022, a master lease covering two SNFs that was scheduled to mature in 2023 was renewed at the contractual rate for another five years extending the maturity to November 2028. The centers have a total 216 beds and are located in Florida.

(3) Excludes a 48-unit closed ALF located in Colorado.

29

*Mortgage Loans.* The following table sets forth certain information regarding our mortgage loans as of December 31, 2022 (*dollars amounts in thousands):*

| ​ ​ ​ Location | ​ ​ ​ | ​ ​ No. of SNFs (1) | ​ ​ ​ | ​ ​ No. of ALFs (1) | ​ ​ ​ | ​ ​ No. of OTHs (1) | ​ ​ ​ | ​ ​ No. of Beds/ Units | ​ ​ ​ | ​ ​ Interest Rate | ​ ​ ​ | ​ Average Months to Maturity | ​ ​ ​ | ​ ​ Original Face Amount of Mortgage Loans | ​ ​ ​ | ​ ​ ​ ​ Gross Investments | ​ ​ ​ | ​ ​ Current Annual Debt Service (2) | ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | --- | --- | --- | --- | --- | --- |
| Florida | ​ | — | ​ | 1 | ​ | — | ​ | 68 | ​ | 7.75% | ​ | 32 | ​ | $13,123 | ​ | $14,308 | ​ | $1,101 | ​ |
| Louisiana |  | 1 |  | — |  | — |  | 189 |  | 7.5% |  | 21 | ​ | 27,347 | ​ | 29,347 | ​ | 2,232 | ​ |
| Michigan |  | 22 |  | — |  | — |  | 2,702 |  | 9.6%-10.6% | ​ | 256 | ​ | ​ 264,370 | ​ | ​ 258,003 | ​ | ​ 26,657 | ​ |
| Missouri | ​ | — | ​ | — | ​ | — | ​ | — | ​ | 7.5% | ​ | 6 | ​ | ​ 1,886 | ​ | ​ 1,886 | ​ | ​ 143 | ​ |
| North Carolina (3) | ​ | — | ​ | 16 | ​ | — | ​ | 695 | ​ | 7.25% | ​ | 37 | ​ | ​ 81,437 | ​ | ​ 85,328 | ​ | ​ 6,394 | ​ |
| South Carolina (3) | ​ | — | ​ | 1 | ​ | — | ​ | 45 | ​ | 7.25% | ​ | 35 | ​ | ​ 4,529 | ​ | ​ 4,786 | ​ | ​ 360 | ​ |
| **TOTAL** |  | 23 |  | 18 |  | — |  | 3,699 | ​ | ​ | ​ | 179 | ​ | $392,692 | ​ | $393,658 | ​ | $36,887 | ​ |

(1) Consists of ten mortgage loans in six states with five borrowers.

(2) Includes principal and interest payments.

(3) Represents a single mortgage loan secured by 13 ALFs. The mortgage loan was allocated by state for reporting purposes only.

## Legal proceedings

As filed, 822 characters.

We are and may become from time to time a party to various claims and lawsuits arising in the ordinary course of our business, which in our opinion are not singularly or in the aggregate anticipated to be material to our results of operations or financial condition. Claims and lawsuits may include matters involving general or professional liability asserted against the lessees or borrowers of our properties, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder. We believe that these matters are the responsibility of our lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable leases or mortgages. We intend to continue to vigorously defend such claims and lawsuits.

## Management's discussion and analysis

As filed, 76,635 characters.

### Executive Overview

### Business and Investment Strategy

We are a real estate investment trust (“REIT”) that invests in seniors housing and health care properties through sale-leasebacks, financing leases, mortgage financing, joint ventures and structured finance solutions including preferred equity and mezzanine lending. We seek to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. Our primary seniors housing and health care property classifications include skilled nursing facilities (“SNF”), assisted living facilities (“ALF”), independent living facilities (“ILF”), memory care communities (“MC”) and combinations thereof. We also invest in other (“OTH”) types of properties, such as land parcels, projects under development (“UDP”) and behavioral health care hospitals. To meet these objectives, we attempt to invest in properties that provide opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment.

We conduct and manage our business as one operating segment for internal reporting and internal decision-making purposes. For purposes of this Annual Report on Form 10-K and other presentations, we generally include ALF, ILF, and MC in the ALF property classification. We have been operating since August 1992.

The following graph summarizes our gross investments as of December 31, 2022:

Substantially all of our revenues and sources of cash flows from operations are derived from operating lease rentals, interest earned on outstanding loans receivable and income from investments in unconsolidated joint ventures. Our investments in owned properties, financing leases, mortgage loans, mezzanine loans and preferred equity investments represent our primary source of liquidity to fund distributions and are dependent upon the performance of the operators on their lease and loan obligations and the rates earned thereon. To the extent that the operators experience operating difficulties and are unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. To mitigate this risk, we monitor our investments through a variety of methods determined by property type and operator. Our monitoring process includes periodic review of financial statements for each facility, periodic review of operator credit, scheduled property inspections and review of covenant compliance.

In addition to our monitoring and research efforts, we also structure our investments to help mitigate payment risk. Some operating leases, financing leases and loans are credit enhanced by guaranties and/or letters of credit. In addition, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other loans, operating leases or agreements between us and the operator and its affiliates.

Depending upon the availability and cost of external capital, we anticipate making additional investments in health care related properties. New investments are generally funded from cash on hand, temporary borrowings under our unsecured revolving line of credit and internally generated cash flows. Our investments generate internal cash from rent and interest receipts and principal payments on mortgage loans receivable. Permanent financing for future investments, which replaces funds drawn under our unsecured revolving line of credit, is expected to be provided through a combination of public and private offerings of debt and equity securities and secured and unsecured debt financing. The timing, source and amount of cash flows provided by financing activities and used in investing activities are sensitive to the capital markets’ environment, especially to changes in interest rates. Changes in the capital markets’ environment may impact the availability of cost-effective capital.

We believe our business model has enabled and will continue to enable us to maintain the integrity of our property investments, including in response to financial difficulties that may be experienced by operators. Traditionally, we have taken a conservative approach to managing our business, choosing to maintain liquidity and exercise patience until favorable investment opportunities arise.

### COVID-19

On March 11, 2020, the World Health Organization declared the outbreak of coronavirus (“COVID-19”) as a pandemic, and on March 13, 2020, the United States declared a national emergency with regard to COVID-19. The COVID-19 pandemic has had repercussions across regional and global economies and financial markets. The outbreak of COVID-19 in many countries, including the United States, has significantly and adversely impacted public health and economic activity, and has contributed to significant volatility, dislocations and liquidity disruptions in financial markets.

The operations and occupancy levels at our properties have been adversely affected by COVID-19 and could be further adversely affected by COVID-19 or another pandemic especially if there are infections on a large scale at our properties. The impact of COVID-19 has included, and another pandemic could include, early resident move-outs, our operators delaying accepting new residents due to quarantines or admission suspensions, potential occupants postponing moves to our operators’ facilities, and/or hospitals cancelling or significantly reducing elective surgeries thereby there were fewer people in need of skilled nursing care. Additionally, as our operators have responded to the pandemic, operating costs have begun to rise. A decrease in occupancy, ability to collect rents from residents and/or increase in operating costs could have a material adverse effect on the ability of our operators to meet their financial and other contractual obligations to us, including the payment of rent or interest. In recognition of the pandemic impact affecting our operators, we provided assistance in form of rent abatements and rent deferrals and may continue to provide assistance as needed.

### Portfolio Overview

The following tables summarize our real estate investment portfolio as of December 31, 2022 (*dollar amounts in thousands):*

| ​ ​ ​ ​ ​ Owned Properties | ​ ​ ​ ​ ​ ​ | ​ ​ ​ ​ Number of Properties (1) | ​ ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of SNF ​ ALF Beds (2) ​ Units (2) | ​ ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross ​ Investments ​ | ​ ​ ​ ​ ​ ​ Percentage ​ of ​ Investments ​ | ​ ​ ​ ​ ​ ​ | ​ ​ Twelve Months Ended December 31, 2022 ​ ​ Rental Revenue | ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Percentage ​ of Total ​ Revenues ​ | ​ ​ ​ ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | --- | ---: | --- | --- | --- | --- | ---: | --- |
| Assisted Living | ​ | 99 | ​ | — ​ 5,497 | ​ | $797,813 ​ | 40.7% | ​ | $53,923 | ​ | ​ | 34.1% | ​ |
| Skilled Nursing | ​ | 52 | ​ | 6,348 ​ 236 | ​ | ​ 600,974 ​ | 30.7% | ​ | ​ 55,126 | ​ | ​ | 34.8% | ​ |
| Other (3) | ​ | 1 | ​ | 118 ​ — | ​ | ​ 11,918 ​ | 0.6% | ​ | ​ 991 | ​ | ​ | 0.6% | ​ |
| **Total Owned Properties** | ​ | 152 | ​ | 6,466 ​ 5,733 | ​ | ​ 1,410,705 ​ | 72.0% | ​ | ​ 110,040 | (5)​ | ​ | 69.5% | ​ |
| **​** | ​ | ​ | ​ | ​ ​ ​ | ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ | ​ |
| **​** | ​ | ​ | ​ | **Number of** | ​ | ​ ​ ​ | **Percentage** ​ | ​ | **Interest Income** | ​ | ​ | **Percentage** ​ | ​ |
| **​** | ​ | **Number of** | ​ | **SNF** ​ **ALF** | ​ | ​ **Gross** **​** | **of** ​ | ​ | **from Financing** | ​ | ​ | **of Total** ​ | ​ |
| **Financing Receivable** | ​ | **Properties (1)** | ​ | **Beds** **​** **Units** | ​ | ​ **Investments** **​** | **Investments** ​ | ​ | **Receivable** | ​ | ​ | **Revenues** ​ | ​ |
| Skilled Nursing | ​ | 3 | ​ | 299 ​ — | ​ | ​ 76,767 ​ | 3.9% | ​ | ​ 1,762 | ​ | ​ | 1.1% | ​ |
| **Total Financing Receivable** | ​ | 3 | ​ | 299 ​ — | ​ | ​ 76,767 ​ | 3.9% | ​ | ​ 1,762 | ​ | ​ | 1.1% | ​ |
| **​** | ​ | ​ | ​ | ​ ​ ​ | ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ | ​ |
| **​** | ​ | ​ | ​ | **Number of** | ​ | ​ ​ ​ | **Percentage** ​ | ​ | **Interest Income** | ​ | ​ | **Percentage** ​ | ​ |
| ​ | ​ | **Number of** | ​ | **SNF** ​ **ALF** | ​ | ​ **Gross** **​** | **of** ​ | ​ | **from Mortgage** | ​ | ​ | **of Total** ​ | ​ |
| **Mortgage Loans** | ​ | **Properties (1)** | ​ | **Beds** **​** **Units** | ​ | ​ **Investments** **​** | **Investments** ​ | ​ | **Loans** | ​ | ​ | **Revenues** ​ | ​ |
| Assisted Living | ​ | 18 | ​ | — ​ 808 | ​ | ​ 103,626 ​ | 5.4% | ​ | ​ 6,730 | ​ | ​ | 4.3% | ​ |
| Skilled Nursing | ​ | 23 | ​ | 2,891 ​ — | ​ | ​ 287,349 ​ | 14.6% | ​ | ​ 33,692 | ​ | ​ | 21.3% | ​ |
| Other (4) | ​ | — | ​ | — ​ — | ​ | ​ 2,683 ​ | 0.1% | ​ | ​ 178 | ​ | ​ | 0.1% | ​ |
| **Total Mortgage Loans** | ​ | 41 | ​ | 2,891 ​ 808 | ​ | ​ 393,658 ​ | 20.1% | ​ | ​ 40,600 | ​ | ​ | 25.7% | ​ |
| **​** | ​ | ​ | ​ | ​ ​ ​ | ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ | ​ |
| **​** | ​ | ​ | ​ | **Number of** | ​ | ​ ​ ​ | **Percentage** ​ | ​ | **Interest** | ​ | ​ | **Percentage** ​ | ​ |
| **​** | ​ | **Number of** | ​ | **SNF** ​ **ALF** | ​ | ​ **Gross** **​** | **of** ​ | ​ | **and other** | ​ | ​ | **of Total** ​ | ​ |
| **Notes Receivable** | ​ | **Properties (1)** | ​ | **Beds** **​** **Units** | ​ | ​ **Investments** **​** | **Investments** ​ | ​ | **Income** | ​ | ​ | **Revenues** ​ | ​ |
| Assisted Living | ​ | 7 | ​ | — ​ 961 | ​ | ​ 43,662 ​ | 2.2% | ​ | ​ 3,590 | ​ | ​ | 2.3% | ​ |
| Skilled Nursing | ​ | — | ​ | — ​ — | ​ | ​ 15,311 ​ | 0.8% | ​ | ​ 720 | ​ | ​ | 0.4% | ​ |
| **Total Notes Receivable** | ​ | 7 | ​ | — ​ 961 | ​ | ​ 58,973 ​ | 3.0% | ​ | ​ 4,310 | ​ | ​ | 2.7% | ​ |
| **​** | ​ | ​ | ​ | ​ ​ ​ | ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ | ​ |
| **​** | ​ | ​ | ​ | **Number of** | ​ | ​ ​ ​ | **Percentage** ​ | ​ | **Income from** | ​ | ​ | **Percentage** ​ | ​ |
| **​** | ​ | **Number of** | ​ | **SNF** ​ **ALF** | ​ | ​ **Gross** | **of** ​ | ​ | **Unconsolidated** | ​ | ​ | **of Total** ​ | ​ |
| **Unconsolidated Joint Ventures** | ​ | **Properties (1)** | ​ | **Beds** **​** **Units** | ​ | ​ **Investments** | **Investments** ​ | ​ | **Joint Ventures** | ​ | ​ | **Revenues** ​ | ​ |
| Assisted Living | ​ | 1 | ​ | — ​ 95 | ​ | ​ 6,340 ​ | 0.3% | ​ | ​ 450 | ​ | ​ | 0.3% | ​ |
| Under Development | ​ | — | ​ | — ​ — | ​ | ​ 13,000 ​ | 0.7% | ​ | ​ 1,054 | ​ | ​ | 0.7% | ​ |
| **Total Unconsolidated Joint Ventures** | ​ | 1 | ​ | — ​ 95 | ​ | ​ 19,340 ​ | 1.0% | ​ | ​ 1,504 | ​ | ​ | 1.0% | ​ |
| **​** | ​ | ​ | ​ | ​ ​ ​ | ​ | ​ ​ ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ | ​ |
| **Total Portfolio** | ​ | 204 | ​ | 9,656 ​ 7,597 | ​ | $1,959,443 ​ | 100.0% | ​ | $158,216 | ​ | ​ | 100.0% | ​ |

| ​ ​ ​ Summary of Properties by Type | ​ ​ ​ ​ | ​ Number of Properties (1) | ​ ​ ​ ​ | ​ Number of SNF Beds (2) | ​ ​ ​ | ​ ALF Units (2) | ​ ​ ​ ​ | ​ ​ ​ ​ Gross Investments | ​ ​ ​ ​ | ​ ​ Percentage ​ of ​ Investments ​ | ​ ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | --- | --- | ---: | --- |
| Skilled Nursing | ​ | 78 | ​ | 9,538 | ​ | 236 | ​ | $980,401 | ​ | 50.0% | ​ |
| Assisted Living | ​ | 125 | ​ | — | ​ | 7,361 | ​ | ​ 951,441 | ​ | 48.6% | ​ |
| Under Development | ​ | — | ​ | — | ​ | — | ​ | ​ 13,000 | ​ | 0.7% | ​ |
| Other (3) (4) | ​ | 1 | ​ | 118 | ​ | — | ​ | ​ 14,601 | ​ | 0.7% | ​ |
| **Total Portfolio** | ​ | 204 | ​ | 9,656 | ​ | 7,597 | ​ | $1,959,443 | ​ | 100.0% | ​ |

(1) We have investments in owned properties, financing receivable, mortgage loans, notes receivable and unconsolidated joint ventures in 29 states to 32 different operators.

(2) See *Item 2. Properties* for discussion of bed/unit count.

(3) Includes three parcels of land held-for-use and one behavioral health care hospital.

(4) Includes one parcel of land in Missouri securing a first mortgage held for future development of a post-acute SNF and one parcel of land in North Carolina securing a first mortgage held for future development of a seniors housing community.

(5) Excludes $15,459 variable rental income from lessee reimbursement of our real estate taxes and $2,745 rental income from sold properties.

As of December 31, 2022, we had $1.6 billion in carrying value of net investments, consisting of $1.0 billion or 65.2% invested in owned and leased properties, $76.0 million or 4.9% invested in financing receivable, $0.4 billion or

24.9% invested in mortgage loans secured by first mortgages, $58.4 million or 3.7% in notes receivable and $19.3 million or 1.3% in unconsolidated joint ventures.

Rental income, income from financing receivable and interest income from mortgage loans represented 73.2%, 1% and 23.2%, respectively, of *Total revenues* on the *Consolidated Statements of Income* for the year ended December 31, 2022. In most instances, our lease structure contains annual rental escalations. Our leases that contain fixed annual rental escalations and/or have annual rental escalations that are contingent upon changes in the Consumer Price Index or the Medicare Market Basket Rate, are generally recognized on a straight-line basis over the minimum lease period. Certain leases have annual rental escalations that are contingent upon changes in the gross operating revenues of the property. This revenue is not recognized until the appropriate contingencies have been resolved. For the year ended December 31, 2022, we recognized a $1.4 million straight-line rental adjustment reflecting higher cash rent received than recorded as rental income and $1.1 million in amortization and write-off of lease incentives. For the remaining leases in place at December 31, 2022, assuming no modification or replacement of existing leases and no new leased investments are added to our portfolio, except for the potential subsequent lease extensions and the leases reported below under *Update on Certain Operators*, we currently expect that the non-cash straight-line rent portion of rental income will decrease from negative $1.4 million in 2022 to negative $1.9 million for projected annual 2023 which represents higher cash rent received than recorded as rental income. Our cash rental income is projected to increase from $130.7 million in 2022 to $120.8 million for projected annual 2023. At December 31, 2022, the straight-line rent receivable balance on the consolidated balance sheet was $21.8 million.

Many of our existing leases contain renewal options that, if exercised, could result in the amount of rent payable upon renewal being greater or less than that currently being paid. During the year ended December 31, 2022, we renewed one lease covering a 99-bed skilled nursing center in Oregon and a master lease covering 11 skilled nursing centers in Texas with a total of 1,444 beds. See *Update on Certain Operators and Former Operators* below for discussion regarding renewal of a master lease subsequent to December 31, 2022.

Some of our lease agreements provide purchase options allowing the lessees to purchase the properties they currently lease from us. See *Item 8. FINANCIAL STATEMENTS— Note 5. Real Estate Investments. Owned Properties* for a table that includes information about purchase options included in our lease agreements.

#### Update on Certain Operators and Former Operators

#### Anthem Memory Care

Anthem Memory Care (“Anthem”) operates 11 memory care communities under a master lease and was placed in default in 2017 resulting from Anthem’s partial payment of its minimum rent. However, we did not enforce our rights and remedies pertaining to the event of default, under the stipulation that Anthem achieves sufficient performance and pays agreed upon rent. Anthem increased their rent payment every year between 2017 and 2021. During the second and third quarter of 2022, we agreed to a certain temporary rent reduction totaling $1.5 million. During the fourth quarter of 2022, we received payment of Anthem’s $1.5 million temporary rent reduction and a return to Anthem’s previously agreed upon rent of $0.9 million per month. Accordingly, Anthem paid us the agreed upon annual cash rent of $10.8 million in 2022. Anthem is current on agreed upon rent payments through January and February 2023. We receive regular financial performance updates from Anthem and continue to monitor their performance obligations under the master lease agreement.

#### Brookdale Senior Living Communities, Inc

The Brookdale master lease matures on December 31, 2023 and provides three renewal options consisting of a two-year renewal option, a five-year renewal option and a 10-year renewal option. The first renewal option expires on February 28, 2023. The master lease provides Brookdale a $4.0 million capital commitment, which matures on February 28, 2023, at a yield of 7% with a reduced rate for qualified ESG projects. During the fourth quarter of 2022, we funded $1.5 million under Brookdale’s capital commitment. Accordingly, we have a remaining commitment of $0.9 million. Brookdale is current on rent payments through January and February 2023.

#### Other Operators

During the third quarter of 2022, we terminated a master lease with an operator and transitioned the communities to an existing LTC operator. In connection with the lease termination, we abated rent for June 2022 and have forgiven the former operator’s outstanding deferred rent balance of $7.1 million. Also, we paid the former operator a $0.5 million lease termination fee in exchange for cooperation and assistance in facilitating an orderly transition. The transitioned communities are operated pursuant to a new master lease with a two-year term, with zero rent for each of July, August, September, and October of 2022. Thereafter, cash rent is based on mutually agreed upon fair market rent. In conjunction with the new master lease, we paid the new operator a $0.4 million lease incentive payment which will be amortized as a yield adjustment to rental income over the two-year lease term. LTC is evaluating options for this portfolio.

A master lease covering two assisted living communities is scheduled to mature during 2023. One of the two communities is located in Kentucky. During the third quarter of 2022, we classified this community as held-for-sale and recorded an impairment loss of $1.3 million as a result of our decision to sell the community below our carrying value. We are negotiating a new lease for the other community which is located in Ohio.

Subsequent to December 31, 2022, a master lease covering two skilled nursing centers that was scheduled to mature in 2023 was renewed at the contractual rate for another five years extending the maturity to November 2028. The centers have a total 216 beds and are located in Florida.

#### Senior Care Centers, LLC – Former Operator

Senior Care Centers, LLC and affiliates and subsidiaries (“Senior Care”) filed for Chapter 11 bankruptcy in December 2018. During 2019, while in bankruptcy, Senior Care assumed LTC’s master lease and, in March 2020, Senior Care emerged from bankruptcy. Concurrent with their emergence from bankruptcy, in accordance with the order confirming Senior Care’s plan of reorganization, Abri Health Services, LLC (“Abri Health”) was formed as the parent company of reorganized Senior Care and became co-tenant and co-obligor with reorganized Senior Care under our master lease. In March 2021, Senior Care and Abri Health (collectively, “Lessee”) failed to pay rent and additional obligations owed under the master lease. Accordingly, we sent the lessee a notice of default and applied proceeds from letters of credit to certain obligations owed under the master lease. Furthermore, we sent the Lessee a notice of termination of the master lease to be effective April 17, 2021. On April 16, 2021, the Lessee filed for Chapter 11 bankruptcy. In August 2021, the United States Bankruptcy Court approved a settlement agreement between Lessee and LTC. The settlement provided for, among other things, a one-time payment of $3.3 million from LTC to the affiliates of Lessee in exchange for cooperation and assistance in facilitating an orderly transition of the 11 skilled nursing centers from the Lessee and its affiliates to affiliates of HMG Healthcare, LLC (“HMG”) which occurred on October 1, 2021. As of October 1, 2021, Senior Care and Abri Health no longer operate any properties in our portfolio.

#### Senior Lifestyle Corporation

During 2020, an affiliate of Senior Lifestyle (“Senior Lifestyle”) failed to pay its contractual obligations under its master lease. As a result, we applied their letter of credit and deposits to past due rent and to their outstanding notes receivable. Senior Lifestyle did not pay rent or its other obligations under the master lease since 2021. During 2021, we transitioned 18 assisted living communities previously leased to Senior Lifestyle to six operators. These communities are located in Illinois, Ohio, Wisconsin, Colorado, Pennsylvania and Nebraska. Also, during 2021, we sold three Wisconsin communities and a closed community in Nebraska previously leased to Senior Lifestyle for a combined total of $35.9 million. We received total proceeds of $34.8 million and recorded a net gain on sale of $5.4 million. During 2022, an assisted living community located in Colorado, which transitioned from Senior Lifestyle to a new operator during the first quarter of 2021, was closed and the lease was terminated. Additionally, during 2022, we transitioned the remaining community located in New Jersey under the Senior Lifestyle master lease to an existing operator. Accordingly, as of December 31, 2022, Senior Lifestyle does not operate any properties in our portfolio.

### 2022 Transactions Overview

The following tables summarizes our transactions in 2022 *(dollar amounts in thousand):*

#### Investment in Owned Properties

| ​ ​ ​ State | ​ ​ ​ ​ | ​ Number of Properties | ​ ​ ​ ​ | ​ Type of Properties | ​ ​ ​ ​ | ​ Number of Beds/Units | ​ ​ ​ ​ | ​ ​ Initial ​ Cash ​ Yield ​ | ​ ​ ​ ​ | ​ ​ ​ ​ ​ Purchase ​ Price | ​ ​ ​ ​ | ​ ​ ​ Total ​ Transaction ​ Costs | ​ ​ ​ ​ | ​ ​ ​ Total ​ Acquisition ​ Costs | ​ ​ ​ ​ |
| --- | --- | ---: | --- | --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- |
| Texas (1) | ​ | 4 | ​ | SNF | ​ | 339 | ​ | 8.0% | ​ | $51,534 | ​ | $283 | ​ | $51,817 | ​ |

(1) The properties are leased to an affiliate of an existing operator under a 10-year lease with two 5-year renewal options. Additionally, the lease allows the operator to elect for either an earn-out payment or purchase option. If neither option is elected within the timeframe defined in the lease, both elections are terminated. The earn-out payment is available, contingent on achieving certain thresholds per the lease, beginning at the end of the second lease year through the end of the fifth lease year. The purchase option is available beginning in the sixth lease year through the end of the seventh lease year. The initial cash yield is 8% for the first lease year increasing to 8.25% for the second year, then increases annually by 2.0% to 4.0% based on the change in the Medicare Market Basket Rate. In connection with the transition, we provided the lessee a 10-year working capital loan for up to $2,000 at 8% for the first year, increasing to 8.25% for the second year, then increasing annually with the lease rate. At December 31, 2022, the working capital loan had an outstanding balance of $1,642.

#### Investment in Development and Improvement Projects

| ​ ​ | ​ ​ | ​ ​ Developments | ​ ​ | ​ ​ Improvements |
| --- | --- | ---: | --- | ---: |
| Assisted Living Communities | ​ | $105 | ​ | $5,538 |
| Skilled Nursing Centers | ​ | ​ — | ​ | ​ 2,897 |
| Other | ​ | ​ — | ​ | ​ 559 |
| Total | ​ | $105 | ​ | $8,994 |

#### Sold Properties

| ​ ​ ​ State | ​ ​ ​ ​ | ​ Type of Properties | ​ ​ ​ ​ | ​ Number of Properties | ​ ​ ​ ​ | ​ Number of Beds/Units | ​ ​ ​ ​ | ​ ​ ​ ​ ​ Sales ​ Price | ​ ​ ​ ​ | ​ ​ ​ ​ ​ Carrying ​ Value | ​ ​ ​ ​ | ​ ​ ​ ​ ​ Net ​ Gain (Loss) (1) | ​ ​ ​ ​ |
| --- | --- | --- | --- | ---: | --- | ---: | --- | --- | --- | --- | --- | --- | --- |
| California | ​ | ALF | ​ | 2 | ​ | 232 | ​ | $43,715 | ​ | $17,832 | ​ | $25,867 | ​ |
| California | ​ | SNF | ​ | 1 | ​ | 121 | ​ | ​ 13,250 | ​ | ​ 1,846 | ​ | ​ 10,846 | ​ |
| Texas | ​ | SNF | ​ | 1 | ​ | — | ​ | ​ 485 | ​ | ​ 697 | ​ | ​ (441) | ​ |
| Virginia | ​ | ALF | ​ | 1 | ​ | 74 | ​ | ​ 16,895 | ​ | ​ 15,549 | ​ | ​ 1,344 | (2)​ |
| n/a | ​ | n/a | ​ | — | ​ | — | ​ | ​ — | ​ | ​ — | ​ | ​ 214 | (3)​ |
| ​ | ​ | ​ | ​ | 5 | ​ | 427 | ​ | $74,345 | ​ | $35,924 | ​ | $37,830 | ​ |

(1) Calculation of net gain (loss) includes cost of sales and write-off of straight-line rent receivable and lease incentives, when applicable.

(2) In connection with this sale, the former operator paid us a lease termination fee of $1,181 which is not included in the gain on sale.

(3) We recognized additional gain due to the reassessment adjustment of the holdbacks related to properties sold during 2020 and 2019, under the expected value model per ASC Topic 606, *Contracts with Customers.*

#### Financing Receivable

*Financing Receivable.* During 2022, we entered into a joint venture and contributed $61.7 million into the JV that purchased three skilled nursing centers located in Florida for $75.8 million. Our JV partner contributed the remaining $14.3 million of equity. The JV leased the centers back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year. Accordingly, the transaction has been accounted for as a *Financing receivable* on our *Consolidated Balance Sheets.* During 2022, we recognized $1.8 million of *Interest income from financing receivable* on our *Consolidated Statements of Income*. Additionally, we recorded $0.8 million provision for expected loan losses during 2022.

Subsequent to December 31, 2022, we entered into a $121.3 million JV with an affiliate of an existing operator and contributed $117.9 million into the JV that purchased 11 assisted living and memory care communities from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit Internal Rate of Return (“IRR”) of 9.0%. In accordance with GAAP, the communities acquired by the JV are required to be presented as a *Financing receivable* on our *Consolidated Balance Sheets.*

#### Investment in Mortgage Loans

| ​ | ​ | ​ ​ | ​ |
| --- | --- | --- | --- |
| Originations and funding under mortgage loans receivable | ​ | $40,732 | (1) (2)​ |
| Application of interest reserve | ​ | ​ 6,192 | ​ |
| Scheduled principal payments received | ​ | ​ (1,175) | ​ |
| Mortgage loan premium amortization | ​ | ​ (6) | ​ |
| Provision for loan loss reserve | ​ | ​ (457) | ​ |
| Net increase in mortgage loans receivable | ​ | $45,286 | ​ |

(1) Subsequent to December 31, 2022, we originated a $10,750 mortgage loan secured by a MC located in North Carolina. The loan carries a two-year term with an interest-only rate of 7.25% and an IRR of 9.0%.

(2) We originated two senior mortgage loans, secured by four ALFs operated by an existing operator, as well as a land parcel in North Carolina. The communities have a combined total of 217 units, with an average age of less than four years. The land parcel is approximately 7.6 acers adjacent to one of the ALFs and is being held for the future development of a seniors housing community. The mortgage loans have a four-year term, an interest rate of 7.25% and an IRR of 8%. We also funded an additional $2,000 under an existing mortgage loan.

#### Investment in Notes Receivable

| ​ | ​ | ​ ​ | ​ | ​ |
| --- | --- | ---: | --- | --- |
| Advances under notes receivable |  | $37,192 | (1)​ |  |
| Principal payments received under notes receivable (2) | ​ | ​ (6,843) | ​ | ​ |
| Provision for credit losses | ​ | ​ (303) | ​ | ​ |
| Net increase in notes receivable | ​ | $30,046 | ​ | ​ |

(1) Includes origination of a $25,000 mezzanine loan for the recapitalization of five ALFs located in Oregon and Montana. Additionally includes origination of a working capital loan for a commitment of up to $2,000, of which $1,867 has been funded and $9,761 of funding under a working capital loan to HMG.

(2) Subsequent to December 31, 2022, we received $4,545, which includes a prepayment fee and the exit IRR totaling $190, from a mezzanine loan early payoff. The mezzanine loan was on a 136-unit ILF in Oregon.

### Key Performance Indicators, Trends and Uncertainties

We utilize several key performance indicators to evaluate the various aspects of our business. These indicators are discussed below and relate to concentration risk and credit strength. Management uses these key performance indicators to facilitate internal and external comparisons to our historical operating results in making operating decisions and for budget planning purposes.

*Concentration Risk.* We evaluate by gross real estate investment our concentration risk in terms of asset mix, real estate investment mix, operator mix and geographic mix. Concentration risk is valuable to understand what portion of our real estate investments could be at risk if certain sectors were to experience downturns. Asset mix measures the portion of our real estate investments that are real property or mortgage loans. Investment mix measures the portion of our investments that relate to our various property types. Operator mix measures the portion of our real estate investments that relate to our top five operators. Geographic mix measures the portion of our real estate investment that relate to our top five states.

The following table reflects our recent historical trends of concentration risk *(gross investment, in thousands):*

| ​ ​ ​ Asset mix: | ​ ​ ​ ​ | ​ ​ ​ ​ 12/31/22 ​ | ​ ​ ​ ​ | ​ ​ ​ ​ 9/30/22 ​ | ​ ​ ​ ​ | ​ ​ ​ ​ 6/30/22 ​ | ​ ​ ​ ​ | ​ ​ ​ ​ 3/31/22 ​ | ​ ​ ​ ​ | ​ ​ ​ ​ 12/31/21 ​ | ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Real property | ​ | $1,410,705 | ​ | $1,408,402 | ​ | $1,409,937 | ​ | $1,409,625 | ​ | $1,408,557 | ​ |
| Financing receivable | ​ | ​ 76,767 | ​ | ​ 76,267 | ​ | ​ — | ​ | ​ — | ​ | ​ — | ​ |
| Loans receivable | ​ | ​ 393,658 | ​ | ​ 386,868 | ​ | ​ 383,647 | ​ | ​ 350,037 | ​ | ​ 347,915 | ​ |
| Notes receivable | ​ | ​ 58,973 | ​ | ​ 59,014 | ​ | ​ 58,794 | ​ | ​ 62,127 | ​ | ​ 28,623 | ​ |
| Unconsolidated joint ventures | ​ | ​ 19,340 | ​ | ​ 19,340 | ​ | ​ 19,340 | ​ | ​ 19,340 | ​ | ​ 19,340 | ​ |
| Real estate investment mix: | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Assisted living communities | ​ | $951,441 | ​ | $945,552 | ​ | $942,581 | ​ | $956,642 | ​ | $929,113 | ​ |
| Skilled nursing centers | ​ | ​ 980,401 | ​ | ​ 976,753 | ​ | ​ 901,911 | ​ | ​ 858,150 | ​ | ​ 849,182 | ​ |
| Under development | ​ | ​ 13,000 | ​ | ​ 13,000 | ​ | ​ 13,000 | ​ | ​ 13,000 | ​ | ​ 13,000 | ​ |
| Other (1) | ​ | ​ 14,601 | ​ | ​ 14,586 | ​ | ​ 14,226 | ​ | ​ 13,337 | ​ | ​ 13,140 | ​ |
| Operator mix: | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Prestige Healthcare (1) | ​ | $271,476 | ​ | $271,851 | ​ | $271,853 | ​ | $272,326 | ​ | $272,453 | ​ |
| ALG Senior | ​ | ​ 192,699 | ​ | ​ 189,533 | ​ | ​ 110,075 | ​ | ​ 76,715 | ​ | ​ 74,888 | ​ |
| HMG Healthcare | ​ | ​ 175,835 | ​ | ​ 174,107 | ​ | ​ 175,532 | ​ | ​ 180,662 | ​ | ​ 171,920 | ​ |
| Anthem Memory Care | ​ | ​ 139,176 | ​ | ​ 139,176 | ​ | ​ 139,176 | ​ | ​ 139,176 | ​ | ​ 139,176 | ​ |
| Brookdale Senior Living | ​ | ​ 106,010 | ​ | ​ 104,461 | ​ | ​ 103,831 | ​ | ​ 103,136 | ​ | ​ 102,921 | ​ |
| Remaining operators | ​ | ​ 1,074,247 | ​ | ​ 1,070,763 | ​ | ​ 1,071,251 | ​ | ​ 1,069,114 | ​ | ​ 1,043,077 | ​ |
| Geographic mix: | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Texas | ​ | $327,490 | ​ | $325,380 | ​ | $326,983 | ​ | $274,803 | ​ | $274,626 | ​ |
| Michigan | ​ | ​ 280,389 | ​ | ​ 280,932 | ​ | ​ 280,934 | ​ | ​ 281,407 | ​ | ​ 281,512 | ​ |
| Florida | ​ | ​ 158,892 | ​ | ​ 158,175 | ​ | ​ 81,525 | ​ | ​ 80,815 | ​ | ​ 80,540 | ​ |
| Wisconsin | ​ | ​ 114,838 | ​ | ​ 114,838 | ​ | ​ 114,729 | ​ | ​ 114,729 | ​ | ​ 114,538 | ​ |
| Colorado | ​ | ​ 104,795 | ​ | ​ 104,760 | ​ | ​ 104,651 | ​ | ​ 104,514 | ​ | ​ 104,514 | ​ |
| Remaining states | ​ | ​ 973,039 | ​ | ​ 965,806 | ​ | ​ 962,896 | ​ | ​ 984,861 | ​ | ​ 948,705 | ​ |

(1) As of December 31, 2022, we have three parcels of land. These parcels are located adjacent to properties securing the Prestige Healthcare mortgage loan and are managed by Prestige.

*Credit Strength.* We measure our credit strength both in terms of leverage ratios and coverage ratios. Our leverage ratios include debt to gross asset value and debt to market capitalization. The leverage ratios indicate how much of our *Consolidated Balance Sheet* capitalization is related to long-term obligations. Our coverage ratios include interest coverage ratio and fixed charge coverage ratio. The coverage ratios indicate our ability to service interest and fixed charges (interest). The coverage ratios are based on earnings before interest, taxes, depreciation and amortization for real estate (“EBITDA*re”*) as defined by National Association of Real Estate Investment Trusts (“NAREIT”). EBITDA*re* is calculated as net income available to common stockholders (computed in accordance with GAAP) excluding (i) interest expense, (ii) income tax expense, (iii) real estate depreciation and amortization, (iv) impairment write-downs of depreciable real estate, (v) gains or losses on the sale of depreciable real estate, and (vi) adjustments for unconsolidated partnerships and joint ventures. Adjusted EBITDA*re* is calculated as EBITDA*re* adjusted for non-recurring items. Leverage ratios and coverage ratios are widely used by investors, analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. The following table reflects the recent historical trends for our credit strength measures:

### Balance Sheet Metrics

| ​ ​ ​ | ​ ​ ​ | ​ ​ Year Ended ​ 12/31/22 ​ | ​ ​ Quarter Ended 12/31/22 ​ | ​ ​ | ​ ​ 9/30/22 ​ | ​ ​ | ​ ​ 6/30/22 ​ | ​ ​ | ​ ​ 3/31/22 ​ | ​ ​ | ​ ​ ​ 12/31/21 ​ |
| --- | --- | ---: | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Debt to gross asset value | ​ | 37.4% | 37.4% | (1)​ | 38.9% | (3)​ | 37.6% | (1)​ | 39.6% | (3)​ | 38.4% |
| Debt to market capitalization ratio | ​ | 34.4% | 34.4% | ​ | 34.4% | (4)​ | 32.2% | (5)​ | 33.4% | (6)​ | 35.0% |
| Interest coverage ratio (7) | ​ | 4.3 x | 4.4 x | (2)​ | 4.2 x | ​ | 4.3 x | ​ | 4.4 x | ​ | 4.3 x |
| Fixed charge coverage ratio (7) | ​ | 4.3 x | 4.4 x | (2)​ | 4.2 x | ​ | 4.3 x | ​ | 4.4 x | ​ | 4.3 x |

(1) Decreased due to decrease in outstanding debt and increase in gross asset value.

(2) Increased due to increase in interest expense partially offset by increase in rental income and interest income from financing receivable.

(3) Increased due to increase in outstanding debt partially offset by increase in gross asset value.

(4) Increased due to decrease in market capitalization and increase in outstanding debt primarily related to investments.

(5) Decreased due to decrease in outstanding debt and increase in market capitalization.

(6) Decreased due to increase in market capitalization partially offset by increase in outstanding debt.

(7) In calculating our interest coverage and fixed charge coverage ratios above, we use EBITDA*re*, which is a financial measure not derived in accordance with GAAP (non-GAAP financial measure). EBITDA*re* and Adjusted EBITDA*re* are not alternatives to net income, operating income or cash flows from operating activities as calculated and presented in accordance with GAAP. You should not rely on EBITDA*re* and Adjusted EBITDA*re* as a substitute for any such GAAP financial measures or consider it in isolation, for the purpose of analyzing our financial performance, financial position or cash flows. Net income is the most directly comparable GAAP measure to EBITDA*re* and Adjusted EBITDA*re.*

| ​ ​ | ​ ​ | Year to Date 12/31/22 | ​ ​ | Quarter Ended 12/31/22 | ​ | 9/30/22 | ​ | 6/30/22 | ​ | 3/31/22 | ​ | 12/31/21 | ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Net income | ​ | $100,584 | ​ | $18,198 | ​ | $13,389 | ​ | $54,490 | ​ | $14,507 | ​ | $12,930 | ​ |
| Less/Add: (Gain)/loss on sale | ​ | ​ (37,830) | ​ | ​ (21) | ​ | ​ 387 | ​ | ​ (38,094) | ​ | ​ (102) | ​ | ​ (70) | ​ |
| Add: Impairment loss | ​ | ​ 3,422 | ​ | ​ 2,136 | ​ | ​ 1,286 | ​ | ​ — | ​ | ​ — | ​ | ​ — | ​ |
| Add: Interest expense | ​ | ​ 31,437 | ​ | ​ 8,830 | ​ | ​ 7,941 | ​ | ​ 7,523 | ​ | ​ 7,143 | ​ | ​ 6,933 | ​ |
| Add: Depreciation and amortization | ​ | ​ 37,496 | ​ | ​ 9,294 | ​ | ​ 9,385 | ​ | ​ 9,379 | ​ | ​ 9,438 | ​ | ​ 9,449 | ​ |
| EBITDAre | ​ | $135,109 | ​ | $38,437 | ​ | $32,388 | ​ | $33,298 | ​ | $30,986 | ​ | $29,242 | ​ |
| Add (less): Non-recurring one-time items | ​ | ​ 824 | (1) (2) (3)​ | ​ — | ​ | ​ 1,260 | (1)​ | ​ (859) | (2)​ | ​ 423 | (3)​ | ​ 869 | (4)​ |
| Adjusted EBITDAre | ​ | $135,933 | ​ | $38,437 | ​ | $33,648 | ​ | $32,439 | ​ | $31,409 | ​ | $30,111 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Interest expense | ​ | $31,437 | ​ | $8,830 | ​ | $7,941 | ​ | $7,523 | ​ | $7,143 | ​ | $6,933 | ​ |
| Interest incurred | ​ | $31,437 | ​ | $8,830 | ​ | $7,941 | ​ | $7,523 | ​ | $7,143 | ​ | $6,933 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Interest coverage ratio | ​ | ​ 4.3 | x | ​ 4.4 | x | ​ 4.2 | x | ​ 4.3 | x | ​ 4.4 | x | ​ 4.3 | x |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Interest incurred | ​ | $31,437 | ​ | $8,830 | ​ | $7,941 | ​ | $7,523 | ​ | $7,143 | ​ | $6,933 | ​ |
| Total fixed charges | ​ | $31,437 | ​ | $8,830 | ​ | $7,941 | ​ | $7,523 | ​ | $7,143 | ​ | $6,933 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Fixed charge coverage ratio | ​ | ​ 4.3 | x | ​ 4.4 | x | ​ 4.2 | x | ​ 4.3 | x | ​ 4.4 | x | ​ 4.3 | x |

(1) Represents $500 lease termination fee paid to a former operator in exchange for cooperation in facilitating an orderly transition and $760 provision for credit losses related to the origination of financing receivable during the third quarter of 2022.

(2) Represents the $1,181 lease termination fee income received in connection with the sale of a 74-unit ALF partially offset by $322 provision for credit losses related to the origination of two mortgage loans during the second quarter of 2022.

(3) Represents the provision for credit losses related to the origination of a $25,000 mezzanine loan ($250) and a lease incentive balance write-off ($173) related to a closed property and subsequent lease termination.

(4) Represents the provision for credit losses related to the origination of $86,900 of mortgage loans.

We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results. Our expected results may not be achieved and actual results may differ materially from our expectations. This may be a result of various factors, including, but not limited to:

- The status of the economy;
- The status of capital markets, including prevailing interest rates;
- Compliance with and changes to regulations and payment policies within the health care industry;
- Changes in financing terms;
- Competition within the health care and seniors housing industries;
- Changes in federal, state and local legislation;
- The duration, spread and severity of the COVID-19 outbreak.

Management regularly monitors the economic and other factors listed above. We develop strategic and tactical plans designed to improve performance and maximize our competitive position. Our ability to achieve our financial objectives is dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic and company-specific trends.

### Operating Results

#### Year ended December 31, 2022 compared to year ended December 31, 2021 (in thousands):

| ​ ​ ​ Revenues: | ​ ​ ​ ​ | ​ ​ Years ended December 31, 2022 ​ ​ | ​ ​ ​ | ​ ​ 2021 ​ ​ | ​ ​ ​ ​ | ​ ​ ​ Difference ​ ​ | ​ ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Rental income | ​ | $128,244 | ​ | $121,125 | ​ | $7,119 | (1)​ |
| Interest income from financing receivable | ​ | ​ 1,762 | ​ | ​ — | ​ | ​ 1,762 | (2)​ |
| Interest income from mortgage loans | ​ | ​ 40,600 | ​ | ​ 32,811 | ​ | ​ 7,789 | (3)​ |
| Interest and other income | ​ | ​ 4,547 | ​ | ​ 1,386 | ​ | ​ 3,161 | (4)​ |
| Total revenues | ​ | ​ 175,153 | ​ | ​ 155,322 | ​ | ​ 19,831 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Expenses: | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Interest expense | ​ | ​ 31,437 | ​ | ​ 27,375 | ​ | ​ (4,062) | (5)​ |
| Depreciation and amortization | ​ | ​ 37,496 | ​ | ​ 38,296 | ​ | ​ 800 | (6)​ |
| Impairment loss | ​ | ​ 3,422 | ​ | ​ — | ​ | ​ (3,422) | (7)​ |
| Provision for credit losses | ​ | ​ 1,528 | ​ | ​ 1,021 | ​ | ​ (507) | (8)​ |
| Transaction costs | ​ | ​ 828 | ​ | ​ 4,433 | ​ | ​ 3,605 | (9)​ |
| Property tax expense | ​ | ​ 15,486 | ​ | ​ 15,392 | ​ | ​ (94) | ​ |
| General and administrative expenses | ​ | ​ 23,706 | ​ | ​ 21,460 | ​ | ​ (2,246) | (10)​ |
| Total expenses | ​ | ​ 113,903 | ​ | ​ 107,977 | ​ | ​ (5,926) | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Other operating income: | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Gain on sale of real estate, net | ​ | ​ 37,830 | (11)​ | ​ 7,462 | (12)​ | ​ 30,368 | ​ |
| Operating income | ​ | ​ 99,080 | ​ | ​ 54,807 | ​ | ​ 44,273 | ​ |
| Income from unconsolidated joint ventures | ​ | ​ 1,504 | ​ | ​ 1,417 | ​ | ​ 87 | ​ |
| Net income | ​ | ​ 100,584 | ​ | ​ 56,224 | ​ | ​ 44,360 | ​ |
| Income allocated to non-controlling interests | ​ | ​ (560) | ​ | ​ (363) | ​ | ​ (197) | ​ |
| Net income attributable to LTC Properties, Inc. | ​ | ​ 100,024 | ​ | ​ 55,861 | ​ | ​ 44,163 | ​ |
| Income allocated to participating securities | ​ | ​ (580) | ​ | ​ (458) | ​ | ​ (122) | ​ |
| Net income available to common stockholders | ​ | $99,444 | ​ | $55,403 | ​ | $44,041 | ​ |

(1) Increased primarily due to rent received from transitioned portfolios, lease termination fee income of $1,181 received in connection with the sale of a 74-unit ALF, rental income from acquisitions, completed development projects and annual rent escalations partially offset by property sales.

(2) Represents revenue from the acquisition of three SNFs located in Florida for $75,825. In accordance with ASC 842, this transaction is presented as Financing Receivable on our Consolidated Statements of Balance Sheet. See *Note 5. Real Estate Investments* within our consolidated financial statements for more information.

(3) Increased primarily due to mortgage loan originations during 2022 and 2021 fourth quarter.

(4) Increased primarily due to a mezzanine loan origination during the first quarter of 2022 and third quarter of 2021 and additional funding under working capital loans partially offset by loan payoffs.

(5) Increased primarily due to the origination of two $50,000 term loans in the fourth quarter of 2021, issuance of $75,000 senior unsecured notes during the second quarter of 2022 and higher interest rates on our line of credit in 2022.

(6) Decreased due to property sales.

(7) Represents impairment loss related to a 60-unit ALF in Kentucky, a 70-unit ALF in Florida and a closed MC located in Florida. See *Note 5. Real Estate Investments* within our consolidated financial statements for more information.

(8) Increased primarily due to the financing receivable origination, as discussed in (2) above, mortgage and mezzanine loan originations and capital improvement funding offset by scheduled principal paydowns.

(9) Decreased primarily due to the Senior Care and Abri Health settlement and related fees paid during 2021.

(10) Increased due to conference sponsorships and travel, property maintenance expense for closed properties, higher incentive compensation charges and increase in overall costs due to inflationary pressures.

(11) Represents the net gain on sale of $38,057 related to a SNF located in California and three ALFs located in Virginia and California and $214 quarterly reassessment of prior years’ sale holdbacks partially offset by the net loss on sale of $441 related to a closed SNF in Texas.

(12) Represents the net gain on sale of $8,157 related to a SNF in Washington and three ALFs in Wisconsin and $363 quarterly reassessment of prior years’ sale holdbacks partially offset by the net loss of sale of $1,058 related to a closed ALF in Nebraska and a closed ALF in Florida.

#### Year ended December 31, 2021 compared to year ended December 31, 2020 (in thousands):

| ​ ​ ​ Revenues: | ​ ​ ​ | ​ ​ Years ended December 31, 2021 ​ | ​ ​ | ​ ​ 2020 ​ | ​ ​ ​ | ​ ​ ​ ​ Difference ​ | ​ ​ ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- |
| Rental income | ​ | $121,125 | ​ | $126,094 | ​ | $(4,969) | (1)​ |
| Interest income from mortgage loans | ​ | 32,811 | ​ | 31,396 | ​ | 1,415 | (2)​ |
| Interest and other income | ​ | 1,386 | ​ | 1,847 | ​ | (461) | (3)​ |
| Total revenues | ​ | 155,322 | ​ | 159,337 | ​ | (4,015) | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Expenses: | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Interest expense | ​ | 27,375 | ​ | 29,705 | ​ | 2,330 | (4)​ |
| Depreciation and amortization | ​ | 38,296 | ​ | 39,071 | ​ | 775 | ​ |
| Impairment loss | ​ | — | ​ | 3,977 | ​ | 3,977 | (5)​ |
| Provision (recovery) for credit losses | ​ | ​ 1,021 | ​ | ​ (3) | ​ | ​ (1,024) | (6)​ |
| Transaction costs | ​ | ​ 4,433 | ​ | ​ 299 | ​ | ​ (4,134) | (7)​ |
| Property tax expense | ​ | ​ 15,392 | ​ | ​ 15,065 | ​ | ​ (327) | ​ |
| General and administrative expenses | ​ | 21,460 | ​ | 19,710 | ​ | (1,750) | (8)​ |
| Total expenses | ​ | 107,977 | ​ | 107,824 | ​ | (153) | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Other operating income: | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Gain on sale of real estate, net | ​ | ​ 7,462 | (9)​ | ​ 44,117 | (10)​ | ​ (36,655) | ​ |
| Operating income | ​ | ​ 54,807 | ​ | 95,630 | ​ | (40,823) | ​ |
| Gain from property insurance proceeds | ​ | ​ — | ​ | ​ 373 | (11)​ | ​ (373) | ​ |
| Loss on unconsolidated joint ventures | ​ | ​ — | (11)​ | ​ (758) | (12)​ | ​ 758 | ​ |
| Impairment loss from investments in unconsolidated joint ventures | ​ | ​ — | ​ | ​ — | ​ | ​ — | ​ |
| Income from unconsolidated joint ventures | ​ | ​ 1,417 | ​ | ​ 432 | ​ | ​ 985 | (13)​ |
| Net income | ​ | 56,224 | ​ | 95,677 | ​ | (39,453) | ​ |
| Income allocated to non-controlling interests | ​ | (363) | ​ | (384) | ​ | 21 | ​ |
| Net income attributable to LTC Properties, Inc. | ​ | 55,861 | ​ | 95,293 | ​ | (39,432) | ​ |
| Income allocated to participating securities | ​ | (458) | ​ | (422) | ​ | (36) | ​ |
| Net income available to common stockholders | ​ | $55,403 | ​ | $94,871 | ​ | $(39,468) | ​ |

(1) Decreased primarily due to defaults of lease obligations from Senior lifestyle and Senior Care and Abri Health, abated and deferred rent, net of repayment, a $758 straight-line rent receivable write-off during 2021, a decrease in property tax revenue, reduced rent from sold properties and 50% reduction of 2021 rent escalations partially offset by a $23,214 write-off of straight-line rent receivable and lease incentive balances related to three operators during 2020, increased rent from re-leasing 18 properties previously leased to Senior lifestyle, completed development projects and contractual rent increases.

(2) Increased due to mortgage loan originations and capital improvement funding offset by scheduled principal paydowns and 50% reduction of 2021 interest escalations.

(3) Decreased primarily due to the payoff of a mezzanine loan offset by additional notes receivable funding.

(4) Decreased due to scheduled principal payments on our senior unsecured notes and lower interest rates under our unsecured revolving line of credit partially offset by higher interest rates on $100,000 of new term loans in fourth quarter of 2021 and higher outstanding balances under our unsecured revolving line of credit.

(5) Represents impairment losses related to a 48-unit ALF in Colorado and a 61-unit ALF in Florida.

(6) Increased primarily due to mortgage originations and capital improvement funding offset by scheduled principal paydowns.

(7) Increased due to Senior Care and Abri Health settlement and related fees.

(8) Increased primarily due to higher incentive compensation expense, an increase in non-cash restricted stock and performance-based stock vesting expense and additional employees.

(9) Represents the net gain on sale of $2,562 related to a SNF in Washington, $5,595 related to three ALFs in Wisconsin and $363 of quarterly reassessment of the prior years’ sale holdbacks partially offset by the net loss on sale of $200 related to a closed ALF in Nebraska and the net loss on sale of $858 related to a closed property in Florida.

(10) Represents net gain on sale of 21 SNFs and additional gain due to quarterly reassessment of prior years’ sale holdbacks.

(11) Represents gain on insurance proceeds related to a 114-bed SNF in Texas sold during the first quarter of 2020.

(12) Relates to the sale of properties comprising a joint venture in which we had a preferred equity investment with Senior lifestyle.

(13) Increased due to preferred equity investments in two unconsolidated joint ventures.

### Funds From Operations

Funds from Operations (“FFO”) attributable to common stockholders, basic FFO attributable to common stockholders per share and diluted FFO attributable to common stockholders per share are supplemental measures of a REIT’s financial performance that are not defined by GAAP. Real estate values historically rise and fall with market conditions, but cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. We believe that by excluding the effect of historical cost depreciation, which may be of limited relevance in evaluating current performance, FFO facilitates comparisons of operating performance between periods.

We use FFO as a supplemental performance measurement of our cash flow generated by operations. FFO does not represent cash generated from operating activities in accordance with GAAP, and is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income available to common stockholders.

We calculate and report FFO in accordance with the definition and interpretive guidelines issued by NAREIT. FFO, as defined by NAREIT, means net income available to common stockholders (computed in accordance with GAAP) excluding gains or losses on the sale of real estate and impairment write-downs of depreciable real estate plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our calculation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that have a different interpretation of the current NAREIT definition from us; therefore, caution should be exercised when comparing our FFO to that of other REITs.

The following table reconciles net income available to common stockholders to FFO attributable to common stockholders (*unaudited, amounts in thousands, except per share amounts):*

| ​ ​ ​ | ​ ​ ​ | ​ ​ For the Year Ended December 31, 2022 | ​ ​ | ​ ​ 2021 | ​ ​ | ​ ​ 2020 | ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- |
| GAAP net income available to common stockholders | ​ | $99,444 |  | $55,403 |  | $94,871 | ​ |
| Add: Depreciation and amortization | ​ | 37,496 | ​ | 38,296 | ​ | 39,071 | ​ |
| Add: Impairment loss | ​ | ​ 3,422 | ​ | ​ — | ​ | ​ 3,977 | ​ |
| Add: Loss on unconsolidated joint ventures | ​ | ​ — | ​ | ​ — | ​ | ​ 758 | ​ |
| Less: Gain on sale of real estate, net | ​ | (37,830) | ​ | (7,462) | ​ | (44,117) | ​ |
| NAREIT FFO attributable to common stockholders | ​ | $102,532 | ​ | $86,237 | ​ | $94,560 | ​ |
| NAREIT FFO attributable to common stockholders per share: | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Basic | ​ | $2.57 | ​ | $2.20 | ​ | $2.41 | ​ |
| Diluted | ​ | $2.56 | (1)​ | $2.20 | ​ | $2.41 | ​ |
| Weighted average shares used to calculate NAREIT FFO per share: | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Basic | ​ | 39,894 | ​ | 39,156 | ​ | 39,179 | ​ |
| Diluted | ​ | 40,296 | (2)​ | 39,156 | ​ | 39,264 | (3)​ |

(1) Includes the effect of participating securities.

(2) Diluted weighted average shares used to calculate FFO per share includes the effect of performance-based stock units and participating securities.

(3) Diluted weighted average shares used to calculate FFO per share includes the effect of performance-based stock units.

### Critical Accounting Policies and Estimates

Our accounting policies are more fully described under *Item 8. FINANCIAL STATEMENTS—Footnote 2. Summary of Significant Accounting Policies*. As discussed in *Footnote 2*, the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Listed below are those policies and estimates that we believe are critical and require the use of significant judgement in their application.

### Impairment of Long-Lived Assets

Assets that are classified as held-for-use are periodically evaluated for impairment when events or changes in circumstances indicate that the asset may be impaired or the carrying amount of the asset may not be recoverable through future undiscounted cash flows. Where indicators of impairment exist, the estimation required in the undiscounted future cash flow assumption includes management’s probability-weighting of various scenarios such as modifying the lease with the existing operator, identifying a replacement operator or sale of the real property investment. In addition, the undiscounted future cashflows include management’s assumptions of rental revenues, net operating income, capitalization rates and expected hold periods. In determining fair value, we use current appraisals or other third-party opinions of value and other estimates of fair value such as estimated discounted future cash flows.

### Collectability of operator obligations

We assess the collectability of substantially all our lease payments through maturity. If collectability is not probable, all or a portion of our straight-line rent receivables and other lease receivables may be written-off. In order to assess our lease payments for collectability, we make assumptions that include evaluating lessee’s payment history, the financial strength of the lessee, future market conditions and contractual rents, and timing of expected payments. Our ability to accurately predict collectability of substantially all of our lease payments impacts the timing of straight-line rent and other lease receivable write-offs, if any. While we believe our assumptions are reasonable, changes in these assumptions may have a material impact on our consolidated financial statements.

### Liquidity and Capital Resources

#### Sources and Uses of Cash

As of December 31, 2022, we had a total of $10.4 million of cash and cash equivalents, $270.0 million available under our unsecured revolving line of credit and the potential ability to access the capital markets through the issuance of $130.6 million of common stock under our Equity Distribution Agreements. Furthermore, we have the ability to access the capital markets through the issuance of debt and/or equity securities under an automatic shelf registration statement.

We believe that our current cash balance, cash flow from operations available for distribution or reinvestment, our borrowing capacity and our potential ability to access the capital markets are sufficient to provide for payment of our current operating costs, meet debt obligations and pay common dividends at least sufficient to maintain our REIT status and repay borrowings at, or prior to, their maturity. The timing, source and amount of cash flows used by financing and investing activities are sensitive to the capital markets’ environment, especially to changes in interest rates. In addition, COVID-19 has adversely affected and is expected to continue to adversely affect our operators’ business, results of operations, cash flows and financial condition which could, in turn, adversely affect our financial position.

The operating results of the properties will be impacted by various factors over which the operators/owners may have no control. Those factors include, without limitation, the health of the economy, inflation pressures, employee availability and cost, changes in supply of or demand for competing seniors housing and health care facilities, ability to hire and maintain qualified staff, ability to control rising operating costs, the potential for significant reforms in the health care industry, and the ongoing impact of COVID-19. In addition, our future growth in net income and cash flow may be adversely impacted by various proposals for changes in the governmental regulations and financing of the health care industry, and the continuing impact of COVID-19 or the impact of any other infectious disease outbreaks. We cannot presently predict what impact these potential events may have, if any. We believe that adequate provision has been made for the possibility of loans proving uncollectable but we will continually evaluate the financial status of the operations of the seniors housing and health care properties. In addition, we will monitor our borrowers and the underlying collateral for mortgage loans and will make future revisions to the provision, if considered necessary.

Depending on our borrowing capacity, compliance with financial covenants, ability to access the capital markets, and the payment of dividends may be negatively impacted. We continuously evaluate the availability of cost-effective capital and believe we have sufficient liquidity for our current dividend, corporate expenses and additional capital investments in 2023.

Our investments, principally our investments in owned properties, financing leases and mortgage loans, are subject to the possibility of loss of their carrying values as a result of changes in market prices, interest rates and inflationary expectations. The effects on interest rates may affect our costs of financing our operations and the fair market value of our financial assets. Generally, our leases have agreed upon annual increases and our loans have predetermined increases in interest rates. Inasmuch as we may initially fund some of our investments with variable interest rate debt, we would be at risk of net interest margin deterioration if medium and long-term rates were to increase.

Our primary sources of cash include rent and interest receipts, borrowings under our unsecured credit facility, public and private issuance of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures and construction advances), loan advances and general and administrative expenses. These sources and uses of cash are reflected in our *Consolidated Statements of Cash Flows* as summarized below (*in thousands):*

| ​ ​ Cash provided by (used in): | ​ ​ ​ | ​ ​ Year Ended December 31, 2022 | ​ ​ | ​ ​ 2021 | ​ ​ ​ | ​ ​ ​ Change ​ $​ | ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Operating activities | ​ | $105,586 | ​ | $91,184 | ​ | $14,402 | ​ |
| Investing activities | ​ | ​ (119,949) | ​ | ​ (69,786) | ​ | ​ (50,163) | ​ |
| Financing activities | ​ | ​ 19,581 | ​ | ​ (24,009) | ​ | ​ 43,590 | ​ |
| Increase (decrease) in cash and cash equivalents | ​ | ​ 5,218 | ​ | ​ (2,611) | ​ | ​ 7,829 | ​ |
| Cash and cash equivalents, beginning of period | ​ | ​ 5,161 | ​ | ​ 7,772 | ​ | ​ (2,611) | ​ |
| Cash and cash equivalents, end of period | ​ | $10,379 | ​ | $5,161 | ​ | $5,218 | ​ |

#### Debt Obligations

*Unsecured Credit Facility.* We had an unsecured credit agreement (the “Original Credit Agreement”) that provided for a revolving aggregate commitment of the lenders of up to $600.0 million with the opportunity to increase the commitment size of the credit agreement up to a total of $1.0 billion. The Original Credit Agreement’s maturity was on June 27, 2022 and provided for a one-year extension option at our discretion, subject to customary conditions.

In advance of expiration of the Original Credit Agreement, during the fourth quarter of 2021, we entered into the Third Amended and Restated Credit Agreement (the “Credit Agreement”) to replace the Original Credit Agreement. The Credit Agreement decreased the aggregate commitment of the lenders under the Original Credit Agreement to $500.0 million comprised of a $400.0 million revolving credit facility (the “Revolving Line of Credit”) and two $50.0 million term loans (the “Term Loans”). The Credit Agreement permits us to request increases to the Revolving Line of Credit and Term Loans commitments up to a total of $1.0 billion, extends the maturity of the Revolving Line of Credit to November 19, 2025 and provides for a one-year extension option at our discretion, subject to customary conditions. The Term Loans mature on November 19, 2025 and November 19, 2026. During the fourth quarter of 2022, we entered into the First Amendment to the Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”) to replace London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”), plus a credit spread adjustment of 10 basis points, (“Adjusted SOFR”) as the reference rate for purpose of calculating interest under the Amended Credit Agreement. Other material terms of the Credit Agreement remain unchanged. Based on our leverage at December 31, 2022, the Revolving Line of Credit provides for interest annually at Adjusted SOFR plus 115 points and a facility fee of 20 basis point and the Term Loans provide for interest annually at Adjusted SOFR plus 135 points.

*Interest Rate Swap Agreement.* In connection with entering into the Term Loans as discussed above, we entered into two receive variable/pay fixed interest rate swap agreements (“Interest Rate Swaps”) with maturities of November 19, 2025 and November 19, 2026, respectively, that will effectively lock-in the forecasted interest payments on the Term Loan borrowings over the four and five year terms of the loans. The Interest Rate Swaps are considered cash flow hedges and are recorded on our *Consolidated Balance Sheets* at fair value, with changes in the fair value of these instruments recognized in *Accumulated other comprehensive income (loss)* on our Consolidated Balance Sheets. In connection with entering into the Amended Credit Agreement discussed above, we entered into amendments to our Interest Rate Swaps to account for SOFR as the updated reference rate in the Amended Credit Agreement. During 2022 and 2021, we recorded a $8.9 million increase and $0.2 million decrease, respectively, in fair value of Interest Rate Swaps.

*Senior Unsecured Notes.* We have senior unsecured notes held by institutional investors with interest rates ranging from 3.66% to 5.03%. The senior unsecured notes mature between 2024 and 2033. During 2022, we sold $75.0 million aggregate principal amount of 3.66% senior unsecured notes. The notes have an average 10-year life, scheduled principal payments and mature in May 2033.

The debt obligations by component as of December 31, 2022 are as follows *(dollar amounts in thousands):*

| ​ ​ ​ Debt Obligations | ​ ​ ​ ​ | ​ Applicable Interest Rate (1) | ​ ​ ​ ​ | ​ ​ ​ ​ Outstanding Balance | ​ ​ ​ ​ | ​ ​ Available for Borrowing |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Revolving line of credit (2) | ​ | 5.38% | ​ | $130,000 | ​ | $270,000 |
| Term loans, net of debt issue costs | ​ | 2.69% | ​ | ​ 99,511 | ​ | ​ — |
| Senior unsecured notes, net of debt issue costs (3) | ​ | 4.25% | ​ | ​ 538,343 | ​ | ​ — |
| Total | ​ | 4.24% | ​ | $767,854 | ​ | $270,000 |

(1) Represents weighted average of interest rate as of December 31, 2022.

(2) Subsequent to December 31, 2022, we borrowed $162,700 under our Revolving Line of Credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our Revolving Line of Credit.

(3) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes. Accordingly, we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

Our debt borrowings and repayments during the year ended December 31, 2022, are as follows *(in thousands):*

| ​ Debt Obligations | ​ ​ | ​ ​ ​ Borrowings | ​ ​ | ​ ​ ​ Repayments | ​ ​ |
| --- | --- | ---: | --- | ---: | --- |
| Revolving line of credit (1) | ​ | $194,000 | ​ | $(174,900) | ​ |
| Senior unsecured notes (2) | ​ | ​ 75,000 | ​ | ​ (48,160) | ​ |
| Total | ​ | $269,000 | ​ | $(223,060) | ​ |

(1) Subsequent to December 31, 2022, we borrowed $162,700 under our Revolving Line of Credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our Revolving Line of Credit.

(2) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes. Accordingly, we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

#### Equity

*Non-controlling Interests.* We have entered into partnerships to develop and/or own real estate. Given that our limited members do not have substantive kick-out rights, liquidation rights, or participation rights, we have concluded that the partnerships are VIEs. Since we exercise power over and receive benefits from the VIEs, we are considered the primary beneficiary. Accordingly, we consolidate the VIEs and record the non-controlling interests at cost. As of December 31, 2022, we have the following consolidated VIEs (*in thousands):*

| ​ ​ Investment Year (1) | ​ ​ ​ ​ | ​ ​ ​ Purpose | ​ ​ ​ ​ | ​ ​ Property Type | ​ ​ ​ ​ | ​ ​ ​ State | ​ ​ ​ ​ | ​ ​ ​ Gross ​ Consolidated ​ Assets | ​ ​ ​ ​ | ​ ​ ​ ​ ​ Non-Controlling ​ Interests | ​ ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2022 | ​ | Owned real estate | (2)​ | SNF | ​ | FL | ​ | $76,767 | ​ | $14,325 | ​ |
| 2018 | ​ | Owned real estate | ​ | ILF | ​ | OR | ​ | ​ 14,650 | ​ | ​ 2,906 | ​ |
| 2018 | ​ | Owned real estate and development | ​ | ALF/MC | ​ | OR | ​ | ​ 18,452 | ​ | ​ 1,164 | ​ |
| 2017 | ​ | Owned real estate and development | ​ | ILF/ALF/MC | ​ | WI | ​ | ​ 22,007 | ​ | ​ 2,305 | ​ |
| 2017 | ​ | Owned real estate | ​ | ALF/MC | ​ | SC | ​ | ​ 11,680 | ​ | ​ 1,241 | ​ |
| Total | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $143,556 | ​ | $21,941 | ​ |

(1) Subsequent to December 31, 2022, we entered into a $121,321 JV with an affiliate of an existing operator and contributed $117,900 into the JV that purchased 11 ALF and MC from an affiliate of our JV partner. The JV leased the communities back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options. The contractual initial cash yield of 7.25% increases to 7.5% in year three then escalates thereafter based on CPI subject to a floor of 2.0% and a ceiling of 4.0%. Additionally, the JV provided the seller-lessee with a purchase option to buy up to 50% of the properties at the beginning of the third lease year and the remaining properties at the beginning of the fourth lease year through the end of the sixth lease year, with an exit IRR of 9.0%. In accordance with GAAP, the communities acquired by the JV are required to be presented as a *Financing receivable* on our *Consolidated Balance Sheets.* See *Note 2. Summary of Significant Accounting Policies* and *Note 5. Real Estate Investments* for more information.

(2) During 2022, we entered into a joint venture and contributed $61,661 into the JV that purchased three SNFs located in Florida for $75,825. Our JV partner contributed the remaining $14,325 of equity. The JV leased the centers back to an affiliate of the seller under a 10-year master lease, with two five-year renewal options and provided the seller-lessee with a purchase option, exercisable at the beginning of the fourth year through the end of the fifth year. In accordance with GAAP, the centers acquired by the JV are required to be presented as a *Financing receivable* on our *Consolidated Balance Sheets.* See *Note 2. Summary of Significant Accounting Policies* and *Note 5. Real Estate Investments* for more information.

At December 31, 2022, we had 41,262,191 shares of common stock outstanding, equity on our balance sheet totaled $850.3 million and our equity securities had a market value of $1.5 billion. During the year ended December 31, 2022, we declared and paid $91.5 million of cash dividends.

*Common Stock.* We have separate equity distribution agreements (collectively, “Equity Distribution Agreements”) to offer and sell, from time to time, up to $200.0 million in aggregate offering price of our common shares. The Equity Distribution Agreements provide for sales of common shares to be made by means of ordinary brokers’ transactions, which may include block trades, or transactions that are deemed to be “at the market” offerings. During the year ended December 31, 2022, we sold 1,792,400 shares of common stock for $68.2 million in net proceeds under our Equity Distribution Agreements. In conjunction with the sale of common stock, we incurred $0.5 million costs associated with this agreement which have been recorded in additional paid in capital as a reduction of proceeds received. At December 31, 2022, we had $130.6 million available under our equity distribution agreement.

During 2022, we acquired 39,463 shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations. Subsequent to December 31, 2022, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of January, February and March 2023, payable on January 31, February 28 and March 31, 2023, respectively, to stockholders of record on January 23, February 17, and March 23, 2023, respectively.

*Stock Based Compensation Plans.* During 2021, we adopted, and our shareholders approved the 2021 Equity Participation Plan (the “2021 Plan”) which replaces the 2015 Equity Participation Plan (the “2015 Plan”). Under the 2021 Plan, 1,900,000 shares of common stock have been authorized and reserved for awards, less one share for every one share that was subject to an award granted under the 2015 Plan after December 31, 2020 and prior to adoption. In addition, any shares that are not issued under outstanding awards under the 2015 Plan because the shares were forfeited or cancelled after December 31, 2020 will be added to and again be available for awards under the 2021 Plan. Under the 2021 Plan, the shares were authorized and reserved for awards to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2021 Plan and the 2015 Plan are set by our compensation committee at its discretion.

*Restricted Stock and Performance-based Stock Units.* During 2022, we granted 221,542 shares of restricted common stock and performance-based stock units under the 2021 Plan as follows:

| ​ No. of Shares | ​ ​ ​ | ​ ​ Price per Share | ​ ​ ​ | ​ ​ Award Type | ​ ​ ​ | ​ ​ Vesting Period | ​ ​ ​ |
| ---: | --- | ---: | --- | --- | --- | --- | --- |
| 122,865 | ​ | $33.94 | ​ | Restricted stock | ​ | ratably over 3 years | ​ |
| 86,332 | ​ | $33.94 | ​ | Performance-based stock units | ​ | TSR targets (1) | ​ |
| 12,345 | ​ | $38.48 | ​ | Restricted stock | ​ | May 25,2023 | ​ |
| 221,542 | ​ | ​ ​ | ​ | ​ | ​ | ​ | ​ |

(1) Vesting is based on achieving certain total shareholder return (“TSR”) targets in 4 years with acceleration opportunity in 3 years.

At December 31, 2022, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows *(dollar amounts in thousands):*

| ​ ​ ​ Vesting Date | ​ ​ ​ ​ | ​ ​ Remaining Compensation Expense |
| --- | --- | ---: |
| 2023 | ​ | $5,603 |
| 2024 | ​ | ​ 2,853 |
| 2025 | ​ | ​ 309 |
| Total | ​ | $8,765 |

*Stock Options.* We did not issue any stock options during the year ended December 31, 2022. At December 31, 2022, we have 10,000 stock options outstanding and exercisable.

#### Material Cash Requirements

We monitor our contractual obligations and commitments detailed above to ensure funds are available to meet obligations when due. The following table represents our long-term contractual obligations (scheduled principal payments and amounts due at maturity) as of December 31, 2022, excluding the effects of interest and debt issue costs (*in thousands):*

| ​ ​ | ​ ​ | ​ ​ Total | ​ ​ | ​ ​ 2023 | ​ ​ | ​ ​ 2024 | ​ ​ | ​ ​ 2025 | ​ ​ | ​ ​ 2026 | ​ ​ | ​ ​ 2027 | ​ ​ | ​ ​ Thereafter | ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- |
| Revolving line of credit | ​ | $130,000 | (1)​ | $— | ​ | $— | ​ | $130,000 | (1)​ | $​ | ​ | $— | ​ | $— | ​ |
| Term loans | ​ | ​ 100,000 | ​ | ​ — | ​ | ​ — | ​ | ​ 50,000 | ​ | ​ 50,000 | ​ | ​ — | ​ | ​ — | ​ |
| Senior unsecured notes | ​ | 539,820 | (2)​ | 49,160 | (2)​ | 49,160 | ​ | 49,500 | ​ | 51,500 | ​ | ​ 54,500 | ​ | 286,000 | ​ |
| ​ | ​ | $769,820 | ​ | $49,160 | ​ | $49,160 | ​ | $229,500 | ​ | $101,500 | ​ | $54,500 | ​ | $286,000 | ​ |

(1) Subsequent to December 31, 2022, we had a net borrowing of $162,700 under our unsecured revolving line of credit. Accordingly, we have $292,700 outstanding and $107,300 available for borrowing under our unsecured revolving line of credit.

(2) Subsequent to December 31, 2022, we paid $7,000 under our senior unsecured notes, accordingly we have $531,343 outstanding, net of debt issue costs, under our senior unsecured notes.

The following table represents our projected interest expense, excluding capitalized interest, amortization of debt issue costs and bank fees, as of December 31, 2022 (*in thousands):*

| ​ ​ | ​ | ​ ​ Total | ​ | ​ ​ 2023 | ​ | ​ ​ 2024 | ​ | ​ ​ 2025 | ​ | ​ ​ 2026 | ​ | ​ ​ 2027 | ​ | ​ ​ Thereafter | ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- |
| Revolving line of credit | ​ | $22,475 | ​ | $7,898 | ​ | $7,919 | ​ | $6,658 | ​ | $— | ​ | $— | ​ | $— | ​ |
| Term loans | ​ | ​ 9,265 | ​ | ​ 2,727 | ​ | ​ 2,734 | ​ | ​ 2,570 | ​ | ​ 1,234 | ​ | ​ — | ​ | ​ — | ​ |
| Senior unsecured notes | ​ | 114,749 | ​ | 21,748 | ​ | 19,492 | ​ | 17,281 | ​ | 15,218 | ​ | 13,154 | ​ | 27,856 | ​ |
| ​ | ​ | $146,489 | ​ | $32,373 | ​ | $30,145 | ​ | $26,509 | ​ | $16,452 | ​ | $13,154 | ​ | $27,856 | ​ |

Also, see *Item 8. FINANCIAL STATEMENTS— Note 11. Commitments and Contingencies* for additional information regarding our contractual commitments.

## Market risk

As filed, 4,104 characters.

We are exposed to market risks associated with changes in interest rates as they relate to our mortgage loans receivable and debt. Interest rate risk is sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our control.

We do not utilize forward or option contracts, or foreign currencies or commodities, or other types of derivative financial instruments, with exception of interest rate swaps, nor do we engage in “off-balance sheet” transactions. The purpose of the following disclosure is to provide a framework to understand our sensitivity to hypothetical changes in interest rates as of December 31, 2022.

Our future earnings, cash flows and estimated fair values relating to financial instruments are dependent upon prevalent market rates of interest, such as SOFR or term rates of U.S. Treasury Notes. Changes in interest rates generally impact the fair value, but not future earnings or cash flows, of mortgage loans receivable and fixed rate debt. Our mortgage loans receivable and debt, such as our senior unsecured notes, are primarily fixed-rate instruments. Also, we have two interest rate swap agreements to effectively lock-in the forecasted interest payments on our term loans which are based on SOFR. For variable rate debt, such as our revolving line of credit, changes in interest rates generally do not impact the fair value, but do affect future earnings and cash flows.

At December 31, 2022, the fair value of our financing receivable using a 7.6% discount rate was approximately $76.0 million. A 1% increase in such rate would decrease their estimated fair value by $1.9 million while a 1% decrease in such rate would increase their value by $2.0 million. At December 31, 2022, the fair value of our mortgage loans receivable using a 9.3% discount rate was approximately $461.3 million. A 1% increase in such rate would decrease the estimated fair value of our mortgage loans by approximately $30.8 million while a 1% decrease in such rate would increase their estimated fair value by approximately $35.1 million. At December 31, 2022, the fair value of our notes receivable using a 7.1% discount rate approximately $61.9 million. A 1% increase in such rate would decrease the estimated fair value of our notes receivable by approximately $1.7 million. while a 1% decrease in such rate would increase their estimated fair value by approximately $1.8 million. At December 31, 2022, the fair value of our senior unsecured notes using a 6.5% discount rate for those maturing before year 2030 and 7.0% discount rate for those maturing at or beyond year 2030 was approximately $477.7 million. A 1% increase in such rate would decrease the estimated fair value of our senior unsecured notes by approximately $19.7 million while a 1% decrease in such rate would increase their estimated fair value by approximately $21.0 million. These discount rates were measured based upon management’s estimates of rates currently prevailing for comparable loans available to us and instruments of comparable maturities.

The estimated impact of changes in interest rates discussed above are determined by considering the impact of the hypothetical interest rates on our borrowing costs, lending rates and current U.S. Treasury rates from which our financial instruments may be priced. We do not believe that future market rate risks related to our financial instruments will be material to our financial position or results of operations. These analyses do not consider the effects of industry specific events, changes in the real estate markets, or other overall economic activities that could increase or decrease the fair value of our financial instruments. If such events or changes were to occur, we would consider taking actions to mitigate and/or reduce any negative exposure to such changes. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our capital structure.

## Controls and procedures

As filed, 8,003 characters.

### Disclosure Controls and Procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on such evaluation our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report our disclosure controls and procedures were effective.

### Internal Control Over Financial Reporting.

The Management Report on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm thereon are set forth on the following pages.

There has been no change in our internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

### Management Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers and effected by the issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

- Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;
- Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and
- Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect material misstatements on a timely basis. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control— Integrated Framework (2013 Framework). Based on this assessment, our management concluded that, as of the end of the fiscal year ended December 31, 2022, our internal control over financial reporting was effective.

The effectiveness of our internal control over financial reporting as of December 31, 2022, has been audited by Ernst &Young LLP, independent registered public accounting firm. Ernst & Young LLP’s report on our internal control over financial reporting appears on the following page.

### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of LTC Properties, Inc.

### Opinion on Internal Control Over Financial Reporting

We have audited LTC Properties, Inc.’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, LTC Properties, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the financial statement schedules listed in the Index at Item 15(a) and our report dated February 16, 2023 expressed an unqualified opinion thereon.

### Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

### Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Los Angeles, California

February 16, 2023

Filed Feb 16, 2023.
Source: SEC EDGAR, the filing index for accession 0001558370-23-001423. Last ingested by Listed: Nov 5, 2026, 18:27 ET. No prices; not investment advice.