Sabra Health Care REIT, Inc.SBRA
Sabra Health Care REIT, Inc. Leases Disclosure
OPERATING LEASES
Lessor Accounting
As of December 31, 2025, the substantial majority of the Company’s real estate properties (excluding 87 Senior Housing - Managed communities) were leased under triple-net operating leases with expirations ranging from less than one year to 18 years. As of December 31, 2025, the leases had a weighted-average remaining term of seven years. The leases generally include provisions to extend the lease terms and other negotiated terms and conditions. The Company, through its subsidiaries, retains substantially all of the risks and benefits of ownership of the real estate assets leased to the tenants. The Company may receive additional security under these operating leases in the form of letters of credit and security deposits from the lessee or guarantees from the parent of the lessee. Security deposits received in cash related to tenant leases are included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets and totaled $10.5 million and $9.0 million as of December 31, 2025 and 2024, respectively, and letters of credit deposited with the Company totaled approximately $63 million and $64 million as of December 31, 2025 and 2024, respectively. In addition, the Company’s tenants have deposited with the Company $10.8 million as of each of December 31, 2025 and 2024, respectively, for future real estate taxes, insurance expenditures and tenant improvements related to the Company’s properties and their operations, and these amounts are included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets.
Lessor costs that are paid by the lessor and reimbursed by the lessee are included in the measurement of variable lease revenue and the associated expense. As a result, the Company recognized variable lease revenue and the associated expense of $14.2 million, $14.5 million and $15.3 million during the years ended December 31, 2025, 2024 and 2023, respectively.
The Company monitors the creditworthiness of its tenants by evaluating the ability of the tenants to meet their lease obligations to the Company based on the tenants’ financial performance, including, as applicable and appropriate, the evaluation of any parent guarantees (or the guarantees of other related parties) of such lease obligations. The primary basis for the Company’s evaluation of the credit quality of its tenants (and more specifically the tenant’s ability to pay their rent obligations to the Company) is the tenant’s lease coverage ratio as supplemented by the parent’s fixed charge coverage ratio for those entities with a parent guarantee. These coverage ratios include earnings before interest, taxes, depreciation, amortization and rent (“EBITDAR”) to rent and earnings before interest, taxes, depreciation, amortization, rent and management fees (“EBITDARM”) to rent at the lease level and consolidated EBITDAR to total fixed charges at the parent guarantor level when such a guarantee exists. The Company obtains various financial and operational information from the majority of its tenants each month and reviews this information in conjunction with the above-described coverage metrics to identify financial and operational trends, evaluate the impact of the industry’s operational and financial environment (including the impact of government reimbursement), and evaluate the management of the tenant’s operations. These metrics help the Company identify potential areas of concern relative to its tenants’ credit quality and ultimately the tenant’s ability to generate sufficient liquidity to meet its obligations, including its obligation to continue to pay the rent due to the Company.
For the year ended December 31, 2025, no tenant relationship represented 10% or more of the Company’s total revenues.
As of December 31, 2025, the future minimum rental payments from the Company’s properties held for investment under non-cancelable operating leases were as follows and may materially differ from actual future rental payments received (in thousands):
| 2026 | $ | 355,230 | |||
| 2027 | 343,478 | ||||
| 2028 | 323,161 | ||||
| 2029 | 273,867 | ||||
| 2030 | 246,425 | ||||
| Thereafter | 909,657 | ||||
| $ | 2,451,818 | ||||
Lessee Accounting
For operating leases greater than 12 months for which the Company is the lessee, such as corporate office leases and ground leases, the Company recognizes a right-of-use (“ROU”) asset and related lease liability on its consolidated balance sheets at inception of the lease. ROU assets represent the Company’s right to use underlying assets for the lease term, and lease liabilities are determined based on the estimated present value of the Company’s minimum lease payments under the agreements. The discount rate used to determine the lease liabilities is based on the estimated incremental borrowing rate on a lease-by-lease basis. Certain of the Company’s lease agreements have options to extend or terminate the contract terms upon meeting certain criteria. The lease term utilized in the calculation of the lease liability includes these options if exercise is considered reasonably certain. As of December 31, 2025 and 2024, the Company had $6.5 million and $7.0 million of ROU assets included in , and $7.4 million and $8.3 million of lease liabilities included in , respectively, on its consolidated balance sheets.
During the years ended December 31, 2025, 2024 and 2023, the Company incurred lease expense of $1.0 million, $1.3 million and $1.4 million, respectively. As of December 31, 2025, the weighted average remaining lease term and discount rate were 12 years and 8%, respectively, and the future minimum lease payments under the operating leases included in the Company’s lease liability were as follows (in thousands):
| 2026 | $ | 1,032 | |||
| 2027 | 1,047 | ||||
| 2028 | 1,021 | ||||
| 2029 | 1,050 | ||||
| 2030 | 1,069 | ||||
| Thereafter | 6,819 | ||||
| Undiscounted minimum lease payments included in the lease liability | 12,038 | ||||
| Less: imputed interest | (4,659) | ||||
| Present value of lease liability | $ | 7,379 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.