Notes Payable | 9. Notes Payable Notes payable consists of the following (in thousands): Lender Average Payment Net Book Value Of Collateral(1) Interest Rate Maturity Date Notes Payable 2015 2014 Fannie Mae — — — (4) $ — $ 26,809 Fannie Mae — — — (4) — 5,372 Fannie Mae 78 15,214 5.69 August 2021 12,716 12,915 Fannie Mae 26 5,594 4.97 October 2021 4,502 4,582 Fannie Mae 101 21,093 4.92 October 2021 17,779 18,096 Fannie Mae 27 21,093 5.19 October 2021 4,978 — Fannie Mae 117 24,283 4.92 November 2021 20,674 21,041 Fannie Mae 27 6,273 4.38 March 2022 5,036 5,132 Fannie Mae 60 12,507 4.76 April 2022 10,814 11,007 Fannie Mae 135 28,287 4.69 April 2022 24,584 25,026 Fannie Mae 60 15,981 4.48 May 2022 11,141 11,348 Fannie Mae 144 34,998 4.34 November 2022 27,462 27,970 Fannie Mae 33 7,685 4.50 November 2022 6,113 6,222 Fannie Mae 43 26,987 5.49 November 2022 7,592 — Fannie Mae 84 18,439 4.32 January 2023 16,164 16,460 Fannie Mae 49 18,439 5.39 January 2023 8,684 — Fannie Mae 39 8,682 4.58 January 2023 7,224 7,350 Fannie Mae 85 18,782 4.66 April 2023 15,700 15,967 Fannie Mae 18 5,524 5.46 April 2023 3,150 — Fannie Mae 45 8,700 5.93 October 2023 7,411 7,506 Fannie Mae 67 14,242 5.50 November 2023 11,526 11,686 Fannie Mae 67 13,028 5.38 November 2023 11,591 11,756 Fannie Mae 282 55,740 5.56 January 2024 48,071 48,722 Fannie Mae 632 118,792 4.24 July 2024(5) 125,677 134,650 Fannie Mae 120 27,851 4.48 July 2024 23,196 23,572 Fannie Mae 81 20,660 4.30 July 2024 16,035 16,304 Fannie Mae 134 29,273 4.59 September 2024 25,666 26,070 Fannie Mae 54 11,550 4.70 September 2024 10,200 10,357 Fannie Mae 53 13,093 4.50 January 2025 10,258 10,406 Fannie Mae 95 6,579 4.46 January 2025 18,651 18,923 Fannie Mae 70 16,630 4.35 February 2025 13,909 — Fannie Mae 109 9,434 3.85 March 2025 22,939 — Fannie Mae 102 26,078 3.84 April 2025 21,548 — Fannie Mae 47 10,404 4.55 June 2025 9,087 — Fannie Mae 59 13,014 4.79 June 2025 11,095 — Fannie Mae 81 16,535 5.30 June 2025 14,029 14,237 Fannie Mae 58 13,677 4.69 October 2025 11,122 — Fannie Mae 44 10,380 4.70 October 2025 8,406 — Fannie Mae 273 41,027 4.68 December 2025 52,774 — Fannie Mae 62 12,144 5.43 April 2026 10,761 10,908 Protective Life 96 26,385 3.55 April 2025 21,081 — Protective Life 49 12,207 4.25 August 2025 9,882 — Protective Life 65 19,045 4.25 September 2025 13,145 — Protective Life 138 34,327 4.25 November 2025 27,961 — Berkadia — — — (6) — 13,777 Berkadia — — — (7) — 4,550 Berkadia — — — (6) — 9,300 Berkadia — — — (8) — 8,472 Berkadia — — — (7) — 9,500 Berkadia 48 14,359 (3) July 2017(9) 11,800 11,800 Wells Fargo — — — (10) — 21,600 HUD 16 5,759 4.48 September 2045 3,093 3,142 Insurance Financing 71 — 1.73 October 2016 711 — Insurance Financing 138 — 1.73 April 2016 553 — Insurance Financing 208 — 1.79 March 2016 625 3,095 Insurance Financing — — — February 2015 — 390 Insurance Financing — — — September 2015 — 580 $ 4,490 4.60%(2) 777,116 646,600 Less deferred loan costs, net 8,533 6,331 768,583 640,269 Less current portion 13,634 47,385 $ 754,949 $ 592,884 (1) 69 of the facilities owned by the Company are encumbered by mortgage debt and are provided as collateral under their respective loan agreements. (2) Weighted average interest rate on current fixed interest rate debt outstanding. (3) Variable interest rate of LIBOR plus 4.50%, which was 4.79% at December 31, 2015. (4) On November 12, 2015, the Company obtained new long-term financing from Berkadia, who later sold the loans to Fannie Mae, to replace this mortgage debt with a fixed interest rate of 4.68% and a 10-year term. (5) On August 6, 2015, approximately $6.8 million of this outstanding mortgage debt was assumed by the buyer in conjunction with the Sedgwick Sale Transaction. For additional information refer to Note 5, “Dispositions.” (6) On January 22, 2015, this mortgage debt was repaid or defeased in conjunction with the Four Property Sale Transaction. For additional information refer to Note 5, “Dispositions.” (7) On February 17, 2015, the Company obtained new long-term financing from Fannie Mae to replace this mortgage debt with a fixed interest rate of 3.85% and a 10-year term. (8) On September 24, 2015, the Company obtained new long-term financing from Fannie Mae to replace this mortgage debt with a fixed interest rate of 4.70% and a 10-year term. (9) On February 4, 2015, the Company exercised its right to extend the maturity date with Berkadia to July 10, 2017. (10) On March 5, 2015, the Company obtained new long-term financing from Fannie Mae to replace this mortgage debt with a fixed interest rate of 3.84% and a 10-year term. The aggregate scheduled maturities of notes payable at December 31, 2015 are as follows (in thousands): 2016 14,698 2017 25,318 2018 14,158 2019 14,829 2020 15,443 Thereafter 692,670 $ 777,116 On December 17, 2015, the Company completed supplemental mortgage financing of approximately $7.6 million from Fannie Mae on three senior living communities located in Columbus, Ohio, Chardon, Ohio, and Greenwood, Indiana, at a fixed interest rate of 5.49% which is coterminous with existing mortgage debt maturing in November 2022. The supplemental mortgage loans are cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.2 million in deferred financing costs related to these loans, which are being amortized over the remaining initial loan terms. On November 24, 2015, the Company completed supplemental mortgage financing of approximately $3.2 million from Fannie Mae on one senior living community located in Elkhorn, Nebraska, at a fixed interest rate of 5.46% which is coterminous with existing mortgage debt maturing in April 2023. The supplemental mortgage loan is cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over the remaining initial loan term. On November 24, 2015, the Company completed supplemental mortgage financing of approximately $8.7 million from Fannie Mae on one senior living community located in Springfield, Missouri, at a fixed interest rate of 5.39% which is coterminous with existing mortgage debt maturing in January 2023. The supplemental mortgage loan is cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over the remaining initial loan term. On November 12, 2015, the Company repaid mortgage loans totaling approximately $31.6 million from Fannie Mae associated with four of its senior living communities located in Columbia, South Carolina, Deer Park and Pantego, Texas, and South Bend, Indiana, scheduled to mature in June 2017. The Company obtained approximately $52.8 million of new long-term fixed interest rate mortgage financing from Berkadia Commercial Mortgage LLC (“Berkadia”), who later sold the loans to Fannie Mae, at a fixed interest rate of 4.68% with a 10-year term and the principal amortized over a 30-year term. The Company incurred approximately $0.6 million in deferred financing costs related to the new mortgage loans, which are being amortized over 10 years. As a result of the early repayment of the existing mortgage debt, the Company accelerated the amortization of approximately $0.1 million in unamortized deferred financing costs and incurred a prepayment premium of approximately $1.7 million to Fannie Mae. On October 30, 2015, in conjunction with the Virginia Beach Transaction, the Company obtained $28.0 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.25% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.4 million in deferred financing costs related to this loan, which are being amortized over 10 years. On September 30, 2015, in conjunction with the Mahomet Transaction, the Company obtained approximately $11.1 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.69% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years. On September 30, 2015, the Company completed supplemental financing of approximately $5.0 million from Fannie Mae on an existing senior living community owned by the Company located in Macedonia, Ohio. The supplemental loan is coterminous with existing mortgage debt maturing in October 2021 with a 5.19% fixed interest rate and the principal amortized over a 30-year term. The supplemental loan is cross-collateralized and cross-defaulted with the original mortgage debt. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over the remaining initial loan term. On September 24, 2015, the Company obtained approximately $8.4 million long-term fixed interest rate mortgage financing from Fannie Mae to replace interim variable interest rate financing obtained by the Company from Berkadia on September 30, 2013, in connection with the Company’s previous acquisition of a senior living community located in Oakwood, Georgia. The new mortgage loan has a 10-year term with a 4.7% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years. On August 11, 2015, in conjunction with the Indianapolis Transaction, the Company obtained approximately $13.2 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.25% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years. The note with Protective Life associated with the Indianapolis Transaction includes a loan commitment for up to $2.6 million of supplemental funding at the same terms and 4.25% fixed interest rate. The loan commitment is based on meeting certain funding requirements and is available through February 28, 2018. On August 6, 2015, outstanding mortgage debt totaling approximately $6.8 million was assumed by the buyer in conjunction with the Sedgwick Sale Transaction. As a result of the buyer’s assumption of the existing mortgage debt, the Company accelerated the amortization of approximately $0.1 million in unamortized deferred financing costs. For additional information refer to Note 5, “Dispositions”. On July 28, 2015, in conjunction with the Columbiana Transaction, the Company obtained approximately $9.9 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 4.25% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years. On May 31, 2015, the Company renewed certain insurance policies and entered into a finance agreement totaling approximately $1.7 million. The finance agreement has a fixed interest rate of 1.73% with the principal being repaid over an 11-month term. On May 29, 2015, in conjunction with the Heritage Transaction, the Company obtained approximately $11.2 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.79% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years. On May 21, 2015, in conjunction with the Emerald Transaction, the Company obtained approximately $9.2 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.55% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years. On March 27, 2015, in conjunction with the Baytown Transaction, the Company obtained approximately $21.4 million of mortgage debt from Protective Life. The new mortgage loan has a 10-year term with a 3.55% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over 10 years. On March 5, 2015, the Company repaid an interim, interest only variable rate mortgage loan totaling approximately $21.6 million from Wells Fargo on one of its senior living communities located in Toledo, Ohio. The Company obtained approximately $21.8 million of mortgage debt from Fannie Mae to replace the Wells Fargo interim financing. This new mortgage loan has a 10-year term with a fixed interest rate of 3.84% and the principal amortized over 30-years. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over the loan term. As a result of the refinance, the Company received approximately $0.2 million in cash proceeds. Due to the early repayment, the Company accelerated the amortization of approximately $79,000 in unamortized deferred financing costs and incurred additional prepayment fees totaling approximately $55,000. On February 17, 2015, the Company obtained new permanent mortgage financing totaling approximately $23.2 million from Fannie Mae on one of its owned senior living communities located in Peoria, Illinois. The new financing replaced a mortgage loan previously scheduled to mature on September 1, 2015, which was defeased by the Company on January 22, 2015, in conjunction with the Four Property Sale Transaction. This new mortgage loan has a 10-year term with a fixed interest rate of 3.85% and the principal amortized over 30 years. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which are being amortized over the loan term. As a result of the Peoria financing, the Company repaid existing mortgage debt on two owned properties totaling approximately $14.1 million. Due to the early repayment, the Company accelerated the amortization of approximately $0.2 million in unamortized deferred financing costs and incurred additional prepayment fees totaling approximately $0.5 million. On January 22, 2015, outstanding mortgage debt totaling approximately $13.7 million was defeased in conjunction with the Four Property Sale Transaction. The mortgage loan associated with the Company’s senior living community located in Winston-Salem, North Carolina, carried an outstanding balance of approximately $5.7 million and could not be prepaid under the existing loan agreement as it did not offer a prepayment provision. Additionally, this mortgage loan was cross-collateralized with another mortgage loan on one of the Company’s senior living communities located in Peoria, Illinois, which carried an outstanding mortgage balance of approximately $8.0 million and also did not offer a prepayment provision. Therefore, the Company determined it would defease the Winston-Salem and Peoria mortgage loans by acquiring certain treasury securities to serve as collateral for the outstanding principal balance as of the date of the sale until the note matured on September 1, 2015. The Company contracted with a third party trust to assume the mortgage debt and assigned all of its rights to the treasury securities to serve as collateral until the balance remaining came due. Based on this structure, the Company concluded it met the requirements to report the debt transaction as a legal defeasance which resulted in the Company removing the respective assets and liabilities from its Consolidated Balance Sheet during the first quarter of fiscal 2015 when the transaction closed. Due to the defeasance, the Company accelerated the amortization of approximately $18,000 in unamortized deferred financing costs. For additional information refer to Note 5, “Dispositions”. On January 13, 2015, in conjunction with the Green Bay Transaction, the Company obtained approximately $14.1 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.35% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which are being amortized over 10 years. On December 23, 2014, the Company refinanced a mortgage loan totaling approximately $8.4 million from Freddie Mac associated with one of its senior living communities located in Lincoln, Nebraska. The Company obtained approximately $18.9 million of new mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.46% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which is being amortized over 10 years. As a result of the early repayment of the existing mortgage debt with Freddie Mac, the Company accelerated the amortization of approximately $48,000 in unamortized deferred financing costs and incurred a prepayment premium of approximately $0.9 million. On December 17, 2014, in conjunction with the Canton Transaction, the Company obtained approximately $10.4 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.50% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which is being amortized over 10 years. On August 27, 2014, in conjunction with the Plymouth Transaction, the Company obtained approximately $10.4 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.70% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which is being amortized over 10 years. On August 4, 2014, in conjunction with the Roanoke Transaction, the Company obtained approximately $12.9 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term, with a 4.59% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which is being amortized over 10 years. On August 4, 2014, in conjunction with the Oshkosh Transaction, the Company obtained approximately $13.2 million of mortgage debt from Fannie Mae. The new mortgage loan has a 10-year term with a 4.59% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.1 million in deferred financing costs related to this loan, which is being amortized over 10 years. On June 30, 2014, in conjunction with the SHPIII/CSL Transaction, the Company obtained approximately $16.4 million of mortgage debt from Fannie Mae for the acquisition of SHPIII/CSL Miami. The new mortgage loan has a 10-year term with a fixed interest rate of 4.30% and the principal amortized over a 30-year term. The Company also obtained approximately $23.7 million of mortgage debt from Fannie Mae for the acquisition of SHPIII/CSL Richmond Heights. The new mortgage loan has a 10-year term with a fixed interest rate of 4.48% and the principal amortized over a 30-year term. The Company obtained interim, interest only, financing of $21.6 million from Wells Fargo for the acquisition of SHPIII/CSL Levis Commons with a variable interest rate of LIBOR plus 2.75% and a 24-month term. The Company incurred approximately $0.5 million in deferred financing costs related to these loans, which are being amortized over the respective loan terms. On June 27, 2014, the Company refinanced mortgage loans totaling approximately $111.9 million from Freddie Mac associated with 15 of its senior living communities. The Company obtained approximately $135.5 million of mortgage debt and supplemental financings for 12 of the senior living communities from Fannie Mae. These new mortgage loans have 10-year terms with fixed interest rates of 4.24% and the principal amortized over 30-year terms. The Company obtained interim, interest only, financing of $9.3 million from Berkadia for two of the senior living communities with a variable interest rate of LIBOR plus 4.50% and a 12-month term. The Company also obtained interim, interest only, financing of $11.8 million from Berkadia for one of the senior living communities with a variable interest rate of LIBOR plus 4.50% and a 24-month term. The Company incurred approximately $2.0 million in deferred financing costs related to these loans, which are being amortized over the respective loan terms. As a result of the refinance, the Company received approximately $36.5 million in cash proceeds. As a result of the early repayment of the existing mortgage debt with Freddie Mac, the Company accelerated the amortization of approximately $0.5 million in unamortized deferred loan costs and incurred a prepayment premium of approximately $6.5 million. On May 31, 2014, the Company renewed certain insurance policies and entered into a finance agreement totaling approximately $1.7 million. The finance agreement has a fixed interest rate of 1.92% with principal being repaid over a 9-month term. On March 26, 2014, in conjunction with the Aspen Grove Transaction, the Company obtained approximately $11.0 million of mortgage debt from Fannie Mae. The new mortgage loan has a 12-year term with a 5.43% fixed interest rate and the principal amortized over a 30-year term. The Company incurred approximately $0.2 million in deferred financing costs related to this loan, which is being amortized over 12 years. On March 25, 2011, the Company issued standby letters of credit, totaling approximately $2.6 million, for the benefit of HCN on certain leases between HCN and the Company. On September 10, 2010, the Company issued standby letters of credit, totaling approximately $2.2 million, for the benefit of HCN on certain leases between HCN and the Company. On April 16, 2010, the Company issued standby letters of credit, totaling approximately $1.7 million, for the benefit of HCN on certain leases between HCN and the Company. In connection with the Company’s loan commitments described above, the Company incurred financing charges that were deferred and amortized over the life of the notes. At December 31, 2015 and 2014, the Company had gross deferred loan costs of $10.3 million and $8.5 million, respectively. Accumulated amortization was $1.8 million and $2.2 million at December 31, 2015 and 2014, respectively. During fiscal 2015, due to the early repayment of the Company’s existing mortgage debt associated with the Four Property Sale Transaction, Sedgwick Sale Transaction and refinancings with Fannie Mae, the Company wrote-off approximately $0.5 million in unamortized deferred financing charges and removed the respective accumulated amortization of approximately $1.4 million. Amortization expense is expected to be approximately $1.1 million in each of the next five fiscal years. The Company was in compliance with all aspects of its outstanding indebtedness at December 31, 2015 and 2014. |