Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 01, 2021 | |
Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-15319 | |
Entity Registrant Name | DIVERSIFIED HEALTHCARE TRUST | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 04-3445278 | |
Entity Address, Address Line One | Two Newton Place, 255 Washington Street, Suite 300, | |
Entity Address, City or Town | Newton | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02458-1634 | |
City Area Code | 617 | |
Local Phone Number | 796 - 8350 | |
Title Of Each Class | Common Shares of Beneficial Interest | |
Trading Symbol(s) | DHC | |
Name Of Each Exchange On Which Registered | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Smaller Reporting Company | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 238,994,894 | |
Entity Central Index Key | 0001075415 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Senior Notes Due 2042 | ||
Entity Information | ||
Title Of Each Class | 5.625% Senior Notes due 2042 | |
Trading Symbol(s) | DHCNI | |
Name Of Each Exchange On Which Registered | NASDAQ | |
Senior Notes Due 2046 | ||
Entity Information | ||
Title Of Each Class | 6.25% Senior Notes due 2046 | |
Trading Symbol(s) | DHCNL | |
Name Of Each Exchange On Which Registered | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | |
Real estate properties: | |||
Land | $ 793,555 | $ 789,125 | |
Buildings and improvements | 6,760,990 | 6,621,605 | |
Total real estate properties, gross | 7,554,545 | 7,410,730 | |
Accumulated depreciation | (1,841,172) | (1,694,901) | |
Total real estate properties, net | 5,713,373 | 5,715,829 | |
Assets of properties held for sale | 0 | 112,437 | |
Cash and cash equivalents | 794,739 | 74,417 | |
Restricted cash | 16,698 | [1] | 16,432 |
Acquired real estate leases and other intangible assets, net | 252,629 | 286,513 | |
Other assets, net | 288,609 | 270,796 | |
Total assets | 7,066,048 | 6,476,424 | |
Liabilities and Equity | |||
Revolving credit facility | 800,000 | 0 | |
Term loan, net | 0 | 199,049 | |
Senior unsecured notes, net | 2,805,154 | 2,608,189 | |
Secured debt and finance leases, net | 689,044 | 691,573 | |
Liabilities of properties held for sale | 0 | 3,525 | |
Accrued interest | 47,234 | 23,772 | |
Assumed real estate lease obligations, net | 61,335 | 67,830 | |
Other liabilities | 253,624 | 263,264 | |
Total liabilities | 4,656,391 | 3,857,202 | |
Commitments and contingencies | |||
Equity attributable to common shareholders: | |||
Common shares of beneficial interest, $.01 par value: 300,000,000 shares authorized, 238,995,435 and 238,268,478 shares issued and outstanding, respectively | 2,390 | 2,383 | |
Additional paid in capital | 4,615,162 | 4,613,904 | |
Cumulative net income | 1,722,039 | 1,913,109 | |
Cumulative distributions | (4,040,709) | (4,033,559) | |
Total equity attributable to common shareholders | 2,298,882 | 2,495,837 | |
Noncontrolling interest: | |||
Total equity attributable to noncontrolling interest | 110,775 | 123,385 | |
Total equity | 2,409,657 | 2,619,222 | |
Total liabilities and equity | $ 7,066,048 | $ 6,476,424 | |
[1] | Restricted cash consists of amounts escrowed for real estate taxes, insurance and capital expenditures at certain of our mortgaged properties and cash held for the operations of the life science property that is owned in a joint venture arrangement in which we own a 55% equity interest. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares of beneficial interest, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common shares of beneficial interest, shares issued (in shares) | 238,995,435 | 238,268,478 |
Common shares of beneficial interest, shares outstanding (in shares) | 238,995,435 | 238,268,478 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Revenues | $ 337,416 | $ 394,339 | $ 1,046,481 | $ 1,247,117 |
Expenses: | ||||
Property operating expenses | 266,073 | 315,650 | 818,096 | 934,150 |
Depreciation and amortization | 68,702 | 67,211 | 202,743 | 204,466 |
General and administrative | 8,870 | 6,988 | 25,538 | 23,132 |
Acquisition and certain other transaction related costs | 3,108 | 53 | 15,179 | 803 |
Impairment of assets | 0 | 64,202 | (174) | 106,611 |
Total expenses | 346,753 | 454,104 | 1,061,382 | 1,269,162 |
Gain (loss) on sale of properties | 200 | (211) | 30,838 | 2,403 |
Gains and losses on equity securities, net | (14,755) | 12,510 | (26,943) | 14,541 |
Interest and other income | 976 | 134 | 19,849 | 8,008 |
Interest expense (including net amortization of debt premiums, discounts and issuance costs of $3,948, $2,448, $9,777 and $5,574, respectively) | (64,493) | (58,091) | (192,241) | (143,715) |
Gain on lease termination | 0 | 0 | 0 | 22,896 |
Loss on early extinguishment of debt | 0 | 0 | (2,410) | (427) |
Loss from continuing operations before income tax expense | (87,409) | (105,423) | (185,808) | (118,339) |
Income tax expense | (595) | (365) | (1,024) | (1,048) |
Net loss | (88,004) | (105,788) | (186,832) | (119,387) |
Net income attributable to noncontrolling interest | (1,339) | (1,100) | (4,238) | (3,838) |
Net loss attributable to common shareholders | $ (89,343) | $ (106,888) | $ (191,070) | $ (123,225) |
Weighted average common shares outstanding (basic) (in shares) | 238,008 | 237,752 | 237,905 | 237,707 |
Weighted average common shares outstanding (diluted) (in shares) | 238,008 | 237,752 | 237,905 | 237,707 |
Per common share amounts (basic and diluted): | ||||
Net loss attributable to common shareholders - basic (in dollars per share) | $ (0.38) | $ (0.45) | $ (0.80) | $ (0.52) |
Net loss attributable to common shareholders - diluted (in dollars per share) | $ (0.38) | $ (0.45) | $ (0.80) | $ (0.52) |
Rental income | ||||
Revenues: | ||||
Revenues | $ 101,403 | $ 104,238 | $ 306,555 | $ 320,943 |
Residents fees and services | ||||
Revenues: | ||||
Revenues | $ 236,013 | $ 290,101 | $ 739,926 | $ 926,174 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Net amortization of debt premiums, discounts and issuance costs | $ 3,948 | $ 2,448 | $ 9,777 | $ 5,574 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Five Star | Five StarShareholders | Total Equity Attributable to Common Shareholders | Total Equity Attributable to Common ShareholdersFive StarShareholders | Common Shares | Additional Paid In Capital | Cumulative Net Income | Cumulative Distributions | Cumulative DistributionsFive StarShareholders | Total Equity Attributable to Noncontrolling Interest |
Beginning balance at Dec. 31, 2019 | $ 2,877,050 | $ 2,736,519 | $ 2,379 | $ 4,612,511 | $ 2,052,562 | $ (3,930,933) | $ 140,531 | ||||
Beginning balance (in shares) at Dec. 31, 2019 | 10,268,158 | 237,897,163 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net (loss) income | 11,143 | 9,735 | 9,735 | 1,408 | |||||||
Distributions | (35,684) | $ (59,801) | (35,684) | $ (59,801) | (35,684) | $ (59,801) | |||||
Share grants | 249 | 249 | 249 | ||||||||
Share repurchases | (21) | (21) | (21) | ||||||||
Share repurchases (in shares) | (3,438) | ||||||||||
Distributions to noncontrolling interest | (5,767) | (5,767) | |||||||||
Ending balance at Mar. 31, 2020 | 2,787,169 | 2,650,997 | $ 2,379 | 4,612,739 | 2,062,297 | (4,026,418) | 136,172 | ||||
Ending balance (in shares) at Mar. 31, 2020 | 237,893,725 | ||||||||||
Beginning balance at Dec. 31, 2019 | 2,877,050 | 2,736,519 | $ 2,379 | 4,612,511 | 2,052,562 | (3,930,933) | 140,531 | ||||
Beginning balance (in shares) at Dec. 31, 2019 | 10,268,158 | 237,897,163 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net (loss) income | (119,387) | ||||||||||
Ending balance at Sep. 30, 2020 | 2,641,706 | 2,514,044 | $ 2,383 | 4,613,501 | 1,929,337 | (4,031,177) | 127,662 | ||||
Ending balance (in shares) at Sep. 30, 2020 | 238,268,478 | ||||||||||
Beginning balance at Mar. 31, 2020 | 2,787,169 | 2,650,997 | $ 2,379 | 4,612,739 | 2,062,297 | (4,026,418) | 136,172 | ||||
Beginning balance (in shares) at Mar. 31, 2020 | 237,893,725 | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net (loss) income | (24,742) | (26,072) | (26,072) | 1,330 | |||||||
Distributions | (2,379) | (2,379) | (2,379) | ||||||||
Share grants | 416 | 416 | $ 1 | 415 | |||||||
Share grants (in shares) | 60,000 | ||||||||||
Share repurchases | (8) | (8) | (8) | ||||||||
Share repurchases (in shares) | (1,757) | ||||||||||
Distributions to noncontrolling interest | (5,616) | (5,616) | |||||||||
Ending balance at Jun. 30, 2020 | 2,754,840 | 2,622,954 | $ 2,380 | 4,613,146 | 2,036,225 | (4,028,797) | 131,886 | ||||
Ending balance (in shares) at Jun. 30, 2020 | 237,951,968 | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net (loss) income | (105,788) | (106,888) | (106,888) | 1,100 | |||||||
Distributions | (2,380) | (2,380) | (2,380) | ||||||||
Share grants | 506 | 506 | $ 3 | 503 | |||||||
Share grants (in shares) | 360,000 | ||||||||||
Share repurchases | (142) | (142) | (142) | ||||||||
Share repurchases (in shares) | (42,180) | ||||||||||
Share forfeitures | (6) | (6) | (6) | ||||||||
Share forfeitures (in shares) | (1,310) | ||||||||||
Distributions to noncontrolling interest | (5,324) | (5,324) | |||||||||
Ending balance at Sep. 30, 2020 | 2,641,706 | 2,514,044 | $ 2,383 | 4,613,501 | 1,929,337 | (4,031,177) | 127,662 | ||||
Ending balance (in shares) at Sep. 30, 2020 | 238,268,478 | ||||||||||
Beginning balance at Dec. 31, 2020 | $ 2,619,222 | 2,495,837 | $ 2,383 | 4,613,904 | 1,913,109 | (4,033,559) | 123,385 | ||||
Beginning balance (in shares) at Dec. 31, 2020 | 238,268,478 | 238,268,478 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net (loss) income | $ (66,183) | (67,505) | (67,505) | 1,322 | |||||||
Distributions | (2,383) | (2,383) | (2,383) | ||||||||
Share grants | 228 | 228 | 228 | ||||||||
Distributions to noncontrolling interest | (5,694) | (5,694) | |||||||||
Ending balance at Mar. 31, 2021 | 2,545,190 | 2,426,177 | $ 2,383 | 4,614,132 | 1,845,604 | (4,035,942) | 119,013 | ||||
Ending balance (in shares) at Mar. 31, 2021 | 238,268,478 | ||||||||||
Beginning balance at Dec. 31, 2020 | $ 2,619,222 | 2,495,837 | $ 2,383 | 4,613,904 | 1,913,109 | (4,033,559) | 123,385 | ||||
Beginning balance (in shares) at Dec. 31, 2020 | 238,268,478 | 238,268,478 | |||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net (loss) income | $ (186,832) | ||||||||||
Ending balance at Sep. 30, 2021 | $ 2,409,657 | 2,298,882 | $ 2,390 | 4,615,162 | 1,722,039 | (4,040,709) | 110,775 | ||||
Ending balance (in shares) at Sep. 30, 2021 | 238,995,435 | 238,995,435 | |||||||||
Beginning balance at Mar. 31, 2021 | $ 2,545,190 | 2,426,177 | $ 2,383 | 4,614,132 | 1,845,604 | (4,035,942) | 119,013 | ||||
Beginning balance (in shares) at Mar. 31, 2021 | 238,268,478 | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net (loss) income | (32,645) | (34,222) | (34,222) | 1,577 | |||||||
Distributions | (2,383) | (2,383) | (2,383) | ||||||||
Share grants | 676 | 676 | $ 1 | 675 | |||||||
Share grants (in shares) | 120,000 | ||||||||||
Share repurchases | (59) | (59) | (59) | ||||||||
Share repurchases (in shares) | (13,906) | ||||||||||
Distributions to noncontrolling interest | (5,630) | (5,630) | |||||||||
Ending balance at Jun. 30, 2021 | 2,505,149 | 2,390,189 | $ 2,384 | 4,614,748 | 1,811,382 | (4,038,325) | 114,960 | ||||
Ending balance (in shares) at Jun. 30, 2021 | 238,374,572 | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Net (loss) income | (88,004) | (89,343) | (89,343) | 1,339 | |||||||
Distributions | (2,384) | (2,384) | (2,384) | ||||||||
Share grants | 745 | 745 | $ 7 | 738 | |||||||
Share grants (in shares) | 718,000 | ||||||||||
Share repurchases | (322) | (322) | $ (1) | (321) | |||||||
Share repurchases (in shares) | (94,937) | ||||||||||
Share forfeitures | (3) | (3) | (3) | ||||||||
Share forfeitures (in shares) | (2,200) | ||||||||||
Distributions to noncontrolling interest | (5,524) | (5,524) | |||||||||
Ending balance at Sep. 30, 2021 | $ 2,409,657 | $ 2,298,882 | $ 2,390 | $ 4,615,162 | $ 1,722,039 | $ (4,040,709) | $ 110,775 | ||||
Ending balance (in shares) at Sep. 30, 2021 | 238,995,435 | 238,995,435 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (186,832) | $ (119,387) |
Adjustments to reconcile net loss to cash (used in) provided by operating activities: | ||
Depreciation and amortization | 202,743 | 204,466 |
Net amortization of debt premiums, discounts and issuance costs | 9,777 | 5,574 |
Straight line rental income | (3,804) | (3,029) |
Amortization of acquired real estate leases | (5,563) | (5,559) |
Loss on early extinguishment of debt | 2,410 | 51 |
Gain on lease termination | 0 | (22,896) |
Impairment of assets | (174) | 106,611 |
Gain on sale of properties | (30,838) | (2,403) |
Gains and losses on equity securities, net | 26,943 | (14,541) |
Other non-cash adjustments, net | (1,183) | (1,662) |
Change in assets and liabilities: | ||
Deferred leasing costs, net | (11,736) | (5,522) |
Other assets | (29,227) | (35,417) |
Accrued interest | 23,462 | 29,604 |
Other liabilities | (9,176) | 23,089 |
Net cash (used in) provided by operating activities | (13,198) | 158,979 |
Cash flows from investing activities: | ||
Real estate acquisitions and deposits | 0 | (2,526) |
Real estate improvements | (126,142) | (118,141) |
Proceeds from sale of properties, net | 103,257 | 78,244 |
Distributions in excess of earnings from Affiliates Insurance Company | 0 | 287 |
Net cash used in investing activities | (22,885) | (42,136) |
Cash flows from financing activities: | ||
Proceeds from issuance of senior unsecured notes, net | 492,500 | 985,000 |
Proceeds from borrowings on revolving credit facility | 800,000 | 430,500 |
Repayments of borrowings on revolving credit facility | 0 | (968,000) |
Repayment of senior unsecured notes | (300,000) | (200,000) |
Repayment of term loan | (200,000) | (250,000) |
Repayment of other debt | (2,349) | (5,189) |
Loss on early extinguishment of debt settled in cash | 0 | (376) |
Payment of debt issuance costs | (9,101) | (5,306) |
Repurchase of common shares | (381) | (171) |
Distributions to noncontrolling interest | (16,848) | (16,707) |
Distributions to shareholders | (7,150) | (40,443) |
Net cash provided by (used in) financing activities | 756,671 | (70,692) |
Increase in cash and cash equivalents and restricted cash | 720,588 | 46,151 |
Cash and cash equivalents and restricted cash at beginning of period | 90,849 | 52,224 |
Cash and cash equivalents and restricted cash at end of period | $ 811,437 | $ 98,375 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Supplemental (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Supplemental cash flow information: | ||
Interest paid | $ 160,091 | $ 109,689 |
Income taxes paid | 1,985 | 381 |
Non-cash investing activities: | ||
Real estate improvements accrued, not paid | 15,751 | 21,342 |
Capitalized interest | 1,089 | 1,152 |
Five Star | ||
Non-cash investing activities: | ||
Restructuring transaction additional consideration | 0 | (75,000) |
Five Star | ||
Non-cash investing activities: | ||
Five Star Senior Living Inc. common stock | 0 | 97,896 |
Non-cash financing activities: | ||
Distribution to common shareholders of the right to receive Five Star Senior Living Inc. common stock | $ 0 | $ (59,801) |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Cash and Restricted Cash (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | ||
Cash and cash equivalents | $ 794,739 | $ 74,417 | $ 82,241 | |||
Restricted cash | 16,698 | [1] | 16,432 | 16,134 | [1] | |
Total cash and cash equivalents and restricted cash shown in our condensed consolidated statements of cash flows | $ 811,437 | $ 90,849 | $ 98,375 | $ 52,224 | ||
Life Science Property | Joint Venture | ||||||
Ownership percentage | 55.00% | |||||
[1] | Restricted cash consists of amounts escrowed for real estate taxes, insurance and capital expenditures at certain of our mortgaged properties and cash held for the operations of the life science property that is owned in a joint venture arrangement in which we own a 55% equity interest. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of Diversified Healthcare Trust and its subsidiaries, or we, us, or our, are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2020, or our Annual Report. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in our condensed consolidated financial statements include purchase price allocations, useful lives of fixed assets and impairments of real estate and intangible assets. We have been, are currently, and expect in the future to be involved in claims, lawsuits, and regulatory and other governmental audits, investigations and proceedings arising in the ordinary course of our business, some of which may involve material amounts. Also, the defense and resolution of these claims, lawsuits, and regulatory and other governmental audits, investigations and proceedings may require us to incur significant expense. We account for claims and litigation losses in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Codification Topic 450, Contingencies , or ASC 450. Under ASC 450, loss contingency provisions are recorded for probable and estimable losses at our best estimate of a loss or, when a best estimate cannot be made, at our estimate of the minimum loss. These estimates are often developed prior to knowing the amount of the ultimate loss, require the application of considerable judgment, and are refined as additional information becomes known. Accordingly, we are often initially unable to develop a best estimate of loss and therefore the estimated minimum loss amount, which could be zero, is recorded; and then, as information becomes known, the minimum loss amount is updated, as appropriate. A minimum or best estimate amount may be increased or decreased when events result in a changed expectation. We are party to a joint venture arrangement with an institutional investor. This joint venture arrangement owns a life science property located in Boston, Massachusetts. The investor owns a 45% equity interest in the joint venture, and we own the remaining 55% equity interest in the joint venture. We have determined that this joint venture is a variable interest entity, or VIE, as defined under the Consolidation Topic of the FASB Accounting Standards Codification. We concluded that we must consolidate this VIE because we are the entity with the power to direct the activities that most significantly impact the VIE's economic performance and we have the obligation to absorb losses of, and the right to receive benefits from, the VIE that could be significant to the VIE, and therefore are the primary beneficiary of the VIE. The assets of this VIE were $935,340 and $970,142 as of September 30, 2021 and December 31, 2020, respectively, and consist primarily of the net real estate owned by the joint venture. The liabilities of this VIE were $690,714 and $697,129 as of September 30, 2021 and December 31, 2020, respectively, and consist primarily of mortgage debts secured by the property. The investor's interest in this consolidated entity is reflected as a noncontrolling interest in our condensed consolidated financial statements. See Note 6 for further information about this joint venture. |
Real Estate Properties
Real Estate Properties | 9 Months Ended |
Sep. 30, 2021 | |
Real Estate [Abstract] | |
Real Estate Properties | Real Estate Properties As of September 30, 2021, we owned 392 properties located in 36 states and Washington, D.C., including one life science property owned in a joint venture arrangement in which we own a 55% equity interest. We regularly evaluate our assets for indicators of impairment. Impairment indicators may include declining tenant or resident occupancy, weak or declining profitability from the property, decreasing tenant cash flows or liquidity, our decision to dispose of an asset before the end of its estimated useful life, and legislative, market or industry changes that could permanently reduce the value of an asset. If indicators of impairment are present, we evaluate the carrying value of the affected assets by comparing it to the expected future cash flows to be generated from those assets. The future cash flows are subjective and are based in part on assumptions regarding hold periods, market rents and terminal capitalization rates. If the sum of these expected future cash flows is less than the carrying value, we reduce the net carrying value of the asset to its estimated fair value. During the nine months ended September 30, 2021, we recorded a reversal of impairment charges of $174 related to the estimated costs to sell 10 senior living communities that were classified as held for sale as of December 31, 2020 and changed the status of those communities from held for sale to held and used as of March 31, 2021. Acquisitions and Dispositions: During the nine months ended September 30, 2021, we sold five properties for an aggregate sales price of $104,500, excluding closing costs, as presented in the table below. The sales of these properties do not represent significant dispositions, individually or in the aggregate, and we do not believe these sales represent a strategic shift in our business. As a result, the results of operations for these properties are included in continuing operations through the date of sale of such properties in our condensed consolidated statements of comprehensive income (loss). Date of Sale Location Type of Property Number of Properties Square Feet Sales Price (1) Gain (Loss) on Sale February 2021 Pennsylvania Medical Office 1 92,000 $ 9,000 $ (122) April 2021 Florida Life Science and Medical Office 4 263,656 95,500 30,760 5 $ 104,500 $ 30,638 (1) Sales price excludes closing costs. During the nine months ended September 30, 2021, we recognized a gain of $200 related to the sales of skilled nursing bed licenses at certain of our senior living communities. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | Leases We are a lessor of medical office and life science properties, senior living communities and other healthcare related properties. Our leases provide our tenants with the contractual right to use and economically benefit from all of the premises demised under the leases; therefore, we have determined to evaluate our leases as lease arrangements. Certain of our leases provide for base rent payments and in addition may include variable payments. Rental income from operating leases, including any payments derived by index or market based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. We increased rental income to record revenue on a straight line basis by $1,679 and $491 for the three months ended September 30, 2021 and 2020, respectively, and $3,804 and $3,029 for the nine months ended September 30, 2021 and 2020, respectively. Rents receivable, excluding receivables related to our properties classified as held for sale, if any, include $108,180 and $104,803 of straight line rent receivables at September 30, 2021 and December 31, 2020, respectively, and are included in other assets, net in our condensed consolidated balance sheets. We do not include in our measurement of our lease receivables certain variable payments, including changes in the index or market based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Such payments totaled $17,930 and $18,501 for the three months ended September 30, 2021 and 2020, respectively, of which tenant reimbursements totaled $17,875 and $18,550, respectively, and $54,634 and $56,792 for the nine months ended September 30, 2021 and 2020, respectively, of which tenant reimbursements totaled $54,495 and $56,742, respectively. Certain of our tenants requested relief from their obligations to pay rent due to us in response to the current economic conditions resulting from the COVID-19 pandemic. In most cases, these tenants granted deferrals were obligated to pay the deferred rents in 12 equal monthly installments beginning in September 2020. As of September 30, 2021 and December 31, 2020, deferred payments totaling $84 and $1,486, respectively, are included in other assets, net in our condensed consolidated balance sheets. These deferred amounts did not negatively impact our operating results for the three or nine months ended September 30, 2021 or 2020. Right of Use Asset and Lease Liability . For leases where we are the lessee, we recognized a right of use asset and a lease liability equal to the present value of the minimum lease payments with rental payments being applied to the lease liability and the right of use asset being amortized over the term of the lease. The values of the right of use asset and related liability representing our future obligation under the lease arrangement for which we are the lessee were $4,174 and $4,366, respectively, as of September 30, 2021, and $4,237 and $4,410, respectively, as of December 31, 2020. The right of use asset and related lease liability are included within other assets, net other liabilities |
Indebtedness
Indebtedness | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness Our principal debt obligations at September 30, 2021 were: (1) outstanding borrowings under our $800,000 revolving credit facility; (2) $2,850,000 outstanding principal amount of senior unsecured notes; and (3) $683,008 aggregate principal amount of mortgage notes secured by seven properties, of which $620,000 is related to the life science property owned by a joint venture arrangement in which we own a 55% equity interest. These seven mortgaged properties had a gross book value of $948,813 at September 30, 2021. We also had two properties subject to finance leases with lease obligations totaling $6,937 at September 30, 2021; these two properties had gross book value and accumulated depreciation of $36,319 and $18,014, respectively, at September 30, 2021, and $35,676 and $17,579, respectively, at December 31, 2020, and the finance leases expire in 2026. We have a $800,000 revolving credit facility that is available for general business purposes. As of September 30, 2021, the maturity date of our revolving credit facility was January 2022. In October 2021, we exercised our option to extend the maturity date of our revolving credit facility by one year to January 2023. Subject to the payment of an extension fee and meeting other conditions, we have an additional option to extend the maturity date of the facility by one year to January 2024. Our revolving credit facility provides that we can borrow, repay and re-borrow funds available under our revolving credit facility until maturity, and no principal repayment is due until maturity. As of September 30, 2021, our revolving credit facility required interest to be paid on borrowings at the annual rate of 2.9%, plus a facility fee of 30 basis points per annum on the total amount of lending commitments under the facility. The weighted average annual interest rates for borrowings under our revolving credit facility were 2.9% and 2.6% for the three months ended September 30, 2021 and 2020, respectively, and 2.9% and 2.2% for the nine months ended September 30, 2021 and 2020, respectively. The interest rate premium and facility fee are each subject to adjustment based upon changes to our credit ratings. On March 31, 2021, we borrowed $800,000 under our revolving credit facility as a precautionary measure to increase our cash position and preserve financial flexibility in light of continued uncertainties related to the COVID-19 pandemic. As of September 30, 2021 and November 1, 2021, we were fully drawn under our revolving credit facility. In February 2021, we issued $500,000 aggregate principal amount of our 4.375% senior notes due 2031 in an underwritten public offering raising net proceeds of $491,357, after deducting estimated offering expenses and underwriters' discounts. These notes are guaranteed by all of our subsidiaries, except for certain excluded subsidiaries, including pledged subsidiaries under the agreement governing our revolving credit facility, or our credit agreement, and require semi-annual interest payments through maturity. We used the net proceeds from this offering to prepay in full in February 2021 our $200,000 term loan which was scheduled to mature in September 2022. The weighted average interest rate under our $200,000 term loan was 2.9% for the period from January 1, 2021 to February 7, 2021 and 2.7% for each of the three and nine months ended September 30, 2020. As a result of the prepayment of our $200,000 term loan, we recorded a loss on early extinguishment of debt of $1,477 for the nine months ended September 30, 2021. In June 2021, we used the remaining net proceeds from this offering and cash on hand to redeem all of our outstanding 6.75% senior notes due 2021 for a redemption price equal to the principal amount of $300,000 plus accrued and unpaid interest of $10,125, when these notes became redeemable with no prepayment premium. In connection with this redemption, we recorded a loss on early extinguishment of debt of $370 for the nine months ended September 30, 2021. In January 2021, we and our lenders amended the agreements governing our revolving credit facility and our $200,000 term loan, or collectively, our credit and term loan agreements, in order to provide us with certain flexibility in light of continued uncertainties related to the COVID-19 pandemic. Pursuant to the amendments: • certain of the financial covenants under our credit and term loan agreements, including covenants that require us to maintain certain financial ratios, have been waived through June 2022, or the Amendment Period; • the revolving credit facility commitments have been reduced from $1,000,000 to $800,000, and as a result of the reduction in commitments, we recorded a loss on early extinguishment of debt of $563 for the nine months ended September 30, 2021; • we pledged certain equity interests of subsidiaries owning properties to secure our obligations under our credit and term loan agreements and agreed to provide, and as of September 2021 had provided, first mortgage liens on 61 medical office and life science properties with an aggregate gross book value of real estate assets of $991,074 as of September 30, 2021 to secure our obligations, which pledges and/or mortgage liens may be removed or new ones may be added during the Amendment Period based on outstanding debt amounts, among other things; • we had the ability to fund $250,000 of capital expenditures per year, which increased to $350,000 per year following the repayment of our term loan in February 2021, and are restricted in our ability to acquire real property as defined in our credit agreement; • the interest rate premium over LIBOR under our revolving credit facility and term loan increased by 30 basis points; • certain covenants and restrictions on distributions to common shareholders, share repurchases, capital expenditures, acquiring additional properties and incurring additional indebtedness (in each case subject to various exceptions), and the minimum liquidity requirement of $200,000 will remain in place during the Amendment Period; and • we are generally required to apply the net cash proceeds from the disposition of assets, capital markets transactions, and debt financings to the repayment of any amounts outstanding under our revolving credit facility. In September 2021, we and our lenders further amended our credit agreement. Among other things, the amendment sets forth the mechanics for establishing a replacement benchmark rate under our credit agreement at such time as LIBOR is no longer available to calculate interest payable on amounts outstanding thereunder. Our credit agreement and our senior unsecured notes indentures and their supplements provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, as defined, which includes The RMR Group LLC, or RMR LLC, ceasing to act as our business and property manager. Our credit agreement and our senior unsecured notes indentures and their supplements also contain covenants, including covenants that restrict our ability to incur debts, and generally require us to maintain certain financial ratios, and our credit agreement restricts our ability to make distributions under certain circumstances. As of September 30, 2021, our ratio of consolidated income available for debt service to debt service was below the 1.5x incurrence requirement under our revolving credit facility and our public debt covenants as the effects of the COVID-19 pandemic continued to adversely impact our operations. We are not allowed to incur additional debt while this ratio is below 1.5x on a pro forma basis. We believe we were in compliance with the remaining terms and conditions of the respective covenants under our credit agreement and our senior unsecured notes indentures and their supplements at September 30, 2021. Although we have taken steps to enhance our ability to maintain sufficient liquidity, as noted elsewhere in this Quarterly Report on Form 10-Q, a protracted negative impact on the economy or the industries in which our properties and businesses operate resulting from the COVID-19 pandemic may cause increased pressure on our ability to satisfy financial and other covenants. Continued availability of borrowings under our revolving credit facility is subject to our satisfying certain financial covenants and other credit facility conditions. If our operating results and financial condition are significantly negatively impacted by economic conditions or otherwise, we may fail to satisfy covenants and conditions under our credit agreement or fail to satisfy our public debt covenants. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities The following table presents certain of our assets that are measured at fair value at September 30, 2021, categorized by the level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset. Fair Value at Reporting Date Using Quoted Prices in Significant Other Observable Inputs Significant Unobservable Inputs Description Total (Level 1) (Level 2) (Level 3) Recurring Fair Value Measurements Assets: Investment in Five Star (1) $ 46,829 $ 46,829 $ — $ — (1) Our 10,691,658 shares of common stock of Five Star Senior Living Inc., or Five Star, are included in other assets, net in our condensed consolidated balance sheets, and are reported at fair value, which is based upon quoted market prices on The Nasdaq Stock Market LLC, or Nasdaq, (Level 1 inputs). Our adjusted cost basis for these shares was $44,448 as of September 30, 2021. During the three months ended September 30, 2021 and 2020, we recorded an unrealized loss of $14,755 and an unrealized gain of $12,510, respectively, and during the nine months ended September 30, 2021 and 2020, we recorded an unrealized loss of $26,943 and an unrealized gain of $14,541, respectively, which are included in gains and losses on equity securities, net in our condensed consolidated statements of comprehensive income (loss), to adjust the carrying value of our investment in Five Star common shares to their fair value. See Note 11 for further information about our investment in Five Star. In addition to the assets described in the table above, our financial instruments at September 30, 2021 and December 31, 2020 included cash and cash equivalents, restricted cash, other assets, our revolving credit facility, term loan, senior unsecured notes, secured debt and finance leases and other unsecured obligations and liabilities. The fair values of these financial instruments approximated their carrying values in our condensed consolidated financial statements as of such dates, except as follows: As of September 30, 2021 As of December 31, 2020 Description Carrying Amount (1) Estimated Fair Value Carrying Amount (1) Estimated Fair Value Senior unsecured notes, 6.750% coupon rate, due 2021 $ — $ — $ 299,273 $ 303,891 Senior unsecured notes, 4.750% coupon rate, due 2024 249,278 258,096 249,068 256,258 Senior unsecured notes, 9.750% coupon rate, due 2025 987,017 1,094,415 984,359 1,135,800 Senior unsecured notes, 4.750% coupon rate, due 2028 491,881 505,630 490,925 502,648 Senior unsecured notes, 4.375% coupon rate, due 2031 491,913 485,743 — — Senior unsecured notes, 5.625% coupon rate, due 2042 342,088 337,540 341,802 330,120 Senior unsecured notes, 6.250% coupon rate, due 2046 242,977 250,300 242,762 245,000 Secured debts (2) (3) 689,044 707,026 691,573 716,185 $ 3,494,198 $ 3,638,750 $ 3,299,762 $ 3,489,902 (1) Includes unamortized net debt issuance costs, premiums and discounts. (2) We assumed certain of these secured debts in connection with our acquisition of certain properties. We recorded the assumed mortgage notes at estimated fair value on the date of acquisition and we are amortizing the fair value adjustments, if any, to interest expense over the respective terms of the mortgage notes to adjust interest expense to the estimated market interest rates as of the date of acquisition. (3) Includes secured debts for the life science property owned by a joint venture arrangement in which we own a 55% equity interest. The amounts listed in the table for these debts have not been adjusted to reflect the equity interests in the joint venture that we do not own. We estimated the fair value of our two issuances of senior unsecured notes due 2042 and 2046 based on the closing price on Nasdaq (Level 1 input) as of September 30, 2021. We estimated the fair values of our four issuances of senior unsecured notes due 2024, 2025, 2028 and 2031 using an average of the bid and ask price on Nasdaq on or about September 30, 2021 |
Noncontrolling Interest
Noncontrolling Interest | 9 Months Ended |
Sep. 30, 2021 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | Noncontrolling Interest We are party to a joint venture arrangement with an institutional investor for one of our life science properties located in Boston, Massachusetts. The investor owns a 45% equity interest in the joint venture, and we own the remaining 55% equity interest in the joint venture. We continue to control this property and therefore continue to account for this property on a consolidated basis in our condensed consolidated financial statements under the VIE model. The portion of the joint venture's net income and comprehensive income not attributable to us, or $1,339 and $1,100 for the three months ended September 30, 2021 and 2020, respectively, and $4,238 and $3,838 for the nine months ended September 30, 2021 and 2020, respectively, is reported as a noncontrolling interest in our condensed consolidated statements of comprehensive income (loss). The joint venture made aggregate cash distributions to the other joint venture investor of $5,524 and $5,324 for the three months ended September 30, 2021 and 2020, respectively, and $16,848 and $16,707 for the nine months ended September 30, 2021 and 2020, respectively, which are reflected as a decrease in total equity attributable to noncontrolling interest in our condensed consolidated balance sheets. As of September 30, 2021, this joint venture held real estate assets with an aggregate net book value of $690,382, subject to mortgage notes of $620,000. In assessing whether we have a controlling interest in this joint venture arrangement and are required to consolidate the accounts of the joint venture entity, we considered the members' rights to residual gains and obligations to absorb losses, which activities most significantly impact the economic performance of the entity and which member has the power to direct those activities. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders' Equity Common Share Awards: On June 3, 2021, in accordance with our Trustee compensation arrangements, we awarded to each of our six Trustees 20,000 of our common shares, valued at $3.70 per share, the closing price of our common shares on Nasdaq on that day . On September 15, 2021, we awarded under our equity compensation plan an aggregate of 718,000 of our common shares, valued at $3.41 per share, the closing price of our common shares on Nasdaq on that day, to our officers and certain other employees of RMR LLC . Common Share Repurchases: During the three and nine months ended September 30, 2021, we purchased an aggregate of 94,937 and 108,843 of our common shares, respectively, valued at a weighted average share price of $3.39 and $3.49 per share, respectively, from our officers and certain current and former officers and employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. Distributions: During the nine months ended September 30, 2021, we declared and paid quarterly distributions to common shareholders as follows: Declaration Date Record Date Payment Date Distribution Per Share Total Distributions January 14, 2021 January 25, 2021 February 18, 2021 $ 0.01 $ 2,383 April 15, 2021 April 26, 2021 May 20, 2021 0.01 2,383 July 15, 2021 July 26, 2021 August 19, 2021 0.01 2,384 $ 0.03 $ 7,150 |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We operate in, and report financial information for, the following two segments: Office Portfolio and senior housing operating portfolio, or SHOP. We aggregate each of these two reporting segments based on their similar operating and economic characteristics. Our Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. Our SHOP segment consists of managed senior living communities that provide short term and long term residential living and in some instances care and other services for residents where we pay fees to managers to operate the communities. We also report “non-segment” operations, which consists of triple net leased senior living communities that are leased to operators from which we receive rents, and wellness centers, which we do not consider to be sufficiently material to constitute a separate reporting segment, and any other income or expenses that are not attributable to a specific reporting segment. For the Three Months Ended September 30, 2021 Office Portfolio SHOP Non-Segment Consolidated Revenues: Rental income $ 91,520 $ — $ 9,883 $ 101,403 Residents fees and services — 236,013 — 236,013 Total revenues 91,520 236,013 9,883 337,416 Expenses: Property operating expenses 32,386 233,687 — 266,073 Depreciation and amortization 32,142 33,688 2,872 68,702 General and administrative — — 8,870 8,870 Acquisition and certain other transaction related costs — — 3,108 3,108 Total expenses 64,528 267,375 14,850 346,753 Gain on sale of properties — 200 — 200 Losses on equity securities, net — — (14,755) (14,755) Interest and other income — 786 190 976 Interest expense (6,053) (523) (57,917) (64,493) Income (loss) from continuing operations before income tax expense 20,939 (30,899) (77,449) (87,409) Income tax expense — — (595) (595) Net income (loss) 20,939 (30,899) (78,044) (88,004) Net income attributable to noncontrolling interest (1,339) — — (1,339) Net income (loss) attributable to common shareholders $ 19,600 $ (30,899) $ (78,044) $ (89,343) For the Nine Months Ended September 30, 2021 Office Portfolio SHOP Non-Segment Consolidated Revenues: Rental income $ 277,647 $ — $ 28,908 $ 306,555 Residents fees and services — 739,926 — 739,926 Total revenues 277,647 739,926 28,908 1,046,481 Expenses: Property operating expenses 95,000 723,096 — 818,096 Depreciation and amortization 96,577 97,587 8,579 202,743 General and administrative — — 25,538 25,538 Acquisition and certain other transaction related costs — — 15,179 15,179 Impairment of assets — (174) — (174) Total expenses 191,577 820,509 49,296 1,061,382 Gain on sale of properties 30,638 200 — 30,838 Losses on equity securities, net — — (26,943) (26,943) Interest and other income — 18,967 882 19,849 Interest expense (17,984) (1,576) (172,681) (192,241) Loss on early extinguishment of debt — — (2,410) (2,410) Income (loss) from continuing operations before income tax expense 98,724 (62,992) (221,540) (185,808) Income tax expense — — (1,024) (1,024) Net income (loss) 98,724 (62,992) (222,564) (186,832) Net income attributable to noncontrolling interest (4,238) — — (4,238) Net income (loss) attributable to common shareholders $ 94,486 $ (62,992) $ (222,564) $ (191,070) Under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, the U.S. Department of Health and Human Services, or HHS, established a Provider Relief Fund. Retention and use of the funds received under the CARES Act are subject to certain terms and conditions. The terms and conditions require that the funds be utilized to compensate for lost revenues that are attributable to the COVID-19 pandemic and for eligible costs to prevent, prepare for and respond to the COVID-19 pandemic that are not covered by other sources. Further, fund recipients are required to be participating in Medicare at the time of distribution and are subject to certain other terms and conditions, including quarterly reporting requirements. In addition, fund recipients are required to have billed Medicare during 2019 and to continue to provide care after January 31, 2020 for diagnosis, testing or care for individuals with possible or actual COVID-19 cases. Any funds not used in accordance with the terms and conditions must be returned to HHS. We have recognized $18,967 and $7,346 as other income with respect to our SHOP segment for the nine months ended September 30, 2021 and 2020, respectively. We have applied for additional funds that may be available under the CARES Act Provider Relief Fund; however, we may not receive any additional funding. As of September 30, 2021 Office Portfolio SHOP Non-Segment Consolidated Total assets $ 2,990,711 $ 2,948,995 $ 1,126,342 $ 7,066,048 For the Three Months Ended September 30, 2020 Office Portfolio SHOP Non-Segment Consolidated Revenues: Rental income $ 94,235 $ — $ 10,003 $ 104,238 Residents fees and services — 290,101 — 290,101 Total revenues 94,235 290,101 10,003 394,339 Expenses: Property operating expenses 33,448 282,202 — 315,650 Depreciation and amortization 32,816 31,570 2,825 67,211 General and administrative — — 6,988 6,988 Acquisition and certain other transaction related costs — — 53 53 Impairment of assets 1,334 62,868 — 64,202 Total expenses 67,598 376,640 9,866 454,104 Loss on sale of properties (169) (42) — (211) Gains on equity securities, net — — 12,510 12,510 Interest and other income — — 134 134 Interest expense (6,068) (552) (51,471) (58,091) Income (loss) from continuing operations before income tax expense 20,400 (87,133) (38,690) (105,423) Income tax expense — — (365) (365) Net income (loss) 20,400 (87,133) (39,055) (105,788) Net income attributable to noncontrolling interest (1,100) — — (1,100) Net income (loss) attributable to common shareholders $ 19,300 $ (87,133) $ (39,055) $ (106,888) For the Nine Months Ended September 30, 2020 Office Portfolio SHOP Non-Segment Consolidated Revenues: Rental income $ 288,515 $ — $ 32,428 $ 320,943 Residents fees and services — 926,174 — 926,174 Total revenues 288,515 926,174 32,428 1,247,117 Expenses: Property operating expenses 97,047 837,103 — 934,150 Depreciation and amortization 97,213 98,385 8,868 204,466 General and administrative — — 23,132 23,132 Acquisition and certain other transaction related costs — — 803 803 Impairment of assets 8,090 98,521 — 106,611 Total expenses 202,350 1,034,009 32,803 1,269,162 Gain (loss) on sale of properties 2,613 (210) — 2,403 Gains on equity securities, net — — 14,541 14,541 Interest and other income — 7,346 662 8,008 Interest expense (18,140) (1,676) (123,899) (143,715) Gain on lease termination — — 22,896 22,896 Loss on early extinguishment of debt (401) — (26) (427) Income (loss) from continuing operations before income tax expense 70,237 (102,375) (86,201) (118,339) Income tax expense — — (1,048) (1,048) Net income (loss) 70,237 (102,375) (87,249) (119,387) Net income attributable to noncontrolling interest (3,838) — — (3,838) Net income (loss) attributable to common shareholders $ 66,399 $ (102,375) $ (87,249) $ (123,225) As of December 31, 2020 Office Portfolio SHOP Non-Segment Consolidated Total assets $ 3,092,289 $ 2,912,570 $ 471,565 $ 6,476,424 |
Leases and Management Agreement
Leases and Management Agreements with Five Star | 9 Months Ended |
Sep. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
Leases and Management Agreements with Five Star | Leases and Management Agreements with Five Star 2020 Restructuring of our Business Arrangements with Five Star. Effective as of January 1, 2020: • our previously existing master leases with Five Star for all of our senior living communities that Five Star leased, as well as our previously existing management agreements and pooling agreements with Five Star for our senior living communities that Five Star managed, were terminated and replaced with new management agreements and a related omnibus agreement. These new management and omnibus agreements were subsequently replaced in June 2021, as described below; • Five Star issued to us 10,268,158 Five Star common shares and an aggregate of 16,118,849 Five Star common shares to our shareholders of record as of December 13, 2019; • as consideration for these share issuances, we provided Five Star with $75,000 of additional consideration by assuming certain of Five Star's working capital liabilities and through cash payments, resulting in a gain on lease termination of $22,896 for the nine months ended September 30, 2020 in our condensed consolidated statements of comprehensive income (loss); and • pursuant to a guaranty agreement dated as of January 1, 2020 made by Five Star in favor of our applicable subsidiaries, Five Star has guaranteed the payment and performance of each of its applicable subsidiary's obligations under our applicable management agreements with Five Star. Effective January 1, 2020, we determined that Five Star was not a VIE and we continue to account for our 33.7% investment in Five Star using the equity method of accounting because we are deemed to exert significant influence, but not control, over Five Star's most significant activities. We have elected to use the fair value option to account for our investment in Five Star. 2021 Amendments to our Management Arrangements with Five Star. On June 9, 2021, we and Five Star amended our management arrangements. The principal changes to the management arrangements include: • that Five Star is cooperating with us in transitioning 108 of our senior living communities with approximately 7,500 living units to other third party managers without our payment of any termination fee to Five Star; • that we no longer have the right to sell up to an additional $682,000 of senior living communities currently managed by Five Star and terminate Five Star's management of those communities without our payment of a fee to Five Star upon sale; • that Five Star is continuing to manage 120 of our senior living communities with approximately 18,000 living units, and that the skilled nursing units in all of our continuing care retirement communities that Five Star is continuing to manage, which then included approximately 1,500 living units, have been closed and are in the process of being evaluated and repositioned; • that beginning in 2025, we will have the right to terminate up to 10% of the senior living communities that Five Star is continuing to manage, based on total revenues per year for failure to meet 80% of a target earnings before interest, taxes, depreciation and amortization, or EBITDA, for the applicable period; • that the incentive fee that Five Star may earn in any calendar year for the senior living communities that Five Star is continuing to manage is no longer subject to a cap and that any senior living communities that are undergoing a major renovation or repositioning are excluded from the calculation of the incentive fee; • that RMR LLC will oversee any major renovation or repositioning activities at the senior living communities that Five Star is continuing to manage; and • that the term of our management agreements with Five Star for our senior living communities that Five Star is continuing to manage was extended by two years to December 31, 2036. Pursuant to these changes, we and Five Star entered into an amended and restated master management agreement, or the Master Management Agreement, for the senior living communities that Five Star is continuing to manage and interim management agreements for the senior living communities that we and Five Star agreed to transition to new operators. These agreements replaced our prior management and omnibus agreements with Five Star. In addition, Five Star delivered to us a related amended and restated guaranty agreement pursuant to which Five Star is continuing to guarantee the payment and performance of each of its applicable subsidiary's obligations under the applicable management agreements. As of September 30, 2021, we transitioned 69 of the 108 senior living communities containing 4,755 living units to new third party managers. From September 30, 2021 to November 3, 2021, we completed the transition of 30 senior living communities containing 1,845 living units to new third party managers. As of November 3, 2021, we have entered into agreements to transition eight of the remaining nine senior living communities to be transitioned containing 819 living units to new third party managers. We expect to complete the transition of 107 senior living communities from Five Star by December 31, 2021 and we currently intend to close the remaining senior living community that we and Five Star agreed to transition and are assessing opportunities to redevelop that community. We lease our senior living communities that have been transitioned to new managers to our taxable REIT subsidiaries, or TRSs. We have incurred and expect to continue to incur costs related to retention and other transition costs for these communities. For the three and nine months ended September 30, 2021, we recorded $3,123 and $15,037, respectively, of these costs to acquisition and certain other transaction related costs in our condensed consolidated statements of comprehensive income (loss). Pursuant to the terms of the management agreements with the new third party managers, the terms are generally as follows: the new third party managers will receive a management fee equal to 5% to 6% of the gross revenues realized at the applicable senior living communities plus reimbursement for direct costs and expenses related to such communities. These agreements generally also provide for the new third party managers to earn a minimum base fee for a portion of the term of the agreement. Additionally, the new third party managers have the ability to earn incentive fees equal to 15% to 25% of the amount by which EBITDA of the communities exceeds the target EBITDA. The new third party managers can also earn a construction supervision fee ranging between 3% and 5% of construction costs. The initial terms of the management agreements with the new third party managers are generally five years, subject to automatic extensions of successive terms of two years each unless earlier terminated or timely notice of nonrenewal is delivered. The management agreements with the new third party managers also generally provide us with the right to terminate the management agreements for communities that do not earn 70% to 80% of the target EBITDA for such communities, after an agreed upon stabilized period. Our Senior Living Communities Managed by Five Star . Five Star managed 159 and 239 of our senior living communities as of September 30, 2021 and 2020, respectively. We lease our senior living communities that are managed by Five Star to our TRSs. We incurred management fees payable to Five Star of $11,220 and $15,182 for the three months ended September 30, 2021 and 2020, respectively, and $37,997 and $47,937 for the nine months ended September 30, 2021 and 2020, respectively. For the three months ended September 30, 2021 and 2020, $10,518 and $14,609, respectively, of the total management fees were expensed to property operating expenses in our condensed consolidated statements of comprehensive income (loss) and $702 and $573, respectively, were capitalized in our condensed consolidated balance sheets. For the nine months ended September 30, 2021 and 2020, $35,746 and $46,458, respectively, of the total management fees were expensed to property operating expenses in our condensed consolidated statements of comprehensive income (loss) and $2,251 and $1,479, respectively, were capitalized in our condensed consolidated balance sheets. The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets. We incurred fees of $1,508 and $5,972 for the three months ended September 30, 2021 and 2020, respectively, and $9,579 and $19,843 for the nine months ended September 30, 2021 and 2020, respectively, with respect to rehabilitation services Five Star provided at senior living communities that are payable by us. These amounts are included in property operating expenses in our condensed consolidated statements of comprehensive income (loss). As a result of routine monitoring protocols that are a part of Five Star's compliance program activities related to Medicare billing, Five Star discovered potentially inadequate documentation at one of our senior living communities that Five Star manages. This monitoring was not initiated in response to any specific complaint or allegation but rather was of the type that Five Star periodically undertakes to test its compliance with applicable Medicare billing rules. We and Five Star voluntarily disclosed this matter to the United States Department of Health and Human Services, Office of the Inspector General, or the OIG, pursuant to the OIG’s Provider Self-Disclosure Protocol. In January 2021, we and Five Star settled this matter with the OIG and we agreed to pay approximately $5,763 in exchange for a customary release, but we and Five Star did not admit any liability. We recognized that amount in our consolidated statement of comprehensive income (loss) during the year ended December 31, 2020 and paid that amount to the OIG in January 2021. Five Star refunded to us approximately $115 of management fees it previously received relating to the Medicare payments we refunded to the OIG. Since January 1, 2020, we sold certain senior living communities that were then managed by Five Star. We and Five Star terminated our management agreements for these senior living communities in connection with these sales. See Note 3 to the consolidated financial statements contained in our Annual Report for further information regarding these sales. We lease to Five Star space at certain of our senior living communities, which it uses to provide certain outpatient rehabilitation and wellness services. We recorded $399 and $393 for the three months ended September 30, 2021 and 2020, respectively, and $1,194 and $1,175 for the nine months ended September 30, 2021 and 2020, respectively, with respect to these leases. The following table presents residents fees and services revenue from our managed senior living communities disaggregated by type of contract and payer: Three Months Ended September 30, Nine Months Ended September 30, Revenue from contracts with customers: 2021 2020 2021 2020 Basic housing and support services $ 188,381 $ 208,941 $ 564,579 $ 659,240 Medicare and Medicaid programs 18,948 38,882 79,803 131,460 Private pay and other third party payer SNF services 28,684 42,278 95,544 135,474 Total residents fees and services $ 236,013 $ 290,101 $ 739,926 $ 926,174 |
Business and Property Managemen
Business and Property Management Agreements with RMR LLC | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Business and Property Management Agreements with RMR LLC | Business and Property Management Agreements with RMR LLC We have no employees. The personnel and various services we require to operate our business are provided to us by RMR LLC. We have two agreements with RMR LLC to provide management services to us: (1) a business management agreement, which relates to our business generally; and (2) a property management agreement, which relates to the property level operations of our medical office and life science properties and major renovation or repositioning activities at our senior living communities. We also have a subsidiary level management agreement with RMR LLC related to the life science property located in Boston, Massachusetts, which we entered in connection with the joint venture arrangement for that life science property. Under that agreement, our subsidiary pays RMR LLC certain management fees directly, which fees are credited against the business management fees payable by us to RMR LLC. See Note 11 for further information regarding our relationship, agreements and transactions with RMR LLC. We recognized net business management fees of $5,986 and $5,004 for the three months ended September 30, 2021 and 2020, respectively, and $17,627 and $15,614 for the nine months ended September 30, 2021 and 2020, respectively. The net business management fees we recognized include $725 and $2,175 of management fees related to our subsidiary level management agreement with RMR LLC entered in connection with our joint venture arrangement for the three and nine months ended September 30, 2021 and 2020, respectively. Based on our common share total return, as defined in our business management agreement, as of each of September 30, 2021 and 2020, no estimated incentive fees are included in the net business management fees we recognized for the three or nine months ended September 30, 2021 or 2020. The actual amount of annual incentive fees for 2021, if any, will be based on our common share total return as defined in our business management agreement, for the three-year period ending December 31, 2021, and will be payable in January 2022. We did not incur any incentive fee payable for the year ended December 31, 2020. We recognize business management and incentive fees in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss). We and RMR LLC amended our business management agreement effective August 1, 2021 to replace the benchmark index used in the calculation of incentive management fees. Pursuant to the amendment, for periods beginning on and after August 1, 2021, the MSCI U.S. REIT/Health Care REIT Index will replace the discontinued SNL U.S. REIT Healthcare Index and be used to calculate benchmark returns per share for purposes of determining any incentive management fee payable by us to RMR LLC. For periods prior to August 1, 2021, the SNL U.S. REIT Healthcare Index will continue to be used. Accordingly, the calculation of incentive management fees for the next three measurement periods will continue to use the SNL U.S. REIT Healthcare Index in calculating the benchmark returns for periods through July 31, 2021. This change of index was due to S&P Global ceasing to publish the SNL U.S. REIT Healthcare Index. We recognized aggregate net property management and construction supervision fees of $2,931 and $3,477 for the three months ended September 30, 2021 and 2020, respectively. Of those amounts, for the three months ended September 30, 2021 and 2020, $2,410 and $2,496, respectively, of property management fees were expensed to property operating expenses in our condensed consolidated statements of comprehensive income (loss) and $521 and $981, respectively, were capitalized as building improvements in our condensed consolidated balance sheets. We recognized aggregate net property management and construction supervision fees of $9,276 and $10,076 for the nine months ended September 30, 2021 and 2020, respectively. Of those amounts, for the nine months ended September 30, 2021 and 2020, $7,360 and $7,573, respectively, of property management fees were expensed to property operating expenses in our condensed consolidated statements of comprehensive income (loss) and $1,916 and $2,503, respectively, were capitalized as building improvements in our condensed consolidated balance sheets. The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets. We are generally responsible for all our operating expenses, including certain expenses incurred or arranged by RMR LLC on our behalf. We are generally not responsible for payment of RMR LLC's employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR LLC's employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR LLC's centralized accounting personnel, our share of RMR LLC's costs for providing our internal audit function, or as otherwise agreed. Our property level operating expenses are generally incorporated into the rents charged to our tenants, including certain payroll and related costs incurred by RMR LLC. We reimbursed RMR LLC $3,121 and $3,571 for these expenses and costs for the three months ended September 30, 2021 and 2020, respectively, and $9,620 and $10,433 for the nine months ended September 30, 2021 and 2020, respectively. These amounts are included in property operating expenses and general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income (loss). On June 9, 2021, we and RMR LLC amended our property management agreement to, among other things, provide for RMR LLC's oversight of any major capital projects and repositionings at our senior living communities, including our senior living communities which Five Star is continuing to manage, and that RMR LLC will receive the same fee previously paid to Five Star for such services, which is equal to 3% of the cost of any such major capital project or repositioning. |
Related Person Transactions
Related Person Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions We have relationships and historical and continuing transactions with RMR LLC, The RMR Group Inc., or RMR Inc., Five Star and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR Inc. is the managing member of RMR LLC. The Chair of our Board and one of our Managing Trustees, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., a managing director and the president and chief executive officer of RMR Inc., an officer and employee of RMR LLC and the chair of the board of directors and a managing director of Five Star. Jennifer F. Francis, our other Managing Trustee and our President and Chief Executive Officer is an executive vice president of RMR Inc. and she and our Chief Financial Officer and Treasurer are also employees and officers of RMR LLC. Jennifer B. Clark, our Secretary and former Managing Trustee, also serves as a managing director and the executive vice president, general counsel and secretary of RMR Inc., an officer and employee of RMR LLC, an officer of ABP Trust and a managing director and the secretary of Five Star. Certain of Five Star's officers are officers and employees of RMR LLC. Some of our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR LLC or its subsidiaries provide management services. Adam Portnoy serves as the chair of the boards of trustees or boards of directors and as a managing trustee or managing director of those companies. Other officers of RMR LLC, including Ms. Clark and certain of our officers, serve as managing trustees, managing directors or officers of certain of these companies. In addition, officers of RMR LLC and RMR Inc. serve as our officers and officers of other companies to which RMR LLC or its subsidiaries provide management services. See Note 7 for information relating to the annual share awards we made in September 2021 to our officers and certain other employees of RMR LLC and common shares we purchased from our officers and certain current and former officers and employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares to them. We include amounts recognized as expense for share awards to RMR LLC employees in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss). Five Star. We are currently Five Star's largest stockholder. As of September 30, 2021, we owned 10,691,658 Five Star common shares, or approximately 33.7% of Five Star's outstanding common shares. Five Star manages certain of the senior living communities we own. RMR LLC provides management services to both us and Five Star. See Note 9 for further information regarding our relationships, agreements and transactions with Five Star and Note 5 for further information regarding our investment in Five Star. As of September 30, 2021, ABP Acquisition LLC, a subsidiary of ABP Trust, the controlling shareholder of RMR Inc., together with ABP Trust, owned approximately 6.4% of Five Star's outstanding common shares. Our Manager, RMR LLC. We have two agreements with RMR LLC to provide management services to us. See Note 10 for further information regarding our management agreements with RMR LLC. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesWe have elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended, and, as such, are generally not subject to federal and most state income taxation on our operating income provided we distribute our taxable income to our shareholders and meet certain organization and operating requirements. We do, however, lease our managed senior living communities to our wholly owned TRSs that, unlike most of our subsidiaries, file a separate consolidated federal corporate income tax return and are subject to federal and state income taxes. Our consolidated income tax provision includes the income tax provision related to the operations of our TRSs and certain state income taxes we incur despite our taxation as a REIT. During the three months ended September 30, 2021 and 2020, we recognized income tax expense of $595 and $365, respectively, and during the nine months ended September 30, 2021 and 2020, we recognized income tax expense of $1,024 and $1,048, respectively. |
Weighted Average Common Shares
Weighted Average Common Shares | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Weighted Average Common Shares | Weighted Average Common Shares (share amounts in thousands) We calculate basic earnings per common share by dividing net income (loss) by the weighted average number of our common shares outstanding during the period. We calculate diluted earnings per share using the more dilutive of the two class method or the treasury stock method. Unvested share awards and other potentially dilutive common shares, and the related impact on earnings, are considered when calculating diluted earnings per share. For the three months ended September 30, 2021 and 2020, 39 and 237 unvested common shares, respectively, and for the nine months ended September 30, 2021 and 2020, 25 and 235 unvested common shares, respectively, were not included in the calculation of diluted earnings per share because to do so would have been antidilutive. |
Real Estate Properties (Tables)
Real Estate Properties (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties | Date of Sale Location Type of Property Number of Properties Square Feet Sales Price (1) Gain (Loss) on Sale February 2021 Pennsylvania Medical Office 1 92,000 $ 9,000 $ (122) April 2021 Florida Life Science and Medical Office 4 263,656 95,500 30,760 5 $ 104,500 $ 30,638 (1) Sales price excludes closing costs. |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Recurring and Nonrecurring Measured at Fair Value | The following table presents certain of our assets that are measured at fair value at September 30, 2021, categorized by the level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset. Fair Value at Reporting Date Using Quoted Prices in Significant Other Observable Inputs Significant Unobservable Inputs Description Total (Level 1) (Level 2) (Level 3) Recurring Fair Value Measurements Assets: Investment in Five Star (1) $ 46,829 $ 46,829 $ — $ — (1) Our 10,691,658 shares of common stock of Five Star Senior Living Inc., or Five Star, are included in other assets, net in our condensed consolidated balance sheets, and are reported at fair value, which is based upon quoted market prices on The Nasdaq Stock Market LLC, or Nasdaq, (Level 1 inputs). Our adjusted cost basis for these shares was $44,448 as of September 30, 2021. During the three months ended September 30, 2021 and 2020, we recorded an unrealized loss of $14,755 and an unrealized gain of $12,510, respectively, and during the nine months ended September 30, 2021 and 2020, we recorded an unrealized loss of $26,943 and an unrealized gain of $14,541, respectively, which are included in gains and losses on equity securities, net in our condensed consolidated statements of comprehensive income (loss), to adjust the carrying value of our investment in Five Star common shares to their fair value. See Note 11 for further information about our investment in Five Star. |
Schedule of Carrying Value and Fair Value of the Financial Instruments | The fair values of these financial instruments approximated their carrying values in our condensed consolidated financial statements as of such dates, except as follows: As of September 30, 2021 As of December 31, 2020 Description Carrying Amount (1) Estimated Fair Value Carrying Amount (1) Estimated Fair Value Senior unsecured notes, 6.750% coupon rate, due 2021 $ — $ — $ 299,273 $ 303,891 Senior unsecured notes, 4.750% coupon rate, due 2024 249,278 258,096 249,068 256,258 Senior unsecured notes, 9.750% coupon rate, due 2025 987,017 1,094,415 984,359 1,135,800 Senior unsecured notes, 4.750% coupon rate, due 2028 491,881 505,630 490,925 502,648 Senior unsecured notes, 4.375% coupon rate, due 2031 491,913 485,743 — — Senior unsecured notes, 5.625% coupon rate, due 2042 342,088 337,540 341,802 330,120 Senior unsecured notes, 6.250% coupon rate, due 2046 242,977 250,300 242,762 245,000 Secured debts (2) (3) 689,044 707,026 691,573 716,185 $ 3,494,198 $ 3,638,750 $ 3,299,762 $ 3,489,902 (1) Includes unamortized net debt issuance costs, premiums and discounts. (2) We assumed certain of these secured debts in connection with our acquisition of certain properties. We recorded the assumed mortgage notes at estimated fair value on the date of acquisition and we are amortizing the fair value adjustments, if any, to interest expense over the respective terms of the mortgage notes to adjust interest expense to the estimated market interest rates as of the date of acquisition. (3) Includes secured debts for the life science property owned by a joint venture arrangement in which we own a 55% equity interest. The amounts listed in the table for these debts have not been adjusted to reflect the equity interests in the joint venture that we do not own. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Dividends Declared and Paid | During the nine months ended September 30, 2021, we declared and paid quarterly distributions to common shareholders as follows: Declaration Date Record Date Payment Date Distribution Per Share Total Distributions January 14, 2021 January 25, 2021 February 18, 2021 $ 0.01 $ 2,383 April 15, 2021 April 26, 2021 May 20, 2021 0.01 2,383 July 15, 2021 July 26, 2021 August 19, 2021 0.01 2,384 $ 0.03 $ 7,150 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | For the Three Months Ended September 30, 2021 Office Portfolio SHOP Non-Segment Consolidated Revenues: Rental income $ 91,520 $ — $ 9,883 $ 101,403 Residents fees and services — 236,013 — 236,013 Total revenues 91,520 236,013 9,883 337,416 Expenses: Property operating expenses 32,386 233,687 — 266,073 Depreciation and amortization 32,142 33,688 2,872 68,702 General and administrative — — 8,870 8,870 Acquisition and certain other transaction related costs — — 3,108 3,108 Total expenses 64,528 267,375 14,850 346,753 Gain on sale of properties — 200 — 200 Losses on equity securities, net — — (14,755) (14,755) Interest and other income — 786 190 976 Interest expense (6,053) (523) (57,917) (64,493) Income (loss) from continuing operations before income tax expense 20,939 (30,899) (77,449) (87,409) Income tax expense — — (595) (595) Net income (loss) 20,939 (30,899) (78,044) (88,004) Net income attributable to noncontrolling interest (1,339) — — (1,339) Net income (loss) attributable to common shareholders $ 19,600 $ (30,899) $ (78,044) $ (89,343) For the Nine Months Ended September 30, 2021 Office Portfolio SHOP Non-Segment Consolidated Revenues: Rental income $ 277,647 $ — $ 28,908 $ 306,555 Residents fees and services — 739,926 — 739,926 Total revenues 277,647 739,926 28,908 1,046,481 Expenses: Property operating expenses 95,000 723,096 — 818,096 Depreciation and amortization 96,577 97,587 8,579 202,743 General and administrative — — 25,538 25,538 Acquisition and certain other transaction related costs — — 15,179 15,179 Impairment of assets — (174) — (174) Total expenses 191,577 820,509 49,296 1,061,382 Gain on sale of properties 30,638 200 — 30,838 Losses on equity securities, net — — (26,943) (26,943) Interest and other income — 18,967 882 19,849 Interest expense (17,984) (1,576) (172,681) (192,241) Loss on early extinguishment of debt — — (2,410) (2,410) Income (loss) from continuing operations before income tax expense 98,724 (62,992) (221,540) (185,808) Income tax expense — — (1,024) (1,024) Net income (loss) 98,724 (62,992) (222,564) (186,832) Net income attributable to noncontrolling interest (4,238) — — (4,238) Net income (loss) attributable to common shareholders $ 94,486 $ (62,992) $ (222,564) $ (191,070) As of September 30, 2021 Office Portfolio SHOP Non-Segment Consolidated Total assets $ 2,990,711 $ 2,948,995 $ 1,126,342 $ 7,066,048 For the Three Months Ended September 30, 2020 Office Portfolio SHOP Non-Segment Consolidated Revenues: Rental income $ 94,235 $ — $ 10,003 $ 104,238 Residents fees and services — 290,101 — 290,101 Total revenues 94,235 290,101 10,003 394,339 Expenses: Property operating expenses 33,448 282,202 — 315,650 Depreciation and amortization 32,816 31,570 2,825 67,211 General and administrative — — 6,988 6,988 Acquisition and certain other transaction related costs — — 53 53 Impairment of assets 1,334 62,868 — 64,202 Total expenses 67,598 376,640 9,866 454,104 Loss on sale of properties (169) (42) — (211) Gains on equity securities, net — — 12,510 12,510 Interest and other income — — 134 134 Interest expense (6,068) (552) (51,471) (58,091) Income (loss) from continuing operations before income tax expense 20,400 (87,133) (38,690) (105,423) Income tax expense — — (365) (365) Net income (loss) 20,400 (87,133) (39,055) (105,788) Net income attributable to noncontrolling interest (1,100) — — (1,100) Net income (loss) attributable to common shareholders $ 19,300 $ (87,133) $ (39,055) $ (106,888) For the Nine Months Ended September 30, 2020 Office Portfolio SHOP Non-Segment Consolidated Revenues: Rental income $ 288,515 $ — $ 32,428 $ 320,943 Residents fees and services — 926,174 — 926,174 Total revenues 288,515 926,174 32,428 1,247,117 Expenses: Property operating expenses 97,047 837,103 — 934,150 Depreciation and amortization 97,213 98,385 8,868 204,466 General and administrative — — 23,132 23,132 Acquisition and certain other transaction related costs — — 803 803 Impairment of assets 8,090 98,521 — 106,611 Total expenses 202,350 1,034,009 32,803 1,269,162 Gain (loss) on sale of properties 2,613 (210) — 2,403 Gains on equity securities, net — — 14,541 14,541 Interest and other income — 7,346 662 8,008 Interest expense (18,140) (1,676) (123,899) (143,715) Gain on lease termination — — 22,896 22,896 Loss on early extinguishment of debt (401) — (26) (427) Income (loss) from continuing operations before income tax expense 70,237 (102,375) (86,201) (118,339) Income tax expense — — (1,048) (1,048) Net income (loss) 70,237 (102,375) (87,249) (119,387) Net income attributable to noncontrolling interest (3,838) — — (3,838) Net income (loss) attributable to common shareholders $ 66,399 $ (102,375) $ (87,249) $ (123,225) As of December 31, 2020 Office Portfolio SHOP Non-Segment Consolidated Total assets $ 3,092,289 $ 2,912,570 $ 471,565 $ 6,476,424 |
Leases and Management Agreeme_2
Leases and Management Agreements with Five Star (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
Disaggregation of Revenue | The following table presents residents fees and services revenue from our managed senior living communities disaggregated by type of contract and payer: Three Months Ended September 30, Nine Months Ended September 30, Revenue from contracts with customers: 2021 2020 2021 2020 Basic housing and support services $ 188,381 $ 208,941 $ 564,579 $ 659,240 Medicare and Medicaid programs 18,948 38,882 79,803 131,460 Private pay and other third party payer SNF services 28,684 42,278 95,544 135,474 Total residents fees and services $ 236,013 $ 290,101 $ 739,926 $ 926,174 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Basis Of Presentation | ||
Assets | $ 7,066,048 | $ 6,476,424 |
Liabilities | 4,656,391 | 3,857,202 |
VIE, Primary Beneficiary | ||
Basis Of Presentation | ||
Assets | 935,340 | 970,142 |
Liabilities | $ 690,714 | $ 697,129 |
Joint Venture | ||
Basis Of Presentation | ||
Noncontrolling interest, ownership percentage by parent | 45.00% | |
Ownership percentage | 55.00% | |
Joint Venture | Lire Science Building Located In Boston Massachusetts | ||
Basis Of Presentation | ||
Ownership percentage | 55.00% | |
Joint Venture | Lire Science Building Located In Boston Massachusetts | Investor | ||
Basis Of Presentation | ||
Noncontrolling interest, ownership percentage by parent | 45.00% |
Real Estate Properties - Narrat
Real Estate Properties - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($)propertystatecommunity | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)propertystatecommunity | Sep. 30, 2020USD ($) | |
Real Estate Properties | ||||
Number of real estate properties | property | 392 | 392 | ||
Number of states in which properties are located | state | 36 | 36 | ||
Impairment of assets | $ 0 | $ (64,202) | $ 174 | $ (106,611) |
Life Science Building | ||||
Real Estate Properties | ||||
Number of real estate properties | property | 1 | 1 | ||
Senior Living Communities | Skilled nursing bed license | ||||
Real Estate Properties | ||||
Gain on sales of beds | $ 200 | |||
Senior Living Communities | Scenario, Adjustment | ||||
Real Estate Properties | ||||
Number of real estate properties | community | 10 | 10 | ||
Impairment of assets | $ 174 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Real Estate Properties | ||||
Number of real estate properties | property | 5 | 5 | ||
Aggregate sale price | $ 104,500 | |||
Joint Venture | ||||
Real Estate Properties | ||||
Ownership percentage | 55.00% | 55.00% |
Real Estate Properties - Schedu
Real Estate Properties - Schedule of Real Estate Properties (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Apr. 30, 2021USD ($)ft²property | Feb. 28, 2021USD ($)ft²property | Sep. 30, 2021USD ($)property | |
Real Estate | |||
Number of properties (property) | property | 392 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Real Estate | |||
Number of properties (property) | property | 5 | ||
Sales Price | $ 104,500 | ||
Gain (Loss) on Sale | $ 30,638 | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Medical Office | Pennsylvania | |||
Real Estate | |||
Number of properties (property) | property | 1 | ||
Square Feet | ft² | 92,000 | ||
Sales Price | $ 9,000 | ||
Gain (Loss) on Sale | $ (122) | ||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Life Science and Medical Office | Florida | |||
Real Estate | |||
Number of properties (property) | property | 4 | ||
Square Feet | ft² | 263,656 | ||
Sales Price | $ 95,500 | ||
Gain (Loss) on Sale | $ 30,760 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Leases [Abstract] | |||||
Straight line rental income | $ 1,679 | $ 491 | $ 3,804 | $ 3,029 | |
Straight line rental income, excluding properties held-for-sale | 108,180 | 108,180 | $ 104,803 | ||
Variable lease, payment | 17,930 | 18,501 | 54,634 | 56,792 | |
Reimbursement revenue lease | 17,875 | $ 18,550 | 54,495 | $ 56,742 | |
Deferred rents | 84 | 84 | 1,486 | ||
Operating lease, right-of-use asset | 4,174 | 4,174 | 4,237 | ||
Operating lease, liability | $ 4,366 | $ 4,366 | $ 4,410 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position | Other assets, net | Other assets, net | Other assets, net | ||
Operating Lease, Liability, Statement of Financial Position | Other liabilities | Other liabilities | Other liabilities |
Indebtedness (Details)
Indebtedness (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Oct. 31, 2021 | Feb. 28, 2021USD ($) | Feb. 07, 2021 | Jan. 31, 2021USD ($) | Sep. 30, 2021USD ($)property | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)property | Sep. 30, 2020USD ($) | Mar. 31, 2021USD ($) | Jan. 30, 2021USD ($) | Dec. 31, 2020USD ($) | |
Indebtedness | |||||||||||
Number of properties (property) | property | 392 | 392 | |||||||||
Total real estate properties, gross | $ 7,554,545,000 | $ 7,554,545,000 | $ 7,410,730,000 | ||||||||
Revolving credit facility | 800,000,000 | 800,000,000 | 0 | ||||||||
Loss on early extinguishment of debt | 0 | $ 0 | 2,410,000 | $ 427,000 | |||||||
Unpaid interest | $ 47,234,000 | $ 47,234,000 | 23,772,000 | ||||||||
Debt ratio | 150.00% | 150.00% | |||||||||
Finance Leased Properties | |||||||||||
Indebtedness | |||||||||||
Number of properties (property) | property | 2 | 2 | |||||||||
Finance lease obligations | $ 6,937,000 | $ 6,937,000 | |||||||||
Finance leased asset, gross | 36,319,000 | 36,319,000 | 35,676,000 | ||||||||
Finance leased asset, accumulated depreciation | $ 18,014,000 | $ 18,014,000 | $ 17,579,000 | ||||||||
Joint Venture | |||||||||||
Indebtedness | |||||||||||
Ownership percentage | 55.00% | 55.00% | |||||||||
Unsecured revolving credit facility | |||||||||||
Indebtedness | |||||||||||
Unsecured revolving credit facility, maximum borrowing capacity | $ 800,000,000 | $ 800,000,000 | $ 800,000,000 | $ 1,000,000,000 | |||||||
Revolving credit facility, interest rate payable (as a percent) | 2.90% | 2.90% | |||||||||
Debt instrument, facility fee (as a percent) | 0.30% | ||||||||||
Weighted average interest rate on debt (as a percent) | 2.90% | 2.60% | 2.90% | 2.20% | |||||||
Revolving credit facility | $ 800,000,000 | ||||||||||
Loss on early extinguishment of debt | $ 563,000 | ||||||||||
Capital expenditure | $ 350,000,000 | 250,000,000 | |||||||||
Minimum liquidity requirement | $ 200,000,000 | ||||||||||
Unsecured revolving credit facility | LIBOR | Revolving Credit Facility | |||||||||||
Indebtedness | |||||||||||
Basis points per annum (as a percent) | 0.30% | ||||||||||
Unsecured revolving credit facility | Medical Office And Life Science | |||||||||||
Indebtedness | |||||||||||
Number of properties (property) | property | 61 | 61 | |||||||||
Total real estate properties, gross | $ 991,074,000 | $ 991,074,000 | |||||||||
Unsecured revolving credit facility | Subsequent Event | |||||||||||
Indebtedness | |||||||||||
Extension term | 1 year | ||||||||||
Additional extension term | 1 year | ||||||||||
Mortgages | |||||||||||
Indebtedness | |||||||||||
Aggregate principal amount of mortgage debt | $ 683,008,000 | $ 683,008,000 | |||||||||
Number of properties (property) | property | 7 | 7 | |||||||||
Total real estate properties, gross | $ 948,813,000 | $ 948,813,000 | |||||||||
Mortgages | Joint Venture | |||||||||||
Indebtedness | |||||||||||
Aggregate principal amount of mortgage debt | $ 620,000,000 | $ 620,000,000 | |||||||||
Ownership percentage | 55.00% | 55.00% | |||||||||
Unsecured Debt | |||||||||||
Indebtedness | |||||||||||
Debt face amount | $ 2,850,000,000 | $ 2,850,000,000 | |||||||||
Senior Unsecured Notes | Senior Note 4.375 Due 2031 | |||||||||||
Indebtedness | |||||||||||
Debt face amount | $ 500,000,000 | ||||||||||
Interest rate (as a percent) | 4.375% | ||||||||||
Proceeds from debt | $ 491,357,000 | ||||||||||
Senior Unsecured Notes | Term loan due 2022 | |||||||||||
Indebtedness | |||||||||||
Debt face amount | $ 200,000,000 | ||||||||||
Weighted average interest rate on debt (as a percent) | 2.90% | 2.70% | 2.70% | ||||||||
Revolving credit facility | $ 200,000,000 | ||||||||||
Loss on early extinguishment of debt | 1,477,000 | ||||||||||
Senior Unsecured Notes | Senior Unsecured Notes Due June 2021 | |||||||||||
Indebtedness | |||||||||||
Debt face amount | $ 300,000,000 | $ 300,000,000 | |||||||||
Interest rate (as a percent) | 6.75% | 6.75% | |||||||||
Loss on early extinguishment of debt | $ 370,000 | ||||||||||
Unpaid interest | $ 10,125,000 | $ 10,125,000 |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities - Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||
Gains and losses on equity securities, net | $ (14,755) | $ 12,510 | $ (26,943) | $ 14,541 |
Five Star | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||
Equity securities investment (in shares) | 10,691,658 | 10,691,658 | ||
Recurring | Five Star | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||
Investments in affiliates, fair value | $ 46,829 | $ 46,829 | ||
Recurring | Five Star | Carrying Amount | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||
Investments in affiliates, fair value | 44,448 | 44,448 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Five Star | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||
Investments in affiliates, fair value | 46,829 | 46,829 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Five Star | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||
Investments in affiliates, fair value | 0 | 0 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Five Star | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||
Investments in affiliates, fair value | $ 0 | $ 0 | ||
Common Shares | Five Star | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||
Equity securities investment (in shares) | 10,691,658 | 10,691,658 |
Fair Value of Assets and Liab_4
Fair Value of Assets and Liabilities - Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Life Science Property | Joint Venture | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Ownership percentage | 55.00% | |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value disclosure | $ 3,494,198 | $ 3,299,762 |
Carrying Amount | Senior Unsecured Notes | Senior unsecured notes, 6.750% coupon rate, due 2021 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Coupon rate (percent) | 6.75% | |
Fair value disclosure | $ 0 | 299,273 |
Carrying Amount | Senior Unsecured Notes | Senior unsecured notes, 4.750% coupon rate, due 2024 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Coupon rate (percent) | 4.75% | |
Fair value disclosure | $ 249,278 | 249,068 |
Carrying Amount | Senior Unsecured Notes | Senior unsecured notes, 9.750% coupon rate, due 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Coupon rate (percent) | 9.75% | |
Fair value disclosure | $ 987,017 | 984,359 |
Carrying Amount | Senior Unsecured Notes | Senior unsecured notes, 4.750% coupon rate, due 2028 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Coupon rate (percent) | 4.75% | |
Fair value disclosure | $ 491,881 | 490,925 |
Carrying Amount | Senior Unsecured Notes | Senior unsecured notes, 4.375% coupon rate, due 2031 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Coupon rate (percent) | 4.375% | |
Fair value disclosure | $ 491,913 | 0 |
Carrying Amount | Senior Unsecured Notes | Senior unsecured notes, 5.625% coupon rate, due 2042 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Coupon rate (percent) | 5.625% | |
Fair value disclosure | $ 342,088 | 341,802 |
Carrying Amount | Senior Unsecured Notes | Senior unsecured notes, 6.250% coupon rate, due 2046 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Coupon rate (percent) | 6.25% | |
Fair value disclosure | $ 242,977 | 242,762 |
Carrying Amount | Secured debts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value disclosure | 689,044 | 691,573 |
Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value disclosure | 3,638,750 | 3,489,902 |
Estimated Fair Value | Senior Unsecured Notes | Senior unsecured notes, 6.750% coupon rate, due 2021 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value disclosure | 0 | 303,891 |
Estimated Fair Value | Senior Unsecured Notes | Senior unsecured notes, 4.750% coupon rate, due 2024 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value disclosure | 258,096 | 256,258 |
Estimated Fair Value | Senior Unsecured Notes | Senior unsecured notes, 9.750% coupon rate, due 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value disclosure | 1,094,415 | 1,135,800 |
Estimated Fair Value | Senior Unsecured Notes | Senior unsecured notes, 4.750% coupon rate, due 2028 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value disclosure | 505,630 | 502,648 |
Estimated Fair Value | Senior Unsecured Notes | Senior unsecured notes, 4.375% coupon rate, due 2031 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value disclosure | 485,743 | 0 |
Estimated Fair Value | Senior Unsecured Notes | Senior unsecured notes, 5.625% coupon rate, due 2042 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value disclosure | 337,540 | 330,120 |
Estimated Fair Value | Senior Unsecured Notes | Senior unsecured notes, 6.250% coupon rate, due 2046 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value disclosure | 250,300 | 245,000 |
Estimated Fair Value | Secured debts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value disclosure | $ 707,026 | $ 716,185 |
Fair Value of Assets and Liab_5
Fair Value of Assets and Liabilities - Narrative (Details) | Sep. 30, 2021security |
Fair Value, Inputs, Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Fair value measurement, number of debt securities | 2 |
Fair Value, Inputs, Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |
Fair value measurement, number of debt securities | 4 |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)property | Sep. 30, 2020USD ($) | |
Noncontrolling Interest | ||||
Net income attributable to noncontrolling interest | $ 1,339 | $ 1,100 | $ 4,238 | $ 3,838 |
Cash distribution for joint venture partners | 5,524 | $ 5,324 | 16,848 | $ 16,707 |
Variable interest entity, consolidated, carrying amount, real estate assets | 690,382 | 690,382 | ||
Variable interest entity, consolidated, carrying amount, mortgage debt | $ 620,000 | $ 620,000 | ||
Joint Venture | ||||
Noncontrolling Interest | ||||
Ownership percentage by noncontrolling owners | 45.00% | 45.00% | ||
Ownership percentage | 55.00% | 55.00% | ||
Boston, MA | Life Science Building | Joint Venture | ||||
Noncontrolling Interest | ||||
Number of properties included in joint venture agreement | property | 1 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) $ / shares in Units, $ in Thousands | Oct. 14, 2021USD ($)$ / shares | Sep. 15, 2021$ / sharesshares | Aug. 19, 2021USD ($) | Jun. 03, 2021trustee$ / sharesshares | May 20, 2021USD ($) | Feb. 18, 2021USD ($) | Sep. 30, 2021$ / sharesshares | Jun. 30, 2021shares | Sep. 30, 2020shares | Jun. 30, 2020shares | Mar. 31, 2020shares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||||
Number of trustees | trustee | 6 | ||||||||||||
Weighted average share price (in dollars per share) | $ / shares | $ 3.39 | $ 3.49 | |||||||||||
Distributions to shareholders | $ | $ 2,384 | $ 2,383 | $ 2,383 | $ 7,150 | $ 40,443 | ||||||||
Common Shares | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||||
Number of shares (in shares) | shares | 94,937 | 13,906 | 42,180 | 1,757 | 3,438 | ||||||||
Subsequent Event | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||||
Distributions to common shareholders declared (in dollars per share) | $ / shares | $ 0.01 | ||||||||||||
Distributions to shareholders | $ | $ 2,390 | ||||||||||||
Employees Of RMR LLC | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||||
Common shares awarded (in shares) | shares | 718,000 | ||||||||||||
Common shares awarded, par value (in dollars per share) | $ / shares | $ 3.41 | ||||||||||||
Former Employees Of RMR LLC | Common Shares | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||||
Number of shares (in shares) | shares | 94,937 | 108,843 | |||||||||||
Trustees | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||||||||
Common shares awarded (in shares) | shares | 20,000 | ||||||||||||
Common shares awarded, par value (in dollars per share) | $ / shares | $ 3.70 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Dividends Declared and Paid (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 19, 2021 | May 20, 2021 | Feb. 18, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Stockholders' Equity Note [Abstract] | |||||
Distribution per share (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.03 | |
Total Distributions | $ 2,384 | $ 2,383 | $ 2,383 | $ 7,150 | $ 40,443 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Segment reporting | ||||
Number of operating segments | segment | 2 | |||
Interest and other income | $ 976 | $ 134 | $ 19,849 | $ 8,008 |
Operating Segments | SHOP | ||||
Segment reporting | ||||
Interest and other income | $ 786 | $ 0 | $ 18,967 | $ 7,346 |
Segment Reporting - Income Stat
Segment Reporting - Income Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||||||
Total revenues | $ 337,416 | $ 394,339 | $ 1,046,481 | $ 1,247,117 | ||||
Expenses: | ||||||||
Property operating expenses | 266,073 | 315,650 | 818,096 | 934,150 | ||||
Depreciation and amortization | 68,702 | 67,211 | 202,743 | 204,466 | ||||
General and administrative | 8,870 | 6,988 | 25,538 | 23,132 | ||||
Acquisition and certain other transaction related costs | 3,108 | 53 | 15,179 | 803 | ||||
Impairment of assets | 0 | 64,202 | (174) | 106,611 | ||||
Total expenses | 346,753 | 454,104 | 1,061,382 | 1,269,162 | ||||
Gain (loss) on sale of properties | 200 | (211) | 30,838 | 2,403 | ||||
Gains and losses on equity securities, net | (14,755) | 12,510 | (26,943) | 14,541 | ||||
Interest and other income | 976 | 134 | 19,849 | 8,008 | ||||
Interest expense | (64,493) | (58,091) | (192,241) | (143,715) | ||||
Gain on lease termination | 0 | 0 | 0 | 22,896 | ||||
Loss on early extinguishment of debt | 0 | 0 | (2,410) | (427) | ||||
Loss from continuing operations before income tax expense | (87,409) | (105,423) | (185,808) | (118,339) | ||||
Income tax expense | (595) | (365) | (1,024) | (1,048) | ||||
Net loss | (88,004) | $ (32,645) | $ (66,183) | (105,788) | $ (24,742) | $ 11,143 | (186,832) | (119,387) |
Net income attributable to noncontrolling interest | (1,339) | (1,100) | (4,238) | (3,838) | ||||
Net loss attributable to common shareholders | (89,343) | (106,888) | (191,070) | (123,225) | ||||
Operating Segments | Office Portfolio | ||||||||
Revenues: | ||||||||
Total revenues | 91,520 | 94,235 | 277,647 | 288,515 | ||||
Expenses: | ||||||||
Property operating expenses | 32,386 | 33,448 | 95,000 | 97,047 | ||||
Depreciation and amortization | 32,142 | 32,816 | 96,577 | 97,213 | ||||
General and administrative | 0 | 0 | 0 | 0 | ||||
Acquisition and certain other transaction related costs | 0 | 0 | 0 | 0 | ||||
Impairment of assets | 1,334 | 0 | 8,090 | |||||
Total expenses | 64,528 | 67,598 | 191,577 | 202,350 | ||||
Gain (loss) on sale of properties | 0 | (169) | 30,638 | 2,613 | ||||
Gains and losses on equity securities, net | 0 | 0 | 0 | 0 | ||||
Interest and other income | 0 | 0 | 0 | 0 | ||||
Interest expense | (6,053) | (6,068) | (17,984) | (18,140) | ||||
Gain on lease termination | 0 | |||||||
Loss on early extinguishment of debt | 0 | (401) | ||||||
Loss from continuing operations before income tax expense | 20,939 | 20,400 | 98,724 | 70,237 | ||||
Income tax expense | 0 | 0 | 0 | 0 | ||||
Net loss | 20,939 | 20,400 | 98,724 | 70,237 | ||||
Net income attributable to noncontrolling interest | (1,339) | (1,100) | (4,238) | (3,838) | ||||
Net loss attributable to common shareholders | 19,600 | 19,300 | 94,486 | 66,399 | ||||
Operating Segments | SHOP | ||||||||
Revenues: | ||||||||
Total revenues | 236,013 | 290,101 | 739,926 | 926,174 | ||||
Expenses: | ||||||||
Property operating expenses | 233,687 | 282,202 | 723,096 | 837,103 | ||||
Depreciation and amortization | 33,688 | 31,570 | 97,587 | 98,385 | ||||
General and administrative | 0 | 0 | 0 | 0 | ||||
Acquisition and certain other transaction related costs | 0 | 0 | 0 | 0 | ||||
Impairment of assets | 62,868 | (174) | 98,521 | |||||
Total expenses | 267,375 | 376,640 | 820,509 | 1,034,009 | ||||
Gain (loss) on sale of properties | 200 | (42) | 200 | (210) | ||||
Gains and losses on equity securities, net | 0 | 0 | 0 | 0 | ||||
Interest and other income | 786 | 0 | 18,967 | 7,346 | ||||
Interest expense | (523) | (552) | (1,576) | (1,676) | ||||
Gain on lease termination | 0 | |||||||
Loss on early extinguishment of debt | 0 | 0 | ||||||
Loss from continuing operations before income tax expense | (30,899) | (87,133) | (62,992) | (102,375) | ||||
Income tax expense | 0 | 0 | 0 | 0 | ||||
Net loss | (30,899) | (87,133) | (62,992) | (102,375) | ||||
Net income attributable to noncontrolling interest | 0 | 0 | 0 | 0 | ||||
Net loss attributable to common shareholders | (30,899) | (87,133) | (62,992) | (102,375) | ||||
Non-Segment | ||||||||
Revenues: | ||||||||
Total revenues | 9,883 | 10,003 | 28,908 | 32,428 | ||||
Expenses: | ||||||||
Property operating expenses | 0 | 0 | 0 | 0 | ||||
Depreciation and amortization | 2,872 | 2,825 | 8,579 | 8,868 | ||||
General and administrative | 8,870 | 6,988 | 25,538 | 23,132 | ||||
Acquisition and certain other transaction related costs | 3,108 | 53 | 15,179 | 803 | ||||
Impairment of assets | 0 | 0 | 0 | |||||
Total expenses | 14,850 | 9,866 | 49,296 | 32,803 | ||||
Gain (loss) on sale of properties | 0 | 0 | 0 | 0 | ||||
Gains and losses on equity securities, net | (14,755) | 12,510 | (26,943) | 14,541 | ||||
Interest and other income | 190 | 134 | 882 | 662 | ||||
Interest expense | (57,917) | (51,471) | (172,681) | (123,899) | ||||
Gain on lease termination | 22,896 | |||||||
Loss on early extinguishment of debt | (2,410) | (26) | ||||||
Loss from continuing operations before income tax expense | (77,449) | (38,690) | (221,540) | (86,201) | ||||
Income tax expense | (595) | (365) | (1,024) | (1,048) | ||||
Net loss | (78,044) | (39,055) | (222,564) | (87,249) | ||||
Net income attributable to noncontrolling interest | 0 | 0 | 0 | 0 | ||||
Net loss attributable to common shareholders | (78,044) | (39,055) | (222,564) | (87,249) | ||||
Rental income | ||||||||
Revenues: | ||||||||
Total revenues | 101,403 | 104,238 | 306,555 | 320,943 | ||||
Rental income | Operating Segments | Office Portfolio | ||||||||
Revenues: | ||||||||
Total revenues | 91,520 | 94,235 | 277,647 | 288,515 | ||||
Rental income | Operating Segments | SHOP | ||||||||
Revenues: | ||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||
Rental income | Non-Segment | ||||||||
Revenues: | ||||||||
Total revenues | 9,883 | 10,003 | 28,908 | 32,428 | ||||
Residents fees and services | ||||||||
Revenues: | ||||||||
Total revenues | 236,013 | 290,101 | 739,926 | 926,174 | ||||
Residents fees and services | Operating Segments | Office Portfolio | ||||||||
Revenues: | ||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||
Residents fees and services | Operating Segments | SHOP | ||||||||
Revenues: | ||||||||
Total revenues | 236,013 | 290,101 | 739,926 | 926,174 | ||||
Residents fees and services | Non-Segment | ||||||||
Revenues: | ||||||||
Total revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Segment Reporting - Assets (Det
Segment Reporting - Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Segment reporting | ||
Total assets | $ 7,066,048 | $ 6,476,424 |
Operating Segments | Office Portfolio | ||
Segment reporting | ||
Total assets | 2,990,711 | 3,092,289 |
Operating Segments | SHOP | ||
Segment reporting | ||
Total assets | 2,948,995 | 2,912,570 |
Non-Segment | ||
Segment reporting | ||
Total assets | $ 1,126,342 | $ 471,565 |
Leases and Management Agreeme_3
Leases and Management Agreements with Five Star - Narrative (Details) $ in Thousands | Jun. 09, 2021USD ($)unitcommunity | Jan. 31, 2021USD ($) | Sep. 30, 2021USD ($)communityunitpropertytrusteeshares | Sep. 30, 2020USD ($)community | Sep. 30, 2021USD ($)communityunitpropertytrusteeshares | Sep. 30, 2020USD ($)community | Nov. 02, 2021unitcommunity | Dec. 31, 2020shares | Dec. 31, 2019shares |
Common shares of beneficial interest, shares issued (in shares) | shares | 238,995,435 | 238,995,435 | 238,268,478 | ||||||
Gain on lease termination | $ 0 | $ 0 | $ 0 | $ 22,896 | |||||
Number of properties (property) | property | 392 | 392 | |||||||
Rental income | $ 399 | $ 393 | $ 1,194 | 1,175 | |||||
Five Star | |||||||||
Total rental income recognized | 75,000 | ||||||||
Gain on lease termination | $ 22,896 | ||||||||
Five Star | Minimum | |||||||||
Percentage target EBITDA of new management agreement not earned | 70.00% | ||||||||
Management fees as a percentage of gross revenues | 5.00% | 5.00% | |||||||
Percentage of annual incentive fee | 15.00% | 15.00% | |||||||
Five Star | Maximum | |||||||||
Percentage target EBITDA of new management agreement not earned | 80.00% | ||||||||
Management fees as a percentage of gross revenues | 6.00% | 6.00% | |||||||
Percentage of annual incentive fee | 25.00% | 25.00% | |||||||
Five Star | |||||||||
Payments made in exchange for customary release | $ 5,763 | ||||||||
Five Star | Senior Living Communities | |||||||||
Number of properties (property) | community | 159 | 239 | 159 | 239 | |||||
Number of real estate properties inadequate documentation | trustee | 1 | 1 | |||||||
Revenue reserve, management fees payable reduction | $ 115 | ||||||||
Five Star | |||||||||
Common shares of beneficial interest, shares issued (in shares) | shares | 10,268,158 | ||||||||
Aggregate Shares Issued | shares | 16,118,849 | ||||||||
Third Party Investor | Senior Living Communities | Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | Scenario, Plan | Subsequent Event | |||||||||
Number of properties transitioned | community | 8 | ||||||||
Third Party Investor | Five Star | Minimum | |||||||||
Construction supervision fee (percent) | 3.00% | 3.00% | |||||||
Third Party Investor | Five Star | Maximum | |||||||||
Construction supervision fee (percent) | 5.00% | 5.00% | |||||||
Five Star | |||||||||
Investment owned, percentage of total shares outstanding | 33.70% | 33.70% | |||||||
Property management agreement expense | $ 11,220 | $ 15,182 | $ 37,997 | $ 47,937 | |||||
Related party transaction capitalized amount | 702 | 573 | 2,251 | 1,479 | |||||
Five Star | Operating Expense | |||||||||
Property management agreement expense | $ 10,518 | 14,609 | $ 35,746 | 46,458 | |||||
Five Star | Senior Living Communities | |||||||||
Number of properties (property) | community | 120 | 108 | 108 | ||||||
Number of property units (units) | unit | 18,000 | ||||||||
Related party transactions, termination percentage | 10.00% | ||||||||
Percentage target EBITDA of new management agreement not earned | 80.00% | ||||||||
Number of properties transitioned | community | 107 | 107 | |||||||
Five Star | Senior Living Communities | Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | |||||||||
Total rental income recognized | $ 682,000 | $ 3,123 | $ 15,037 | ||||||
Number of property units (units) | unit | 7,500 | 4,755 | 4,755 | ||||||
Number of properties transitioned | community | 69 | 69 | |||||||
Five Star | Senior Living Communities | Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | Scenario, Plan | |||||||||
Number of properties (property) | community | 108 | ||||||||
Five Star | Senior Living Communities | Closed | |||||||||
Number of property units (units) | unit | 1,500 | ||||||||
Five Star | Rehabilitation Services | |||||||||
Expenses from transactions with related party | $ 1,508 | $ 5,972 | $ 9,579 | $ 19,843 | |||||
Five Star | Third Party Investor | Senior Living Communities | Subsequent Event | |||||||||
Number of properties (property) | community | 9 | ||||||||
Five Star | Third Party Investor | Senior Living Communities | Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | Subsequent Event | |||||||||
Number of property units (units) | unit | 1,845 | ||||||||
Number of properties transitioned | community | 30 | ||||||||
Five Star | Third Party Investor | Senior Living Communities | Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations | Scenario, Plan | Subsequent Event | |||||||||
Number of property units (units) | unit | 819 |
Leases and Management Agreeme_4
Leases and Management Agreements with Five Star - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue | ||||
Revenues | $ 337,416 | $ 394,339 | $ 1,046,481 | $ 1,247,117 |
Residents fees and services | ||||
Disaggregation of Revenue | ||||
Revenues | 236,013 | 290,101 | 739,926 | 926,174 |
Residents fees and services | Basic housing and support services | ||||
Disaggregation of Revenue | ||||
Revenues | 188,381 | 208,941 | 564,579 | 659,240 |
Residents fees and services | Medicare and Medicaid programs | ||||
Disaggregation of Revenue | ||||
Revenues | 18,948 | 38,882 | 79,803 | 131,460 |
Residents fees and services | Private pay and other third party payer SNF services | ||||
Disaggregation of Revenue | ||||
Revenues | $ 28,684 | $ 42,278 | $ 95,544 | $ 135,474 |
Business and Property Managem_2
Business and Property Management Agreements with RMR LLC (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($)employee | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)agreementemployee | Sep. 30, 2020USD ($) | |
Related person transactions | ||||
Number of employees | employee | 0 | 0 | ||
Related party transaction business management agreement, annual incentive fee estimate included in management fees | $ 0 | $ 0 | ||
Property management and construction supervision fees | $ 2,931,000 | $ 3,477,000 | 9,276,000 | 10,076,000 |
Property management and construction supervision fees paid | 3,121,000 | 3,571,000 | 9,620,000 | 10,433,000 |
RMR LLC | ||||
Related person transactions | ||||
Business management fees incurred | 5,986,000 | 5,004,000 | 17,627,000 | 15,614,000 |
Related party transaction business management fees related to subsidiary level management | $ 725,000 | 2,175,000 | ||
Related party transaction business management agreement, annual incentive fee estimate included in management fees | 0 | 0 | ||
Period of actual amount of incentive fees | 3 years | |||
Property management and construction supervision fees | 2,410,000 | 2,496,000 | $ 7,360,000 | 7,573,000 |
Party transaction property management and construction supervision fees capitalized | $ 521,000 | $ 981,000 | $ 1,916,000 | $ 2,503,000 |
Property management fee | 3.00% | 3.00% | ||
Senior Living Communities | RMR LLC | ||||
Related person transactions | ||||
Number of consecutive renewal terms of agreement | agreement | 2 |
Related Person Transactions (De
Related Person Transactions (Details) | Sep. 30, 2021agreementshares |
Five Star | |
Related person transactions | |
Equity securities investment (in shares) | shares | 10,691,658 |
Investment owned, percentage of total shares outstanding | 33.70% |
RMR LLC | |
Related person transactions | |
Number of management agreements | agreement | 2 |
RMR LLC | Five Star | |
Related person transactions | |
Investment owned, percentage of total shares outstanding | 6.40% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 595 | $ 365 | $ 1,024 | $ 1,048 |
Weighted Average Common Shares
Weighted Average Common Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 39 | 237 | 25 | 235 |