Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 30, 2013 | |
Document and Entity Information | ||
Entity Registrant Name | SENIOR HOUSING PROPERTIES TRUST | |
Entity Central Index Key | 1075415 | |
Document Type | 10-Q | |
Document Period End Date | 30-Sep-13 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 188,168,168 | |
Document Fiscal Year Focus | 2013 | |
Document Fiscal Period Focus | Q3 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Real estate properties: | ||
Land | $617,512 | $599,313 |
Buildings and improvements | 4,580,487 | 4,420,302 |
Total real estate properties, gross | 5,197,999 | 5,019,615 |
Less accumulated depreciation | -808,264 | -714,687 |
Total real estate properties, net | 4,389,735 | 4,304,928 |
Cash and cash equivalents | 52,258 | 42,382 |
Restricted cash | 10,046 | 9,432 |
Deferred financing fees, net | 29,063 | 29,410 |
Acquired real estate leases and other intangible assets, net | 105,705 | 113,986 |
Other assets | 220,523 | 247,864 |
Total assets | 4,807,330 | 4,748,002 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Unsecured revolving credit facility | 125,000 | 190,000 |
Senior unsecured notes, net of discount | 1,093,016 | 1,092,053 |
Secured debt and capital leases | 703,058 | 724,477 |
Accrued interest | 21,763 | 15,757 |
Assumed real estate lease obligations, net | 13,299 | 13,482 |
Other liabilities | 74,751 | 65,665 |
Total liabilities | 2,030,887 | 2,101,434 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Common shares of beneficial interest, $.01 par value: 199,700,000 shares authorized, 188,168,168 and 176,553,600 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 1,881 | 1,765 |
Additional paid in capital | 3,497,588 | 3,233,354 |
Cumulative net income | 1,122,778 | 1,043,821 |
Cumulative other comprehensive income | 6,689 | 4,562 |
Cumulative distributions | -1,852,493 | -1,636,934 |
Total shareholders' equity | 2,776,443 | 2,646,568 |
Total liabilities and shareholders' equity | $4,807,330 | $4,748,002 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
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 | 199,700,000 | 199,700,000 |
Common shares of beneficial interest, shares issued | 188,168,168 | 176,553,600 |
Common shares of beneficial interest, shares outstanding | 188,168,168 | 176,553,600 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues: | ||||
Rental income | $112,319 | $113,756 | $336,468 | $329,191 |
Residents fees and services | 74,946 | 42,352 | 224,634 | 113,906 |
Total revenues | 187,265 | 156,108 | 561,102 | 443,097 |
Expenses: | ||||
Property operating expenses | 74,729 | 46,805 | 222,893 | 125,109 |
Depreciation | 38,473 | 35,276 | 114,472 | 102,673 |
General and administrative | 7,798 | 8,352 | 24,615 | 24,106 |
Acquisition related costs | 396 | 4,297 | 2,590 | 6,814 |
Impairment of assets | 5,675 | 3,071 | ||
Total expenses | 121,396 | 94,730 | 370,245 | 261,773 |
Operating income | 65,869 | 61,378 | 190,857 | 181,324 |
Interest and other income | 42 | 248 | 612 | 957 |
Interest expense | -29,405 | -30,417 | -88,536 | -87,426 |
Loss on early extinguishment of debt | -692 | -6,349 | -797 | -6,349 |
Loss on lease terminations | -104 | -104 | ||
Gain (loss) on sale of properties | 1,141 | -101 | 1,141 | -101 |
Equity in earnings of an investee | 64 | 115 | 219 | 236 |
Income before income tax expense | 37,019 | 24,770 | 103,496 | 88,537 |
Income tax expense | -125 | -43 | -405 | -290 |
Income from continuing operations | 36,894 | 24,727 | 103,091 | 88,247 |
Discontinued operations: | ||||
Income from discontinued operations | 1,231 | 919 | 3,762 | 3,001 |
Impairment of assets from discontinued operations | -27,896 | |||
Net income | 38,125 | 25,646 | 78,957 | 91,248 |
Other comprehensive income: | ||||
Change in net unrealized (loss) / gain on investments | -2,166 | 7,499 | 2,195 | 8,416 |
Share of comprehensive income of an investee | 13 | 35 | -68 | 31 |
Comprehensive income | $35,972 | $33,180 | $81,084 | $99,695 |
Weighted average shares outstanding (in shares) | 188,102 | 174,690 | 186,942 | 166,698 |
Income from continuing operations per share (in dollars per share) | $0.20 | $0.14 | $0.55 | $0.53 |
Income (loss) from discontinued operations per share (in dollars per share) | $0.01 | ($0.13) | $0.02 | |
Net income per share (in dollars per share) | $0.20 | $0.15 | $0.42 | $0.55 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ||
Net income | $78,957 | $91,248 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation | 115,274 | 104,487 |
Amortization of deferred financing fees and debt discounts | 4,559 | 4,494 |
Straight line rental income | -5,256 | -10,248 |
Amortization of acquired real estate leases and other intangible assets | 2,793 | 746 |
Loss on early extinguishment of debt | 797 | 6,349 |
Impairment of assets | 33,571 | 3,071 |
Loss on lease terminations | 104 | |
(Gain) loss on sale of properties | -1,141 | 101 |
Equity in earnings of an investee | -219 | -236 |
Change in assets and liabilities: | ||
Restricted cash | -614 | -4,249 |
Other assets | 569 | 13,978 |
Accrued interest | 6,006 | -263 |
Other liabilities | 12,884 | 29,430 |
Cash provided by operating activities | 248,180 | 239,012 |
Cash flows from investing activities: | ||
Real estate acquisitions and deposits | -148,775 | -255,769 |
Real estate improvements | -36,820 | -29,645 |
Principal payments on loan receivable | 38,000 | |
Proceeds from sale of properties | 2,550 | 1,041 |
Cash used for investing activities | -183,045 | -246,373 |
Cash flows from financing activities: | ||
Proceeds from issuance of common shares, net | 261,813 | 287,052 |
Proceeds from issuance of unsecured senior notes, net of discount | 350,000 | |
Proceeds from borrowings on revolving credit facility | 160,000 | 509,000 |
Repayments of borrowings on revolving credit facility | -225,000 | -454,000 |
Redemption of senior notes | -225,000 | |
Repayment of other debt | -33,261 | -259,400 |
Payment of deferred financing fees | -3,252 | -12,186 |
Distributions to shareholders | -215,559 | -190,680 |
Cash (used for) provided by financing activities | -55,259 | 4,786 |
Increase (decrease) in cash and cash equivalents | 9,876 | -2,575 |
Cash and cash equivalents at beginning of period | 42,382 | 23,560 |
Cash and cash equivalents at end of period | 52,258 | 20,985 |
Supplemental cash flow information: | ||
Interest paid | 79,552 | 83,195 |
Income taxes paid | 536 | 389 |
Non-cash investing activities: | ||
Acquisitions funded by assumed debt | -12,266 | -112,153 |
Non-cash financing activities: | ||
Assumption of mortgage notes payable | 12,266 | 112,153 |
Issuance of common shares | $2,538 | $2,138 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation. | |
Basis of Presentation | Note 1. Basis of Presentation |
The accompanying condensed consolidated financial statements of Senior Housing Properties 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, 2012, or our Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation have been included. All material intercompany transactions and balances among us and 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. Reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation. These reclassifications were made to conform the prior periods’ rental income, property operating expenses, discontinued operations, general and administrative expenses, interest and other income and impairment of assets to the current classification. These reclassifications had no effect on net income or shareholders’ equity. | |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2013 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Note 2. Recent Accounting Pronouncements |
In January 2013, we adopted Financial Accounting Standards Board, or FASB, Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This update is the culmination of the FASB’s deliberation on reporting reclassification adjustments from accumulated other comprehensive income, or AOCI. This standard does not change the current requirements for reporting net income or other comprehensive income. However, it requires disclosure of amounts reclassified out of AOCI in their entirety, by component, on the face of the statement of operations or in the notes thereto. Amounts that are not required to be reclassified in their entirety to net income must be cross referenced to other disclosures that provide additional detail. This standard is effective prospectively for annual and interim reporting periods beginning after December 15, 2012. This update has not caused any material changes to the disclosures in, or the presentation of, our condensed consolidated financial statements. | |
Real_Estate_Properties
Real Estate Properties | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||
Real Estate Properties | |||||||||||||||||||||||||||||
Real Estate Properties | Note 3. Real Estate Properties | ||||||||||||||||||||||||||||
At September 30, 2013, we owned 396 properties located in 40 states and Washington, D.C. We account for the following acquisitions as business combinations unless otherwise noted. | |||||||||||||||||||||||||||||
Triple Net Senior Living Communities Acquisitions: | |||||||||||||||||||||||||||||
In January 2013, we acquired a senior living community located in Redmond, WA with 150 living units for approximately $22,350, excluding closing costs. We funded this acquisition using cash on hand, borrowings under our revolving credit facility, and by assuming approximately $12,266 of mortgage debt which was recorded at a fair value of $13,306. Details of this acquisition are as follows: | |||||||||||||||||||||||||||||
Triple Net Senior Living Communities Acquisitions since January 1, 2013: | |||||||||||||||||||||||||||||
Number | Premium | ||||||||||||||||||||||||||||
of | Units/ | Purchase | Buildings and | Intangible | Assumed | on Assumed | |||||||||||||||||||||||
Date | Location | Properties | Beds | Price (1) | Land | Improvements | FF&E | Assets | Debt | Debt | |||||||||||||||||||
January 2013 (2) | Redmond, WA | 1 | 150 | $ | 22,350 | $ | 5,120 | $ | 16,562 | $ | 669 | $ | 1,039 | $ | 12,266 | $ | 1,040 | ||||||||||||
(1) Purchase price includes the assumption of mortgage debt and excludes closing costs. The allocation of the purchase price of our acquisition shown above is based upon preliminary estimates of the fair value of assets acquired and liabilities assumed. Consequently, amounts preliminarily allocated to assets acquired and liabilities assumed may change from those used in these condensed consolidated financial statements. | |||||||||||||||||||||||||||||
(2) We leased this property to a subsidiary of Stellar Senior Living, LLC for an initial term expiring in 2028 for initial rent of approximately $1,732 per year. Percentage rent, based on increases in gross revenues at this property, will commence in 2016. | |||||||||||||||||||||||||||||
Managed Senior Living Communities Acquisitions: | |||||||||||||||||||||||||||||
In August 2013, we acquired a senior living community located in Cumming, GA with 93 private pay assisted living units for approximately $22,030, excluding closing costs. We funded this acquisition using cash on hand and borrowings under our revolving credit facility. A subsidiary of Five Star Quality Care, Inc., which together with its subsidiaries, we refer to in this report as Five Star, will manage this community for our account pursuant to a long term management agreement. As of September 30, 2013, we owned 40 communities that are managed by Five Star. We use the taxable REIT subsidiary, or TRS, structures authorized by the Real Estate Investment Trust Investment Diversification and Empowerment Act for our managed senior living communities. See Note 10 for more information regarding our management arrangements with Five Star. Details of this acquisition are as follows: | |||||||||||||||||||||||||||||
Senior Living Managed Communities Acquisitions since January 1, 2013: | |||||||||||||||||||||||||||||
Number | |||||||||||||||||||||||||||||
of | Units/ | Purchase | Buildings and | Intangible | |||||||||||||||||||||||||
Date | Location | Properties | Beds | Price (1) | Land | Improvements | FF&E | Assets | |||||||||||||||||||||
August 2013 | Cumming, GA | 1 | 93 | $ | 22,030 | $ | 1,548 | $ | 18,666 | $ | 803 | $ | 1,013 | ||||||||||||||||
(1) Purchase price excludes closing costs. The allocation of the purchase price of certain of our acquisitions shown above is based upon preliminary estimates of the fair value of assets acquired and liabilities assumed. Consequently, amounts preliminarily allocated to assets acquired and liabilities assumed may change from those used in these condensed consolidated financial statements. | |||||||||||||||||||||||||||||
MOB Acquisitions: | |||||||||||||||||||||||||||||
In February 2013, we acquired two properties leased to medical providers, medical related businesses, clinics and biotech laboratory tenants, or MOBs, with a total of 144,900 square feet located in Bothell, WA for approximately $38,000, excluding closing costs; we funded this acquisition using cash on hand. In March 2013, we acquired a MOB with 71,824 square feet located in Hattiesburg, MS for approximately $14,600, excluding closing costs; we funded this acquisition using cash on hand. In August 2013, we acquired another MOB with 105,462 square feet located in Boston, MA for approximately $49,500, excluding closing costs; we funded this acquisition using cash on hand and borrowings under our revolving credit facility. Details of these acquisitions are as follows: | |||||||||||||||||||||||||||||
MOB Acquisitions since January 1, 2013: | |||||||||||||||||||||||||||||
Acquired | |||||||||||||||||||||||||||||
Number | Acquired | Real Estate | |||||||||||||||||||||||||||
of | Square | Purchase | Buildings and | Real Estate | Lease | ||||||||||||||||||||||||
Date | Location | Properties | Feet (000’s) | Price (1) | Land | Improvements | Leases | Obligations | |||||||||||||||||||||
February 2013 | Bothell, WA | 2 | 145 | $ | 38,000 | $ | 5,639 | $ | 25,239 | $ | 8,442 | $ | 1,539 | ||||||||||||||||
March 2013 | Hattiesburg, MS | 1 | 72 | 14,600 | 1,269 | 11,691 | 2,323 | 683 | |||||||||||||||||||||
August 2013 (2) | Boston, MA | 1 | 105 | 49,500 | 4,600 | 44,900 | — | — | |||||||||||||||||||||
4 | 322 | $ | 102,100 | $ | 11,508 | $ | 81,830 | $ | 10,765 | $ | 2,222 | ||||||||||||||||||
(1) Purchase price excludes closing costs. The allocation of the purchase price of our acquisitions shown above is based upon preliminary estimates of the fair value of assets acquired and liabilities assumed. Consequently, amounts preliminarily allocated to assets acquired and liabilities assumed may change from those used in these condensed consolidated financial statements. | |||||||||||||||||||||||||||||
(2) This acquisition is accounted for as an asset purchase. | |||||||||||||||||||||||||||||
In October 2013, we acquired three senior living communities with an aggregate of 213 assisted living units for an aggregate purchase price of approximately $29,000, excluding closing costs. One of those communities is located in Tennessee, and the other two are located in Georgia. Subsidiaries of Five Star will manage these communities for our account pursuant to a long term management agreement. | |||||||||||||||||||||||||||||
In August 2013, we entered into an agreement to acquire one senior living community for approximately $12,000, excluding closing costs. The senior living community is located in Verona, WI and includes 68 assisted living units. We expect that a subsidiary of Five Star will manage this community for our account pursuant to a long term management agreement. In October 2013, we entered into an agreement to acquire a portfolio of three MOBs with 62,826 square feet located in Orlando, FL for approximately $15,375, excluding closing costs. The closings of these acquisitions are contingent upon completion of our diligence and other customary closing conditions; accordingly, we may not purchase some or all of these properties, these purchases may be delayed or the terms of these purchases may change. | |||||||||||||||||||||||||||||
Impairment | |||||||||||||||||||||||||||||
We periodically evaluate our properties for impairments. Impairment indicators may include declining tenant occupancy, weak or declining tenant profitability, cash flow or liquidity, our decision to dispose of an asset before the end of its estimated useful life, or legislative, market or industry changes that could permanently reduce the value of a property. If indicators of impairment are present, we evaluate the carrying value of the affected property by comparing it to the expected future undiscounted net cash flows to be generated from that property. If the sum of these expected future net cash flows is less than the carrying value, we reduce the net carrying value of the property to its estimated fair value. During the nine months ended September 30, 2013 and 2012, we recorded impairment of assets charges of $1,304 and $3,071, respectively, to reduce the carrying value of one of our properties to its estimated net sale price. | |||||||||||||||||||||||||||||
As of September 30, 2013, we had 10 senior living communities with 744 units, two rehabilitation hospitals with 364 licensed beds, and seven MOBs with 831,499 square feet categorized as properties held for sale. During the nine months ended September 30, 2013, we recorded impairment of assets charges of $32,267 to reduce the carrying value of 11 of these 19 properties to their aggregate estimated net sale price. These properties are included in other assets in our condensed consolidated balance sheets and have a net book value (after impairment) of approximately $94,891 at September 30, 2013. As of December 31, 2012, we had one senior living community with 120 units held for sale (which is included within the 10 senior living communities held for sale as of September 30, 2013). This property is included in other assets in our condensed consolidated balance sheets and had a net book value (after impairment) of approximately $850 at December 31, 2012. We decided to sell these properties due to underlying conditions in the markets where these properties are located. We classify all properties that meet the criteria outlined in the Property, Plant and Equipment Topic of the FASB Accounting Standards Codification, or the Codification, as held for sale in our condensed consolidated balance sheets. | |||||||||||||||||||||||||||||
Results of operations for properties sold or held for sale are included in discontinued operations in our condensed consolidated statements of operations once the criteria for discontinued operations in the Presentation of Financial Statements Topic of the Codification are met. Summarized income statement information for the seven MOBs that meet the criteria for discontinued operations is included in discontinued operations as follows: | |||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||
Rental income | $ | 2,189 | $ | 2,525 | $ | 7,284 | $ | 7,581 | |||||||||||||||||||||
Property operating expenses | (958 | ) | (1,002 | ) | (2,723 | ) | (2,766 | ) | |||||||||||||||||||||
Depreciation and amortization | — | (604 | ) | (799 | ) | (1,814 | ) | ||||||||||||||||||||||
Income from discontinued operations | $ | 1,231 | $ | 919 | $ | 3,762 | $ | 3,001 | |||||||||||||||||||||
In August 2013, we sold a skilled nursing facility with 112 units that was previously classified as held for sale for $2,550 and recorded a gain on the sale of this property of approximately $1,141. | |||||||||||||||||||||||||||||
The senior living properties which we are offering for sale do not meet the criteria for discontinued operations as they are included within combination leases with other properties that we expect to continue leasing. | |||||||||||||||||||||||||||||
In August 2013, we and Five Star entered into an asset purchase agreement, or the Purchase Agreement, with certain unrelated parties pursuant to which we agreed to sell our two rehabilitation hospitals and certain related assets for a sale price of $90,000, subject to certain adjustments, and Five Star agreed to transfer the operations of the two hospitals and several in-patient and out-patient clinics affiliated with those hospitals, to those third parties. Each hospital is currently leased by us to Five Star under one of our combination leases with Five Star, or our Lease No. 2. The sale of these rehabilitation hospitals is subject to various closing conditions, including the purchaser obtaining appropriate licenses and regulatory approvals, and there can be no assurance that the sale will occur. | |||||||||||||||||||||||||||||
Unrealized_Gain_Loss_on_Invest
Unrealized Gain / Loss on Investments | 9 Months Ended |
Sep. 30, 2013 | |
Unrealized Gain / Loss on Investments | |
Unrealized Gain / Loss on Investments | Note 4. Unrealized Gain / Loss on Investments |
As of September 30, 2013, we owned 250,000 common shares of CommonWealth REIT, or CWH, and 4,235,000 common shares of Five Star, which are carried at fair market value in other assets on our condensed consolidated balance sheets. Cumulative other comprehensive income shown in our condensed | |
consolidated balance sheets includes the net unrealized gain or loss on investments determined as the net difference between the value at quoted market prices of our CWH and Five Star shares as of September 30, 2013 ($21.91 and $5.17 per share, respectively) and our weighted average costs at the time we acquired these shares, as adjusted to reflect any share splits or combinations ($26.00 and $3.36 per share, respectively). | |
Loan_Receivable
Loan Receivable | 9 Months Ended |
Sep. 30, 2013 | |
Loan Receivable | |
Loan Receivable | Note 5. Loan Receivable |
In May 2011, we and Five Star entered into a loan agreement, or the Bridge Loan, under which we agreed to lend Five Star up to $80,000 to fund a portion of Five Star’s purchase of a portfolio of six senior living communities. By September 30, 2011, Five Star had completed its acquisition of these communities and had borrowed all $80,000 of this Bridge Loan. By December 31, 2011, Five Star had repaid $42,000 of those borrowings. In April 2012, Five Star paid the remaining balance of $38,000, resulting in the termination of this Bridge Loan. The Bridge Loan was secured by mortgages on three of the senior living communities that Five Star acquired and on four other senior living communities owned by Five Star. The Bridge Loan required interest payable to us at a rate equal to the annual rates of interest applicable to our borrowings under our revolving credit facility, plus 1%. We recognized interest income from this Bridge Loan of $314 for the nine months ended September 30, 2012, which is included in interest and other income in our condensed consolidated statements of income and comprehensive income. | |
Indebtedness
Indebtedness | 9 Months Ended |
Sep. 30, 2013 | |
Indebtedness | |
Indebtedness | Note 6. Indebtedness |
Our principal debt obligations at September 30, 2013 were: (1) outstanding borrowings under our $750,000 unsecured revolving credit facility; (2) four public issuances of unsecured senior notes, including: (a) $250,000 principal amount at an annual interest rate of 4.30% due 2016, (b) $200,000 principal amount at an annual interest rate of 6.75% due 2020, (c) $300,000 principal amount at an annual interest rate of 6.75% due 2021 and (d) $350,000 principal amount at an annual interest rate of 5.625% due 2042; and (3) $684,615 aggregate principal amount of mortgages secured by 51 of our properties with maturity dates from 2013 to 2043. The 51 mortgaged properties had a carrying value of $950,736 at September 30, 2013. We also had two properties subject to capital leases totaling $13,436 at September 30, 2013; these two properties had a carrying value of $18,528 at September 30, 2013. | |
In connection with the acquisitions discussed in Note 3 above, during the nine months ended September 30, 2013, we assumed $12,266 of mortgage debt, which was recorded at a fair value of $13,306. This mortgage has a contractual interest rate of 6.25% and matures in May 2015. We recorded the assumed mortgage at its fair value, which exceeded its outstanding principal balance by $1,040. We determined the fair value of the assumed mortgage using a market approach based upon Level 3 inputs (significant other unobservable inputs) in the fair value hierarchy. | |
In June 2013, we prepaid mortgage notes encumbering four of our properties that had an aggregate principal balance of $10,377, a weighted average interest rate of 6.1% and maturity dates later in 2013. In September 2013, we prepaid a mortgage note encumbering two of our properties that had an aggregate principal balance of $13,579, a weighted average interest rate of 6.9% and a maturity date later in 2013. As a result, we recognized losses on early extinguishment of debt of $154 and $259 for the three and nine months ended September 30, 2013, respectively. | |
On September 4, 2013, we amended the agreement governing our unsecured revolving credit facility with Wells Fargo Bank, National Association, as administrative agent, and a syndicate of other lenders. As a result of the amendment the stated maturity date of the revolving credit facility was extended from June 24, 2015 to January 15, 2018. Subject to the payment of an extension fee and meeting certain other conditions, we have an option to further extend the stated maturity date by an additional one year. The revolving credit facility agreement provides that we can borrow, repay and reborrow funds available under the revolving credit facility agreement until maturity, and no principal repayment is due until maturity. The $750,000 maximum amount of our revolving credit facility remained unchanged by the amendment. The revolving credit facility agreement continues to include a feature under which maximum borrowings under the facility may be increased to up to $1,500,000 in certain circumstances. Under this amendment, the interest rate paid on borrowings under the revolving credit facility agreement was reduced from LIBOR plus a premium of 160 basis points to LIBOR plus a premium of 130 basis points, and the facility fee was reduced from 35 basis points to 30 basis points per annum on the total amount of lending commitments. Both the interest rate premium and the facility fee are subject to adjustment based upon changes to our credit ratings. As a result of the amendment, we recognized a loss on early extinguishment of debt of $538 for the three and nine months ended September 30, 2013. The weighted average interest rate for borrowings under our revolving credit facility was 1.68% for the nine months ended September 30, 2013. We incurred interest expense and other associated costs related to our revolving credit facility of $271 and $555 for the three and nine months ended September 30, 2013. As of September 30, 2013 and October 30, 2013, we had $125,000 and $115,000 outstanding and $625,000 and $635,000 available under our revolving credit facility, respectively. | |
Shareholders_Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2013 | |
Shareholders' Equity | |
Shareholders' Equity | Note 7. Shareholders’ Equity |
On February 19, 2013, we paid a $0.39 per share, or $68,857, distribution to our common shareholders with respect to our operating results for the quarter ended December 31, 2012. On May 21, 2013, we paid a $0.39 per share, or $73,349, distribution to our common shareholders with respect to our operating results for the quarter ended March 31, 2013. On August 21, 2013, we paid a $0.39 per share, or $73,353, distribution to our common shareholders with respect to our operating results for the quarter ended June 30, 2013. On October 3, 2013, we declared a quarterly distribution of $0.39 per share, or $73,386, to our common shareholders of record on October 17, 2013, with respect to our operating results for the quarter ended September 30, 2013; we expect to pay this distribution on or about November 21, 2013. | |
In January 2013, we issued 11,500,000 common shares in a public offering, raising net proceeds of approximately $262,068 after underwriting discounts but before expenses. We used the net proceeds from this offering to repay borrowings outstanding under our revolving credit facility and for general business purposes, including the partial funding of the acquisitions described above. | |
Under the terms of our business management agreement with Reit Management & Research LLC, or RMR, on March 27, 2013, we issued 21,968 common shares in payment of an incentive fee of approximately $582 for services rendered to us by RMR during 2012. | |
On May 9, 2013, we granted 2,000 common shares of beneficial interest, par value $.01 per share, valued at $28.64 per share, the closing price of our common shares on the New York Stock Exchange, or the NYSE, on that day, to each of our five Trustees. | |
On September 13, 2013, pursuant to our 2012 Equity Compensation Plan, we granted an aggregate of 82,600 of our common shares to our officers and certain employees of our manager, RMR, valued at $22.86 per share, the closing price of our common shares on the NYSE on that day. | |
Fair_Value_of_Assets_and_Liabi
Fair Value of Assets and Liabilities | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Fair Value of Assets and Liabilities | ||||||||||||||
Fair Value of Assets and Liabilities | Note 8. Fair Value of Assets and Liabilities | |||||||||||||
The following table presents certain of our assets and liabilities that are measured at fair value on a recurring and non recurring basis at September 30, 2013 categorized by the level of inputs used in the valuation of each asset or liability. | ||||||||||||||
Quoted Prices in | Significant | Significant | ||||||||||||
Active Markets for | Other | Unobservable | ||||||||||||
Identical Assets | Observable | Inputs | ||||||||||||
Inputs | ||||||||||||||
Description | Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Assets held for sale(1) | $ | 94,891 | $ | — | $ | 94,891 | $ | — | ||||||
Long-lived assets held and used(2) | $ | 653 | $ | — | $ | 653 | $ | — | ||||||
Investments in available for sale securities(3) | $ | 27,372 | $ | 27,372 | $ | — | $ | — | ||||||
Unsecured senior notes(4) | $ | 1,102,198 | $ | 1,102,198 | $ | — | $ | — | ||||||
Secured debt(5) | $ | 764,495 | $ | — | $ | — | $ | 764,495 | ||||||
(1) Assets held for sale consist of nineteen of our properties that we expect to sell that are reported at fair value less costs to sell. We used offers to purchase these properties made by third parties or comparable sales transactions (Level 2 inputs) to determine the fair value of these properties. We have recorded cumulative impairments of approximately $38,005 to these properties in order to reduce their book value to fair value. | ||||||||||||||
(2) Long-lived assets held and used consist of one of our properties for which we reduced the carrying value. We used broker information and comparable sales transactions (Level 2 inputs) to determine the fair value of this property. We have previously recorded impairment of assets charges of $1,304 and $3,071 for the nine months ended September 30, 2013 and 2012, respectively, for this property in order to reduce its carrying value to the amount stated. | ||||||||||||||
(3) Our investments in available for sale securities include our 250,000 common shares of CWH and 4,235,000 common shares of Five Star. The fair values of these shares are based on quoted prices at September 30, 2013 in active markets (Level 1 inputs). | ||||||||||||||
(4) We estimate the fair values of our unsecured senior notes using an average of the bid and ask price of our outstanding four issuances of senior notes (Level 1 inputs) on or about September 30, 2013. The fair values of these senior note obligations exceed their aggregate book values of $1,093,017 by $9,181 because these notes were trading at a premium to their face amounts. | ||||||||||||||
(5) We estimate the fair values of our secured debt by using discounted cash flow analyses and currently prevailing market terms at September 30, 2013 (Level 3 inputs). Because Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value. | ||||||||||||||
In addition to the assets and liabilities described in the above table, our additional financial instruments include rents receivable, cash and cash equivalents, restricted cash, other unsecured debt and other liabilities. The fair values of these additional financial instruments approximate their carrying values at September 30, 2013 based upon their liquidity, short term maturity, variable rate pricing or our estimate of fair value using discounted cash flow analyses and prevailing interest rates. | ||||||||||||||
Segment_Reporting
Segment Reporting | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting. | |||||||||||||||||
Segment Reporting | Note 9. Segment Reporting | ||||||||||||||||
We have four operating segments, of which three are separately reportable operating segments: (i) triple net senior living communities that provide short term and long term residential care and dining services for residents, (ii) managed senior living communities that provide short term and long term residential care and dining services for residents and (iii) MOBs. Our triple net and managed senior living communities include independent living communities and assisted living communities, skilled nursing facilities, or SNFs, and two rehabilitation hospitals. Properties in the MOB segment include medical office, clinic and biotech laboratory buildings. The “All Other” category in the following table includes amounts related to corporate business activities and the operating results of certain properties that offer fitness, wellness and spa services to members. | |||||||||||||||||
For the Three Months Ended September 30, 2013 | |||||||||||||||||
Triple Net | Managed | MOBs | All Other | Consolidated | |||||||||||||
Senior Living | Senior Living | Operations | |||||||||||||||
Communities | Communities | ||||||||||||||||
Revenues: | |||||||||||||||||
Rental income | $ | 57,073 | $ | — | $ | 50,910 | $ | 4,336 | $ | 112,319 | |||||||
Residents fees and services | — | 74,946 | — | — | 74,946 | ||||||||||||
Total revenues | 57,073 | 74,946 | 50,910 | 4,336 | 187,265 | ||||||||||||
Expenses: | |||||||||||||||||
Property operating expenses | — | 57,708 | 17,021 | — | 74,729 | ||||||||||||
Depreciation | 16,760 | 7,251 | 13,514 | 948 | 38,473 | ||||||||||||
General and administrative | — | — | — | 7,798 | 7,798 | ||||||||||||
Acquisition related costs | — | — | — | 396 | 396 | ||||||||||||
Total expenses | 16,760 | 64,959 | 30,535 | 9,142 | 121,396 | ||||||||||||
Operating income (loss) | 40,313 | 9,987 | 20,375 | (4,806 | ) | 65,869 | |||||||||||
Interest and other income | — | — | — | 42 | 42 | ||||||||||||
Interest expense | (6,546 | ) | (3,054 | ) | (1,369 | ) | (18,436 | ) | (29,405 | ) | |||||||
Loss on early extinguishment of debt | — | — | — | (692 | ) | (692 | ) | ||||||||||
Gain on sale of properties | 1,141 | — | — | — | 1,141 | ||||||||||||
Equity in earnings of an investee | — | — | — | 64 | 64 | ||||||||||||
Income (loss) before income tax expense | 34,908 | 6,933 | 19,006 | (23,828 | ) | 37,019 | |||||||||||
Income tax expense | — | — | — | (125 | ) | (125 | ) | ||||||||||
Income (loss) from continuing operations | 34,908 | 6,933 | 19,006 | (23,953 | ) | 36,894 | |||||||||||
Discontinued operations: | |||||||||||||||||
Income from discontinued operations | — | — | 1,231 | — | 1,231 | ||||||||||||
Net income (loss) | $ | 34,908 | $ | 6,933 | $ | 20,237 | $ | (23,953 | ) | $ | 38,125 | ||||||
Total assets | $ | 1,861,729 | $ | 967,187 | $ | 1,732,217 | $ | 246,197 | $ | 4,807,330 | |||||||
For the Three Months Ended September 30, 2012 | |||||||||||||||||
Triple Net | Managed | MOBs | All Other | Consolidated | |||||||||||||
Senior Living | Senior Living | Operations | |||||||||||||||
Communities | Communities | ||||||||||||||||
Revenues: | |||||||||||||||||
Rental income | $ | 60,496 | $ | — | $ | 48,821 | $ | 4,439 | $ | 113,756 | |||||||
Residents fees and services | — | 42,352 | — | — | 42,352 | ||||||||||||
Total revenues | 60,496 | 42,352 | 48,821 | 4,439 | 156,108 | ||||||||||||
Expenses: | |||||||||||||||||
Property operating expenses | — | 31,233 | 15,572 | — | 46,805 | ||||||||||||
Depreciation | 17,433 | 5,037 | 11,858 | 948 | 35,276 | ||||||||||||
General and administrative | — | — | — | 8,352 | 8,352 | ||||||||||||
Acquisition related costs | — | — | — | 4,297 | 4,297 | ||||||||||||
Total expenses | 17,433 | 36,270 | 27,430 | 13,597 | 94,730 | ||||||||||||
Operating income (loss) | 43,063 | 6,082 | 21,391 | (9,158 | ) | 61,378 | |||||||||||
Interest and other income | — | — | — | 248 | 248 | ||||||||||||
Interest expense | (8,665 | ) | (2,929 | ) | (1,014 | ) | (17,809 | ) | (30,417 | ) | |||||||
Loss on early extinguishment of debt | — | — | — | (6,349 | ) | (6,349 | ) | ||||||||||
Loss on lease terminations | (104 | ) | — | — | — | (104 | ) | ||||||||||
Loss on sale of properties | — | — | (101 | ) | — | (101 | ) | ||||||||||
Equity in earnings of an investee | — | — | — | 115 | 115 | ||||||||||||
Income (loss) before income tax expense | 34,294 | 3,153 | 20,276 | (32,953 | ) | 24,770 | |||||||||||
Income tax expense | — | — | — | (43 | ) | (43 | ) | ||||||||||
Income (loss) from continuing operations | 34,294 | 3,153 | 20,276 | (32,996 | ) | 24,727 | |||||||||||
Discontinued operations: | |||||||||||||||||
Income from discontinued operations | — | — | 919 | — | 919 | ||||||||||||
Net income (loss) | $ | 34,294 | $ | 3,153 | $ | 21,195 | $ | (32,996 | ) | $ | 25,646 | ||||||
Total assets | $ | 2,019,325 | $ | 803,009 | $ | 1,625,180 | $ | 198,782 | $ | 4,646,296 | |||||||
For the Nine Months Ended September 30, 2013 | |||||||||||||||||
Triple Net | Managed | MOBs | All Other | Consolidated | |||||||||||||
Senior Living | Senior Living | Operations | |||||||||||||||
Communities | Communities | ||||||||||||||||
Revenues: | |||||||||||||||||
Rental income | $ | 170,794 | $ | — | $ | 152,492 | $ | 13,182 | $ | 336,468 | |||||||
Residents fees and services | — | 224,634 | — | — | 224,634 | ||||||||||||
Total revenues | 170,794 | 224,634 | 152,492 | 13,182 | 561,102 | ||||||||||||
Expenses: | |||||||||||||||||
Property operating expenses | — | 173,844 | 49,049 | — | 222,893 | ||||||||||||
Depreciation | 50,696 | 21,128 | 39,804 | 2,844 | 114,472 | ||||||||||||
General and administrative | — | — | — | 24,615 | 24,615 | ||||||||||||
Acquisition related costs | — | — | — | 2,590 | 2,590 | ||||||||||||
Impairment of assets | 4,371 | — | — | 1,304 | 5,675 | ||||||||||||
Total expenses | 55,067 | 194,972 | 88,853 | 31,353 | 370,245 | ||||||||||||
Operating income (loss) | 115,727 | 29,662 | 63,639 | (18,171 | ) | 190,857 | |||||||||||
Interest and other income | — | — | — | 612 | 612 | ||||||||||||
Interest expense | (20,030 | ) | (9,196 | ) | (4,103 | ) | (55,207 | ) | (88,536 | ) | |||||||
Loss on early extinguishment of debt | — | — | — | (797 | ) | (797 | ) | ||||||||||
Gain on sale of properties | 1,141 | — | — | — | 1,141 | ||||||||||||
Equity in earnings of an investee | — | — | — | 219 | 219 | ||||||||||||
Income (loss) before income tax expense | 96,838 | 20,466 | 59,536 | (73,344 | ) | 103,496 | |||||||||||
Income tax expense | — | — | — | (405 | ) | (405 | ) | ||||||||||
Income (loss) from continuing operations | 96,838 | 20,466 | 59,536 | (73,749 | ) | 103,091 | |||||||||||
Discontinued operations: | |||||||||||||||||
Income from discontinued operations | — | — | 3,762 | — | 3,762 | ||||||||||||
Impairment of assets from discontinued operations | — | — | (27,896 | ) | — | (27,896 | ) | ||||||||||
Net income (loss) | $ | 96,838 | $ | 20,466 | $ | 35,402 | $ | (73,749 | ) | $ | 78,957 | ||||||
Total assets | $ | 1,861,729 | $ | 967,187 | $ | 1,732,217 | $ | 246,197 | $ | 4,807,330 | |||||||
For the Nine Months Ended September 30, 2012 | |||||||||||||||||
Triple Net | Managed | MOBs | All Other | Consolidated | |||||||||||||
Senior Living | Senior Living | Operations | |||||||||||||||
Communities | Communities | ||||||||||||||||
Revenues: | |||||||||||||||||
Rental income | $ | 178,964 | $ | — | $ | 136,910 | $ | 13,317 | $ | 329,191 | |||||||
Residents fees and services | — | 113,906 | — | — | 113,906 | ||||||||||||
Total revenues | 178,964 | 113,906 | 136,910 | 13,317 | 443,097 | ||||||||||||
Expenses: | |||||||||||||||||
Property operating expenses | — | 82,976 | 42,133 | — | 125,109 | ||||||||||||
Depreciation | 51,816 | 12,617 | 35,396 | 2,844 | 102,673 | ||||||||||||
General and administrative | — | — | — | 24,106 | 24,106 | ||||||||||||
Acquisition related costs | — | — | — | 6,814 | 6,814 | ||||||||||||
Impairment of assets | — | — | — | 3,071 | 3,071 | ||||||||||||
Total expenses | 51,816 | 95,593 | 77,529 | 36,835 | 261,773 | ||||||||||||
Operating income (loss) | 127,148 | 18,313 | 59,381 | (23,518 | ) | 181,324 | |||||||||||
Interest and other income | — | — | — | 957 | 957 | ||||||||||||
Interest expense | (29,073 | ) | (8,675 | ) | (1,807 | ) | (47,871 | ) | (87,426 | ) | |||||||
Loss on early extinguishment of debt | — | — | — | (6,349 | ) | (6,349 | ) | ||||||||||
Loss on lease terminations | (104 | ) | — | — | — | (104 | ) | ||||||||||
Loss on sale of properties | — | — | (101 | ) | — | (101 | ) | ||||||||||
Equity in earnings of an investee | — | — | — | 236 | 236 | ||||||||||||
Income (loss) before income tax expense | 97,971 | 9,638 | 57,473 | (76,545 | ) | 88,537 | |||||||||||
Income tax expense | — | — | — | (290 | ) | (290 | ) | ||||||||||
Income (loss) from continuing operations | 97,971 | 9,638 | 57,473 | (76,835 | ) | 88,247 | |||||||||||
Discontinued operations: | |||||||||||||||||
Income from discontinued operations | — | — | 3,001 | — | 3,001 | ||||||||||||
Net income (loss) | $ | 97,971 | $ | 9,638 | $ | 60,474 | $ | (76,835 | ) | $ | 91,248 | ||||||
Total assets | $ | 2,019,325 | $ | 803,009 | $ | 1,625,180 | $ | 198,782 | $ | 4,646,296 |
Related_Person_Transactions
Related Person Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Person Transactions | |
Related Person Transactions | Note 10. Related Person Transactions |
Five Star was formerly our 100% owned subsidiary. Five Star is our largest tenant, we are Five Star’s largest stockholder and Five Star manages several senior living communities for us. In 2001, we distributed substantially all of Five Star’s then outstanding shares of common stock to our shareholders. As of September 30, 2013, we owned 4,235,000 shares of common stock of Five Star, or approximately 8.8% of Five Star’s outstanding shares of common stock. One of our Managing Trustees, Mr. Barry Portnoy, is also a managing director of Five Star. RMR provides management services to both us and Five Star. | |
As of September 30, 2013, we leased 187 senior living communities and two rehabilitation hospitals to Five Star. Under Five Star’s leases with us, Five Star pays us rent consisting of minimum annual rent amounts plus percentage rent based on increases in gross revenues at certain properties. Five Star’s total minimum annual rent payable to us as of September 30, 2013 was $199,257, excluding percentage rent. We recognized total rental income from Five Star of $49,705 and $49,148 for the three months ended September 30, 2013 and 2012, respectively, and $148,732 and $146,901 for the nine months ended September 30, 2013 and 2012, respectively. As of September 30, 2013 and December 31, 2012, our rents receivable from Five Star were $17,863 and $17,680, respectively, and those amounts are included in other assets in our condensed consolidated balance sheets. We had deferred percentage rent under our Five Star leases of $1,301 and $1,190 for the three months ended September 30, 2013 and 2012, respectively, and $3,823 and $3,602 for the nine months ended September 30, 2013 and 2012, respectively. We determine percentage rent due under our Five Star leases annually and recognize it at year end when all contingencies are met. During the nine months ended September 30, 2013, pursuant to the terms of our leases with Five Star, we purchased $22,501 of improvements made to properties leased to Five Star, and, as a result, the annual rent payable to us by Five Star increased by approximately $1,800. | |
In August 2013, we and Five Star entered into the Purchase Agreement with certain unrelated parties pursuant to which we agreed to sell our two rehabilitation hospitals and certain related assets for a sale price of $90,000, subject to certain adjustments, and Five Star agreed to transfer the operations of the two hospitals and several in-patient and out-patient clinics affiliated with those hospitals, to those third parties. Each hospital is leased by us to Five Star under Lease No. 2 and is currently operated by Five Star. In September 2013, we entered into an amendment to Lease No. 2 in connection with our agreement to sell these rehabilitation hospitals and Five Star’s agreement to transfer its related hospital operations. The lease amendment provides, among other things, that effective upon the sale of the rehabilitation hospitals pursuant to the Purchase Agreement, Lease No. 2 will terminate with respect to the rehabilitation hospitals and the annual rent paid to us by Five Star under Lease No. 2 will be reduced by $9,500. The lease amendment also provides for an allocation of indemnification obligations under the Purchase Agreement between us and Five Star. The sale of these rehabilitation hospitals is subject to various closing conditions, including the purchaser’s obtaining appropriate licenses and regulatory approvals, and there can be no assurance that the sale will occur. | |
We and Five Star have agreed to offer for sale 11 senior living communities we lease to Five Star. Five Star’s rent payable to us will be reduced if and as these sales may occur pursuant to terms set in our leases with Five Star. In August 2013, we sold one of these communities, a SNF with 112 living units, for a sales price of $2,550, and as a result of this sale, Five Star’s annual minimum rent payable to us decreased by $255, or 10% of the net proceeds of the sale to us, in accordance with the terms of the applicable lease. We can provide no assurance that the remaining ten senior living communities which we and Five Star have agreed to offer for sale will be sold or what the terms of any sales may provide. | |
As of September 30, 2013, Five Star managed 40 senior living communities for our account. We lease our senior living communities that are managed by Five Star that include assisted living units to our TRSs, and Five Star manages these communities pursuant to long term management agreements on substantially similar terms. In connection with the management agreements, we and Five Star have entered into three combination agreements, or pooling agreements: two pooling agreements which combine our management agreements for communities that include assisted living units, or the AL Pooling Agreements, and a third pooling agreement, which combines our management agreements for communities consisting only of independent living units, or the IL Pooling Agreement. We entered into the initial AL Pooling Agreement in May 2011 and the second AL Pooling Agreement in October 2012. Each of our AL Pooling Agreements includes 20 identified communities (including three assisted living communities that we acquired in October 2013 under the second AL Pooling Agreement). We entered into the IL Pooling Agreement in August 2012 and that agreement currently includes management agreements for two communities that have only independent living units. Each of the AL Pooling Agreements and the IL Pooling Agreement aggregates the determination of fees and expenses of the various communities that are subject to the applicable pooling agreement, including determinations of our return on our invested capital and Five Star’s incentive fees. The senior living community in New York described below that Five Star manages for our account is not included in any of our Pooling Agreements. We incurred management fees of $2,290 and $1,284 for the three months ended September 30, 2013 and 2012, respectively, and $6,866 and $3,431 for the nine months ended September 30, 2013 and 2012, respectively, with respect to the communities Five Star manages. These amounts are included in property operating expenses in our condensed consolidated statements of income and comprehensive income. | |
In August 2013, we acquired a senior living community located in Cumming, GA with 93 assisted living units for $22,030, excluding closing costs. In October 2013, we acquired three senior living communities with an aggregate of 213 assisted living units for an aggregate purchase price of approximately $29,100, excluding closing costs; one of those communities is located in Tennessee, and the other two are located in Georgia. We lease these four senior living communities to our TRSs and Five Star manages these communities for our account pursuant to separate long term management agreements on terms similar to those management arrangements we currently have with Five Star for communities that include assisted living units and these agreements were added to the second AL Pooling Agreement. As noted in Note 3, we have agreed to acquire an additional senior living community. If this acquisition is completed, we will lease that community to one of our TRSs and we expect to enter into a long term management agreement with Five Star to manage that community on terms similar to those management arrangements we currently have with Five Star for communities that include assisted living units and that this management agreement would be added to one of our existing AL Pooling Agreements or to a new pooling agreement that we may enter into with Five Star; accordingly, this acquisition is subject to due diligence and other conditions and this acquisition may not be completed, it may be delayed or its terms may change. Also, we expect that we may enter into additional management arrangements with Five Star for senior living communities that we may acquire in the future on terms similar to the management arrangements we currently have with Five Star. | |
We own a senior living community in New York with 310 living units, a portion of which is managed by Five Star pursuant to a long term management agreement with us with respect to the living units at this community that are not subject to the requirements of New York healthcare licensing laws. The terms of this management agreement are substantially consistent with the terms of our other management agreements with Five Star for communities that include assisted living units, except the management fee we pay is equal to 5% of the gross revenues realized at that portion of the community and there is no incentive fee payable by us to Five Star. In order to accommodate certain requirements of New York healthcare licensing laws, one of our TRSs subleases the portion of this community that is subject to those requirements to an entity, D&R Yonkers LLC, which is owned by our President and Chief Operating Officer and our Treasurer and Chief Financial Officer. Five Star manages this portion of the community pursuant to a long term management agreement with D&R Yonkers LLC. Under the sublease agreement, D&R Yonkers LLC is obligated to pay rent only from available revenues generated by the subleased community and our TRS is obligated to advance any rent shortfalls to D&R Yonkers LLC. | |
As discussed above in Note 5, in May 2011, we and Five Star entered into the Bridge Loan, under which we lent to Five Star $80,000 to fund a portion of Five Star’s purchase of six senior living communities. In April 2012, Five Star repaid in full the $38,000 principal amount then outstanding under the Bridge Loan, resulting in the termination of the Bridge Loan. We recognized interest income from Five Star under the Bridge Loan of $314 for the nine months ended September 30, 2012. | |
We have no employees. Personnel and various services we require to operate our business are provided to us by RMR. We have two agreements with RMR to provide management and administrative 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 MOBs. | |
Under our business management agreement with RMR, we acknowledge that RMR also provides management services to other companies, which include Five Star. One of our Managing Trustees, Barry Portnoy, is Chairman, majority owner and an employee of RMR. Our other Managing Trustee, Adam Portnoy, is the son of Barry Portnoy, and an owner, President, Chief Executive Officer and a director of RMR. Each of our executive officers is also an officer of RMR, and our President and Chief Operating Officer, David Hegarty, is a director of RMR. Five Star’s President and Chief Executive Officer and its Chief Financial Officer and Treasurer are officers of RMR. Our Independent Trustees also serve as independent directors or independent trustees of other public companies to which RMR provides management services. Barry Portnoy serves as a managing director or managing trustee of those companies, including Five Star, and Adam Portnoy serves as a managing trustee of a majority of those companies, but not Five Star. In addition, officers of RMR serve as officers of those companies. | |
Pursuant to our business management agreement with RMR, we incurred business management fees of $6,847 and $6,745 for the three months ended September 30, 2013 and 2012, respectively, and $20,088 and $19,472 for the nine months ended September 30, 2013 and 2012, respectively. These amounts are included in general and administrative expenses in our condensed consolidated statements of income and comprehensive income. In March 2013, we issued 21,968 of our common shares to RMR for an incentive fee payable to RMR for 2012 services, in accordance with the terms of our business management agreement. | |
In connection with our property management agreement with RMR, we incurred property management and construction supervision fees of $1,678 and $1,557 for the three months ended September 30, 2013 and 2012, respectively, and $4,937 and $4,328 for the nine months ended September 30, 2013 and 2012, respectively. These amounts are included in property operating expenses or have been capitalized, as appropriate, in our condensed consolidated balance sheets. | |
In September 2013, we and RMR agreed to restructure the base business management and incentive fees payable to RMR under our business management agreement beginning in 2014, as follows: | |
· The base business management fees we pay to RMR will be calculated on the basis of the lower of: (i) gross historical cost of our real estate assets, as defined, or (ii) our total market capitalization. Market capitalization will include the market value of our common shares, plus the liquidation preference of preferred shares, if any, and the principal amount of debt. The market value of our common shares will be calculated based on the average shares outstanding multiplied by the average closing share price during the period in which the fees are earned. | |
· 10% of the base business management fees we pay to RMR will be paid in our common shares. The amount of our common shares granted as part of the base business management fee will be calculated based on the average closing share price during the period in which the fees are earned. | |
· The annual incentive fees which may be earned by RMR will be calculated based upon total returns realized by our common shareholders (i.e., share price appreciation plus dividends) in excess of benchmarks. The benchmarks will be set by our Compensation Committee, which is comprised solely of Independent Trustees, and will be disclosed in our annual meeting proxy statements. Incentive fees will be paid in our common shares which will vest over a multiyear period and will be subject to a “claw back” in the event of certain material restatements of financial results. | |
We, RMR, Five Star and five other companies to which RMR provides management services each currently own 12.5% of Affiliates Insurance Company, or AIC, an Indiana insurance company. All of our Trustees, all of the trustees and directors of the other publicly held AIC shareholders and nearly all of the directors of RMR currently serve on the board of directors of AIC. RMR provides management and administrative services to AIC pursuant to a management and administrative services agreement with AIC. As of September 30, 2013, we have invested $5,209 in AIC. Although we own less than 20% of AIC, we use the equity method to account for this investment because we believe that we have significant influence over AIC because all of our Trustees are also directors of AIC. Our investment in AIC had a carrying value of $5,781 and $5,629 as of September 30, 2013 and December 31, 2012, respectively, which amounts are include in other assets on our condensed consolidated balance sheets. We recognized income of $64 and $115 for the three months ended September 30, 2013 and 2012, respectively, and $219 and $236 for the nine months ended September 30, 2013 and 2012, respectively, arising from our investment in AIC. We and the other shareholders of AIC have purchased property insurance providing $500,000 of coverage pursuant to an insurance program arranged by AIC and with respect to which AIC is a reinsurer of certain coverage amounts. This program was modified and extended in June 2013 for a one year term, and we paid a premium, including taxes and fees, of $4,748 in connection with that renewal, which amount may be adjusted from time to time as we acquire or dispose of properties that are included in this program. We periodically consider the possibilities for expanding our insurance relationships with AIC to include other types of insurance and may in the future participate in additional insurance offerings AIC may provide or arrange. We may invest additional amounts in AIC in the future if the expansion of this insurance business requires additional capital, but we are not obligated to do so. By participating in this insurance business with RMR and the other companies to which RMR provides management services, we expect that we may benefit financially by possibly reducing our insurance expenses or by realizing our pro rata share of any profits of this insurance business. | |
Effective July 2013, we, RMR, Five Star and four other companies to which RMR provides management services purchased from an unrelated third party insurer a combined directors’ and officers’ liability insurance policy providing $10,000 of aggregate coverage and we also purchased from an unrelated third party insurer a separate directors’ and officers’ liability insurance policy providing $5,000 of coverage. We paid aggregate premiums of approximately $343 in connection with these policies. | |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Taxes | |
Income Taxes | Note 11. Income Taxes |
We 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 certain 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 REIT status. During the three and nine months ended September 30, 2013, we recognized income tax expense of $125 and $405, respectively. During the three and nine months ended 2012, we recognized income tax expense of $43 and $290, respectively. | |
Real_Estate_Properties_Tables
Real Estate Properties (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||
Real Estate Properties | |||||||||||||||||||||||||||||
Schedule of summarized income statement information for the seven MOBs that meet the criteria for discontinued operations included in discontinued operations | |||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||
Rental income | $ | 2,189 | $ | 2,525 | $ | 7,284 | $ | 7,581 | |||||||||||||||||||||
Property operating expenses | (958 | ) | (1,002 | ) | (2,723 | ) | (2,766 | ) | |||||||||||||||||||||
Depreciation and amortization | — | (604 | ) | (799 | ) | (1,814 | ) | ||||||||||||||||||||||
Income from discontinued operations | $ | 1,231 | $ | 919 | $ | 3,762 | $ | 3,001 | |||||||||||||||||||||
Triple Net Senior Living Communities | |||||||||||||||||||||||||||||
Real Estate Properties | |||||||||||||||||||||||||||||
Schedule of real estate property acquisition | Triple Net Senior Living Communities Acquisitions since January 1, 2013: | ||||||||||||||||||||||||||||
Number | Premium | ||||||||||||||||||||||||||||
of | Units/ | Purchase | Buildings and | Intangible | Assumed | on Assumed | |||||||||||||||||||||||
Date | Location | Properties | Beds | Price (1) | Land | Improvements | FF&E | Assets | Debt | Debt | |||||||||||||||||||
January 2013 (2) | Redmond, WA | 1 | 150 | $ | 22,350 | $ | 5,120 | $ | 16,562 | $ | 669 | $ | 1,039 | $ | 12,266 | $ | 1,040 | ||||||||||||
(1) Purchase price includes the assumption of mortgage debt and excludes closing costs. The allocation of the purchase price of our acquisition shown above is based upon preliminary estimates of the fair value of assets acquired and liabilities assumed. Consequently, amounts preliminarily allocated to assets acquired and liabilities assumed may change from those used in these condensed consolidated financial statements. | |||||||||||||||||||||||||||||
(2) We leased this property to a subsidiary of Stellar Senior Living, LLC for an initial term expiring in 2028 for initial rent of approximately $1,732 per year. Percentage rent, based on increases in gross revenues at this property, will commence in 2016. | |||||||||||||||||||||||||||||
Managed Senior Living Communities | |||||||||||||||||||||||||||||
Real Estate Properties | |||||||||||||||||||||||||||||
Schedule of real estate property acquisition | Senior Living Managed Communities Acquisitions since January 1, 2013: | ||||||||||||||||||||||||||||
Number | |||||||||||||||||||||||||||||
of | Units/ | Purchase | Buildings and | Intangible | |||||||||||||||||||||||||
Date | Location | Properties | Beds | Price (1) | Land | Improvements | FF&E | Assets | |||||||||||||||||||||
August 2013 | Cumming, GA | 1 | 93 | $ | 22,030 | $ | 1,548 | $ | 18,666 | $ | 803 | $ | 1,013 | ||||||||||||||||
(1) Purchase price excludes closing costs. The allocation of the purchase price of certain of our acquisitions shown above is based upon preliminary estimates of the fair value of assets acquired and liabilities assumed. Consequently, amounts preliminarily allocated to assets acquired and liabilities assumed may change from those used in these condensed consolidated financial statements. | |||||||||||||||||||||||||||||
MOB | |||||||||||||||||||||||||||||
Real Estate Properties | |||||||||||||||||||||||||||||
Schedule of real estate property acquisition | MOB Acquisitions since January 1, 2013: | ||||||||||||||||||||||||||||
Acquired | |||||||||||||||||||||||||||||
Number | Acquired | Real Estate | |||||||||||||||||||||||||||
of | Square | Purchase | Buildings and | Real Estate | Lease | ||||||||||||||||||||||||
Date | Location | Properties | Feet (000’s) | Price (1) | Land | Improvements | Leases | Obligations | |||||||||||||||||||||
February 2013 | Bothell, WA | 2 | 145 | $ | 38,000 | $ | 5,639 | $ | 25,239 | $ | 8,442 | $ | 1,539 | ||||||||||||||||
March 2013 | Hattiesburg, MS | 1 | 72 | 14,600 | 1,269 | 11,691 | 2,323 | 683 | |||||||||||||||||||||
August 2013 (2) | Boston, MA | 1 | 105 | 49,500 | 4,600 | 44,900 | — | — | |||||||||||||||||||||
4 | 322 | $ | 102,100 | $ | 11,508 | $ | 81,830 | $ | 10,765 | $ | 2,222 | ||||||||||||||||||
(1) Purchase price excludes closing costs. The allocation of the purchase price of our acquisitions shown above is based upon preliminary estimates of the fair value of assets acquired and liabilities assumed. Consequently, amounts preliminarily allocated to assets acquired and liabilities assumed may change from those used in these condensed consolidated financial statements. | |||||||||||||||||||||||||||||
(2) This acquisition is accounted for as an asset purchase. |
Fair_Value_of_Assets_and_Liabi1
Fair Value of Assets and Liabilities (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Fair Value of Assets and Liabilities | ||||||||||||||
Assets and liabilities measured at fair value | The following table presents certain of our assets and liabilities that are measured at fair value on a recurring and non recurring basis at September 30, 2013 categorized by the level of inputs used in the valuation of each asset or liability. | |||||||||||||
Quoted Prices in | Significant | Significant | ||||||||||||
Active Markets for | Other | Unobservable | ||||||||||||
Identical Assets | Observable | Inputs | ||||||||||||
Inputs | ||||||||||||||
Description | Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Assets held for sale(1) | $ | 94,891 | $ | — | $ | 94,891 | $ | — | ||||||
Long-lived assets held and used(2) | $ | 653 | $ | — | $ | 653 | $ | — | ||||||
Investments in available for sale securities(3) | $ | 27,372 | $ | 27,372 | $ | — | $ | — | ||||||
Unsecured senior notes(4) | $ | 1,102,198 | $ | 1,102,198 | $ | — | $ | — | ||||||
Secured debt(5) | $ | 764,495 | $ | — | $ | — | $ | 764,495 | ||||||
(1) Assets held for sale consist of nineteen of our properties that we expect to sell that are reported at fair value less costs to sell. We used offers to purchase these properties made by third parties or comparable sales transactions (Level 2 inputs) to determine the fair value of these properties. We have recorded cumulative impairments of approximately $38,005 to these properties in order to reduce their book value to fair value. | ||||||||||||||
(2) Long-lived assets held and used consist of one of our properties for which we reduced the carrying value. We used broker information and comparable sales transactions (Level 2 inputs) to determine the fair value of this property. We have previously recorded impairment of assets charges of $1,304 and $3,071 for the nine months ended September 30, 2013 and 2012, respectively, for this property in order to reduce its carrying value to the amount stated. | ||||||||||||||
(3) Our investments in available for sale securities include our 250,000 common shares of CWH and 4,235,000 common shares of Five Star. The fair values of these shares are based on quoted prices at September 30, 2013 in active markets (Level 1 inputs). | ||||||||||||||
(4) We estimate the fair values of our unsecured senior notes using an average of the bid and ask price of our outstanding four issuances of senior notes (Level 1 inputs) on or about September 30, 2013. The fair values of these senior note obligations exceed their aggregate book values of $1,093,017 by $9,181 because these notes were trading at a premium to their face amounts. | ||||||||||||||
(5) We estimate the fair values of our secured debt by using discounted cash flow analyses and currently prevailing market terms at September 30, 2013 (Level 3 inputs). Because Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value. |
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting. | |||||||||||||||||
Schedule of segment reporting information | |||||||||||||||||
For the Three Months Ended September 30, 2013 | |||||||||||||||||
Triple Net | Managed | MOBs | All Other | Consolidated | |||||||||||||
Senior Living | Senior Living | Operations | |||||||||||||||
Communities | Communities | ||||||||||||||||
Revenues: | |||||||||||||||||
Rental income | $ | 57,073 | $ | — | $ | 50,910 | $ | 4,336 | $ | 112,319 | |||||||
Residents fees and services | — | 74,946 | — | — | 74,946 | ||||||||||||
Total revenues | 57,073 | 74,946 | 50,910 | 4,336 | 187,265 | ||||||||||||
Expenses: | |||||||||||||||||
Property operating expenses | — | 57,708 | 17,021 | — | 74,729 | ||||||||||||
Depreciation | 16,760 | 7,251 | 13,514 | 948 | 38,473 | ||||||||||||
General and administrative | — | — | — | 7,798 | 7,798 | ||||||||||||
Acquisition related costs | — | — | — | 396 | 396 | ||||||||||||
Total expenses | 16,760 | 64,959 | 30,535 | 9,142 | 121,396 | ||||||||||||
Operating income (loss) | 40,313 | 9,987 | 20,375 | (4,806 | ) | 65,869 | |||||||||||
Interest and other income | — | — | — | 42 | 42 | ||||||||||||
Interest expense | (6,546 | ) | (3,054 | ) | (1,369 | ) | (18,436 | ) | (29,405 | ) | |||||||
Loss on early extinguishment of debt | — | — | — | (692 | ) | (692 | ) | ||||||||||
Gain on sale of properties | 1,141 | — | — | — | 1,141 | ||||||||||||
Equity in earnings of an investee | — | — | — | 64 | 64 | ||||||||||||
Income (loss) before income tax expense | 34,908 | 6,933 | 19,006 | (23,828 | ) | 37,019 | |||||||||||
Income tax expense | — | — | — | (125 | ) | (125 | ) | ||||||||||
Income (loss) from continuing operations | 34,908 | 6,933 | 19,006 | (23,953 | ) | 36,894 | |||||||||||
Discontinued operations: | |||||||||||||||||
Income from discontinued operations | — | — | 1,231 | — | 1,231 | ||||||||||||
Net income (loss) | $ | 34,908 | $ | 6,933 | $ | 20,237 | $ | (23,953 | ) | $ | 38,125 | ||||||
Total assets | $ | 1,861,729 | $ | 967,187 | $ | 1,732,217 | $ | 246,197 | $ | 4,807,330 | |||||||
For the Three Months Ended September 30, 2012 | |||||||||||||||||
Triple Net | Managed | MOBs | All Other | Consolidated | |||||||||||||
Senior Living | Senior Living | Operations | |||||||||||||||
Communities | Communities | ||||||||||||||||
Revenues: | |||||||||||||||||
Rental income | $ | 60,496 | $ | — | $ | 48,821 | $ | 4,439 | $ | 113,756 | |||||||
Residents fees and services | — | 42,352 | — | — | 42,352 | ||||||||||||
Total revenues | 60,496 | 42,352 | 48,821 | 4,439 | 156,108 | ||||||||||||
Expenses: | |||||||||||||||||
Property operating expenses | — | 31,233 | 15,572 | — | 46,805 | ||||||||||||
Depreciation | 17,433 | 5,037 | 11,858 | 948 | 35,276 | ||||||||||||
General and administrative | — | — | — | 8,352 | 8,352 | ||||||||||||
Acquisition related costs | — | — | — | 4,297 | 4,297 | ||||||||||||
Total expenses | 17,433 | 36,270 | 27,430 | 13,597 | 94,730 | ||||||||||||
Operating income (loss) | 43,063 | 6,082 | 21,391 | (9,158 | ) | 61,378 | |||||||||||
Interest and other income | — | — | — | 248 | 248 | ||||||||||||
Interest expense | (8,665 | ) | (2,929 | ) | (1,014 | ) | (17,809 | ) | (30,417 | ) | |||||||
Loss on early extinguishment of debt | — | — | — | (6,349 | ) | (6,349 | ) | ||||||||||
Loss on lease terminations | (104 | ) | — | — | — | (104 | ) | ||||||||||
Loss on sale of properties | — | — | (101 | ) | — | (101 | ) | ||||||||||
Equity in earnings of an investee | — | — | — | 115 | 115 | ||||||||||||
Income (loss) before income tax expense | 34,294 | 3,153 | 20,276 | (32,953 | ) | 24,770 | |||||||||||
Income tax expense | — | — | — | (43 | ) | (43 | ) | ||||||||||
Income (loss) from continuing operations | 34,294 | 3,153 | 20,276 | (32,996 | ) | 24,727 | |||||||||||
Discontinued operations: | |||||||||||||||||
Income from discontinued operations | — | — | 919 | — | 919 | ||||||||||||
Net income (loss) | $ | 34,294 | $ | 3,153 | $ | 21,195 | $ | (32,996 | ) | $ | 25,646 | ||||||
Total assets | $ | 2,019,325 | $ | 803,009 | $ | 1,625,180 | $ | 198,782 | $ | 4,646,296 | |||||||
For the Nine Months Ended September 30, 2013 | |||||||||||||||||
Triple Net | Managed | MOBs | All Other | Consolidated | |||||||||||||
Senior Living | Senior Living | Operations | |||||||||||||||
Communities | Communities | ||||||||||||||||
Revenues: | |||||||||||||||||
Rental income | $ | 170,794 | $ | — | $ | 152,492 | $ | 13,182 | $ | 336,468 | |||||||
Residents fees and services | — | 224,634 | — | — | 224,634 | ||||||||||||
Total revenues | 170,794 | 224,634 | 152,492 | 13,182 | 561,102 | ||||||||||||
Expenses: | |||||||||||||||||
Property operating expenses | — | 173,844 | 49,049 | — | 222,893 | ||||||||||||
Depreciation | 50,696 | 21,128 | 39,804 | 2,844 | 114,472 | ||||||||||||
General and administrative | — | — | — | 24,615 | 24,615 | ||||||||||||
Acquisition related costs | — | — | — | 2,590 | 2,590 | ||||||||||||
Impairment of assets | 4,371 | — | — | 1,304 | 5,675 | ||||||||||||
Total expenses | 55,067 | 194,972 | 88,853 | 31,353 | 370,245 | ||||||||||||
Operating income (loss) | 115,727 | 29,662 | 63,639 | (18,171 | ) | 190,857 | |||||||||||
Interest and other income | — | — | — | 612 | 612 | ||||||||||||
Interest expense | (20,030 | ) | (9,196 | ) | (4,103 | ) | (55,207 | ) | (88,536 | ) | |||||||
Loss on early extinguishment of debt | — | — | — | (797 | ) | (797 | ) | ||||||||||
Gain on sale of properties | 1,141 | — | — | — | 1,141 | ||||||||||||
Equity in earnings of an investee | — | — | — | 219 | 219 | ||||||||||||
Income (loss) before income tax expense | 96,838 | 20,466 | 59,536 | (73,344 | ) | 103,496 | |||||||||||
Income tax expense | — | — | — | (405 | ) | (405 | ) | ||||||||||
Income (loss) from continuing operations | 96,838 | 20,466 | 59,536 | (73,749 | ) | 103,091 | |||||||||||
Discontinued operations: | |||||||||||||||||
Income from discontinued operations | — | — | 3,762 | — | 3,762 | ||||||||||||
Impairment of assets from discontinued operations | — | — | (27,896 | ) | — | (27,896 | ) | ||||||||||
Net income (loss) | $ | 96,838 | $ | 20,466 | $ | 35,402 | $ | (73,749 | ) | $ | 78,957 | ||||||
Total assets | $ | 1,861,729 | $ | 967,187 | $ | 1,732,217 | $ | 246,197 | $ | 4,807,330 | |||||||
For the Nine Months Ended September 30, 2012 | |||||||||||||||||
Triple Net | Managed | MOBs | All Other | Consolidated | |||||||||||||
Senior Living | Senior Living | Operations | |||||||||||||||
Communities | Communities | ||||||||||||||||
Revenues: | |||||||||||||||||
Rental income | $ | 178,964 | $ | — | $ | 136,910 | $ | 13,317 | $ | 329,191 | |||||||
Residents fees and services | — | 113,906 | — | — | 113,906 | ||||||||||||
Total revenues | 178,964 | 113,906 | 136,910 | 13,317 | 443,097 | ||||||||||||
Expenses: | |||||||||||||||||
Property operating expenses | — | 82,976 | 42,133 | — | 125,109 | ||||||||||||
Depreciation | 51,816 | 12,617 | 35,396 | 2,844 | 102,673 | ||||||||||||
General and administrative | — | — | — | 24,106 | 24,106 | ||||||||||||
Acquisition related costs | — | — | — | 6,814 | 6,814 | ||||||||||||
Impairment of assets | — | — | — | 3,071 | 3,071 | ||||||||||||
Total expenses | 51,816 | 95,593 | 77,529 | 36,835 | 261,773 | ||||||||||||
Operating income (loss) | 127,148 | 18,313 | 59,381 | (23,518 | ) | 181,324 | |||||||||||
Interest and other income | — | — | — | 957 | 957 | ||||||||||||
Interest expense | (29,073 | ) | (8,675 | ) | (1,807 | ) | (47,871 | ) | (87,426 | ) | |||||||
Loss on early extinguishment of debt | — | — | — | (6,349 | ) | (6,349 | ) | ||||||||||
Loss on lease terminations | (104 | ) | — | — | — | (104 | ) | ||||||||||
Loss on sale of properties | — | — | (101 | ) | — | (101 | ) | ||||||||||
Equity in earnings of an investee | — | — | — | 236 | 236 | ||||||||||||
Income (loss) before income tax expense | 97,971 | 9,638 | 57,473 | (76,545 | ) | 88,537 | |||||||||||
Income tax expense | — | — | — | (290 | ) | (290 | ) | ||||||||||
Income (loss) from continuing operations | 97,971 | 9,638 | 57,473 | (76,835 | ) | 88,247 | |||||||||||
Discontinued operations: | |||||||||||||||||
Income from discontinued operations | — | — | 3,001 | — | 3,001 | ||||||||||||
Net income (loss) | $ | 97,971 | $ | 9,638 | $ | 60,474 | $ | (76,835 | ) | $ | 91,248 | ||||||
Total assets | $ | 2,019,325 | $ | 803,009 | $ | 1,625,180 | $ | 198,782 | $ | 4,646,296 |
Real_Estate_Properties_Details
Real Estate Properties (Details) (USD $) | 9 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | |||||||||||||||||||||||||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Jan. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Feb. 28, 2013 | Jan. 31, 2013 | Feb. 28, 2013 | Jan. 31, 2013 | Feb. 28, 2013 | Jan. 31, 2013 | Jan. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Aug. 31, 2013 | Oct. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Oct. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Oct. 31, 2013 | Oct. 31, 2013 |
item | Managed Senior Living Communities | MOB | MOB | Senior living communities | Senior living communities | Acquisition | Acquisition | Land | Buildings and improvements | WA | WA | WA | WA | WA | WA | WA | Hattiesburg, MS | Hattiesburg, MS | Hattiesburg, MS | GA | GA | GA | GA | GA | Tennessee | Boston, MA | Boston, MA | Boston, MA | Verona, WI | Tennessee and Georgia | Orlando, FL | ||
property | Five Star | item | item | item | MOB | Senior Living Leased Community | Acquisition | Acquisition | Acquisition | Acquisition | Land | Land | Buildings and improvements | Buildings and improvements | Furniture, fixtures and equipment | Acquisition | Land | Buildings and improvements | Acquisition | Acquisition | Land | Buildings and improvements | Furniture, fixtures and equipment | Acquisition | Acquisition | Land | Buildings and improvements | Agreement to acquire | Acquisition | Agreement to acquire | |||
item | sqft | item | Stellar Senior Living, LLC | MOB | MOB | MOB | Senior Living Leased Community | Acquisition | Acquisition | Acquisition | Acquisition | Acquisition | MOB | Acquisition | Acquisition | Managed Senior Living Communities | Senior living communities | Acquisition | Acquisition | Acquisition | Senior living communities | MOB | Acquisition | Acquisition | MOB | Senior living communities | MOB | ||||||
sqft | item | item | MOB | Senior Living Leased Community | MOB | Senior Living Leased Community | Senior Living Leased Community | item | MOB | MOB | Cumming | Subsequent event | Managed Senior Living Communities | Managed Senior Living Communities | Managed Senior Living Communities | Subsequent event | item | MOB | MOB | item | Subsequent event | Subsequent event | |||||||||||
sqft | sqft | item | item | Cumming | Cumming | Cumming | item | sqft | item | item | |||||||||||||||||||||||
sqft | |||||||||||||||||||||||||||||||||
Real Estate Properties | |||||||||||||||||||||||||||||||||
Number of properties owned | 396 | ||||||||||||||||||||||||||||||||
Number of states in which properties are located | 40 | ||||||||||||||||||||||||||||||||
Real Estate Properties | |||||||||||||||||||||||||||||||||
Number of properties acquired or agreed to be acquired | 4 | 2 | 1 | 1 | 1 | 2 | 1 | 1 | 1 | 3 | 3 | ||||||||||||||||||||||
Number of units | 744 | 120 | 150 | 93 | 68 | 213 | |||||||||||||||||||||||||||
Aggregate purchase price of properties acquired, excluding closing costs | $102,100 | $38,000 | $22,350 | $14,600 | $22,030 | $49,500 | $12,000 | $29,000 | $15,375 | ||||||||||||||||||||||||
Intangible assets recorded related to acquisition | 1,039 | 1,013 | |||||||||||||||||||||||||||||||
Assumption of mortgage notes payable | 12,266 | 112,153 | 12,266 | ||||||||||||||||||||||||||||||
Fair value of mortgage notes payable | 13,306 | ||||||||||||||||||||||||||||||||
Premium on Assumed Debt | 1,040 | ||||||||||||||||||||||||||||||||
Area of real estate properties acquired (in square feet) | 322,000 | 144,900 | 71,824 | 105,462 | 62,826 | ||||||||||||||||||||||||||||
Intangible lease liabilities recorded | 10,765 | 8,442 | 2,323 | ||||||||||||||||||||||||||||||
Intangible lease assets recorded | 2,222 | 1,539 | 683 | ||||||||||||||||||||||||||||||
Property plant and equipment recorded | 11,508 | 81,830 | 5,639 | 5,120 | 25,239 | 16,562 | 669 | 1,269 | 11,691 | 1,548 | 18,666 | 803 | 4,600 | 44,900 | |||||||||||||||||||
Number of properties classified as held for sale | 19 | 7 | 10 | 1 | |||||||||||||||||||||||||||||
Number of properties impaired | 11 | ||||||||||||||||||||||||||||||||
Real estate properties, held for sale | 94,891 | 850 | |||||||||||||||||||||||||||||||
Impairment of asset charges recorded | 5,675 | 3,071 | 1,304 | 3,071 | 32,267 | ||||||||||||||||||||||||||||
Annual lease rent payable | $1,732 | ||||||||||||||||||||||||||||||||
Number of properties acquired, referred to as managed properties | 40 | ||||||||||||||||||||||||||||||||
Property held for sale (in square feet) | 831,499 |
Real_Estate_Properties_Details1
Real Estate Properties (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Aug. 31, 2013 | Sep. 30, 2013 | Aug. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
item | item | MOBs | Skilled nursing facility | Rehabilitation hospitals | Rehabilitation hospitals | Discontinued operations, properties sold or held for sale | Discontinued operations, properties sold or held for sale | Discontinued operations, properties sold or held for sale | Discontinued operations, properties sold or held for sale | |||
item | Sale | item | Purchase Agreement | MOBs | MOBs | MOBs | MOBs | |||||
item | item | item | item | |||||||||
Real estate properties | ||||||||||||
Rental income | $112,319 | $113,756 | $336,468 | $329,191 | $2,189 | $2,525 | $7,284 | $7,581 | ||||
Property operating expenses | -74,729 | -46,805 | -222,893 | -125,109 | -958 | -1,002 | -2,723 | -2,766 | ||||
Depreciation and amortization | -38,473 | -35,276 | -114,472 | -102,673 | -604 | -799 | -1,814 | |||||
Income from discontinued operations | 1,231 | 919 | 3,762 | 3,001 | 1,231 | 919 | 3,762 | 3,001 | ||||
Number of properties that met the criteria for discontinued operations | 19 | 19 | 7 | 2 | 7 | 7 | ||||||
Number of units/beds | 112 | 364 | ||||||||||
Sale price of property sold and agreed to be sold | 2,550 | 90,000 | ||||||||||
Gain on the sale of property | $1,141 | ($101) | $1,141 | ($101) | $1,141 | |||||||
Number of properties to be sold | 2 | |||||||||||
Number of properties covered under the agreement | 2 |
Unrealized_Gain_Loss_on_Invest1
Unrealized Gain / Loss on Investments (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
CommonWealth REIT (CWH) | |
Unrealized gain on investments | |
Investment in common shares | 250,000 |
Quoted market prices (in dollars per share) | $21.91 |
Weighted average costs (in dollars per share) | $26 |
Five Star | |
Unrealized gain on investments | |
Investment in common shares | 4,235,000 |
Quoted market prices (in dollars per share) | $5.17 |
Weighted average costs (in dollars per share) | $3.36 |
Loan_Receivable_Details
Loan Receivable (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | 31-May-11 | Apr. 30, 2012 | Dec. 31, 2011 | Sep. 30, 2011 | 31-May-11 | Sep. 30, 2012 |
Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | |||||
Maximum | Senior living communities | Senior living communities | Senior living communities | Senior living communities | Senior living communities | |||||
item | item | |||||||||
Loans Receivable | ||||||||||
Amount agreed to be lent under Bridge Loan Agreement | $80,000 | |||||||||
Number of properties funded under Bridge Loan | 6 | |||||||||
Amount borrowed under the Bridge Loan | 80,000 | |||||||||
Amount repaid by borrower | 38,000 | 42,000 | ||||||||
Number of properties mortgaged, acquired by borrower | 3 | |||||||||
Number of properties mortgaged, owned by borrower | 4 | |||||||||
Spread over annual rates of interest applicable to borrowings under revolving credit facility (as a percent) | 1.00% | |||||||||
Interest income recognized | $42 | $248 | $612 | $957 | $314 |
Indebtedness_Details
Indebtedness (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 03, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
item | item | Unsecured revolving credit facility | Unsecured revolving credit facility | Unsecured revolving credit facility | Unsecured revolving credit facility | Senior unsecured notes 4.30% | Senior unsecured notes 6.75% | Senior unsecured notes 6.75% maturing in 2021 | Senior unsecured notes 5.625% due in 2042 | Mortgages | Mortgages | Mortgages | Mortgages | Mortgages | Capital leases | ||||
item | item | item | item | Significant Unobservable Inputs (Level 3) | item | ||||||||||||||
Indebtedness | |||||||||||||||||||
Unsecured revolving credit facility, maximum borrowing capacity | $750,000 | $750,000 | |||||||||||||||||
Number of public issues of unsecured senior notes | 4 | 4 | |||||||||||||||||
Principal amount of unsecured senior notes | 1,093,016 | 1,093,016 | 1,092,053 | 250,000 | 200,000 | 300,000 | 350,000 | ||||||||||||
Aggregate principal amount of mortgage debt | 684,615 | 684,615 | 684,615 | ||||||||||||||||
Interest rate (as a percent) | 4.30% | 6.75% | 6.75% | 5.63% | 6.25% | 6.25% | 6.25% | ||||||||||||
Number of properties mortgaged | 51 | 51 | 51 | ||||||||||||||||
Number of properties encumbered under mortgage notes | 2 | 4 | 2 | 2 | |||||||||||||||
Carrying value of mortgaged properties | 4,389,735 | 4,389,735 | 4,304,928 | 950,736 | 950,736 | 950,736 | 18,528 | ||||||||||||
Mortgage debt assumed in connection with real estate acquisitions | 12,266 | 112,153 | 12,266 | ||||||||||||||||
Fair value of mortgage notes payable | 13,306 | ||||||||||||||||||
Increase (decrease) in outstanding principal balances | 1,040 | ||||||||||||||||||
Number of properties recorded under capital lease | 2 | ||||||||||||||||||
Capital leases | 13,436 | ||||||||||||||||||
Number of mortgage notes | 2 | 4 | |||||||||||||||||
Prepayment of mortgage notes | 13,579 | 10,377 | |||||||||||||||||
Extension period of revolving credit facility | 1 year | ||||||||||||||||||
Option to increase the borrowing capacity under revolving credit facility | 1,500,000 | 1,500,000 | |||||||||||||||||
Interest rate, description | LIBOR | LIBOR | |||||||||||||||||
Interest rate added to the base rate (as a percent) | 1.60% | 1.30% | |||||||||||||||||
Debt instrument, facility fee (as a percent) | 0.35% | 0.30% | |||||||||||||||||
Principal repayment due until maturity | 0 | ||||||||||||||||||
Weighted average interest rate on debt (as a percent) | 1.68% | 1.68% | 6.90% | 6.10% | 6.90% | 6.90% | |||||||||||||
Losses on early extinguishment of debt | 692 | 6,349 | 797 | 6,349 | 538 | 538 | 154 | 259 | |||||||||||
Interest expense and other associated costs incurred | 271 | 555 | |||||||||||||||||
Unsecured revolving credit facility, amount outstanding | 125,000 | 125,000 | 115,000 | ||||||||||||||||
Revolving credit facility, available amount | $625,000 | $625,000 | $635,000 |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 0 Months Ended | |||||||
In Thousands, except Share data, unless otherwise specified | Oct. 03, 2013 | Aug. 21, 2013 | 21-May-13 | Feb. 19, 2013 | Jan. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | 9-May-13 | Dec. 31, 2012 | Sep. 13, 2013 | Mar. 27, 2013 |
item | RMR | RMR | |||||||||
Distributions | |||||||||||
Distribution to common shareholders (in dollars per share) | $0.39 | $0.39 | $0.39 | $0.39 | |||||||
Distribution to common shareholders | $73,386 | $73,353 | $73,349 | $68,857 | $215,559 | $190,680 | |||||
Common shares issued in payment of an incentive fee for services rendered from RMR | 21,968 | ||||||||||
Value of common shares issued in payment of an incentive fee for services rendered from RMR | 582 | ||||||||||
Common shares issued in public offering | 11,500,000 | ||||||||||
Net proceeds from issuance of common shares issued in public offering | $262,068 | $261,813 | $287,052 | ||||||||
Common shares of beneficial interest | |||||||||||
Common shares of beneficial interest granted | 2,000 | ||||||||||
Common shares of beneficial interest, par value (in dollars per share) | $0.01 | $0.01 | $0.01 | ||||||||
Common stock price per share which is the closing price at New York Stock Exchange (in dollars per share) | $28.64 | ||||||||||
Number of trustees | 5 | ||||||||||
Common shares granted to the entity's officers and certain employees | 82,600 | ||||||||||
Closing price of common shares granted to the entity's officers and certain employees (in dollars per share) | $22.86 |
Fair_Value_of_Assets_and_Liabi2
Fair Value of Assets and Liabilities (Details) (USD $) | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
item | |||
Assets and liabilities measured at fair value | |||
Number of properties classified as held for sale | 19 | ||
Cumulative impairments of properties held for sale | $38,005 | ||
Number of properties in long-lived assets held and used | 1 | ||
Impairment of assets charge related to long-lived assets held and used | 1,304 | 3,071 | |
Number of public issues of unsecured senior notes | 4 | ||
Senior notes | 1,093,016 | 1,092,053 | |
Excess of fair value over aggregate book value | 9,181 | ||
CommonWealth REIT (CWH) | |||
Assets and liabilities measured at fair value | |||
Investment in common shares | 250,000 | ||
Five Star | |||
Assets and liabilities measured at fair value | |||
Investment in common shares | 4,235,000 | ||
Recurring and Nonrecurring | Total | |||
Assets and liabilities measured at fair value | |||
Assets held for sale | 94,891 | ||
Long-lived assets held and used | 653 | ||
Investments in available for sale securities | 27,372 | ||
Unsecured senior notes | 1,102,198 | ||
Secured debt | 764,495 | ||
Recurring and Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Assets and liabilities measured at fair value | |||
Investments in available for sale securities | 27,372 | ||
Unsecured senior notes | 1,102,198 | ||
Recurring and Nonrecurring | Significant Other Observable Inputs (Level 2) | |||
Assets and liabilities measured at fair value | |||
Assets held for sale | 94,891 | ||
Long-lived assets held and used | 653 | ||
Recurring and Nonrecurring | Significant Unobservable Inputs (Level 3) | |||
Assets and liabilities measured at fair value | |||
Secured debt | $764,495 |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
item | |||||
Segment Reporting. | |||||
Number of operating segments | 4 | ||||
Number of reportable segments | 3 | ||||
Number of rehabilitation hospitals | 2 | ||||
Revenues: | |||||
Rental income | $112,319 | $113,756 | $336,468 | $329,191 | |
Residents fees and services | 74,946 | 42,352 | 224,634 | 113,906 | |
Total revenues | 187,265 | 156,108 | 561,102 | 443,097 | |
Expenses: | |||||
Property operating expenses | 74,729 | 46,805 | 222,893 | 125,109 | |
Depreciation | 38,473 | 35,276 | 114,472 | 102,673 | |
General and administrative | 7,798 | 8,352 | 24,615 | 24,106 | |
Acquisition related costs | 396 | 4,297 | 2,590 | 6,814 | |
Impairment of assets | 5,675 | 3,071 | |||
Total expenses | 121,396 | 94,730 | 370,245 | 261,773 | |
Operating income | 65,869 | 61,378 | 190,857 | 181,324 | |
Interest and other income | 42 | 248 | 612 | 957 | |
Interest expense | -29,405 | -30,417 | -88,536 | -87,426 | |
Loss on early extinguishment of debt | -692 | -6,349 | -797 | -6,349 | |
Loss on lease terminations | -104 | -104 | |||
Gain (loss) on sale of properties | 1,141 | -101 | 1,141 | -101 | |
Equity in earnings of an investee | 64 | 115 | 219 | 236 | |
Income before income tax expense | 37,019 | 24,770 | 103,496 | 88,537 | |
Income tax expense | -125 | -43 | -405 | -290 | |
Income from continuing operations | 36,894 | 24,727 | 103,091 | 88,247 | |
Discontinued operations: | |||||
Income from discontinued operations | 1,231 | 919 | 3,762 | 3,001 | |
Impairment of assets from discontinued operations | -27,896 | ||||
Net income | 38,125 | 25,646 | 78,957 | 91,248 | |
Total assets | 4,807,330 | 4,646,296 | 4,807,330 | 4,646,296 | 4,748,002 |
Triple Net Senior Living Communities | |||||
Revenues: | |||||
Rental income | 57,073 | 60,496 | 170,794 | 178,964 | |
Total revenues | 57,073 | 60,496 | 170,794 | 178,964 | |
Expenses: | |||||
Depreciation | 16,760 | 17,433 | 50,696 | 51,816 | |
Impairment of assets | 4,371 | ||||
Total expenses | 16,760 | 17,433 | 55,067 | 51,816 | |
Operating income | 40,313 | 43,063 | 115,727 | 127,148 | |
Interest expense | -6,546 | -8,665 | -20,030 | -29,073 | |
Loss on lease terminations | -104 | -104 | |||
Gain (loss) on sale of properties | 1,141 | 1,141 | |||
Income before income tax expense | 34,908 | 34,294 | 96,838 | 97,971 | |
Income from continuing operations | 34,908 | 34,294 | 96,838 | 97,971 | |
Discontinued operations: | |||||
Net income | 34,908 | 34,294 | 96,838 | 97,971 | |
Total assets | 1,861,729 | 2,019,325 | 1,861,729 | 2,019,325 | |
Managed Senior Living Communities | |||||
Revenues: | |||||
Residents fees and services | 74,946 | 42,352 | 224,634 | 113,906 | |
Total revenues | 74,946 | 42,352 | 224,634 | 113,906 | |
Expenses: | |||||
Property operating expenses | 57,708 | 31,233 | 173,844 | 82,976 | |
Depreciation | 7,251 | 5,037 | 21,128 | 12,617 | |
Total expenses | 64,959 | 36,270 | 194,972 | 95,593 | |
Operating income | 9,987 | 6,082 | 29,662 | 18,313 | |
Interest expense | -3,054 | -2,929 | -9,196 | -8,675 | |
Income before income tax expense | 6,933 | 3,153 | 20,466 | 9,638 | |
Income from continuing operations | 6,933 | 3,153 | 20,466 | 9,638 | |
Discontinued operations: | |||||
Net income | 6,933 | 3,153 | 20,466 | 9,638 | |
Total assets | 967,187 | 803,009 | 967,187 | 803,009 | |
MOBs | |||||
Revenues: | |||||
Rental income | 50,910 | 48,821 | 152,492 | 136,910 | |
Total revenues | 50,910 | 48,821 | 152,492 | 136,910 | |
Expenses: | |||||
Property operating expenses | 17,021 | 15,572 | 49,049 | 42,133 | |
Depreciation | 13,514 | 11,858 | 39,804 | 35,396 | |
Total expenses | 30,535 | 27,430 | 88,853 | 77,529 | |
Operating income | 20,375 | 21,391 | 63,639 | 59,381 | |
Interest expense | -1,369 | -1,014 | -4,103 | -1,807 | |
Gain (loss) on sale of properties | -101 | -101 | |||
Income before income tax expense | 19,006 | 20,276 | 59,536 | 57,473 | |
Income from continuing operations | 19,006 | 20,276 | 59,536 | 57,473 | |
Discontinued operations: | |||||
Income from discontinued operations | 1,231 | 919 | 3,762 | 3,001 | |
Impairment of assets from discontinued operations | -27,896 | ||||
Net income | 20,237 | 21,195 | 35,402 | 60,474 | |
Total assets | 1,732,217 | 1,625,180 | 1,732,217 | 1,625,180 | |
All Other Operations | |||||
Revenues: | |||||
Rental income | 4,336 | 4,439 | 13,182 | 13,317 | |
Total revenues | 4,336 | 4,439 | 13,182 | 13,317 | |
Expenses: | |||||
Depreciation | 948 | 948 | 2,844 | 2,844 | |
General and administrative | 7,798 | 8,352 | 24,615 | 24,106 | |
Acquisition related costs | 396 | 4,297 | 2,590 | 6,814 | |
Impairment of assets | 1,304 | 3,071 | |||
Total expenses | 9,142 | 13,597 | 31,353 | 36,835 | |
Operating income | -4,806 | -9,158 | -18,171 | -23,518 | |
Interest and other income | 42 | 248 | 612 | 957 | |
Interest expense | -18,436 | -17,809 | -55,207 | -47,871 | |
Loss on early extinguishment of debt | -692 | -6,349 | -797 | -6,349 | |
Equity in earnings of an investee | 64 | 115 | 219 | 236 | |
Income before income tax expense | -23,828 | -32,953 | -73,344 | -76,545 | |
Income tax expense | -125 | -43 | -405 | -290 | |
Income from continuing operations | -23,953 | -32,996 | -73,749 | -76,835 | |
Discontinued operations: | |||||
Net income | -23,953 | -32,996 | -73,749 | -76,835 | |
Total assets | $246,197 | $198,782 | $246,197 | $198,782 |
Related_Person_Transactions_De
Related Person Transactions (Details) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Aug. 31, 2013 | Mar. 27, 2013 | Jul. 31, 2013 | Sep. 30, 2013 | Oct. 01, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Apr. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | 31-May-11 | Sep. 30, 2013 | Sep. 30, 2013 | Aug. 31, 2012 | Aug. 31, 2013 | 31-May-11 | Oct. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 31, 2013 | Oct. 31, 2013 | Aug. 31, 2013 | Sep. 30, 2013 | Oct. 31, 2013 | Aug. 31, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
item | item | Senior living communities | Senior living communities | Rehabilitation hospitals | Purchase Agreement | RMR | RMR | RMR | RMR | RMR | RMR | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | Five Star | AIC | AIC | AIC | AIC | AIC | AIC | |||
item | item | item | Rehabilitation hospitals | item | item | item | item | item | item | AL Pooling Agreement | Second AL Pooling Agreement | IL Pooling Agreement | Senior living communities | Senior living communities | Senior living communities | Senior living communities | Rehabilitation hospitals | Acquisition | Acquisition | Acquisition | Acquisition | Acquisition | Sale | |||||||||||||||||||
item | item | item | item | item | item | item | item | item | Senior living communities | Senior living communities | Senior living communities | Senior living communities | Senior living communities | Senior living communities | ||||||||||||||||||||||||||||
item | GA | GA | New York | TN | item | |||||||||||||||||||||||||||||||||||||
item | Cumming | item | item | |||||||||||||||||||||||||||||||||||||||
item | ||||||||||||||||||||||||||||||||||||||||||
Related person transactions | ||||||||||||||||||||||||||||||||||||||||||
Beneficial ownership of common shares (as a percent) | 100.00% | 100.00% | 100.00% | |||||||||||||||||||||||||||||||||||||||
Investment in common shares | 4,235,000 | 4,235,000 | 4,235,000 | |||||||||||||||||||||||||||||||||||||||
Percentage of total shares outstanding | 8.80% | 8.80% | 8.80% | |||||||||||||||||||||||||||||||||||||||
Number of real estate properties leased | 187 | 2 | ||||||||||||||||||||||||||||||||||||||||
Minimum annual rent payable to entity | $199,257 | |||||||||||||||||||||||||||||||||||||||||
Total rental income recognized | 49,705 | 49,148 | 148,732 | 146,901 | ||||||||||||||||||||||||||||||||||||||
Rents receivable | 17,863 | 17,863 | 17,863 | 17,680 | ||||||||||||||||||||||||||||||||||||||
Deferred percentage rent | 1,301 | 1,190 | 3,823 | 3,602 | ||||||||||||||||||||||||||||||||||||||
Real estate improvements purchased | 22,501 | |||||||||||||||||||||||||||||||||||||||||
Increase or decrease in annual lease rent payable | 9,500 | 1,800 | 255 | |||||||||||||||||||||||||||||||||||||||
Sale price of properties under agreement to be sold | 90,000 | 2,550 | ||||||||||||||||||||||||||||||||||||||||
Number of properties sold or agreed to be sold | 2 | 1 | ||||||||||||||||||||||||||||||||||||||||
Number of properties agreed to be sold | 11 | |||||||||||||||||||||||||||||||||||||||||
Increase or decrease in annual lease rent payable as a percentage of net proceeds of the sale | 10.00% | |||||||||||||||||||||||||||||||||||||||||
Number of properties agreed to be offered for sale | 19 | 19 | 10 | 1 | 2 | 10 | ||||||||||||||||||||||||||||||||||||
Number of combination or pooling agreements | 3 | 3 | 3 | 2 | ||||||||||||||||||||||||||||||||||||||
Number of communities that include assisted living units | 20 | 3 | ||||||||||||||||||||||||||||||||||||||||
Number of communities that include independent living units | 2 | 2 | 1 | |||||||||||||||||||||||||||||||||||||||
Number of properties acquired, referred to as managed properties | 4 | 40 | ||||||||||||||||||||||||||||||||||||||||
Property management agreement expense | 1,678 | 1,557 | 4,937 | 4,328 | 2,290 | 1,284 | 6,866 | 3,431 | ||||||||||||||||||||||||||||||||||
Number of living units | 744 | 120 | 364 | 3 | 213 | 93 | 310 | 112 | ||||||||||||||||||||||||||||||||||
Aggregate purchase price of properties acquired, excluding closing costs | 29,100 | 22,030 | ||||||||||||||||||||||||||||||||||||||||
Amount agreed to be lent under Bridge Loan Agreement | 80,000 | |||||||||||||||||||||||||||||||||||||||||
Number of employees | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||
Number of agreements to avail management and administrative services | 2 | 2 | ||||||||||||||||||||||||||||||||||||||||
Number of Managing Trustees also serving as managing trustee of Five Star | 1 | 1 | 1 | |||||||||||||||||||||||||||||||||||||||
Business management agreement expense | 6,847 | 6,745 | 20,088 | 19,472 | ||||||||||||||||||||||||||||||||||||||
Common shares issued in payment of an incentive fee for services rendered from RMR | 21,968 | |||||||||||||||||||||||||||||||||||||||||
Base business management fee payable in common shares (as a percent) | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||||||||||
Management fees payable under property management agreement as a percentage of gross rents | 5.00% | |||||||||||||||||||||||||||||||||||||||||
Interest and other income | 42 | 248 | 612 | 957 | 314 | |||||||||||||||||||||||||||||||||||||
Proceeds from repayment of bridge loan | 38,000 | |||||||||||||||||||||||||||||||||||||||||
Number of other shareholders in the equity method investee company | 5 | 5 | ||||||||||||||||||||||||||||||||||||||||
Ownership percentage held by us, RMR, Five Star, CWH and four other companies | 12.50% | 12.50% | ||||||||||||||||||||||||||||||||||||||||
The entity owns less than this percentage of an equity method investment | 20.00% | 20.00% | ||||||||||||||||||||||||||||||||||||||||
Number of properties acquired or agreed to be acquired | 6 | |||||||||||||||||||||||||||||||||||||||||
Amount invested in equity investee | 5,209 | 5,209 | ||||||||||||||||||||||||||||||||||||||||
Equity method investments, carrying value | 5,781 | 5,781 | 5,629 | |||||||||||||||||||||||||||||||||||||||
Earnings and losses recognized arising from equity investments | 64 | 115 | 219 | 236 | 64 | 115 | 219 | 236 | ||||||||||||||||||||||||||||||||||
Period for which property insurance program was extended | 1 year | |||||||||||||||||||||||||||||||||||||||||
Coverage of property insurance | 500,000 | |||||||||||||||||||||||||||||||||||||||||
Total premiums including taxes and fees | 4,748 | |||||||||||||||||||||||||||||||||||||||||
Incentive fee payable | 0 | |||||||||||||||||||||||||||||||||||||||||
Number of entities to which RMR provides management services | 4 | |||||||||||||||||||||||||||||||||||||||||
Aggregate coverage of combined directors' and officers' liability insurance policy purchased by the related party | 10,000 | |||||||||||||||||||||||||||||||||||||||||
Aggregate coverage of separate directors' and officers' liability insurance policy purchased | 5,000 | |||||||||||||||||||||||||||||||||||||||||
Premium paid for combined and separate directors' and officers' liability insurance policy | $343 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Taxes | ||||
Recognized income tax expense | $125 | $43 | $405 | $290 |