Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 13, 2013 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'Summit Healthcare REIT, Inc | ' |
Entity Central Index Key | '0001310383 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 23,028,285 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
ASSETS | ' | ' |
Cash and cash equivalents | $17,161,000 | $999,000 |
Real estate properties (held in variable interest entity): | ' | ' |
Notes receivable, net (Note 8) | 908,000 | 908,000 |
Deferred financing costs, net | 713,000 | 690,000 |
Deferred acquisition costs | 213,000 | 0 |
Receivable from related parties (Note 14) | 164,000 | 7,000 |
Tenant and other receivables, net | 1,020,000 | 512,000 |
Restricted cash | 609,000 | 325,000 |
Deferred leasing commission, net | 1,753,000 | 1,340,000 |
Other assets, net | 24,000 | 296,000 |
Assets held for sale, net (Note 17) | 567,000 | 44,851,000 |
Total assets | 84,076,000 | 93,992,000 |
LIABILITIES AND EQUITY (DEFICIT) | ' | ' |
Accounts payable and accrued liabilities | 748,000 | 511,000 |
Payable to related parties | 0 | 136,000 |
Prepaid rent, security deposits and deferred revenue | 159,000 | 72,000 |
Security deposit | 1,371,000 | 852,000 |
Distribution payable | 5,000 | 0 |
Liabilities associated with real estate held for sale (Note 17) | 52,000 | 22,762,000 |
Liabilities held in variable interest entity: | ' | ' |
Total liabilities | 46,424,000 | 55,235,000 |
Commitments and contingencies (Note 16) | ' | ' |
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding at September 30, 2013 and December 31, 2012 | ' | ' |
Common stock, $0.001 par value; 290,000,000 shares authorized; 23,028,285 shares issued and outstanding at September 30, 2013 and December 31, 2012 respectively | 23,000 | 23,000 |
Additional paid-in capital | 117,226,000 | 117,226,000 |
Accumulated deficit | -77,117,000 | -76,206,000 |
Total stockholders' equity | 40,132,000 | 41,043,000 |
Noncontrolling interest | -2,480,000 | -2,286,000 |
Total equity | 37,652,000 | 38,757,000 |
Total liabilities and equity | 84,076,000 | 93,992,000 |
Variable Interest Entity [Member] | ' | ' |
Real estate properties (held in variable interest entity): | ' | ' |
Land | 5,709,000 | 4,521,000 |
Buildings and improvements, net | 36,944,000 | 23,093,000 |
Furniture and fixtures, net | 3,679,000 | 2,750,000 |
Intangible lease assets, net | 3,640,000 | 2,650,000 |
Certificate of need (license) | 6,786,000 | 6,786,000 |
Real estate properties, net | 56,758,000 | 39,800,000 |
Assets of variable interest entity held for sale (Note 17) | 4,186,000 | 4,264,000 |
Liabilities held in variable interest entity: | ' | ' |
Loan payable | 41,534,000 | 28,450,000 |
Liabilities of variable interest entity held for sale (Note 17) | $2,555,000 | $2,452,000 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 290,000,000 | 290,000,000 |
Common stock, shares issued | 23,028,285 | 23,028,285 |
Common stock, shares outstanding | 23,028,285 | 23,028,285 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenues: | ' | ' | ' | ' |
Rental revenues | $1,551,000 | $298,000 | $4,185,000 | $298,000 |
Tenant reimbursements and other income | 165,000 | 23,000 | 380,000 | 23,000 |
Interest income from notes receivable | 13,000 | 13,000 | 38,000 | 40,000 |
Revenues, Total | 1,729,000 | 334,000 | 4,603,000 | 361,000 |
Expenses: | ' | ' | ' | ' |
Property operating costs | 216,000 | 33,000 | 519,000 | 33,000 |
General and administrative | 694,000 | 757,000 | 2,552,000 | 2,489,000 |
Asset management fees and expenses | 271,000 | 240,000 | 865,000 | 662,000 |
Real estate acquisition costs | 121,000 | 737,000 | 257,000 | 737,000 |
Depreciation and amortization | 627,000 | 130,000 | 1,709,000 | 130,000 |
Recovery of reserve for excess advisor obligation | -50,000 | 0 | -100,000 | 988,000 |
Costs and Expenses, Total | 1,879,000 | 1,897,000 | 5,802,000 | 5,039,000 |
Operating loss | -150,000 | -1,563,000 | -1,199,000 | -4,678,000 |
Other income and (expense): | ' | ' | ' | ' |
Other income | 23,000 | 0 | 33,000 | 0 |
Interest expense | -574,000 | -123,000 | -1,517,000 | -122,000 |
Loss from continuing operations | -701,000 | -1,686,000 | -2,683,000 | -4,800,000 |
Discontinued operations: | ' | ' | ' | ' |
Income (loss) from discontinued operations | -1,009,000 | 115,000 | -1,009,000 | -234,000 |
Impairment of real estate | 0 | 0 | -3,368,000 | -1,140,000 |
Gain on sales of real estate | 1,323,000 | 0 | 5,411,000 | 0 |
Income (loss) from discontinued operations | 314,000 | 115,000 | 1,034,000 | -1,374,000 |
Net loss | -387,000 | -1,571,000 | -1,649,000 | -6,174,000 |
Noncontrolling interest’s share in loss | 274,000 | 258,000 | 738,000 | 787,000 |
Net loss applicable to common shares | ($113,000) | ($1,313,000) | ($911,000) | ($5,387,000) |
Basic and diluted loss per common share | ' | ' | ' | ' |
Continuing operations (in dollars per share) | ($0.03) | ($0.07) | ($0.12) | ($0.21) |
Discontinued operations (in dollars per share) | $0.03 | $0.01 | $0.08 | ($0.03) |
Net loss applicable to common shares (in dollars per share) | $0 | ($0.06) | ($0.04) | ($0.24) |
Weighted average shares used to calculate basic and diluted net loss per common share (in shares) | 23,028,285 | 23,028,285 | 23,028,285 | 23,028,285 |
Distributions declared per common share (in dollars per share) | $0 | $0 | $0 | $0 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Parent [Member] | Noncontrolling Interest [Member] |
Balance at Dec. 31, 2012 | $38,757,000 | $23,000 | $117,226,000 | ($76,206,000) | $41,043,000 | ($2,286,000) |
Balance (in shares) at Dec. 31, 2012 | ' | 23,028,285 | ' | ' | ' | ' |
Distribution | 0 | 0 | 0 | 0 | 0 | 0 |
Redeemed Shares | 0 | 0 | 0 | 0 | 0 | 0 |
Offering costs | 0 | 0 | 0 | 0 | 0 | 0 |
Dividends paid to noncontrolling interests | -80,000 | 0 | 0 | 0 | 0 | -80,000 |
Noncontrolling interest contribution | 624,000 | 0 | 0 | 0 | 0 | 624,000 |
Net loss | -1,649,000 | 0 | 0 | -911,000 | -911,000 | -738,000 |
Balance at Sep. 30, 2013 | $37,652,000 | $23,000 | $117,226,000 | ($77,117,000) | $40,132,000 | ($2,480,000) |
Balance (in shares) at Sep. 30, 2013 | ' | 23,028,285 | ' | ' | ' | ' |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($1,649,000) | ($6,174,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Amortization of deferred financing costs | 119,000 | 99,000 |
Depreciation and amortization | 2,215,000 | 1,294,000 |
Straight-line rents and amortization of acquired above (below) market leases, net | -441,000 | -264,000 |
Bad debt expense (recovery), net | 7,000 | -19,000 |
Impairment of real estate | 3,368,000 | 1,140,000 |
Reserve for excess advisor obligation | 0 | 988,000 |
Write-off of lease commission, straight-line rent receivables and other assets, net | 1,049,000 | 0 |
Gain on sales of real estate, net | -5,411,000 | 0 |
Change in operating assets and liabilities: | ' | ' |
Tenant and other receivables, net | 38,000 | 95,000 |
Prepaid and other assets | 621,000 | -1,590,000 |
Leasing commission | -704,000 | 0 |
Restricted cash, net | -283,000 | -379,000 |
Prepaid rent, security deposit and deferred revenues | 12,000 | -42,000 |
Payable to related parties, net | -202,000 | -9,000 |
Deferred costs and deposits | 11,000 | 5,000 |
Accounts payable and accrued expenses | 93,000 | 703,000 |
Net cash used in operating activities | -1,157,000 | -4,153,000 |
Cash flows from investing activities | ' | ' |
Real estate acquisition | -18,555,000 | -32,100,000 |
Deferred acquisition costs | -153,000 | 0 |
Real estate improvements | -54,000 | -54,000 |
Acquisition deposits | 0 | -348,000 |
Proceeds from real estate dispositions | 44,955,000 | 0 |
Net cash provided by (used in) investing activities | 26,193,000 | -32,502,000 |
Cash flows from financing activities: | ' | ' |
Proceeds from issuance of notes payable | 13,125,000 | 37,000,000 |
Repayment of notes payable | -21,975,000 | -13,780,000 |
Security deposits refunded/received, net | -66,000 | 826,000 |
Non-controlling interest contribution | 533,000 | 591,000 |
Distributions to noncontrolling interest | -75,000 | 0 |
Deferred financing costs | -375,000 | -636,000 |
Net cash (used in) provided by financing activities | -8,833,000 | 24,001,000 |
Net increase (decrease) in cash | 16,203,000 | -12,654,000 |
Cash and cash equivalents - beginning of period (including cash of VIE) | 1,067,000 | 17,483,000 |
Cash and cash equivalents - end of period (including cash of VIE) | 17,270,000 | 4,829,000 |
Less cash and cash equivalents of VIE held for sale - end of period (see Note 11) | -109,000 | -40,000 |
Cash and cash equivalents - end of period | 17,161,000 | 4,789,000 |
Supplemental disclosure of cash flow information | ' | ' |
Cash paid for interest | 1,790,000 | 728,000 |
Supplemental disclosure of non-cash financing and investing activities | ' | ' |
Distribution not paid | 5,000 | 0 |
Deferred acquisition costs | 61,000 | 0 |
Deferred loan origination fees | 13,000 | 0 |
Proceeds from non-controlling interests | 90,000 | 0 |
Security deposit not received | 72,000 | 0 |
Reduction of excess offering costs | $0 | $988,000 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' |
1. Organization | |
Summit Healthcare REIT, Inc., (formerly Cornerstone Core Properties REIT, Inc.) a Maryland Corporation (the “Company”), was formed on October 22, 2004 for the purpose of engaging in the business of investing in and owning commercial real estate. As used in this report, the “Company”, “we”, “us” and “our” refer to Summit Healthcare REIT, Inc. and its consolidated subsidiaries except where the context otherwise requires. Subject to certain restrictions and limitations, our business is managed pursuant to an amended and restated advisory agreement (the “Advisory Agreement”) by an affiliate, Cornerstone Realty Advisors, LLC (the “Advisor”); a Delaware limited liability company that was formed on November 30, 2004. | |
We formed Cornerstone Healthcare Partners LLC (“CHP LLC”) with Cornerstone Healthcare Real Estate Fund, Inc. (“CHREF”), an affiliate of our Advisor. We own 95% of CHP LLC, with the remaining 5% owned by CHREF. We acquired the Sheridan Care Center, Fern Hill Care Center, Farmington Square, Friendship Haven Healthcare and Rehabilitation Center and Pacific Health and Rehabilitation Center healthcare properties (collectively, the “JV Properties”) through CHP LLC. In the third quarter of 2013, as part of our strategy to raise new property level joint venture equity capital to support growth and diversify operator, geographic and other risks, we caused CHP LLC to sell a portion of its interests in the JV Properties to third party investors. Proceeds from the sale of interests in these JV Properties were $550,000 as of September 30, 2013, of which we received $523,000 and CHREF received $27,000. At September 30, 2013, we owned a 91.3% interest in the JV Properties, CHREF, an affiliate of the Advisor, owned a 4.9% interest and third party investors owned 3.8%. CHP LLC may sell up to an aggregate 46% interest in these JV Properties, leaving us with 54%. As outside investors acquire additional interests in the JV Properties, our interest in the JV Properties, and that of CHREF, will be reduced proportionately. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Significant Accounting Policies [Text Block] | ' |
2. Summary of Significant Accounting Policies | |
For more information regarding our significant accounting policies and estimates, please refer to “Summary of Significant Accounting Policies” contained in our Annual Report on Form 10-K for the year ended December 31, 2012. | |
Principles of Consolidation and Basis of Presentation | |
The accompanying interim condensed consolidated financial statements have been prepared by our management in accordance with generally accepted accounting principles of the United States of America (“GAAP”) and in conjunction with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Certain amounts have been reclassified for prior periods to conform to current period presentation. Assets sold or held for sale and associated liabilities have been reclassified on the condensed consolidated balance sheets and the related operating results reclassified from continuing to discontinued operations on the condensed consolidated income statements. Additionally certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the interim condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. | |
The accompanying financial information reflects all adjustments which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods. Interim results of operations are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the 2012 Annual Report on Form 10-K as filed with the SEC on March 29, 2013. Operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. | |
Recently Issued Accounting Pronouncements | |
In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (“ASU 2013-02”). This requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. Additionally, ASU 2013-02 requires presentation, either on the face of the income statement or in the notes, of significant amounts reclassified out of accumulated other comprehensive income by respective line items of net income, but only if the amounts reclassified are required to be reclassified in their entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about these amounts. ASU 2013-02 was effective for us on January 1, 2013. The adoption of ASU 2013-02 did not have a material effect on the consolidated financial statement presentation. | |
In June 2013, the FASB issued Accounting Standards Update 2013-08, Financial Services - Investment Companies Topic Amendments to the Scope, Measurement, and Disclosure Requirements ("ASU 2013-08"). ASU 2013-08 clarifies the characteristics of an investment company and requires an investment company to measure noncontrolling ownership interests in other investment companies at fair value rather than using the equity method of accounting. In addition, an entity is required to disclose (a) the fact that it is an investment company applying the guidance in the Financial Services - Investment Companies Topic, (b) information about any changes in the entity's status as an investment company, and (c) information about financial support provided to its investees. ASU 2013-08 will be effective for the period beginning on January 1, 2014. We expect that the adoption of ASU 2013-08 will not have a material impact on its consolidated financial statements or disclosures. | |
Fair_Value_Financial_Instrumen
Fair Value Financial Instruments | 9 Months Ended |
Sep. 30, 2013 | |
Fair Value Disclosures [Abstract] | ' |
Fair Value Disclosures [Text Block] | ' |
3. Fair Value Financial Instruments | |
Our condensed consolidated balance sheets include the following financial instruments: cash and cash equivalents, notes receivable, certain other assets, deferred costs and deposits, payable to related parties, prepaid rent, security deposits and deferred revenue, and notes payable. With the exception of notes receivable and notes payable discussed below, we consider the carrying values to approximate fair value for such financial instruments because of the short period of time between origination of the instruments and their expected payment. | |
As of September 30, 2013 and December 31, 2012, the fair value of notes receivable was $1.0 million compared to the carrying value of $0.9 million. The fair value of notes receivable was estimated by discounting the expected cash flows at current market rates at which management believes similar loans would be made. To estimate fair value at September 30, 2013, we discounted the expected cash flows using a rate of 10%. As the inputs to our valuation estimate are neither observable in nor supported by market activity, our notes receivable are classified as Level 3 assets within the fair value hierarchy. | |
As of September 30, 2013 and December 31, 2012, the fair value of notes payable, including notes payable classified as held for sale, was $41.9 million and $51.0 million compared to the carrying value of $41.5 million and $50.3 million, respectively. The fair value of notes payable is estimated by discounting the contractual cash payments at current market rates at which management believes similar loans would be made. To estimate fair value at September 30, 2013, we utilized discount rate of 5.0%. As the inputs to our valuation estimate are neither observable in nor supported by market activity, our notes payable are classified as Level 3 assets within the fair value hierarchy. | |
At September 30, 2013 and December 31, 2012, we do not have any financial assets or financial liabilities that are measured at fair value on a recurring basis in our condensed consolidated financial statements. | |
Investments_in_Real_Estate
Investments in Real Estate | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
Real Estate [Abstract] | ' | |||||||||||||||||
Real Estate Disclosure [Text Block] | ' | |||||||||||||||||
4. Investments in Real Estate | ||||||||||||||||||
As of September 30, 2013, our healthcare portfolio consisted of seven purchased properties. Our healthcare properties are leased to operators on a triple net basis. Our remaining industrial property, Shoemaker, was 100.0% leased. The following table provides summary information regarding our properties. | ||||||||||||||||||
Property (1) | Location | Date Purchased | Square | Purchase | Debt | September 30, 2013 | ||||||||||||
Footage | Price | % Leased | ||||||||||||||||
Healthcare: | ||||||||||||||||||
Sheridan Care Center | Sheridan, OR | 3-Aug-12 | 13,912 | $ | 4,100,000 | $ | 2,796,000 | 100 | % | |||||||||
Fern Hill Care Center | Portland, OR | 3-Aug-12 | 13,344 | 4,500,000 | 2,995,000 | 100 | % | |||||||||||
Farmington Square | Medford, OR | 14-Sep-12 | 32,557 | 8,500,000 | 5,792,000 | 100 | % | |||||||||||
Friendship Haven Healthcare | Galveston County, TX | 14-Sep-12 | 56,968 | 15,000,000 | 10,685,000 | 100 | % | |||||||||||
and Rehabilitation Center | ||||||||||||||||||
Pacific Health and Rehabilitation | Tigard, OR | 24-Dec-12 | 28,514 | 8,140,000 | 6,141,000 | 100 | % | |||||||||||
Center | ||||||||||||||||||
Danby House | Winston-Salem, NC | 31-Jan-13 | 27,135 | 9,700,000 | 7,275,000 | 100 | % | |||||||||||
Heritage Woods of Aledo | Aledo, IL | 2-Jul-13 | 25,261 | 8,625,000 | 5,850,000 | 100 | % | |||||||||||
Subtotal Healthcare: | 197,691 | 58,565,000 | 41,534,000 | 100 | % | |||||||||||||
Industrial (2): | ||||||||||||||||||
Shoemaker Industrial | Santa Fe Springs, CA | 30-Jun-06 | 9,721 | 1,200,000 | — | 100 | % | |||||||||||
Total | 207,412 | $ | 59,765,000 | $ | 41,534,000 | 100 | % | |||||||||||
-1 | The above table excludes Sherburne Commons Residences, LLC (“Sherburne Commons”), a variable interest entity (“VIE”) for which we became the primary beneficiary and began consolidating its financial results as of June 30, 2011. As of October 19, 2011, Sherburne Commons was classified as held for sale (See Note 17). | |||||||||||||||||
-2 | The industrial properties have been classified as held for sale as of September 30, 2013 and December 31, 2012 (see Note 17). | |||||||||||||||||
As of September 30, 2013, our adjusted cost and accumulated depreciation and amortization related to investments in real estate and related intangible lease assets and liabilities, including those acquired through CHP LLC, were as follows: | ||||||||||||||||||
Healthcare | Land | Buildings and | Furniture and | In-Place Lease | Certificate of | |||||||||||||
Improvements | Fixture | Value | Need | |||||||||||||||
Investments in real estate and | $ | 5,709,000 | $ | 38,052,000 | $ | 4,319,000 | $ | 3,935,000 | $ | 6,786,000 | ||||||||
related intangible lease assets | ||||||||||||||||||
(liabilities) | ||||||||||||||||||
Less: accumulated depreciation and | — | -1,108,000 | -640,000 | -295,000 | — | |||||||||||||
amortization | ||||||||||||||||||
Net investments in real estate | $ | 5,709,000 | $ | 36,944,000 | $ | 3,679,000 | $ | 3,640,000 | $ | 6,786,000 | ||||||||
and related intangible lease | ||||||||||||||||||
assets (liabilities) | ||||||||||||||||||
Impairments | ||||||||||||||||||
In accordance with Accounting Standards Codification (“ASC”) 360, Property, Plant, and Equipment (“ASC 360”), we regularly conduct comprehensive reviews of our real estate assets for impairment. ASC 360 requires that asset values be analyzed whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable. | ||||||||||||||||||
Indicators of potential impairment include the following: | ||||||||||||||||||
· | Changes in strategy resulting in a decreased holding period; | |||||||||||||||||
· | Decreased occupancy levels; | |||||||||||||||||
· | Deterioration of the rental market as evidenced by rent decreases over numerous quarters; | |||||||||||||||||
· | Properties adjacent to or located in the same submarket as those with recent impairment issues; | |||||||||||||||||
· | Significant decrease in market price; | |||||||||||||||||
· | Tenant financial problems. | |||||||||||||||||
We recorded no impairment charges related to properties held for sale for the three months ended September 30, 2013 and 2012, respectively. We recorded an impairment charge of $3.4 million and $1.1 million related to properties held for sale for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||||||||||||
Real Estate Held for Sale and Sold | ||||||||||||||||||
In the fourth quarter of 2011, we reclassified Nantucket Acquisition LLC (“Nantucket”), a VIE for which we are the primary beneficiary, as real estate held for sale. The financial results for this property have been reclassified to discontinued operations for all periods presented (see Note 17). In the fourth quarter of 2012, we listed the 20100 Western Avenue (“Western Avenue”) and Carter Commerce Center (“Carter”) properties for sale and reclassified their financial results for all periods presented to discontinued operations (See Note 17). On January 28, 2013, we entered into a purchase and sale agreement for the sale of a portion of our Marathon property for $1.3 million in cash. This transaction closed in June 2013. On February 26, 2013, our Board of Directors resolved to sell the remaining industrial properties and in March 2013, these properties were listed for sale. On March 11, 2013, we entered into two purchase and sale agreements for the sale of two of the four Shoemaker Industrial buildings for $0.5 million in cash each. The first building closed on August 5, 2013 and the second building closed on August 14, 2013. On May 14, 2013, we entered into a purchase and sale agreement for the sale of our 1830 Santa Fe property for $1.7 million in cash. This transaction closed in July 2013. On June 6, 2013, we entered into a purchase and sale agreement for the sale of our OSB portfolio for $24.0 million in cash. This transaction closed in September 2013. The financial results of the industrial properties for all periods presented have been reclassified to discontinued operations (See Note 17). | ||||||||||||||||||
When assets are classified as held for sale, they are recorded at the lower of carrying value or the estimated fair value of the asset, net of selling costs. Accordingly, in the first quarter of 2012, we assessed Sherburne Commons, the property owned by Nantucket Acquisition LLC, to determine whether its carrying value exceeded its estimated fair value, net of selling costs. Consequently, we recorded an impairment charge of $1.1 million in the first quarter of 2012. We estimated fair value, net of selling costs, for Sherburne Commons based on a formal offer to acquire the property received from an independent third party. The property was deemed to be a Level 2 asset as our estimate of fair value was based on a non-binding purchase offer. We do not believe that this asset was a Level 1 asset as a purchase and sale agreement had not been signed as of the valuation date, giving the potential buyer the right to opt out of the transaction at its discretion (see Note 17). | ||||||||||||||||||
In the first quarter of 2013, we listed all remaining industrial properties for sale and reported them as held for sale in discontinued operations. We assessed whether the fair values, net of estimated selling costs, for our industrial properties exceeded their carrying values. We estimated fair value, net of selling costs for Marathon, Shoemaker, Santa Fe and the Orlando Small Bay (“OSB”) portfolio based on formal offers to acquire the properties received from an independent third parties. The properties were deemed to be a Level 1 asset as our estimate of fair value was based on the purchase offer. Based on this assessment in the second quarter of 2013, we recorded an impairment charge of $3.4 million related to our OSB portfolio and sold our Marathon property. In the third quarter of 2013, we sold our Santa Fe, two of four Shoemaker buildings and our OSB portfolio. No impairment was recorded in the third quarter of 2013. | ||||||||||||||||||
Leasing Commissions | ||||||||||||||||||
Leasing commissions paid to third party brokers and/or our Advisor are capitalized at cost and amortized on a straight-line basis over the related lease term. As of September 30, 2013 and December 31, 2012, the balance of capitalized leasing commissions was $1.8 million and $1.3 million, respectively. Amortization expense related to capitalized leasing commissions for the three months ended September 30, 2013 and 2012 was $41,000 and $10,000, respectively. Amortization expense related to capitalized leasing commission for the nine months ended September 30, 2013 and 2012 was $108,000 and $10,000, respectively. | ||||||||||||||||||
Real_Estate_Acquisitions
Real Estate Acquisitions | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Real Estate Acquisitions [Abstract] | ' | ||||||||||
Real Estate Acquisitions [Text Block] | ' | ||||||||||
5. Real Estate Acquisitions | |||||||||||
Winston-Salem, North Carolina | |||||||||||
On January 31, 2013, we acquired Danby House, an assisted living and memory care facility located in Winston-Salem, North Carolina (“Danby House”) for $9.8 million. The facility is leased to Danby House, LLC, the prior operator of the facility, pursuant to a long-term triple-net lease. The initial lease term is ten years with a lessee option to renew for two additional five-year periods. | |||||||||||
Aledo, Illinois | |||||||||||
On July 2, 2013, we acquired Heritage Woods (“Aledo”), an assisted living facility located in Aledo, Illinois for $8.6 million. The facility is leased to Meridian Senior Living, LLC (“Meridian”), an unrelated third-party operator of healthcare properties, pursuant to a long-term triple-net lease. The initial lease term is fifteen years with a lessee option to renew for an additional five-year period. | |||||||||||
Both transactions were accounted for as asset purchases. Under asset purchase accounting, the assets and liabilities of acquired properties are recorded as of the acquisition date at their respective fair values and consolidated in our financial statements. The following sets forth the allocation of the purchase price of the properties acquired in 2013 as well as the associated acquisitions costs, which have been capitalized or expensed as described below. | |||||||||||
Danby House | Aledo | Total | |||||||||
Land | $ | 973,000 | $ | 215,000 | $ | 1,188,000 | |||||
Buildings & improvements | 6,972,000 | 7,033,000 | 14,005,000 | ||||||||
Site improvements | 292,000 | 451,000 | 743,000 | ||||||||
Furniture & fixtures | 978,000 | 426,000 | 1,404,000 | ||||||||
In-place leases, legal and marketing costs | 606,000 | 609,000 | 1,215,000 | ||||||||
Real estate acquisition and capitalized costs | $ | 9,821,000 | $ | 8,734,000 | $ | 18,555,000 | |||||
Acquisition fees paid to Advisor, expensed | $ | 136,000 | $ | 121,000 | $ | 257,000 | |||||
Third-party acquisition costs, capitalized (included above) | $ | 121,000 | $ | 109,000 | $ | 230,000 | |||||
Allowance_for_Doubtful_Account
Allowance for Doubtful Accounts | 9 Months Ended |
Sep. 30, 2013 | |
Allowance for Doubtful Accounts [Abstract] | ' |
Allowance for Doubtful Accounts [Text Block] | ' |
6. Allowance for Doubtful Accounts | |
Allowance for doubtful accounts was $0 and $0.2 million as of September 30, 2013 and December 31, 2012, respectively. | |
Concentration_of_Risk
Concentration of Risk | 9 Months Ended |
Sep. 30, 2013 | |
Risks and Uncertainties [Abstract] | ' |
Concentration Risk Disclosure [Text Block] | ' |
7. Concentration of Risk | |
Financial instruments that potentially subject us to a concentration of credit risk are primarily notes receivable and the note receivable from related party. Refer to Notes 8 and 9 with regard to credit risk evaluation of notes receivable and the note receivable from related party, respectively. Our cash is generally invested in investment-grade short-term instruments. As of September 30, 2013, we had cash accounts in excess of FDIC-insured limits. We do not believe the risk associated with this excess is significant. | |
As of September 30, 2013, excluding the VIE assets held for sale, we owned one property in California, four properties in Oregon, one property in Texas, one property in North Carolina, and one property in Illinois. Accordingly, there is a geographic concentration of risk subject to economic conditions in certain states. | |
Notes_Receivable
Notes Receivable | 9 Months Ended |
Sep. 30, 2013 | |
Receivables [Abstract] | ' |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | ' |
8. Notes Receivable | |
Notes receivable represent the combined balances due from the two loans to Servant Investments, LLC (“SI”) and Servant Healthcare Investments, LLC (“SHI”) (collectively, “Servant”). When the loans were negotiated, Servant was a sub-advisor in an alliance with the managing member of our Advisor. | |
On a quarterly basis, we evaluate the collectability of our notes receivable. Our evaluation of collectability involves judgment, estimates, and a review of the underlying collateral and borrower’s business models and future cash flows from operations. It is our policy to recognize interest income on the reserved loan on a cash basis. | |
The $1.0 million principal balance is payable pursuant to a promissory note from SHI which provides for interest at a fixed rate of 5.00% per annum. A principal payment of $0.7 million is due on December 22, 2013 and the remaining balance of $0.3 million is due on December 22, 2014. | |
As of September 30, 2013 and December 31, 2012, the SHI note receivable balance was $0.9 million. For the three months ended September 30, 2013 and 2012, interest income related to the note receivable was $13,000. For the nine months ended September 30, 2013 and 2012, interest income related to the note receivable was $38,000 and $40,000, respectively. The borrower is current on all interest income payments as of September 30, 2013. We determined that Servant is not a variable interest entity and there is no requirement to include this entity in our condensed consolidated balance sheets and condensed consolidated statements of operations. | |
Note_Receivable_from_Related_P
Note Receivable from Related Party | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Note Receivable from Related Party [Abstract] | ' | |||||||
Note Receivable from Related Party [Text Block] | ' | |||||||
9. Note Receivable from Related Party | ||||||||
This represents a note receivable from the participating first mortgage loan to Nantucket, owned and managed by Cornerstone Ventures Inc., an affiliate of our Advisor. The loan was made in connection with Nantucket’s purchase of Sherburne Commons and matures on January 1, 2015 with no option to extend and bears interest at a fixed rate of 8.0% for the term of the loan. Interest is payable monthly with the principal balance due at maturity. We have not recorded any interest income on this loan for the nine months ended September 30, 2013 and 2012. | ||||||||
Our quarterly evaluation of collectability involves judgment, estimates, a review of the underlying collateral and review of the Nantucket business model and projected future cash flows from operations. For our financial reporting purposes, Nantucket is considered a VIE and we are the primary beneficiary due to our enhanced ability to direct the activities of the VIE. Therefore, we have consolidated the operations since June 30, 2011 and, accordingly, eliminated the note receivable from related party in consolidation (see Note 11). For the three months ended September 30, 2013 and 2012, we recorded no impairment on this note. For the nine months ended September 30, 2013 and 2012, we recorded impairment charges related to the note of $0 and $1.1 million, respectively. | ||||||||
For the nine months ended September 30, 2013 and 2012, the note receivable balance increased by $0.3 million and $0.4 million, respectively, due to our funding Sherburne Commons’ operating shortfalls. We expect that additional future disbursements to fund operating shortfalls will be required while efforts are made to finalize the sale of the property. The following table reconciles the note receivable from Nantucket Acquisition from January 1, 2013 to September 30, 2013 and from January 1, 2012 to September 30, 2012: | ||||||||
2013 | 2012 | |||||||
Balance at January 1, | $ | — | $ | — | ||||
Additions: | ||||||||
Additions to note receivable from related party | 292,000 | 435,000 | ||||||
Deductions: | ||||||||
Repayments of note receivable from related party | — | — | ||||||
Elimination of balance in consolidation of VIE | -292,000 | -435,000 | ||||||
Balance at September 30, | $ | — | $ | — | ||||
Receivable_from_Related_Party
Receivable from Related Party | 9 Months Ended |
Sep. 30, 2013 | |
Receivable from Related Party [Abstract] | ' |
Receivable from Related Party [Text Block] | ' |
10. Receivable from Related Party | |
The receivable from related party primarily consists of the “excess organization and offering costs” (defined below) paid to the Advisor related to our follow-on offering which terminated on June 10, 2012. According to the advisory agreement, within sixty days after the end of the month in which the offering terminates, our Advisor is obligated to reimburse us for any organization and offering expenses that exceed 3.5% of our offering gross proceeds. Consequently, we recorded a receivable from our Advisor for $1.0 million, but reserved the full amount based on our collectability analysis. On December 31, 2012, we reduced our reserve by $125,000 as this amount was collected in the first quarter of 2013. In June and September 2013, we received a $50,000 payment for a combined total of $100,000 for 2013 from our Advisor which was recorded as a recovery of excess advisor obligation on our Condensed Consolidated Statements of Operations. (See Note 14). | |
Consolidation_of_Variable_Inte
Consolidation of Variable Interest Entities | 9 Months Ended |
Sep. 30, 2013 | |
Consolidation of Variable Interest Entity [Abstract] | ' |
Consolidation of Variable Interest Entity [Text Block] | ' |
11. Consolidation of Variable Interest Entities | |
GAAP requires the consolidation of VIEs in which an enterprise has a controlling financial interest. A controlling financial interest has both of the following characteristics: (i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. | |
In compliance with ASC 810, Consolidation, we continuously analyze and reconsider our initial determination of VIE status to determine whether we are the primary beneficiary by considering, among other things, whether we have the power to direct the activities of the VIE that most significantly impact its economic performance. Such activities would include, among other things, determining or limiting the scope or purpose of the VIE, selling or transferring property owned or controlled by the VIE, or arranging financing for the VIE. We also consider whether we have the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. | |
Nantucket Acquisition | |
As of September 30, 2013, we had a variable interest in a VIE in the form of a note receivable from Nantucket in the amount of $9.4 million (see Note 9). As a result of our issuing a notice of default with respect to the note, we determined that we were the primary beneficiary of the VIE. Therefore, we began consolidating the operations as of June 30, 2011. Assets of the VIE may only be used to settle obligations of the VIE and creditors of the VIE have no recourse to the general credit of the Company. In October 2011, the Sherburne Commons property was reclassified to real estate held for sale and the related assets and liabilities are classified as assets of variable interest entity held for sale and liabilities of variable interest entity held for sale on our condensed consolidated balance sheets as of September 30, 2013 and December 31, 2012. Operating results for the property have been reclassified to discontinued operations on our condensed consolidated statement of operations for the three and nine months ended September 30, 2013 and 2012. | |
In the second quarter of 2012, we received a formal offer from an independent third party to acquire the property. Based upon this evidence and management’s plan to sell the property, we determined that the offer, less estimated selling costs, approximates fair value. Consequently, we recorded an impairment charge of $1.1 million in the first quarter of 2012. As of the valuation date, Sherburne Commons was deemed to be a Level 2 asset as our estimate of fair value was based on a non-binding purchase offer. We do not believe that this asset was a Level 1 asset as a purchase and sale agreement had not been signed as of the valuation date, giving the potential buyer the right to opt out of the transaction at its discretion. No impairment charge was recorded in 2013. | |
Cornerstone Healthcare Partners LLC | |
We formed Cornerstone Healthcare Partners LLC (“CHP LLC”) with Cornerstone Healthcare Real Estate Fund, Inc. (“CHREF”), an affiliate of our Advisor. We own 95% of CHP LLC, with the remaining 5% owned by CHREF. We acquired the Sheridan Care Center, Fern Hill Care Center, Farmington Square, Friendship Haven Healthcare and Rehabilitation Center and Pacific Health and Rehabilitation Center healthcare properties (collectively, the “JV Properties”) through CHP LLC. In the third quarter of 2013, as part of our strategy to raise new property level joint venture equity capital to support growth and diversify operator, geographic and other risks, we caused CHP LLC to sell a portion of its interests in the JV Properties to third party investors. Proceeds from the sale of interests in these JV Properties were $550,000 as of September 30, 2013, of which we received $523,000 and CHREF received $27,000. At September 30, 2013, we owned a 91.3% interest in the JV Properties, CHREF, an affiliate of the Advisor, owned a 4.9% interest and third party investors owned 3.8%. CHP LLC may sell up to an aggregate 46% interest in these JV Properties, leaving us with 54%. As outside investors acquire additional interests in the JV Properties, our interest in the JV Properties, and that of CHREF, will be reduced proportionately. | |
As Summit Healthcare REIT and CHREF are related parties and have voting rights that are disproportionate to their economic interests in CHP LLC, we determined that the entity is a VIE. As we have control over the entity, along with the right to receive a majority of the expected residual returns and the obligation to absorb a majority of the expected losses of the entity, we determined that we were the primary beneficiary of the VIE. Consequently, we have consolidated the operations of the VIE. | |
As of September 30, 2013, the Company has not provided, and is not required to provide, financial support to the VIE except for the services provided to the VIE in its capacity as manager. There are no arrangements requiring the Company to provide additional financial support to the VIE, including circumstances in which the VIE could be exposed to further losses. The properties that were purchased through the VIE are mortgaged by secured loans (see Note 15). These loans are secured by the healthcare properties purchased through the VIE and have no recourse to our general credit. | |
Payable_to_Related_Parties
Payable to Related Parties | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transaction, Due from (to) Related Party [Abstract] | ' |
Payable to Related Party [Text Block] | ' |
12. Payable to Related Parties | |
Payable to related parties at September 30, 2013 and December 31, 2012 consists of expense reimbursements payable to the Advisor. | |
Equity
Equity | 9 Months Ended |
Sep. 30, 2013 | |
Equity [Abstract] | ' |
Stockholders' Equity Note Disclosure [Text Block] | ' |
13. Equity | |
Common Stock | |
As of September 30, 2013 and December 31, 2012, we have cumulatively issued 20.9 million shares of common stock for a total of $167.1 million of gross proceeds, exclusive of shares issued under our distribution reinvestment plan. We are not currently offering shares of our common stock for sale. | |
Distributions | |
We did not pay any distributions to stockholders during the nine months ended September 30, 2013 and 2012. Our distribution reinvestment plan was suspended indefinitely in December 2010. At this time, we cannot provide any assurance as to if or when we will resume our distribution reinvestment plan. | |
Stock Repurchase Program | |
Our Board of Directors suspended repurchases under the program effective December 31, 2010. At this time, we can make no assurance as to when and on what terms repurchases will resume. | |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
14. Related Party Transactions | |
We have no employees. Our Advisor is primarily responsible for managing our business affairs and carrying out the directives of our Board of Directors. The Advisory Agreement entitles our Advisor to specified fees for certain services, investment / disposition of funds in real estate projects, reimbursement of organizational and offering costs incurred by the Advisor and certain other reimbursable costs and expenses incurred by the Advisor including, but not limited to, the following: | |
Acquisition Fees and Expenses - Pay our Advisor acquisition fees not to exceed 2.0% of the purchase price of an acquired property in addition to any out of pocket expenses. For the three months ended September 30, 2013 and 2012, the Advisor earned $0.1 million and $0.4 million of acquisition fees, respectively. For the nine months ended September 30, 2013 and 2012, the Advisor earned $0.3 million and $0.4 million of acquisition fees, respectively which are included in real estate acquisition costs on our Condensed Consolidated Statements of Operations. | |
Asset Management Fees and Expenses - Pay our Advisor a monthly asset management fee equal to one-twelfth of 0.75% of the Average Invested Assets (as defined in the Advisory Agreement). For the three months ended September 30, 2013 and 2012, the Advisor earned $0.2 million and $0.2 million, respectively, which were expensed and included in asset management fees and expenses in our Condensed Consolidated Statements of Operations. For the nine months ended September 30, 2013 and 2012, the Advisor earned $0.7 million and $0.5 million, respectively, which were expensed and included in asset management fees and expenses in our Condensed Consolidated Statements of Operations. | |
Additionally, we will reimburse our Advisor for any direct and indirect costs and expenses incurred in providing asset management services to us, including personnel and related employment costs. For the three months ended September 30, 2013 and 2012, the Advisor was reimbursed $52,000 and $57,000, respectively. For the nine months ended September 30, 2013 and 2012, the Advisor was reimbursed $0.2 million and $0.1 million, respectively. These costs are included in asset management fees and expenses in our Condensed Consolidated Statements of Operations. | |
Disposition Fee - Pay our Advisor disposition fee not greater than 3% of the sales price of the property upon closing. These disposition fees may be paid in addition to real estate commissions paid to non-affiliates, provided that the total real estate commissions (including such disposition fee) paid to all persons shall not exceed an amount equal to the lesser of (i) 6% of the aggregate contract sales price of each property or (ii) the competitive real estate commission for each property. For the three months ended September 30, 2013 and 2012, the Advisor earned $0.2 million and $0, respectively. For the nine months ended September 30, 2013 and 2012, the Advisor earned $0.6 million and $0, respectively. | |
Organizational and Offering Costs – Pay our Advisor for reimbursement of any organizational and offering costs (“O&O”), but in no event will we have any obligation to reimburse the Advisor for costs in excess of 3.5% of the gross offerings raised. For the three months and nine months ended September 30, 2013 and 2012, we did not incur any such costs. | |
On June 10, 2012, our follow-on offering was terminated and per the Advisory Agreement, the Advisor is obligated to repay us O&O costs paid by us related to our follow-on offering that exceeded 3.5% of the gross proceeds of the offering. We have reimbursed our Advisor a total of $1.1 million in organizational and offering costs related to our follow-on offering, of which $1.0 million was in excess of the contractual limit. Consequently, in the second quarter of 2012, we recorded a receivable from the Advisor for $1.0 million reflecting the excess reimbursement. However, as a result of our evaluation of various factors related to collectability of this receivable, we reserved the full amount of the receivable as of June 30, 2012. On December 31, 2012, we reduced our reserve by $0.1 million as we collected this amount in early 2013. We received $50,000 and $0.1 million for the three and nine months ended September 30, 2013 which was recorded as a recovery in our Condensed Consolidated Statement of Operations. No assurances can be made when additional payments, if any, will occur. | |
Operating Expenses – Pay our Advisor’s direct and indirect costs the Advisor has incurred in providing administrative and management services to us. For the three months ended September 30, 2013 and 2012, the Advisor incurred $0.3 million and $0.3 million of such costs, respectively. For the nine months ended September 30, 2013 and 2012, the Advisor incurred $0.9 million and $1.0 million of such costs, respectively. These costs are included in general and administrative expenses in our Condensed Consolidated Statements of Operations. | |
Per our charter and our Advisory Agreement, our Board of Directors has the responsibility of limiting our total operating expenses for the trailing four consecutive quarters to amounts that do not exceed the greater of 2% of our average invested assets or 25% of our net income, calculated in the manner set forth in our charter, unless a majority of the directors (including a majority of the independent directors) has made a finding that, based on unusual and non-recurring factors that they deem sufficient, a higher level of expenses is justified (the “2%/25% Test”). In the event that a majority of the directors (including a majority of the independent directors) does not determine that such excess expenses are justified, our Advisor must reimburse to us the amount of the excess expenses paid or incurred (the “Excess Amount”). | |
For the trailing four-fiscal-quarter period ended September 30, 2013, our total operating expenses exceeded the greater of 2% of our average invested assets and 25% of our net income. We incurred operating expenses of approximately $4.6 million and incurred an Excess Amount of approximately $2.3 million. Our Board of Directors, including a majority of our independent directors, has determined that this Excess Amount is justified as unusual and non-recurring factors because of our small size (for a public reporting company) and as the Company has made substantial progress in execution of its repositioning strategy and has begun reducing its operating expenses. Therefore, the Board of Directors, including the independent directors, has unanimously resolved to permanently waive the Advisor’s reimbursement obligation with respect to Excess Amount incurred in the four fiscal-quarter period ended September 30, 2013, which totals $2.3 million. | |
During the trailing four-fiscal-quarter period ended June 30, 2013, our total operating expenses exceeded the greater of 2% of our average invested assets and 25% of our net income as we incurred operating expenses of approximately $4.7 million and incurred an Excess Amount of approximately $2.4 million. Our Board of Directors, including a majority of our independent directors, determined that this Excess Amount was justified as unusual and non-recurring factors because of our small size (for a public reporting company) and the costs of repositioning of our real estate investments and deferred waiving this Excess Amount. A condition of such justification the Board required that the Excess Amount for the trailing four-fiscal-quarter period ended June 30, 2013, shall be carried over and included in total operating expenses in subsequent periods for purposes of the 2%/25% Test, with any waiver dependent on our Advisor’s continued satisfactory progress with respect to executing the strategic repositioning alternative chosen by the independent directors. The Board of Directors, including the independent directors, has unanimously resolved to permanently waive the Advisor’s reimbursement obligation with respect to Excess Amount incurred in the four fiscal-quarter period ended June 30, 2012, which totals $2.4 million as the Company has made substantial progress in execution of its repositioning strategy and has begun reducing its operating expenses. | |
We believe that the Company’s projected operating expenses are likely to exceed the 2%/25% Test while pursuing our repositioning strategy and growth in assets under management. Any future waiver or adjustments dependent upon the Advisor’s continued satisfactory progress executing the strategic repositioning and cost containment initiatives. The Board of Directors, including the independent directors, will continue to monitor the appropriateness of the expenses and the Advisor’s fees and consider options to reduce the Company’s expense structure. | |
Property Management and Leasing Fees and Expenses - For the three months ended September 30, 2013 and 2012, the Advisor earned property management fees of $43,000 and $10,000, respectively. For the nine months ended September 30, 2013 and 2012, the Advisor earned property management fees of $117,000 and $15,000, respectively. For the three months ended September 30, 2013 and 2012, the Advisor earned leasing fees of $0.3 million and $1.0 million, respectively. For the nine months ended September 30, 2013 and 2012, the Advisor earned leasing fees of $0.5 million and $1.0 million, respectively. The lease fees are capitalized and amortized to the property operating and maintenance expenses in our condensed consolidated statements of operations. | |
Notes_Payable
Notes Payable | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Debt Disclosure [Abstract] | ' | ||||
Debt Disclosure [Text Block] | ' | ||||
15. Notes Payable | |||||
Our total debt obligations are $41.5 million and will mature between 2016 and 2018. The $12.0 million that was classified as liabilities associated with real estate held for sale has been paid-off in the third quarter of 2013, including a prepayment penalty of $0.4 million. Our capitalized financing costs are $0.8 million and $1.1 million as of September 30, 2013 and December 31, 2012, respectively. These financing costs have been capitalized and are being amortized over the life of their respective financing agreements. For the three months ended September 30, 2013 and 2012, $44,000 and $27,000, respectively, of deferred financing costs were amortized. For the nine months ended September 30, 2013 and 2012, $119,000 and $99,000, respectively, of deferred financing costs were amortized. The amortization of these costs is included in interest expense in our Condensed Consolidated Statements of Operations. | |||||
Wells Fargo Bank, National Association | |||||
In the first quarter of 2013, we sold the Carter property for cash proceeds of $1.7 million and used $0.6 million to pay down the loan with Wells Fargo Bank, National Association (“Wells Fargo”). In the third quarter of 2013, we sold two of the four Shoemaker Industrial buildings, Goldenrod Commerce Center, Hanging Moss Commerce Center, Monroe South Commerce Center and Monroe North Commerce Center for $25.1 million in cash and used $5.6 million of the proceeds to pay off the Wells Fargo loan in its entirety. At September 30, 2013 and December 31, 2012, we had net borrowings under the loan of $0 and $6.5 million, respectively. The weighted-average interest rate for the nine months ended September 30, 2013 and the year ended December 31, 2012 was 3.5% and 3.7%, respectively. During the three months ended September 30, 2013 and 2012, we incurred $35,000 and $59,000 of interest expense, respectively. During the nine months ended September 30, 2013 and 2012, we incurred $0.1 million and $0.2 million of interest expense, respectively. | |||||
Transamerica Life Insurance Company | |||||
The Transamerica Life Insurance Company (“Transamerica”) loan agreement was secured by the Monroe North Commerce Center Property. On September 6, 2013, we sold this property, along with three other industrial properties, and used $6.7 million of the net proceeds to pay-off the Transamerica loan of $6.3 million and paid a prepayment penalty fee of $0.4 million. Therefore, as of September 30, 2013 and December 31, 2012, we had net borrowings of $0 and $6.5 million, respectively. During the three months ended September 30, 2013 and 2012, we incurred $68,000 and $96,000 of interest expense, respectively. During the nine months ended September 30, 2013 and 2012, we incurred $0.3 million and $0.3 million of interest expense, respectively. | |||||
General Electric Capital Corporation – Healthcare Properties | |||||
As of September 30, 2013 and December 31, 2012, we had an outstanding balance of $28.4 million and $28.5 million, respectively, under this General Electric Capital Corporation (“GE”) loan agreement secured by the Sheridan Care Center, Fern Hill Care Center, Farmington Square, Friendship Haven Healthcare and Rehabilitation Center, and Pacific Health and Rehabilitation Center properties. During the three months ended September 30, 2013 and 2012, we incurred $0.4 million and $66,000, respectively, of interest expense under this loan. During the nine months ended September 30, 2013 and 2012, we incurred $1.1 million and $66,000, respectively, of interest expense under this loan. | |||||
The principal payments due on the GE loan for the October 1, 2013 to December 31, 2013 period and for each of the five following years ending December 31 are as follows: | |||||
Year | Principal Amount | ||||
October 1, 2013 to December 31, 2013 | $ | 115,000 | |||
2014 | $ | 492,000 | |||
2015 | $ | 523,000 | |||
2016 | $ | 551,000 | |||
2017 | $ | 26,728,000 | |||
We intend to refinance this loan with HUD insured debt to be secured by the Sheridan Care Center, Fern Hill Care Center, Farmington Square, Friendship Haven Healthcare and Rehabilitation Center, and Pacific Health and Rehabilitation facilities. In the fourth quarter of 2013, we have filed loan applications with HUD and have paid $0.2 million in fees and expenses associated with the refinancing. While there can be no assurances made with respect to the HUD refinancing, we expect these loans to close in the first quarter of 2014. | |||||
General Electric Capital Corporation – Western Property | |||||
On January 23, 2013, we sold the 20100 Western Avenue property for cash proceeds of $17.6 million and paid off the entire balance of the related loan ($8.9 million). Therefore, during the three months ended September 30, 2013 and 2012, we incurred $0 and $28,000, respectively, of interest expense related to this loan. During the nine months ended September 30, 2013 and 2012, we incurred $26,000 and $28,000, respectively, of interest expense related to this loan. | |||||
The PrivateBank and Trust Company | |||||
On January 31, 2013, we entered into a loan agreement with The PrivateBank and Trust Company for a loan (the “PB Loan”) in the aggregate principal amount of $7.3 million secured by a first lien security interest in the Danby House facility. The PB Loan, which bears interest at one-month LIBOR (London Interbank Offer Rate) plus 4.00%, with a LIBOR floor of 1.00% or the Prime Rate plus 1.75%, with an all-in floor of 5.00%, matures on January 30, 2016, at which time all outstanding principal, accrued and unpaid interest and any other amounts due under the PB Loan will become due. The PB Loan amortizes over 25 years, with principal amounts being paid into a sinking fund. The PB Loan may be prepaid with no penalty if refinanced through the U.S. Department of Housing and Urban Development (“HUD”). During the three months ended September 30, 2013 and 2012, we incurred $93,000 and $0, respectively, of interest expense related to the PB Loan. During the nine months ended September 30, 2013 and 2012, we incurred $245,000 and $0, respectively, of interest expense related to the PB Loan. | |||||
The principal payments, including payments to be made to the sinking fund, due on the PB loan for the October 1, 2013 to December 31, 2013 period and for each of the five following years ending December 31 are as follows | |||||
Year | Principal | ||||
Amount | |||||
October 1, 2013 to December 31, 2013 | $ | 43,000 | |||
2014 | $ | 170,000 | |||
2015 | $ | 179,000 | |||
2016 | $ | 6,883,000 | |||
We intend to refinance this loan with HUD insured debt to be secured by the Danby House property. In the fourth quarter of 2013 we have filed loan applications with HUD and have paid $0.2 million in fees and expenses associated with the refinancing. While there can be no assurances made with respect to the HUD refinancing, we expect these loans to close in the first quarter of 2014. | |||||
General Electric Capital Corporation – Aledo Property | |||||
On July 2, 2013, we entered into a loan agreement with GE for a loan (the “Aledo Loan”) in the aggregate principal amount of $5.9 million secured by a first lien security interest in the Heritage Woods of Aledo facility. The Aledo Loan, which bears interest for the first 12 months at 90-day LIBOR plus 4.50%, with a LIBOR floor of 0.50%, matures on July 1, 2018, at which time all outstanding principal, accrued and unpaid interest and any other amounts due under the Aledo Loan will become due. The Aledo Loan is interest only for the first 12 months of the loan, and amortizes over a 25 year period with a 6.00% fixed interest rate thereafter. The Aledo Loan may not be prepaid for the first 12 months of the loan. After the 12 months lockout period, the loan may be prepaid without penalty. If certain conditions are met, primarily adding an additional asset to the loan to be cross collateralized with the Heritage Woods of Aledo property, the Company may borrow an additional $0.9 million on the Aledo Loan. During the three and nine months ended September 30, 2013 and 2012, we incurred $74,000 and $0, respectively, of interest expense related to the Aledo Loan. | |||||
The principal payments due on the Aledo Loan for the October 1, 2013 to December 31, 2013 period and for each of the five following years ending December 31 are as follows: | |||||
Year | Principal Amount | ||||
October 1, 2013 to December 31, 2013 | $ | — | |||
2014 | $ | 40,000 | |||
2015 | $ | 102,000 | |||
2016 | $ | 107,000 | |||
2017 | $ | 115,000 | |||
2018 | $ | 5,486,000 | |||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies Disclosure [Text Block] | ' |
16. Commitments and Contingencies | |
We monitor our properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist, we are not currently aware of any environmental liabilities with respect to our properties that would have a material effect on our consolidated financial condition, results of operations or cash flows. Further, we are not aware of any environmental liability or any unasserted claim or assessment with respect to an environmental liability that we believe would require additional disclosure or the recording of a loss contingency. | |
Our commitments and contingencies include the usual obligations of real estate owners and operators in the normal course of business. In the opinion of management, these matters are not expected to have a material impact on our consolidated financial condition, results of operations, and cash flows. We are also subject to contingent losses related to notes receivable as further described in Notes 8 and 9. We are not presently subject to any material litigation nor, to our knowledge, any material litigation threatened against us which, if determined unfavorably to us, would have a material effect on our consolidated financial statements | |
Discontinued_Operations
Discontinued Operations | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | |||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | ' | |||||||||||||
17. Discontinued Operations | ||||||||||||||
Assets Held for Sale | ||||||||||||||
On February 26, 2013, our Board of Directors resolved to sell all of our remaining industrial properties. Therefore, the assets and liabilities of properties for which we have initiated plans to sell, but have not yet sold as of September 30, 2013, have been classified as assets and liabilities held for sale on the accompanying Condensed Consolidated Balance Sheets. As of September 30, 2013, this represents the remaining assets and liabilities of two of our four Shoemaker buildings. The December 31, 2012 balance sheet includes these two buildings plus all the properties sold in 2013 listed below in “Divestures.” The results of operations for the properties held for sale or sold are presented in discontinued operations on the accompanying Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2013 and 2012. | ||||||||||||||
Divestitures | ||||||||||||||
In accordance with ASC 360, Property, Plant & Equipment, we report results of operations from real estate assets that meet the definition of a component of an entity that have been sold, or meet the criteria to be classified as held for sale, as discontinued operations. | ||||||||||||||
On January 23, 2013, we sold Western Avenue to MMB Management, LLC, an unrelated third party, for a sale price of $17.6 million. We used $8.9 million of the proceeds to pay off the GE loan related to the property. The property is located at 20100 Western Avenue, Torrance, California and is an 116,433 square feet industrial building which we acquired in December 2006. | ||||||||||||||
On January 30, 2013, we sold our Carter Commerce Center property to Carter Commerce Center, LLC, an unrelated third party, for a sale price of $1.7 million. We used $0.6 million of the proceeds to pay down the Wells Fargo loan secured by the property. The property, located at 890 Carter Road, Orlando, Florida, is a 49,125 square feet industrial building we acquired in November 2007. | ||||||||||||||
On June 27, 2013, we sold one of the two Marathon Center property buildings to Marathon Acquisitions, LLC, an unrelated third party, for $0.9 million in cash. Marathon Center, located in Tampa Florida, is a 25,117 square foot industrial property we acquired in April 2007. | ||||||||||||||
On June 28, 2013, we sold the second of the two Marathon Center property buildings to Sulmor LLC, an unrelated third party, for $1.2 million in cash. Marathon Center, located in Tampa Florida, is a 26,903 square foot industrial property we acquired in April 2007. | ||||||||||||||
On July 26, 2013, we sold our Santa Fe property to an unrelated third party for $1.7 million in cash. The property consists of 12,200 square feet of industrial space. We acquired the property in August 2010. | ||||||||||||||
On August 5, 2013, we sold one of the four Shoemaker Industrial Buildings to an unrelated third party, for $0.5 million in cash. We used $0.4 million of the proceeds to pay down the Wells Fargo loan secured by the property. The Shoemaker Industrial building that was sold is located in Santa Fe Springs, California. We acquired the property in June 2006. | ||||||||||||||
On August 14, 2013, we sold the second of the four Shoemaker Industrial Buildings to an unrelated third party, for $0.5 million in cash. We used $0.4 million of the proceeds to pay down the Wells Fargo loan secured by the property. The Shoemaker Industrial building that was sold is located in Santa Fe Springs, California. We acquired the property in June 2006. | ||||||||||||||
On September 6, 2013, we sold the Goldenrod Commerce Center, Hanging Moss Commerce Center, Monroe South Commerce Center and Monroe North Commerce Center properties to an unrelated third party for $24.0 million in cash. The Properties collectively comprise 526,694 square feet of industrial space we acquired from November 2007 through April 2008. We used $11.5 million of the sales proceeds to pay off the Wells Fargo Bank and Transamerica Life Insurance Company loans secured by the properties (see Note 15) and paid a prepayment penalty of $0.4 million related to the Transamerica loan. | ||||||||||||||
Assets of Variable Interest Entity Held for Sale | ||||||||||||||
In the fourth quarter of 2011, our Board of Directors authorized us to actively market the Sherburne Commons property, a VIE that we began consolidating on June 30, 2011 (see Note 11). The assets and liabilities of properties for which we have initiated plans to sell, but have not yet sold as of September 30, 2013 are classified as assets of VIE held for sale and liabilities of VIE held for sale on the accompanying Condensed Consolidated Balance Sheets. As of September 30, 2013 and December 31, 2012, this represents the assets and liabilities of the Sherburne Commons property. The results of operations for the VIE held for sale are presented in discontinued operations on the accompanying Condensed Consolidated Statement of Operations for the three months and nine months ended September 30, 2013 and 2012. | ||||||||||||||
As of September 30, 2013, the Sherburne Commons property is under contract to be sold, pending an acceptable financial settlement with a trust benefiting the residents who paid entrance fees when they moved into the property. While the time for clearance of contingencies has expired per the terms of the purchase and sale agreement, the buyer continues to pursue the transaction and secure the needed consents from the town and current owner / occupants. Similarly, the Company is cooperating with the buyer and seeking the political and neighbor support for the change in ownership and operator of the senior living facility. However, there are no assurances that the transaction will be consummated on the terms of the current purchase and sale agreement. | ||||||||||||||
ASC 360 requires that assets classified as held for sale be carried at the lesser of their carrying amount or estimated fair value, less estimated selling costs. Accordingly, we recorded an impairment charge of $1.1 million in the first quarter of 2012 to record the Sherburne Commons property at its estimated fair value, less estimated selling costs (see Note 11). | ||||||||||||||
The following is a summary of the components of (loss) income from discontinued operations for the three months and nine months ended September 30, 2013 and 2012: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Rental revenues, tenant reimbursements and other income | $ | 1,149,000 | $ | 1,764,000 | $ | 3,788,000 | $ | 4,783,000 | ||||||
Operating expenses and real estate taxes | -2,054,000 | -1,256,000 | -4,291,000 | -3,854,000 | ||||||||||
Depreciation and amortization | -104,000 | -393,000 | -506,000 | -1,163,000 | ||||||||||
Impairment of real estate | — | — | -3,368,000 | -1,140,000 | ||||||||||
Gain on sales of real estate, net | 1,323,000 | — | 5,411,000 | — | ||||||||||
Income (loss) from discontinued operations | $ | 314,000 | $ | 115,000 | $ | 1,034,000 | $ | -1,374,000 | ||||||
The following table presents balance sheet information for the properties classified as held for sale as of September 30, 2013 and December 31, 2012. | ||||||||||||||
September 30, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
Investments in real estate held for sale: | ||||||||||||||
Land | $ | 225,000 | $ | 11,525,000 | ||||||||||
Buildings and improvements, net | 307,000 | 31,406,000 | ||||||||||||
Intangible lease assets, net | — | 32,000 | ||||||||||||
Real estate held for sale, net | $ | 532,000 | $ | 42,963,000 | ||||||||||
Other assets: | ||||||||||||||
Tenant and other receivables, net | $ | 14,000 | $ | 672,000 | ||||||||||
Leasing commissions, net | 1,000 | 481,000 | ||||||||||||
Other assets | 20,000 | 735,000 | ||||||||||||
Non-real estate assets associated with real estate held for sale | $ | 35,000 | $ | 1,888,000 | ||||||||||
Assets of variable interest entity held for sale: | ||||||||||||||
Cash and cash equivalents | $ | 109,000 | $ | 68,000 | ||||||||||
Investments in real estate, net | 3,905,000 | 3,905,000 | ||||||||||||
Accounts receivable, inventory and other assets | 172,000 | 291,000 | ||||||||||||
Total assets | $ | 4,186,000 | $ | 4,264,000 | ||||||||||
Liabilities | ||||||||||||||
Accounts payable and accrued liabilities | $ | 33,000 | $ | 421,000 | ||||||||||
Tenant security deposits | 19,000 | 497,000 | ||||||||||||
Notes payable | — | 21,844,000 | ||||||||||||
Liabilities associated with real estate held for sale | $ | 52,000 | $ | 22,762,000 | ||||||||||
Liabilities of variable interest entity held for sale: | ||||||||||||||
Note payable | $ | 1,332,000 | $ | 1,332,000 | ||||||||||
Tenant security deposits | 8,000 | — | ||||||||||||
Loan payable | 132,000 | 222,000 | ||||||||||||
Accounts payable and accrued liabilities | 508,000 | 454,000 | ||||||||||||
Intangible lease liabilities, net | 145,000 | 145,000 | ||||||||||||
Interest payable | 430,000 | 299,000 | ||||||||||||
Liabilities of variable interest entity held for sale | $ | 2,555,000 | $ | 2,452,000 | ||||||||||
Segment_Reporting
Segment Reporting | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||
Segment Reporting Disclosure [Text Block] | ' | |||||||||||||
18. Segment Reporting | ||||||||||||||
ASC 280-10, “Segment Reporting,” establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments. Prior to the third quarter of 2012, we operated in one reportable segment: industrial. As we began to implement our repositioning strategy and acquire healthcare properties in the third quarter of 2012, we reported under two operating segments: industrial and healthcare. Our healthcare segment consists of our senior housing properties. These operating segments represent the segments for which separate financial information is available and for which operating results are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. | ||||||||||||||
On February 26, 2013, our Board of Directors has resolved that our remaining industrial properties should be listed for sale. Therefore, we have classified the industrial assets as held for sale and as of this date, we report our continuing operations under the healthcare segment. | ||||||||||||||
We evaluate the performance of our properties based on net operating income (“NOI”). NOI is a non-GAAP supplemental measure used to evaluate the operating performance of real estate properties. We define NOI as total rental revenues, tenant reimbursements and other income less property operating and maintenance expenses. NOI excludes interest income from notes receivable, general and administrative expense, asset management fees and expenses, real estate acquisition costs, depreciation and amortization, impairments, interest income, interest expense, and income from discontinued operations. We believe NOI provides investors relevant and useful information because it measures the operating performance of the real estate investment trust’s (“REIT’s”) real estate at the property level on an unleveraged basis. We use NOI to make decisions about resource allocations and to assess and compare property-level performance. We believe that net income (loss) is the most directly comparable GAAP measure to NOI. NOI should not be viewed as an alternative measure of operating performance to net income (loss) as defined by GAAP since it does not reflect the aforementioned excluded items. Additionally, NOI as we define it may not be comparable to NOI as defined by other REITs or companies, as they may use different methodologies for calculating NOI. | ||||||||||||||
The following table reconciles NOI from net loss for the three months and nine months ended September 30, 2013 and 2012: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Net loss | $ | -387,000 | $ | -1,571,000 | $ | -1,649,000 | $ | -6,174,000 | ||||||
Interest income from notes receivable | -13,000 | -13,000 | -38,000 | -40,000 | ||||||||||
General and administrative | 694,000 | 757,000 | 2,552,000 | 2,489,000 | ||||||||||
Asset management fees and expenses | 271,000 | 240,000 | 865,000 | 662,000 | ||||||||||
Real estate acquisition costs | 121,000 | 737,000 | 257,000 | 737,000 | ||||||||||
Recovery of excess advisor obligation | -50,000 | — | -100,000 | 988,000 | ||||||||||
Depreciation and amortization | 627,000 | 130,000 | 1,709,000 | 130,000 | ||||||||||
Other/interest expense and income, net | 551,000 | 123,000 | 1,484,000 | 122,000 | ||||||||||
Loss (income) from discontinued operations | -314,000 | -115,000 | -1,034,000 | 1,374,000 | ||||||||||
Net operating income | $ | 1,500,000 | $ | 288,000 | $ | 4,046,000 | $ | 288,000 | ||||||
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
19. Subsequent Events | |
On October 4, 2013, we acquired a 32 unit assisted living facility in Newport, North Carolina (“Carteret House”), a 40 unit assisted living facility in Hamlet, North Carolina (“Hamlet House”), and a 60 unit assisted living facility in Shelby, North Carolina (“Shelby House”) from Meridian Senior Living (“Meridian”) for a transaction purchase price of $15.3 million which was funded by $3.9 million in cash and an $11.4 million loan from The PrivateBank and Trust Company. | |
On October 28, 2013, we sold the third of the four Shoemaker Industrial buildings to an unrelated third party, for $0.6 million in cash. The Shoemaker Industrial Building that was sold is located in Santa Fe Springs, California. We acquired the property in June 2006. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Basis of Accounting, Policy [Policy Text Block] | ' |
Principles of Consolidation and Basis of Presentation | |
The accompanying interim condensed consolidated financial statements have been prepared by our management in accordance with generally accepted accounting principles of the United States of America (“GAAP”) and in conjunction with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Certain amounts have been reclassified for prior periods to conform to current period presentation. Assets sold or held for sale and associated liabilities have been reclassified on the condensed consolidated balance sheets and the related operating results reclassified from continuing to discontinued operations on the condensed consolidated income statements. Additionally certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the interim condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. | |
The accompanying financial information reflects all adjustments which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods. Interim results of operations are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the 2012 Annual Report on Form 10-K as filed with the SEC on March 29, 2013. Operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. | |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
Recently Issued Accounting Pronouncements | |
In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income (“ASU 2013-02”). This requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. Additionally, ASU 2013-02 requires presentation, either on the face of the income statement or in the notes, of significant amounts reclassified out of accumulated other comprehensive income by respective line items of net income, but only if the amounts reclassified are required to be reclassified in their entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about these amounts. ASU 2013-02 was effective for us on January 1, 2013. The adoption of ASU 2013-02 did not have a material effect on the consolidated financial statement presentation. | |
In June 2013, the FASB issued Accounting Standards Update 2013-08, Financial Services - Investment Companies Topic Amendments to the Scope, Measurement, and Disclosure Requirements ("ASU 2013-08"). ASU 2013-08 clarifies the characteristics of an investment company and requires an investment company to measure noncontrolling ownership interests in other investment companies at fair value rather than using the equity method of accounting. In addition, an entity is required to disclose (a) the fact that it is an investment company applying the guidance in the Financial Services - Investment Companies Topic, (b) information about any changes in the entity's status as an investment company, and (c) information about financial support provided to its investees. ASU 2013-08 will be effective for the period beginning on January 1, 2014. We expect that the adoption of ASU 2013-08 will not have a material impact on its consolidated financial statements or disclosures. | |
Investments_in_Real_Estate_Tab
Investments in Real Estate (Tables) | 9 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
Real Estate [Abstract] | ' | |||||||||||||||||
Schedule of Real Estate Properties [Table Text Block] | ' | |||||||||||||||||
The following table provides summary information regarding our properties. | ||||||||||||||||||
Property (1) | Location | Date Purchased | Square | Purchase | Debt | September 30, 2013 | ||||||||||||
Footage | Price | % Leased | ||||||||||||||||
Healthcare: | ||||||||||||||||||
Sheridan Care Center | Sheridan, OR | 3-Aug-12 | 13,912 | $ | 4,100,000 | $ | 2,796,000 | 100 | % | |||||||||
Fern Hill Care Center | Portland, OR | 3-Aug-12 | 13,344 | 4,500,000 | 2,995,000 | 100 | % | |||||||||||
Farmington Square | Medford, OR | 14-Sep-12 | 32,557 | 8,500,000 | 5,792,000 | 100 | % | |||||||||||
Friendship Haven Healthcare | Galveston County, TX | 14-Sep-12 | 56,968 | 15,000,000 | 10,685,000 | 100 | % | |||||||||||
and Rehabilitation Center | ||||||||||||||||||
Pacific Health and Rehabilitation | Tigard, OR | 24-Dec-12 | 28,514 | 8,140,000 | 6,141,000 | 100 | % | |||||||||||
Center | ||||||||||||||||||
Danby House | Winston-Salem, NC | 31-Jan-13 | 27,135 | 9,700,000 | 7,275,000 | 100 | % | |||||||||||
Heritage Woods of Aledo | Aledo, IL | 2-Jul-13 | 25,261 | 8,625,000 | 5,850,000 | 100 | % | |||||||||||
Subtotal Healthcare: | 197,691 | 58,565,000 | 41,534,000 | 100 | % | |||||||||||||
Industrial (2): | ||||||||||||||||||
Shoemaker Industrial | Santa Fe Springs, CA | 30-Jun-06 | 9,721 | 1,200,000 | — | 100 | % | |||||||||||
Total | 207,412 | $ | 59,765,000 | $ | 41,534,000 | 100 | % | |||||||||||
-1 | The above table excludes Sherburne Commons Residences, LLC (“Sherburne Commons”), a variable interest entity (“VIE”) for which we became the primary beneficiary and began consolidating its financial results as of June 30, 2011. As of October 19, 2011, Sherburne Commons was classified as held for sale (See Note 17). | |||||||||||||||||
-2 | The industrial properties have been classified as held for sale as of September 30, 2013 and December 31, 2012 (see Note 17). | |||||||||||||||||
Real Estate and Accumulated Depreciation by Property [Table Text Block] | ' | |||||||||||||||||
As of September 30, 2013, our adjusted cost and accumulated depreciation and amortization related to investments in real estate and related intangible lease assets and liabilities, including those acquired through CHP LLC, were as follows: | ||||||||||||||||||
Healthcare | Land | Buildings and | Furniture and | In-Place Lease | Certificate of | |||||||||||||
Improvements | Fixture | Value | Need | |||||||||||||||
Investments in real estate and | $ | 5,709,000 | $ | 38,052,000 | $ | 4,319,000 | $ | 3,935,000 | $ | 6,786,000 | ||||||||
related intangible lease assets | ||||||||||||||||||
(liabilities) | ||||||||||||||||||
Less: accumulated depreciation and | — | -1,108,000 | -640,000 | -295,000 | — | |||||||||||||
amortization | ||||||||||||||||||
Net investments in real estate | $ | 5,709,000 | $ | 36,944,000 | $ | 3,679,000 | $ | 3,640,000 | $ | 6,786,000 | ||||||||
and related intangible lease | ||||||||||||||||||
assets (liabilities) | ||||||||||||||||||
Real_Estate_Acquisitions_Table
Real Estate Acquisitions (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Real Estate Acquisitions [Abstract] | ' | ||||||||||
Schedule Of Purchase Price Allocations [Table Text Block] | ' | ||||||||||
The following sets forth the allocation of the purchase price of the properties acquired in 2013 as well as the associated acquisitions costs, which have been capitalized or expensed as described below. | |||||||||||
Danby House | Aledo | Total | |||||||||
Land | $ | 973,000 | $ | 215,000 | $ | 1,188,000 | |||||
Buildings & improvements | 6,972,000 | 7,033,000 | 14,005,000 | ||||||||
Site improvements | 292,000 | 451,000 | 743,000 | ||||||||
Furniture & fixtures | 978,000 | 426,000 | 1,404,000 | ||||||||
In-place leases, legal and marketing costs | 606,000 | 609,000 | 1,215,000 | ||||||||
Real estate acquisition and capitalized costs | $ | 9,821,000 | $ | 8,734,000 | $ | 18,555,000 | |||||
Acquisition fees paid to Advisor, expensed | $ | 136,000 | $ | 121,000 | $ | 257,000 | |||||
Third-party acquisition costs, capitalized (included above) | $ | 121,000 | $ | 109,000 | $ | 230,000 | |||||
Note_Receivable_from_Related_P1
Note Receivable from Related Party (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Note Receivable from Related Party [Abstract] | ' | |||||||
Reconciliation of Notes Receivable Related Party [Table Text Block] | ' | |||||||
The following table reconciles the note receivable from Nantucket Acquisition from January 1, 2013 to September 30, 2013 and from January 1, 2012 to September 30, 2012: | ||||||||
2013 | 2012 | |||||||
Balance at January 1, | $ | — | $ | — | ||||
Additions: | ||||||||
Additions to note receivable from related party | 292,000 | 435,000 | ||||||
Deductions: | ||||||||
Repayments of note receivable from related party | — | — | ||||||
Elimination of balance in consolidation of VIE | -292,000 | -435,000 | ||||||
Balance at September 30, | $ | — | $ | — | ||||
Notes_Payable_Tables
Notes Payable (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
General Electric Capital Corporation Healthcare Properties [Member] | ' | ||||
Debt Disclosure [Abstract] | ' | ||||
Schedule of Maturities of Long-term Debt [Table Text Block] | ' | ||||
The principal payments due on the GE loan for the October 1, 2013 to December 31, 2013 period and for each of the five following years ending December 31 are as follows: | |||||
Year | Principal Amount | ||||
October 1, 2013 to December 31, 2013 | $ | 115,000 | |||
2014 | $ | 492,000 | |||
2015 | $ | 523,000 | |||
2016 | $ | 551,000 | |||
2017 | $ | 26,728,000 | |||
Private Bank And Trust Company [Member] | ' | ||||
Debt Disclosure [Abstract] | ' | ||||
Schedule of Maturities of Long-term Debt [Table Text Block] | ' | ||||
The principal payments, including payments to be made to the sinking fund, due on the PB loan for the October 1, 2013 to December 31, 2013 period and for each of the five following years ending December 31 are as follows: | |||||
Year | Principal | ||||
Amount | |||||
October 1, 2013 to December 31, 2013 | $ | 43,000 | |||
2014 | $ | 170,000 | |||
2015 | $ | 179,000 | |||
2016 | $ | 6,883,000 | |||
General Electric Capital Corporation Aledo Property [Member] | ' | ||||
Debt Disclosure [Abstract] | ' | ||||
Schedule of Maturities of Long-term Debt [Table Text Block] | ' | ||||
The principal payments due on the Aledo Loan for the October 1, 2013 to December 31, 2013 period and for each of the five following years ending December 31 are as follows: | |||||
Year | Principal Amount | ||||
October 1, 2013 to December 31, 2013 | $ | — | |||
2014 | $ | 40,000 | |||
2015 | $ | 102,000 | |||
2016 | $ | 107,000 | |||
2017 | $ | 115,000 | |||
2018 | $ | 5,486,000 | |||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ' | |||||||||||||
Impairment Charge Recorded for Real Estate Held for Variable Interest Entity Sale in Discontinued Operations [Table Text Block] | ' | |||||||||||||
The following is a summary of the components of (loss) income from discontinued operations for the three months and nine months ended September 30, 2013 and 2012: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Rental revenues, tenant reimbursements and other income | $ | 1,149,000 | $ | 1,764,000 | $ | 3,788,000 | $ | 4,783,000 | ||||||
Operating expenses and real estate taxes | -2,054,000 | -1,256,000 | -4,291,000 | -3,854,000 | ||||||||||
Depreciation and amortization | -104,000 | -393,000 | -506,000 | -1,163,000 | ||||||||||
Impairment of real estate | — | — | -3,368,000 | -1,140,000 | ||||||||||
Gain on sales of real estate, net | 1,323,000 | — | 5,411,000 | — | ||||||||||
Income (loss) from discontinued operations | $ | 314,000 | $ | 115,000 | $ | 1,034,000 | $ | -1,374,000 | ||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | ' | |||||||||||||
The following table presents balance sheet information for the properties classified as held for sale as of September 30, 2013 and December 31, 2012. | ||||||||||||||
September 30, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
Investments in real estate held for sale: | ||||||||||||||
Land | $ | 225,000 | $ | 11,525,000 | ||||||||||
Buildings and improvements, net | 307,000 | 31,406,000 | ||||||||||||
Intangible lease assets, net | — | 32,000 | ||||||||||||
Real estate held for sale, net | $ | 532,000 | $ | 42,963,000 | ||||||||||
Other assets: | ||||||||||||||
Tenant and other receivables, net | $ | 14,000 | $ | 672,000 | ||||||||||
Leasing commissions, net | 1,000 | 481,000 | ||||||||||||
Other assets | 20,000 | 735,000 | ||||||||||||
Non-real estate assets associated with real estate held for sale | $ | 35,000 | $ | 1,888,000 | ||||||||||
Assets of variable interest entity held for sale: | ||||||||||||||
Cash and cash equivalents | $ | 109,000 | $ | 68,000 | ||||||||||
Investments in real estate, net | 3,905,000 | 3,905,000 | ||||||||||||
Accounts receivable, inventory and other assets | 172,000 | 291,000 | ||||||||||||
Total assets | $ | 4,186,000 | $ | 4,264,000 | ||||||||||
Liabilities | ||||||||||||||
Accounts payable and accrued liabilities | $ | 33,000 | $ | 421,000 | ||||||||||
Tenant security deposits | 19,000 | 497,000 | ||||||||||||
Notes payable | — | 21,844,000 | ||||||||||||
Liabilities associated with real estate held for sale | $ | 52,000 | $ | 22,762,000 | ||||||||||
Liabilities of variable interest entity held for sale: | ||||||||||||||
Note payable | $ | 1,332,000 | $ | 1,332,000 | ||||||||||
Tenant security deposits | 8,000 | — | ||||||||||||
Loan payable | 132,000 | 222,000 | ||||||||||||
Accounts payable and accrued liabilities | 508,000 | 454,000 | ||||||||||||
Intangible lease liabilities, net | 145,000 | 145,000 | ||||||||||||
Interest payable | 430,000 | 299,000 | ||||||||||||
Liabilities of variable interest entity held for sale | $ | 2,555,000 | $ | 2,452,000 | ||||||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||
Reconciliation of Net Operating Income from Net Loss [Table Text Block] | ' | |||||||||||||
The following table reconciles NOI from net loss for the three months and nine months ended September 30, 2013 and 2012: | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Net loss | $ | -387,000 | $ | -1,571,000 | $ | -1,649,000 | $ | -6,174,000 | ||||||
Interest income from notes receivable | -13,000 | -13,000 | -38,000 | -40,000 | ||||||||||
General and administrative | 694,000 | 757,000 | 2,552,000 | 2,489,000 | ||||||||||
Asset management fees and expenses | 271,000 | 240,000 | 865,000 | 662,000 | ||||||||||
Real estate acquisition costs | 121,000 | 737,000 | 257,000 | 737,000 | ||||||||||
Recovery of excess advisor obligation | -50,000 | — | -100,000 | 988,000 | ||||||||||
Depreciation and amortization | 627,000 | 130,000 | 1,709,000 | 130,000 | ||||||||||
Other/interest expense and income, net | 551,000 | 123,000 | 1,484,000 | 122,000 | ||||||||||
Loss (income) from discontinued operations | -314,000 | -115,000 | -1,034,000 | 1,374,000 | ||||||||||
Net operating income | $ | 1,500,000 | $ | 288,000 | $ | 4,046,000 | $ | 288,000 | ||||||
Organization_Details_Textual
Organization (Details Textual) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Entity Incorporation, Date of Incorporation | 22-Oct-04 |
Cornerstone Healthcare Partners [Member] | ' |
Limited Liability Company Llc Or Limited Partnership Lp Members Or Advisors Ownership Interest | 95.00% |
Cornerstone Realty Advisors [Member] | ' |
Limited Liability Company or Limited Partnership, Business, Formation Date | 30-Nov-04 |
Cornerstone Healthcare Real Estate Fund [Member] | ' |
Limited Liability Company Llc Or Limited Partnership Lp Members Or Advisors Ownership Interest | 5.00% |
Parent Company [Member] | ' |
Limited Liability Company Llc Or Limited Partnership Lp Members Or Advisors Ownership Interest | 91.30% |
JV Properties [Member] | ' |
Divestiture Of Interests In Affiliates | 550,000 |
Proceeds from Divestiture of Businesses and Interests in Affiliates, Total | 523,000 |
JV Properties [Member] | CHREF [Member] | ' |
Proceeds from Divestiture of Businesses and Interests in Affiliates, Total | 27,000 |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 4.90% |
JV Properties [Member] | CHP LLC [Member] | ' |
Divestiture Of Interests In Affiliates, Maximum Percentage | 46.00% |
Divestiture Of Interests In Affiliates, Restricted Percentage | 54.00% |
JV Properties [Member] | Third Party Investors [Member] | ' |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 3.80% |
Fair_Value_Financial_Instrumen1
Fair Value Financial Instruments (Details Textual) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Notes Receivable, Fair Value Disclosure | $1,000,000 | $1,000,000 |
Financing Receivable, Net, Total | 908,000 | 908,000 |
Fair Value, Inputs Discount Rate, Notes Receivable | 10.00% | ' |
Notes Payable, Fair Value Disclosure | 41,900,000 | 51,000,000 |
Notes Payable, Total | $41,500,000 | $50,300,000 |
Fair Value Inputs Discount Rate Notes Payable | 5.00% | ' |
Investments_in_Real_Estate_Det
Investments in Real Estate (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | ||
sqft | ||
Square Footage | 207,412 | [1] |
Purchase Price | $59,765,000 | [1] |
Debt | 41,534,000 | [1] |
Percentage of Property Leased | 100.00% | [1] |
Sheridan Care Center [Member] | ' | |
Location | 'Sheridan, OR | [1] |
Date Purchased | 3-Aug-12 | [1] |
Square Footage | 13,912 | [1] |
Purchase Price | 4,100,000 | [1] |
Debt | 2,796,000 | [1] |
Percentage of Property Leased | 100.00% | [1] |
Fern Hill Care Center [Member] | ' | |
Location | 'Portland, OR | [1] |
Date Purchased | 3-Aug-12 | [1] |
Square Footage | 13,344 | [1] |
Purchase Price | 4,500,000 | [1] |
Debt | 2,995,000 | [1] |
Percentage of Property Leased | 100.00% | [1] |
Farmington Square [Member] | ' | |
Location | 'Medford, OR | [1] |
Date Purchased | 14-Sep-12 | [1] |
Square Footage | 32,557 | [1] |
Purchase Price | 8,500,000 | [1] |
Debt | 5,792,000 | [1] |
Percentage of Property Leased | 100.00% | [1] |
Friendship Haven Healthcare and Rehabilitation Center [Member] | ' | |
Location | 'Galveston County, TX | [1] |
Date Purchased | 14-Sep-12 | [1] |
Square Footage | 56,968 | [1] |
Purchase Price | 15,000,000 | [1] |
Debt | 10,685,000 | [1] |
Percentage of Property Leased | 100.00% | [1] |
Pacific Health and Rehabilitation Center [Member] | ' | |
Location | 'Tigard, OR | [1] |
Date Purchased | 24-Dec-12 | [1] |
Square Footage | 28,514 | [1] |
Purchase Price | 8,140,000 | [1] |
Debt | 6,141,000 | [1] |
Percentage of Property Leased | 100.00% | [1] |
Danby House [Member] | ' | |
Location | 'Winston-Salem, NC | [1] |
Date Purchased | 31-Jan-13 | [1] |
Square Footage | 27,135 | [1] |
Purchase Price | 9,700,000 | [1] |
Debt | 7,275,000 | [1] |
Percentage of Property Leased | 100.00% | [1] |
Heritage Woods Of Aledo [Member] | ' | |
Location | 'Aledo, IL | [1] |
Date Purchased | 2-Jul-13 | [1] |
Square Footage | 25,261 | [1] |
Purchase Price | 8,625,000 | [1] |
Debt | 5,850,000 | [1] |
Percentage of Property Leased | 100.00% | [1] |
Shoemaker Industrial [Member] | ' | |
Location | 'Santa Fe Springs, CA | [1],[2] |
Date Purchased | 30-Jun-06 | [1],[2] |
Square Footage | 9,721 | [1],[2] |
Purchase Price | 1,200,000 | [1],[2] |
Debt | 0 | [1],[2] |
Percentage of Property Leased | 100.00% | [1],[2] |
Subtotal Healthcare | ' | |
Square Footage | 197,691 | [1] |
Purchase Price | 58,565,000 | [1] |
Debt | $41,534,000 | [1] |
Percentage of Property Leased | 100.00% | [1] |
[1] | The above table excludes Sherburne Commons Residences, LLC (bSherburne Commonsb), a variable interest entity (bVIEb) for which we became the primary beneficiary and began consolidating its financial results as of June 30, 2011. As of October 19, 2011, Sherburne Commons was classified as held for sale (See Note 17). | |
[2] | The industrial properties have been classified as held for sale as of September 30, 2013 and December 31, 2012 (see Note 17). |
Investments_in_Real_Estate_Det1
Investments in Real Estate (Details 1) (Healthcare [Member], USD $) | Sep. 30, 2013 |
Leases, Acquired-in-Place [Member] | ' |
Investments in real estate and related intangible lease assets (liabilities) | $3,935,000 |
Less: accumulated depreciation and amortization | -295,000 |
Net investments in real estate and related intangible lease assets (liabilities) | 3,640,000 |
Land [Member] | ' |
Investments in real estate and related intangible lease assets (liabilities) | 5,709,000 |
Less: accumulated depreciation and amortization | 0 |
Net investments in real estate and related intangible lease assets (liabilities) | 5,709,000 |
Building Improvements [Member] | ' |
Investments in real estate and related intangible lease assets (liabilities) | 38,052,000 |
Less: accumulated depreciation and amortization | -1,108,000 |
Net investments in real estate and related intangible lease assets (liabilities) | 36,944,000 |
Furniture and Fixtures [Member] | ' |
Investments in real estate and related intangible lease assets (liabilities) | 4,319,000 |
Less: accumulated depreciation and amortization | -640,000 |
Net investments in real estate and related intangible lease assets (liabilities) | 3,679,000 |
Certificate of Need [Member] | ' |
Investments in real estate and related intangible lease assets (liabilities) | 6,786,000 |
Less: accumulated depreciation and amortization | 0 |
Net investments in real estate and related intangible lease assets (liabilities) | $6,786,000 |
Investments_in_Real_Estate_Det2
Investments in Real Estate (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Mar. 31, 2012 | 11-May-13 | Sep. 30, 2013 | 14-May-13 | Jun. 06, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | |
Sherburne Commons Property [Member] | Shoemaker Industrial Buildings [Member] | Marathon Property [Member] | Santa Fe Property [Member] | OSB properties [Member] | OSB properties [Member] | OSB properties [Member] | ||||||
Number of Real Estate Properties | 7 | ' | 7 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of Leased Assets | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment Charges Related to Properties Held for Sale | $0 | $0 | $3,400,000 | $1,100,000 | ' | ' | ' | ' | ' | ' | $3,400,000 | $0 |
Capitalized Leasing Commissions | 1,800,000 | ' | 1,800,000 | ' | 1,300,000 | ' | ' | ' | ' | ' | ' | ' |
Amortization of Leasing Commissions | 41,000 | 10,000 | 108,000 | 10,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment of Real Estate | ' | ' | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | ' | ' |
Proceeds from Sale of Real Estate Held-for-investment | ' | ' | ' | ' | ' | ' | 500,000 | 1,300,000 | ' | ' | ' | ' |
Proceeds from Sale of Property, Plant, and Equipment | ' | ' | ' | ' | ' | ' | ' | ' | $1,700,000 | $24,000,000 | ' | ' |
Real_Estate_Acquisitions_Detai
Real Estate Acquisitions (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Real estate acquisition and capitalized costs | $18,555,000 |
Acquisition fees paid to Advisor, expensed | 257,000 |
Third-party acquisition costs, capitalized (included above) | 230,000 |
Land [Member] | ' |
Real estate acquisition and capitalized costs | 1,188,000 |
Building and Building Improvements [Member] | ' |
Real estate acquisition and capitalized costs | 14,005,000 |
Site Improvements [Member] | ' |
Real estate acquisition and capitalized costs | 743,000 |
Furniture and Fixtures [Member] | ' |
Real estate acquisition and capitalized costs | 1,404,000 |
Assets Held under Capital Leases [Member] | ' |
Real estate acquisition and capitalized costs | 1,215,000 |
Danby House [Member] | ' |
Real estate acquisition and capitalized costs | 9,821,000 |
Acquisition fees paid to Advisor, expensed | 136,000 |
Third-party acquisition costs, capitalized (included above) | 121,000 |
Danby House [Member] | Land [Member] | ' |
Real estate acquisition and capitalized costs | 973,000 |
Danby House [Member] | Building and Building Improvements [Member] | ' |
Real estate acquisition and capitalized costs | 6,972,000 |
Danby House [Member] | Site Improvements [Member] | ' |
Real estate acquisition and capitalized costs | 292,000 |
Danby House [Member] | Furniture and Fixtures [Member] | ' |
Real estate acquisition and capitalized costs | 978,000 |
Danby House [Member] | Assets Held under Capital Leases [Member] | ' |
Real estate acquisition and capitalized costs | 606,000 |
Aledo [Member] | ' |
Real estate acquisition and capitalized costs | 8,734,000 |
Acquisition fees paid to Advisor, expensed | 121,000 |
Third-party acquisition costs, capitalized (included above) | 109,000 |
Aledo [Member] | Land [Member] | ' |
Real estate acquisition and capitalized costs | 215,000 |
Aledo [Member] | Building and Building Improvements [Member] | ' |
Real estate acquisition and capitalized costs | 7,033,000 |
Aledo [Member] | Site Improvements [Member] | ' |
Real estate acquisition and capitalized costs | 451,000 |
Aledo [Member] | Furniture and Fixtures [Member] | ' |
Real estate acquisition and capitalized costs | 426,000 |
Aledo [Member] | Assets Held under Capital Leases [Member] | ' |
Real estate acquisition and capitalized costs | $609,000 |
Real_Estate_Acquisitions_Detai1
Real Estate Acquisitions (Details Textual) (USD $) | 9 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Jan. 31, 2013 | Jul. 02, 2013 | Sep. 30, 2013 | |
Danby House [Member] | Danby House [Member] | Heritage Woods [Member] | Meridian Senior Living, LLC [Member] | |
Business Acquisition Cash Paid To Acquire Asset | ' | $9,800,000 | $8.60 | ' |
Capital Leases of Lessee, Description of initial lease term | '10 years | ' | ' | ' |
Capital Leases of Lessee, Description of additional lease term | '5 years | ' | ' | '5 years |
Allowance_for_Doubtful_Account1
Allowance for Doubtful Accounts (Details Textual) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Allowance for Doubtful Accounts Receivable | $0 | $0.20 |
Notes_Receivable_Details_Textu
Notes Receivable (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Financing Receivable, Net | $908,000 | ' | $908,000 | ' | $908,000 |
Servant Healthcare Investment, Llc Notes Receivable [Member] | ' | ' | ' | ' | ' |
Financing Receivable, Net | 900,000 | ' | 900,000 | ' | 900,000 |
Receivable with Imputed Interest, Effective Yield (Interest Rate) | ' | ' | 5.00% | ' | ' |
Amount Due on Twenty Second December 2013 | 700,000 | ' | 700,000 | ' | ' |
Amount Due on Twenty Second December 2014 | 300,000 | ' | 300,000 | ' | ' |
Interest Income Note Receivable | 13,000 | 13,000 | 38,000 | 40,000 | ' |
Debt Instrument, Face Amount | $1,000,000 | ' | $1,000,000 | ' | ' |
Note_Receivable_from_Related_P2
Note Receivable from Related Party (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Balance at January 1 | $0 | $0 |
Additions to note receivable from related party | 292,000 | 435,000 |
Repayments of note receivable from related party | 0 | 0 |
Elimination of balance in consolidation of VIE | -292,000 | -435,000 |
Balance at September 30, | $0 | $0 |
Note_Receivable_from_Related_P3
Note Receivable from Related Party (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Impairment of Real Estate, Asset Held-for-sale | $0 | $1.10 | $1.10 | $0 | $1.10 |
Sherburne Commons Property [Member] | ' | ' | ' | ' | ' |
Mortgage Loans on Real Estate, Period Increase (Decrease) | ' | ' | ' | $0.30 | $0.40 |
Nantucket Acquisition Llc [Member] | ' | ' | ' | ' | ' |
Mortgage Loans on Real Estate, Interest Rate | ' | ' | ' | 8.00% | ' |
Mortgage Loans on Real Estate, Final Maturity Date | ' | ' | ' | 1-Jan-15 | ' |
Receivable_from_Related_Party_
Receivable from Related Party (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Due from Related Parties | $164,000 | ' | $164,000 | ' | $7,000 |
Received from Advisor | ' | ' | ' | ' | 100,000 |
Expenses of Reserve For Excess Advisor Obligation | 50,000 | 0 | 100,000 | -988,000 | ' |
Advisor To Follow On Offering [Member] | ' | ' | ' | ' | ' |
Percentage of Offering Expenses | ' | ' | 3.50% | ' | ' |
Due from Related Parties | 1,000,000 | ' | 1,000,000 | ' | ' |
Received from Advisor | ' | ' | $125,000 | ' | ' |
Consolidation_of_Variable_Inte1
Consolidation of Variable Interest Entities (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Impairment of Real Estate, Asset Held-for-sale | $0 | $1,100,000 | $1,100,000 | $0 | $1,100,000 |
Cornerstone Healthcare Partners [Member] | ' | ' | ' | ' | ' |
Limited Liability Company Llc Or Limited Partnership Lp Members Or Advisors Ownership Interest | ' | ' | ' | 95.00% | ' |
Nantucket Acquisition [Member] | ' | ' | ' | ' | ' |
Variable Interest Entity, Consolidated, Carrying Amount, Assets | 9,400,000 | ' | ' | 9,400,000 | ' |
Cornerstone Healthcare Real Estate Fund [Member] | ' | ' | ' | ' | ' |
Limited Liability Company Llc Or Limited Partnership Lp Members Or Advisors Ownership Interest | ' | ' | ' | 5.00% | ' |
Parent Company [Member] | ' | ' | ' | ' | ' |
Limited Liability Company Llc Or Limited Partnership Lp Members Or Advisors Ownership Interest | ' | ' | ' | 91.30% | ' |
JV Properties [Member] | ' | ' | ' | ' | ' |
Divestiture Of Interests In Affiliates | ' | ' | ' | 550,000 | ' |
Proceeds from Divestiture of Businesses and Interests in Affiliates, Total | ' | ' | ' | 523,000 | ' |
JV Properties [Member] | CHREF [Member] | ' | ' | ' | ' | ' |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 4.90% | ' | ' | 4.90% | ' |
Proceeds from Divestiture of Businesses and Interests in Affiliates, Total | ' | ' | ' | $27,000 | ' |
JV Properties [Member] | CHP LLC [Member] | ' | ' | ' | ' | ' |
Divestiture Of Interests In Affiliates, Maximum Percentage | ' | ' | ' | 46.00% | ' |
Divestiture Of Interests In Affiliates, Restricted Percentage | ' | ' | ' | 54.00% | ' |
JV Properties [Member] | Third Party Investors [Member] | ' | ' | ' | ' | ' |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 3.80% | ' | ' | 3.80% | ' |
Equity_Details_Textual
Equity (Details Textual) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Cumulative Common Stock, Shares Issued | $20.90 | $167.10 |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 10, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Advisors and Offering Cost Expenses | ' | $200,000 | $0 | $600,000 | $0 | ' |
Advisor Fees, Description | ' | ' | ' | 'Pay our Advisor a monthly asset management fee equal to one-twelfth of 0.75% of the Average Invested Assets (as defined in the Advisory Agreement). | ' | ' |
Asset Management Fees | ' | 271,000 | 240,000 | 865,000 | 662,000 | ' |
Total Operating Expenses Towards Advisory Cost, Description | ' | ' | ' | 'Per our charter and our Advisory Agreement, our Board of Directors has the responsibility of limiting our total operating expenses for the trailing four consecutive quarters to amounts that do not exceed the greater of 2% of our average invested assets or 25% of our net income, calculated in the manner set forth in our charter, unless a majority of the directors (including a majority of the independent directors) has made a finding that, based on unusual and non-recurring factors that they deem sufficient, a higher level of expenses is justified (the 2%/25% Test). In the event that a majority of the directors (including a majority of the independent directors) does not determine that such excess expenses are justified, our Advisor must reimburse to us the amount of the excess expenses paid or incurred (the Excess Amount). | ' | ' |
Reimbursement of Advisory Fees | ' | 52,000 | 57,000 | 200,000 | 100,000 | ' |
Reimbursement of Advisory Fees for Direct Cost | ' | 300,000 | 300,000 | 900,000 | 1,000,000 | ' |
Reimbursement of Advisory Fees for Indirect Cost | ' | 300,000 | 300,000 | 900,000 | 1,000,000 | ' |
Reimbursement Obligation with Respect to Amounts Due for Excess Resulting | ' | ' | ' | ' | 1,000,000 | ' |
Disposition Fees, Percentage | ' | ' | ' | 3.00% | ' | ' |
Disposition Fees, Description | ' | ' | ' | 'These disposition fees may be paid in addition to real estate commissions paid to non-affiliates, provided that the total real estate commissions (including such disposition fee) paid to all persons shall not exceed an amount equal to the lesser of (i) 6% of the aggregate contract sales price of each property or (ii) the competitive real estate commission for each property. | ' | ' |
Percentage In Excess Of Gross Proceeds From Offering As Sponsor Fee | 3.50% | ' | ' | ' | ' | ' |
Terms Of Advisory Agreement Percentage In Excess Of Gross Proceeds | 3.50% | ' | ' | ' | ' | ' |
Sponsor Fees | 1,100,000 | ' | ' | ' | ' | ' |
Sponsor Fees Excess Of Contractual Limit | 1,000,000 | ' | ' | ' | ' | ' |
Accounts Receivable From Advisor | 1,000,000 | ' | ' | ' | ' | ' |
Received from Advisor | ' | ' | ' | ' | ' | 100,000 |
Advisors Fees Reimbursed [Member] | ' | ' | ' | ' | ' | ' |
Asset Management Fees | ' | 200,000 | 200,000 | 700,000 | 500,000 | ' |
Total Operating Expenses Towards Advisory Cost, Description | ' | ' | ' | 'For the trailing four-fiscal-quarter period ended September 30, 2013, our total operating expenses exceeded the greater of 2% of our average invested assets and 25% of our net income. We incurred operating expenses of approximately $4.6 million and incurred an Excess Amount of approximately $2.3 million. Our Board of Directors, including a majority of our independent directors, has determined that this Excess Amount is justified as unusual and non-recurring factors because of our small size (for a public reporting company) and as the Company has made substantial progress in execution of its repositioning strategy and has begun reducing its operating expenses.Therefore, the Board of Directors, including the independent directors, has unanimously resolved to permanently waive the Advisors reimbursement obligation with respect to Excess Amount incurred in the four fiscal-quarter period ended September 30, 2013, which totals $2.3 million. | ' | ' |
Advisory Agreement [Member] | ' | ' | ' | ' | ' | ' |
Advisors and Offering Cost Expenses | ' | 100,000 | 400,000 | 300,000 | 400,000 | ' |
Advisory Acquisition Fees, Description | ' | ' | ' | 'Pay our Advisor acquisition fees not to exceed 2.0% of the purchase price of an acquired property in addition to any out of pocket expenses. | ' | ' |
Asset Management Fees | ' | 43,000 | 10,000 | 117,000 | 15,000 | ' |
Total Operating Expenses Towards Advisory Cost, Description | ' | ' | ' | 'During the trailing four-fiscal-quarter period ended June 30, 2013, our total operating expenses exceeded the greater of 2% of our average invested assets and 25% of our net income as we incurred operating expenses of approximately $4.7 million and incurred an Excess Amount of approximately $2.4 million. Our Board of Directors, including a majority of our independent directors, determined that this Excess Amount was justified as unusual and non-recurring factors because of our small size (for a public reporting company) and the costs of repositioning of our real estate investments and deferred waiving this Excess Amount. A condition of such justification the Board required that the Excess Amount for the trailing four-fiscal-quarter period ended June 30, 2013, shall be carried over and included in total operating expenses in subsequent periods for purposes of the 2%/25% Test, with any waiver dependent on our Advisors continued satisfactory progress with respect to executing the strategic repositioning alternative chosen by the independent directors. The Board of Directors, including the independent directors, has unanimously resolved to permanently waive the Advisors reimbursement obligation with respect to Excess Amount incurred in the four fiscal-quarter period ended June 30, 2012, which totals $2.4 million as the Company has made substantial progress in execution of its repositioning strategy and has begun reducing its operating expenses. | ' | ' |
Leasing Fees | ' | 300,000 | 1,000,000 | 500,000 | 1,000,000 | ' |
Proceeds from Related Party Debt | ' | $50,000 | ' | $100,000 | ' | ' |
Notes_Payable_Details
Notes Payable (Details) (USD $) | Sep. 30, 2013 |
General Electric Capital Corporation Healthcare Properties [Member] | ' |
October 1, 2013 to December 31, 2013 | $115,000 |
2014 | 492,000 |
2015 | 523,000 |
2016 | 551,000 |
2017 | 26,728,000 |
Private Bank And Trust Company [Member] | ' |
October 1, 2013 to December 31, 2013 | 43,000 |
2014 | 170,000 |
2015 | 179,000 |
2016 | 6,883,000 |
General Electric Capital Corporation Aledo Property [Member] | ' |
October 1, 2013 to December 31, 2013 | 0 |
2014 | 40,000 |
2015 | 102,000 |
2016 | 107,000 |
2017 | 115,000 |
2018 | $5,486,000 |
Notes_Payable_Details_Textual
Notes Payable (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jan. 23, 2013 | Jan. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jan. 30, 2013 | Sep. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Jan. 23, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Jul. 02, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
20100 Western Avenue [Member] | Carter Commerce Center [Member] | Carter Commerce Center [Member] | Carter Commerce Center [Member] | Transamerica Life Insurance Company [Member] | Transamerica Life Insurance Company [Member] | Transamerica Life Insurance Company [Member] | Transamerica Life Insurance Company [Member] | Transamerica Life Insurance Company [Member] | Transamerica Life Insurance Company [Member] | Wells Fargo Bank National Association [Member] | Wells Fargo Bank National Association [Member] | Wells Fargo Bank National Association [Member] | Wells Fargo Bank National Association [Member] | Wells Fargo Bank National Association [Member] | Wells Fargo Bank National Association [Member] | Wells Fargo Bank National Association [Member] | General Electric Capital Corporation Healthcare Properties [Member] | General Electric Capital Corporation Healthcare Properties [Member] | General Electric Capital Corporation Healthcare Properties [Member] | General Electric Capital Corporation Healthcare Properties [Member] | General Electric Capital Corporation Healthcare Properties [Member] | General Electric Capital Corporation Western Property [Member] | General Electric Capital Corporation Western Property [Member] | General Electric Capital Corporation Western Property [Member] | General Electric Capital Corporation Western Property [Member] | General Electric Capital Corporation Western Property [Member] | Private Bank And Trust Company [Member] | Private Bank And Trust Company [Member] | Private Bank And Trust Company [Member] | Private Bank And Trust Company [Member] | Private Bank And Trust Company [Member] | General Electric Capital Corporation Aledo Property [Member] | General Electric Capital Corporation Aledo Property [Member] | General Electric Capital Corporation Aledo Property [Member] | General Electric Capital Corporation Aledo Property [Member] | General Electric Capital Corporation Aledo Property [Member] | ||||||
Long-term Debt, Total | $41,500,000 | ' | $41,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Maturity Date, Description | ' | ' | 'mature between 2016 and 2018 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment Of Liabilities Associated With Real Estate Held For Sale | 12,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Issuance Cost | ' | ' | 800,000 | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of Financing Costs | 44,000 | 27,000 | 119,000 | 99,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Sale of Property Held-for-sale | ' | ' | ' | ' | ' | 17,600,000 | 1,700,000 | 1,700,000 | 25,100,000 | 6,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayments of Secured Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,300,000 | ' | ' | ' | ' | ' | 600,000 | ' | 600,000 | ' | 5,600,000 | ' | ' | ' | ' | ' | ' | ' | 8,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Secured Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | 0 | ' | 6,500,000 | ' | 0 | ' | ' | 0 | ' | 6,500,000 | 28,400,000 | ' | 28,400,000 | ' | 28,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Weighted Average Interest Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | ' | ' | 3.50% | ' | 3.70% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest Expense, Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 68,000 | 96,000 | 300,000 | 300,000 | ' | ' | 35,000 | ' | 59,000 | 100,000 | 200,000 | ' | 400,000 | 66,000 | 1,100,000 | 66,000 | ' | ' | 0 | 28,000 | 26,000 | 28,000 | ' | 93,000 | 0 | 245,000 | 0 | ' | 74,000 | 0 | 74,000 | 0 |
Debt Refinanced Expenses Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,300,000 | ' | ' | ' | ' | 5,900,000 | ' | ' | ' | ' |
Expected Additional Borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 900,000 | ' |
Debt Instrument, Description of Variable Rate Basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The PB Loan, which bears interest at one-month LIBOR (London Interbank Offer Rate) plus 4.00%, with a LIBOR floor of 1.00% or the Prime Rate plus 1.75%, with an all-in floor of 5.00%, | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Maturity Date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30-Jan-16 | ' | ' | ' | ' | 1-Jul-18 | ' | ' | ' | ' |
Mortgage Loan Amortization Period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '25 years | ' | ' | ' | ' | '25 years | ' | ' | ' | ' |
Debt Instrument, Interest Rate Terms | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The Aledo Loan, which bears interest for the first 12 months at 90-day LIBOR plus 4.50%, with a LIBOR floor of 0.50%, matures on July 1, 2018, at which time all outstanding principal, accrued and unpaid interest and any other amounts due under the Aledo Loan will become due. The Aledo Loan is interest only for the first 12 months of the loan, and amortizes over a 25 year period with a 6.00% fixed interest rate thereafter. | ' | ' | ' | ' |
Penalty paid for Prepayment of Debt | $400,000 | ' | ' | ' | ' | ' | ' | ' | ' | $400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Rental revenues, tenant reimbursements and other income | $1,729,000 | $334,000 | $4,603,000 | $361,000 |
Operating expenses and real estate taxes | -1,879,000 | -1,897,000 | -5,802,000 | -5,039,000 |
Depreciation and amortization | -627,000 | -130,000 | -1,709,000 | -130,000 |
Income (loss) from discontinued operations | -314,000 | -115,000 | -1,034,000 | 1,374,000 |
Discontinued Operations [Member] | ' | ' | ' | ' |
Rental revenues, tenant reimbursements and other income | 1,149,000 | 1,764,000 | 3,788,000 | 4,783,000 |
Operating expenses and real estate taxes | -2,054,000 | -1,256,000 | -4,291,000 | -3,854,000 |
Depreciation and amortization | -104,000 | -393,000 | -506,000 | -1,163,000 |
Impairment of real estate | 0 | 0 | -3,368,000 | -1,140,000 |
Gain on sales of real estate net | 1,323,000 | 0 | 5,411,000 | 0 |
Income (loss) from discontinued operations | $314,000 | $115,000 | $1,034,000 | ($1,374,000) |
Discontinued_Operations_Detail1
Discontinued Operations (Details 1) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 |
Other assets: | ' | ' | ' |
Tenant and other receivables, net | $1,020,000 | $512,000 | ' |
Leasing commissions, net | 1,753,000 | 1,340,000 | ' |
Other assets | 24,000 | 296,000 | ' |
Assets of variable interest entity held for sale: | ' | ' | ' |
Cash and cash equivalents | 17,161,000 | 999,000 | 4,789,000 |
Total assets | 84,076,000 | 93,992,000 | ' |
Liabilities | ' | ' | ' |
Accounts payable and accrued liabilities | 748,000 | 511,000 | ' |
Notes payable | 41,500,000 | 50,300,000 | ' |
Liabilities of variable interest entity held for sale | 52,000 | 22,762,000 | ' |
Discontinued Operations [Member] | ' | ' | ' |
Investments in real estate held for sale: | ' | ' | ' |
Land | 225,000 | 11,525,000 | ' |
Buildings and improvements, net | 307,000 | 31,406,000 | ' |
Intangible lease assets, net | 0 | 32,000 | ' |
Real estate held for sale, net | 532,000 | 42,963,000 | ' |
Other assets: | ' | ' | ' |
Tenant and other receivables, net | 14,000 | 672,000 | ' |
Leasing commissions, net | 1,000 | 481,000 | ' |
Other assets | 20,000 | 735,000 | ' |
Non-real estate assets associated with real estate held for sale | 35,000 | 1,888,000 | ' |
Assets of variable interest entity held for sale: | ' | ' | ' |
Cash and cash equivalents | 109,000 | 68,000 | ' |
Investments in real estate, net | 3,905,000 | 3,905,000 | ' |
Accounts receivable, inventory and other assets | 172,000 | 291,000 | ' |
Total assets | 4,186,000 | 4,264,000 | ' |
Liabilities | ' | ' | ' |
Accounts payable and accrued liabilities | 33,000 | 421,000 | ' |
Tenant security deposits | 19,000 | 497,000 | ' |
Notes payable | 0 | 21,844,000 | ' |
Intangible lease liabilities, net | 52,000 | 22,762,000 | ' |
Variable Interest Entity, Primary Beneficiary [Member] | ' | ' | ' |
Investments in real estate held for sale: | ' | ' | ' |
Land | 5,709,000 | 4,521,000 | ' |
Buildings and improvements, net | 36,944,000 | 23,093,000 | ' |
Intangible lease assets, net | 3,640,000 | 2,650,000 | ' |
Real estate held for sale, net | 56,758,000 | 39,800,000 | ' |
Liabilities | ' | ' | ' |
Loan payable | 41,534,000 | 28,450,000 | ' |
Variable Interest Entity, Primary Beneficiary [Member] | Discontinued Operations [Member] | ' | ' | ' |
Liabilities | ' | ' | ' |
Accounts payable and accrued liabilities | 508,000 | 454,000 | ' |
Tenant security deposits | 8,000 | 0 | ' |
Notes payable | 1,332,000 | 1,332,000 | ' |
Loan payable | 132,000 | 222,000 | ' |
Intangible lease liabilities, net | 145,000 | 145,000 | ' |
Interest payable | 430,000 | 299,000 | ' |
Liabilities of variable interest entity held for sale | $2,555,000 | $2,452,000 | ' |
Discontinued_Operations_Detail2
Discontinued Operations (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 6 Months Ended | 9 Months Ended | 3 Months Ended | 1 Months Ended | |||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Jan. 23, 2013 | Jan. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jan. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Mar. 31, 2012 | Jan. 23, 2013 | |
sqft | Unrelated third party [Member] | Ge Loan [Member] | Wells Fargo Bank National Association [Member] | Wells Fargo Bank National Association [Member] | Wells Fargo Bank National Association [Member] | Transamerica Life Insurance Company [Member] | Wells Fargo Bank And Transamerica Life Insurance Company [Member] | Carter Commerce Center [Member] | Carter Commerce Center [Member] | Carter Commerce Center [Member] | Marathon Center Property Buildings [Member] | Marathon Center Property Buildings [Member] | Santa Fe Property [Member] | Shoemaker Industrial Buildings One [Member] | Shoemaker Industrial Buildings Two [Member] | Sherburne Commons Property [Member] | 20100 Western Avenue [Member] | ||
sqft | sqft | Marathon Acquisitions LLC [Member] | Sulmor LLC [Member] | Unrelated third party [Member] | Unrelated third party [Member] | Unrelated third party [Member] | sqft | ||||||||||||
sqft | sqft | sqft | |||||||||||||||||
Proceeds from Sale of Property Held-for-sale | ' | $24 | ' | ' | ' | ' | ' | ' | $1.70 | $1.70 | $25.10 | $0.90 | $1.20 | $1.70 | $0.50 | $0.50 | ' | $17.60 | |
Repayments of Secured Debt | ' | ' | 8.9 | 0.6 | 0.6 | 5.6 | ' | 11.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Area of Real Estate Property | 207,412 | [1] | 526,694 | ' | ' | ' | ' | ' | ' | 49,125 | ' | ' | 25,117 | 26,903 | 12,200 | ' | ' | ' | 116,433 |
Impairment of Real Estate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.1 | ' | |
Penalty paid for Prepayment of Debt | $0.40 | ' | ' | ' | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
[1] | The above table excludes Sherburne Commons Residences, LLC (bSherburne Commonsb), a variable interest entity (bVIEb) for which we became the primary beneficiary and began consolidating its financial results as of June 30, 2011. As of October 19, 2011, Sherburne Commons was classified as held for sale (See Note 17). |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Net loss | ($387,000) | ($1,571,000) | ($1,649,000) | ($6,174,000) |
Interest income from notes receivable | -13,000 | -13,000 | -38,000 | -40,000 |
General and administrative | 694,000 | 757,000 | 2,552,000 | 2,489,000 |
Asset management fees and expenses | 271,000 | 240,000 | 865,000 | 662,000 |
Real estate acquisition costs | 121,000 | 737,000 | 257,000 | 737,000 |
Recovery of excess advisor obligation | -50,000 | 0 | -100,000 | 988,000 |
Depreciation and amortization | 627,000 | 130,000 | 1,709,000 | 130,000 |
Other/interest expense and income, net | 551,000 | 123,000 | 1,484,000 | 122,000 |
Loss (income) from discontinued operations | -314,000 | -115,000 | -1,034,000 | 1,374,000 |
Net operating income | $1,500,000 | $288,000 | $4,046,000 | $288,000 |
Subsequent_Events_Details_Text
Subsequent Events (Details Textual) (Subsequent Event [Member], USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Subsequent Event, Date | 28-Oct-13 |
Shoemaker Industrial Buildings [Member] | ' |
Proceeds From Sale Of Property Held-For-Sale | 0.6 |
Real Estate [Member] | ' |
Subsequent Event, Date | 4-Oct-13 |
Acquired Held For Sale Real Estate | 15.3 |
Payments to Acquire Held-for-sale Real Estate | 3.9 |
Real Estate Subsidiary Liabilities | 11.4 |
Carteret House [Member] | ' |
Real Estate Held-for-sale Number of Units | 32 |
Hamlet House [Member] | ' |
Real Estate Held-for-sale Number of Units | 40 |
Shelby House [Member] | ' |
Real Estate Held-for-sale Number of Units | 60 |