Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 01, 2013 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'CNL Healthcare Properties, Inc. | ' |
Entity Central Index Key | '0001496454 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 51,688,517 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Real estate assets: | ' | ' |
Real estate investment properties, net (including VIEs $50,788,543 and $0, respectively) | $505,141,168 | $230,410,959 |
Real estate under development, including land (including VIEs $26,818,643 and $8,399,079, respectively) | 27,521,700 | 8,461,571 |
Total real estate assets, net | 532,662,868 | 238,872,530 |
Cash (including VIEs $956,067 and $8,734, respectively) | 45,481,757 | 18,261,750 |
Intangibles, net (including VIEs $5,596,449 and $0, respectively) | 37,860,571 | 7,024,470 |
Deposits | 19,513,203 | 282,079 |
Investment in unconsolidated entities | 17,864,878 | 64,560,061 |
Loan costs, net (including VIEs $976,711 and $548,157, respectively) | 6,410,537 | 3,338,286 |
Other assets (including VIEs $11,131 and $230,536, respectively) | 4,688,231 | 3,984,849 |
Note receivable from related party | 2,699,604 | ' |
Deferred rent (including VIEs $33,650 and $0, respectively) | 2,245,915 | 843,370 |
Restricted cash (including VIEs $256,769 and $236,000, respectively) | 2,104,325 | 609,908 |
Total assets | 671,531,889 | 337,777,303 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' |
Mortgage and other notes payable (including VIEs $45,332,110 and $2,000, respectively) | 274,166,055 | 193,151,591 |
Other liabilities (including VIEs $954,508 and $0, respectively) | 6,637,195 | 158,801 |
Accounts payable and accrued expenses (including VIEs $565,307 and $7,702, respectively) | 5,515,773 | 2,215,224 |
Due to related parties (including VIEs $257,426 and $71,482, respectively) | 3,473,514 | 1,289,880 |
Accrued development costs (including VIEs $3,070,190 and $310,975) | 3,070,190 | 310,975 |
Total liabilities | 292,862,727 | 197,126,471 |
Commitments and contingencies (Note 15) | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, $0.01 par value per share, 200,000,000 shares authorized and unissued | ' | ' |
Excess shares, $0.01 par value per share, 300,000,000 shares authorized and unissued | ' | ' |
Common stock, $0.01 par value per share, 1,120,000,000 shares authorized; 48,104,751 and 18,447,553 shares issued and 47,970,049 and 18,446,504 shares outstanding as of September 30, 2013 and December 31, 2012, respectively | 479,703 | 184,467 |
Capital in excess of par value | 413,049,433 | 156,199,995 |
Accumulated loss | -21,423,965 | -12,480,338 |
Accumulated other comprehensive loss | -1,167,507 | ' |
Accumulated distributions | -12,268,502 | -3,253,292 |
Total stockholders' equity | 378,669,162 | 140,650,832 |
Total liabilities and stockholders' equity | $671,531,889 | $337,777,303 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Real estate investment properties, net | $505,141,168 | $230,410,959 |
Real estate under development, including land | 27,521,700 | 8,461,571 |
Cash | 45,481,757 | 18,261,750 |
Intangibles, net | 37,860,571 | 7,024,470 |
Loan costs, net | 6,410,537 | 3,338,286 |
Other assets | 4,688,231 | 3,984,849 |
Deferred rent | 2,245,915 | 843,370 |
Restricted cash | 2,104,325 | 609,908 |
Mortgage and other notes payable | 274,166,055 | 193,151,591 |
Other liabilities | 6,637,195 | 158,801 |
Accounts payable and accrued expenses | 5,515,773 | 2,215,224 |
Due to related parties | 3,473,514 | 1,289,880 |
Accrued development costs | 3,070,190 | 310,975 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 200,000,000 | 200,000,000 |
Preferred stock, shares unissued | 200,000,000 | 200,000,000 |
Excess shares, par value | $0.01 | $0.01 |
Excess shares, shares authorized | 300,000,000 | 300,000,000 |
Excess shares, shares unissued | 300,000,000 | 300,000,000 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 1,120,000,000 | 1,120,000,000 |
Common stock, shares issued | 48,104,751 | 18,447,553 |
Common stock, shares outstanding | 47,970,049 | 18,446,504 |
VIEs | ' | ' |
Real estate investment properties, net | 50,788,543 | 0 |
Real estate under development, including land | 26,818,643 | 8,399,079 |
Cash | 956,067 | 8,734 |
Intangibles, net | 5,596,449 | 0 |
Loan costs, net | 976,711 | 548,157 |
Other assets | 11,131 | 230,536 |
Deferred rent | 33,650 | 0 |
Restricted cash | 256,769 | 236,000 |
Mortgage and other notes payable | 45,332,110 | 2,000 |
Other liabilities | 954,508 | 0 |
Accounts payable and accrued expenses | 565,307 | 7,072 |
Due to related parties | 257,426 | 71,482 |
Accrued development costs | $3,070,190 | $310,975 |
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 income from operating leases | $7,250,314 | $1,922,674 | $14,803,521 | $4,786,656 |
Resident fees and services | 6,537,098 | ' | 15,382,193 | ' |
Tenant reimbursement income | 949,325 | ' | 959,799 | ' |
Interest income on note receivable from related party | 35,027 | ' | 37,391 | ' |
Total revenues | 14,771,764 | 1,922,674 | 31,182,904 | 4,786,656 |
Expenses: | ' | ' | ' | ' |
Property operating expenses | 5,501,425 | ' | 12,049,273 | ' |
General and administrative | 1,158,262 | 712,376 | 3,834,990 | 1,771,776 |
Acquisition fees and expenses | 6,694,011 | 73,526 | 9,638,318 | 2,048,710 |
Asset management fees | 1,207,931 | 532,839 | 2,794,585 | 813,006 |
Property management fees | 681,690 | 168,064 | 1,623,065 | 217,579 |
Depreciation and amortization | 4,565,651 | 628,321 | 9,448,020 | 1,470,400 |
Total expenses, net | 19,808,970 | 2,115,126 | 39,388,251 | 6,321,471 |
Operating loss | -5,037,206 | -192,452 | -8,205,347 | -1,534,815 |
Other income (expense): | ' | ' | ' | ' |
Interest and other income | 52,777 | 4,764 | 54,700 | 10,110 |
Interest expense and loan cost amortization | -2,091,292 | -2,406,386 | -7,005,886 | -3,835,147 |
Gain on sale of investment in unconsolidated entity | 4,486,200 | ' | 4,486,200 | ' |
Equity in earnings (loss) from unconsolidated entities | 284,644 | 307,291 | 1,744,779 | -466,337 |
Total other income (expense) | 2,732,329 | -2,094,331 | -720,207 | -4,291,374 |
Loss before income taxes | -2,304,877 | -2,286,783 | -8,925,554 | -5,826,189 |
Income tax expense | ' | ' | -18,073 | ' |
Net loss | ($2,304,877) | ($2,286,783) | ($8,943,627) | ($5,826,189) |
Net loss per share of common stock (basic and diluted) | ($0.05) | ($0.20) | ($0.28) | ($0.80) |
Weighted average number of shares of common stock outstanding (basic and diluted) | 42,444,117 | 11,264,844 | 32,243,492 | 7,293,075 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |||
Net loss | ($2,304,877) | ($2,286,783) | ($8,943,627) | ($5,826,189) | ||
Other comprehensive loss: | ' | ' | ' | ' | ||
Unrealized loss on derivative financial instrument, net | -1,298,261 | [1] | ' | -1,167,507 | [1] | ' |
Total other comprehensive loss | -1,298,261 | ' | -1,167,507 | ' | ||
Comprehensive loss | ($3,603,138) | ($2,286,783) | ($10,111,134) | ($5,826,189) | ||
[1] | This amount includes the Company's share of an unconsolidated joint venture's unrealized gain (loss) of ($69,557) and $61,197, respectively, for the quarter and nine months ended September 30, 2013. |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Capital in Excess of Par Value | Accumulated Loss | Accumulated Distributions | Accumulated Other Comprehensive Loss |
Beginning Balance at Dec. 31, 2011 | $9,702,387 | $13,576 | $11,504,283 | ($1,759,580) | ($55,892) | ' |
Beginning Balance (in shares) at Dec. 31, 2011 | ' | 1,357,572 | ' | ' | ' | ' |
Stock issues (in shares) | ' | 16,850,196 | ' | ' | ' | ' |
Stock issues | 168,266,307 | 168,503 | 168,097,804 | ' | ' | ' |
Stock distributions | ' | 2,398 | -2,398 | ' | ' | ' |
Stock distributions, shares | ' | 239,785 | ' | ' | ' | ' |
Redemption of common stock | -10,474 | -10 | -10,464 | ' | ' | ' |
Redemption of common stock, shares | ' | -1,049 | ' | ' | ' | ' |
Stock issuance and offering costs | -23,389,230 | ' | -23,389,230 | ' | ' | ' |
Net loss | -10,720,758 | ' | ' | -10,720,758 | ' | ' |
Cash distributions, declared and paid or reinvested ($0.29997 per share) | -3,197,400 | ' | ' | ' | -3,197,400 | ' |
Ending Balance at Dec. 31, 2012 | 140,650,832 | 184,467 | 156,199,995 | -12,480,338 | -3,253,292 | ' |
Ending Balance (in shares) at Dec. 31, 2012 | 18,446,504 | 18,446,504 | ' | ' | ' | ' |
Stock issues (in shares) | ' | 28,923,500 | ' | ' | ' | ' |
Stock issues | 288,699,252 | 289,235 | 288,410,017 | ' | ' | ' |
Stock distributions | ' | 6,762 | -6,762 | ' | ' | ' |
Stock distributions, shares | ' | 676,174 | ' | ' | ' | ' |
Redemption of common stock | -705,341 | -761 | -704,580 | ' | ' | ' |
Redemption of common stock, shares | ' | -76,129 | ' | ' | ' | ' |
Stock issuance and offering costs | -30,849,237 | ' | -30,849,237 | ' | ' | ' |
Net loss | -8,943,627 | ' | ' | -8,943,627 | ' | ' |
Other comprehensive loss | -1,167,507 | ' | ' | ' | ' | -1,167,507 |
Cash distributions, declared and paid or reinvested ($0.29997 per share) | -9,015,210 | ' | ' | ' | -9,015,210 | ' |
Ending Balance at Sep. 30, 2013 | $378,669,162 | $479,703 | $413,049,433 | ($21,423,965) | ($12,268,502) | ($1,167,507) |
Ending Balance (in shares) at Sep. 30, 2013 | 47,970,049 | 47,970,049 | ' | ' | ' | ' |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Cash distributions, declared and paid per share | $0.30 | $0.40 |
CONDENSED_CONSOLIDATED_STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | ||
Operating activities: | ' | ' | |
Net cash flows provided by (used in) operating activities | $3,282,058 | ($2,370,488) | |
Investing activities: | ' | ' | |
Acquisition of properties | -311,437,080 | -83,650,000 | |
Development of properties | -16,168,518 | -3,699,867 | |
Investment in unconsolidated entities | -12,174,496 | -64,991,372 | |
Proceeds from sale of investment in unconsolidated entity | 61,760,820 | ' | |
Changes in restricted cash | -1,236,991 | -827,283 | |
Capital expenditures | -180,404 | ' | |
Deposits on real estate | -14,070,188 | -120,000 | |
Issuance of note receivable to related party | -2,647,455 | ' | |
Other | -12,128 | -9,087 | |
Net cash flows used in investing activities | -296,166,440 | -153,297,609 | |
Financing activities: | ' | ' | |
Subscriptions received for common stock through public offering | 283,892,651 | 111,441,860 | |
Payment of stock issuance costs | -30,607,249 | -16,205,969 | |
Distributions to stockholders, net of distribution reinvestments | -4,208,609 | -790,622 | |
Redemption of common stock | -423,784 | -10,474 | |
Proceeds from mortgage notes payable | 197,580,455 | 166,592,000 | |
Principal payment on mortgage notes payable | -116,565,991 | -71,400,000 | |
Lender deposits | -5,261,320 | -601,910 | |
Payment of loan costs | -4,301,764 | -4,149,794 | |
Net cash flows provided by financing activities | 320,104,389 | 184,875,091 | |
Net increase in cash | 27,220,007 | 29,206,994 | |
Cash at beginning of period | 18,261,750 | 10,001,872 | |
Cash at end of period | 45,481,757 | 39,208,866 | |
Amounts incurred but not paid (including amounts due to related parties): | ' | ' | |
Stock issuance and offering costs | 837,445 | 587,661 | |
Loan costs | 262,665 | 70,658 | |
Accrued development costs | 3,070,190 | 203,307 | |
Redemptions payable | 281,557 | ' | |
Construction management fee | 224,416 | 117,935 | |
Stock distributions (at par) | 6,762 | 1,308 | |
Contingent purchase consideration | 507,000 | ' | |
Loan cost amortization capitalized on development properties | 172,479 | 10,842 | |
Unrealized loss on derivative financial instrument, net | $1,167,507 | [1] | ' |
[1] | This amount includes the Company's share of an unconsolidated joint venture's unrealized gain (loss) of ($69,557) and $61,197, respectively, for the quarter and nine months ended September 30, 2013. |
Organization
Organization | 9 Months Ended | |
Sep. 30, 2013 | ||
Organization | ' | |
1 | Organization | |
CNL Healthcare Properties, Inc. (the “Company”) is a Maryland corporation incorporated on June 8, 2010 that elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes for the year ended December 31, 2012. | ||
The Company is externally managed and advised by CNL Healthcare Corp., (the “Advisor”), a Florida corporation. The Advisor is responsible for managing the Company’s day-to-day affairs and for identifying and making acquisitions and investments on its behalf. The Company has also retained CNL Healthcare Manager Corp., (the “Property Manager”) to manage its properties under a six year property management agreement. | ||
On June 27, 2011, the Company commenced its initial public offering of up to $3.0 billion of shares of common stock (the “Offering”), including shares being offered from its distribution reinvestment plan (the “Reinvestment Plan”), pursuant to a registration statement on Form S-11 under the Securities Act of 1933. The shares are being offered at $10.00 per share, or $9.50 per share pursuant to the Reinvestment Plan, unless changed by the board of directors. The Company plans to extend the Offering through June 27, 2014. In certain cases, the current Offering could be extended by an additional 180 days. | ||
The Company’s investment focus is on acquiring a diversified portfolio of healthcare real estate or real estate-related assets, primarily in the United States, within the senior housing, medical facilities and post-acute care asset classes. The types of senior housing that the Company may acquire include active adult communities (age-restricted and age-targeted housing), independent and assisted living facilities, continuing care retirement communities, and memory care facilities. The types of medical facilities that the Company may acquire include medical office buildings, specialty medical and diagnostic service providers, and specialty hospitals. The types of post-acute care assets that the Company may acquire include skilled nursing facilities, long-term acute care hospitals and inpatient rehabilitative facilities. The Company views, manages and evaluates its portfolio homogeneously as one collection of healthcare assets with a common goal to maximize revenues and property income regardless of the asset class or asset type. | ||
The Company primarily expects to lease its properties to third-party tenants under triple-net or similar lease structures, where the tenant bears all or substantially all of the costs (including cost increases, for real estate taxes, utilities, insurance and ordinary repairs); however, the Company is committed to investing the proceeds of its Offering through other strategic investment types aimed to maximize stockholder value by generating sustainable cash flow growth and increasing the value of our healthcare assets. Accordingly, the Company may lease to wholly-owned taxable REIT subsidiaries (“TRS”) and engage independent third-party managers under management agreements to operate the properties as permitted under applicable tax regulations. In addition, the Company intends to continue investing in development opportunities within the healthcare industry and some of the Company’s investments may be in partnership with other entities that offer complimentary expertise or unique development opportunities within the healthcare industry. Finally, the Company also may invest in and originate mortgage, bridge or mezzanine loans or in entities that make investments similar to the foregoing investment types. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |
Sep. 30, 2013 | ||
Summary of Significant Accounting Policies | ' | |
2 | Summary of Significant Accounting Policies | |
Basis of Presentation and Consolidation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are necessary for the fair statement of the Company’s results for the interim period presented. Operating results for the quarter or nine months ended September 30, 2013 may not be indicative of the results that may be expected for the year ending December 31, 2013. Amounts as of December 31, 2012 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. | ||
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. | ||
Reclassifications — Certain prior period amounts in the unaudited condensed consolidated financial statements have been reclassified to conform to the current period presentation with no effect on previously reported total assets and total liabilities, net loss or stockholders’ equity. | ||
Derivative Financial Instruments — The Company and certain unconsolidated equity method investments held by the Company use derivative financial instruments to partially offset the effect of fluctuating interest rates on the cash flows associated with its variable-rate debt. Upon entry into a derivative, the Company or its unconsolidated equity method investment formally designates and documents the financial instrument as a hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transaction. The Company or its unconsolidated equity method investment accounts for derivatives through the use of a fair value concept whereby the derivative positions are stated at fair value in the accompanying condensed consolidated balance sheets. The fair value of derivatives used to hedge or modify risk fluctuates over time. As such, the fair value amounts should not be viewed in isolation, but rather in relation to the cash flows or fair value of the underlying hedged transaction and to the overall reduction in the exposure relating to adverse fluctuations in interest rates on the Company’s or its unconsolidated equity method investment’s variable-rate debt. | ||
Realized and unrealized gain (loss) on derivative financial instruments designated by either the Company or its unconsolidated equity method investment as cash flow hedges are reported as a component of other comprehensive income (loss), a component of stockholders’ equity, in the accompanying condensed consolidated statements of comprehensive income (loss) to the extent they are effective; reclassified into earnings on the same line item associated with the hedged transaction and in the same period the hedged transaction affects earnings. Any ineffective portions of cash flow hedges are reported in the accompanying condensed consolidated statements of operations as derivative gain (loss). Realized and unrealized gain (loss) on derivative financial instruments designated as cash flow hedges that are entered into by the Company’s equity method investments are reported as a component of the Company’s other comprehensive income (loss) in proportion to the Company’s ownership percentage in the investment, with reclassifications and ineffective portions being included in equity in earnings (loss) of unconsolidated entities in the accompanying condensed consolidated statements of operations. | ||
Shares Based Payments to Non-Employees — In connection with the advisor expense support and restricted stock agreement (the “Advisor Expense Support Agreement”) and the property manager expense support and restricted stock agreement (the “Property Manager Expense Support Agreement”) described in Note 9, “Related Party Arrangements,” (hereinafter collectively referred to as the “Expense Support Agreements”), the Company may issue subordinated forfeitable restricted stock (“Restricted Stock”) to the Advisor or the Property Manager on a quarterly basis in exchange for providing expense support in the event that cash distributions declared exceed modified funds from operations as defined by the Expense Support Agreements. | ||
The Restricted Stock is forfeited if shareholders do not ultimately receive their original invested capital back with at least a 6% annualized return of investment upon a future liquidity event of the Company. Upon issuance of Restricted Stock, the Company measures the fair value at its then-current lowest aggregate fair value pursuant to ASC 505-50. On the date in which the Advisor or the Property Manager satisfies the vesting criteria, the Company remeasures the fair value of the Restricted Stock pursuant to ASC 505-50 and records expense equal to the difference between the original fair value and that of the remeasurement date. In addition, given that performance is outside the control of the Advisor or the Property Manager and involves both market conditions and counterparty performance conditions, the shares are treated as unissued for accounting purposes and the Company only includes the Restricted Stock in the calculation of diluted earnings per share to the extent their effect is dilutive and the vesting conditions have been satisfied as of the reporting date. | ||
Pursuant to the Expense Support Agreements, the Advisor or the Property Manager shall be the record owner of the Restricted Stock until the shares of common stock are sold or otherwise disposed of, and shall be entitled to all of the rights of a stockholder of the Company including, without limitation, the right to vote such shares (to the extent permitted by the Articles) and receive all dividends and other distributions paid with respect to such shares. All dividends or other distributions actually paid to the Advisor or the Property Manager in connection with the Restricted Stock shall vest immediately and will not be subject to forfeiture. The Company recognizes expense related to the dividends on the Restricted Stock shares as declared. | ||
Notes Receivable — The Company evaluates impairment on its notes receivable on an individual loan basis which includes, current information and events, periodic visits and quarterly discussions on the financial results of the properties being collateralized and the financial stability of the borrowers. The Company reviews each loan to determine the risk of loss and whether the individual loan is impaired and whether an allowance is necessary. The value credit quality of the Company’s borrowers is primarily based on their payment history on an individual loan basis, as such, the Company does not assign its notes receivable in credit quality categories. | ||
Adopted Accounting Pronouncements — In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (AOCI).” This update clarified the guidance in subtopic 220 and requires preparers to report, in one place, information about reclassifications out of AOCI. The ASU also requires companies to report changes in AOCI balances. Effective January 1, 2013, the Company adopted this ASU. The adoption of this update did not have a material impact on the Company’s financial position, results of operations or cash flows. | ||
In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (Topic 210).” This ASU also serves to amend the disclosure requirements in FASB ASU 815, “Derivatives and Hedging.” This ASU will require companies to provide both net amounts (those that are offset) and gross information (as if amounts are not offset) in notes to the financial statements. In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”, that clarifies which instruments and transactions are subject to the offsetting disclosure requirement within the scope of ASU 2011-11. This ASU is effective for interim and annual periods beginning on or after January 1, 2013. The adoption of this ASU did not have a material effect on the Company’s financial statements and disclosures. | ||
In December 2011, the FASB issued ASU No. 2011-10, “Property, Plant, and Equipment (Topic 360): Derecognition of in Substance Real Estate — a Scope Clarification.” This update clarified the guidance in subtopic 360-20 as it applies to the derecognition of in substance real estate when the parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate because of a default by the subsidiary on its nonrecourse debt. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. The Company has determined that the impact of this update will not have a material impact on the Company’s financial position, results of operations or cash flows. | ||
Recent Accounting Pronouncements — In February 2013, the FASB issued ASU No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.” This update clarified the guidance in subtopic 405 and requires entities to measure obligations resulting from joint and several liability arrangements for which total obligation is fixed at the reporting date. Entities are required to measure the obligation as the amount that the reporting entity agreed to pay on the basis of its arrangement among its co-obligors plus any additional amount the reporting entity expects to pay on behalf of its co-obligors. Additionally, the guidance requires entities to disclose the nature and amount of the obligations as well as other information about those obligations. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2013 for public entities. The Company has determined that the impact of this update will not have a material impact on the Company’s financial position, results of operations or cash flows. | ||
In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a similar Tax Loss, or a Tax Credit Carryforward Exists.” This update clarified the guidance in subtopic 740 and requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward to the extent one is available. The unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2013 for public entities. The Company has determined that the impact of this update will not have a material impact on the Company’s financial position, results of operations or cash flows. |
Acquisitions
Acquisitions | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Acquisitions | ' | ||||||||||||||||
3 | Acquisitions | ||||||||||||||||
Real Estate Investment Properties — During the nine months ended September 30, 2013, the Company acquired the following 24 properties, which were comprised of six skilled nursing facilities (“SNFs”), thirteen medical office buildings (“MOBs”), four senior housing communities and a specialty hospital: | |||||||||||||||||
Property/Description | Structure | Asset Type | Location | Date of | Allocated | ||||||||||||
Acquisition | Purchase Price | ||||||||||||||||
Perennial Communities (“Perennial SNFs”) | |||||||||||||||||
Batesville Healthcare Center | Triple-net Lease | Skilled Nursing | Batesville, AR | 5/31/13 | $ | 6,205,650 | |||||||||||
Broadway Healthcare Center | Triple-net Lease | Skilled Nursing | West Memphis, AR | 5/31/13 | 11,798,650 | ||||||||||||
Jonesboro Healthcare Center | Triple-net Lease | Skilled Nursing | Jonesboro, AR | 5/31/13 | 15,232,050 | ||||||||||||
Magnolia Healthcare Center | Triple-net Lease | Skilled Nursing | Magnolia, AR | 5/31/13 | 11,847,150 | ||||||||||||
Mine Creek Healthcare Center | Triple-net Lease | Skilled Nursing | Nashville, AR | 5/31/13 | 3,373,500 | ||||||||||||
Searcy Healthcare Center | Triple-net Lease | Skilled Nursing | Searcy, AR | 5/31/13 | 7,898,100 | ||||||||||||
LaPorte Cancer Center | Modified Lease | Medical Office | Westville, IN | 6/14/13 | 13,100,000 | ||||||||||||
Knoxville Medical Office Buildings (“Knoxville MOBs”) | |||||||||||||||||
Physicians Plaza A at North Knoxville Medical Center | Modified Lease | Medical Office | Powell, TN | 7/10/13 | 18,124,216 | ||||||||||||
Physicians Plaza B at North Knoxville Medical Center | Modified Lease | Medical Office | Powell, TN | 7/10/13 | 21,799,989 | ||||||||||||
Jefferson Medical Commons | Modified Lease | Medical Office | Jefferson City, TN | 7/10/13 | 11,615,715 | ||||||||||||
Physicians Regional Medical Center - Central Wing Annex | Modified Lease | Medical Office | Knoxville, TN | 7/10/13 | 5,775,000 | ||||||||||||
HarborChase of Jasper | Managed | Senior Housing | Jasper, AL | 8/1/13 | 7,300,000 | ||||||||||||
Medical Portfolio I Properties (“Medical Portfolio I”) | |||||||||||||||||
Doctors Specialty Hospital | Modified Lease | Specialty Hospital | Leawood, KS | 8/16/13 | 10,003,322 | ||||||||||||
John C. Lincoln Medical Office Plaza I | Modified Lease | Medical Office | Phoenix, AZ | 8/16/13 | 4,420,069 | ||||||||||||
John C. Lincoln Medical Office Plaza II | Modified Lease | Medical Office | Phoenix, AZ | 8/16/13 | 3,105,510 | ||||||||||||
North Mountain Medical Plaza | Modified Lease | Medical Office | Phoenix, AZ | 8/16/13 | 6,185,478 | ||||||||||||
Escondido Medical Arts Center | Modified Lease | Medical Office | Escondido, CA | 8/16/13 | 15,602,187 | ||||||||||||
Chestnut Commons Medical Office Building | Modified Lease | Medical Office | Elyria, OH | 8/16/13 | 20,711,800 | ||||||||||||
South Bay Senior Housing Communities (“South Bay Communities”) | |||||||||||||||||
The Club at Raider Ranch | Managed | Senior Housing | Lubbock, TX | 8/29/13 | $ | 30,000,000 | |||||||||||
The Isle at Raider Ranch | Managed | Senior Housing | Lubbock, TX | 8/29/13 | 25,000,000 | ||||||||||||
Town Village | Managed | Senior Housing | Oklahoma City, OK | 8/29/13 | 22,500,000 | ||||||||||||
Property/Description | Structure | Asset Type | Location | Date of | Allocated | ||||||||||||
Acquisition | Purchase Price | ||||||||||||||||
Calvert Medical Office Buildings (“Calvert MOBs”) | |||||||||||||||||
Calvert Medical Office Building I, II, III | Modified Lease | Medical Office | Prince Frederick, MD | 8/30/13 | $ | 16,409,035 | |||||||||||
Calvert Medical Arts Center | Modified Lease | Medical Office | Prince Frederick, MD | 8/30/13 | 19,319,840 | ||||||||||||
Dunkirk Medical Center | Modified Lease | Medical Office | Dunkirk, MD | 8/30/13 | 4,616,819 | ||||||||||||
$ | 311,944,080 | ||||||||||||||||
During the nine months ended September 30, 2012, the Company acquired the following five senior housing communities: | |||||||||||||||||
Primrose Retirement Communities (“Primrose I Communities”) | |||||||||||||||||
Primrose Retirement Community of Casper | Triple-net Lease | Senior Housing | Casper, WY | 2/16/12 | $ | 18,839,437 | |||||||||||
Primrose Retirement Community of Grand Island | Triple-net Lease | Senior Housing | Grand Island, NE | 2/16/12 | 13,272,744 | ||||||||||||
Primrose Retirement Community of Mansfield | Triple-net Lease | Senior Housing | Mansfield, OH | 2/16/12 | 17,993,233 | ||||||||||||
Primrose Retirement Community of Marion | Triple-net Lease | Senior Housing | Marion, OH | 2/16/12 | 17,691,462 | ||||||||||||
Sweetwater Retirement Community | Triple-net Lease | Senior Housing | Billings, MT | 2/16/12 | 16,253,124 | ||||||||||||
$ | 84,050,000 | ||||||||||||||||
The following summarizes the allocation of the purchase price for the above properties, and the estimated fair values of the assets acquired as of September 30, 2013 and 2012: | |||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Land and land improvements | $ | 13,086,233 | $ | 5,746,081 | |||||||||||||
Buildings and building improvements | 263,516,143 | 75,680,273 | |||||||||||||||
Furniture, fixtures and equipment | 5,134,500 | 933,313 | |||||||||||||||
Intangibles (1) | 33,137,867 | 1,690,333 | |||||||||||||||
Other liabilities | (2,930,663 | ) | — | ||||||||||||||
$ | 311,944,080 | $ | 84,050,000 | ||||||||||||||
FOOTNOTES: | |||||||||||||||||
-1 | At the acquisition date, the weighted-average amortization period on the acquired lease intangibles was approximately 6.5 years and 10 years, respectively. | ||||||||||||||||
The revenues and net losses (including deductions for acquisition fees and expenses and depreciation and amortization expense) attributable to the properties included in the Company’s condensed consolidated statements of operations were approximately $5.9 million and $(2.3) million and $6.5 million and $(3.9) million, respectively, for the quarter and nine months ended September 30, 2013; and approximately $1.9 million and $0.1 million and $4.8 million and $1.7 million, respectively, for the quarter and nine months ended September 30, 2012. | |||||||||||||||||
For the nine months ended September 30, 2013, the Company paid to the Advisor approximately $5.8 million of investment service fees and acquisition expenses related to the acquisitions of the properties presented above. | |||||||||||||||||
In conjunction with the acquisition of Medical Portfolio I, the Company entered into an earn-out agreement with the seller related to Cleveland Clinic, the tenant at Chestnut Commons Medical Office Building, whereby the tenant maintains an exercisable right to expand the leased space by an additional 10,000 square feet within 24 months of the property acquisition closing. The earn-out fee will be equal to (a) the base rent due for the first full year of the lease applicable to the expansion space divided by 8% minus (b) the costs incurred by the Company in connection with the exercise by Cleveland Clinic of its option for the expansion space, including tenant improvement costs, multiplied by 50%. As of the acquisition date and September 30, 2013, approximately $0.5 million of the purchase price includes to this contingent purchase consideration. | |||||||||||||||||
The following table presents the unaudited pro forma results of operations for the Company assuming each of the 2013 acquisitions noted above were acquired as of January 1, 2012 and that the 2012 acquisitions noted above were acquired as of January 1, 2011 for purposes of presenting the quarter and nine months ended September 30, 2013 and 2012: | |||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||
Quarter ended September 30, | Nine months ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenues | $ | 20,685,312 | $ | 12,371,075 | $ | 55,564,451 | $ | 35,307,044 | |||||||||
Net income (loss) (1) | $ | 4,983,508 | $ | (1,534,838 | ) | $ | 865,830 | $ | (10,583,942 | ) | |||||||
Income (loss) per share of common stock (basic and diluted) | $ | 0.1 | $ | (0.05 | ) | $ | 0.02 | $ | (0.39 | ) | |||||||
Weighted average number of shares of common stock outstanding (basic and diluted) (2) | 47,824,875 | 31,393,424 | 46,181,390 | 27,421,655 | |||||||||||||
FOOTNOTES: | |||||||||||||||||
-1 | The pro forma results for the quarter and nine months ended September 30, 2013, were adjusted to exclude approximately $8.3 million of acquisition fees and related expenses directly attributable to the acquisition of the 21 properties and were included in the condensed consolidated statement of operations for the nine months ended September 30, 2013. The pro forma results for the quarter and nine months ended September 30, 2012 were adjusted to include these charges as if the properties had been acquired on January 1, 2012. | ||||||||||||||||
-2 | As a result of the properties being treated as operational since January 1, 2012, the Company assumed approximately 20.1 million shares were issued as of January 1, 2012. Consequently the weighted average shares outstanding was adjusted to reflect this amount of shares being issued on January 1, 2012 instead of actual dates on which the shares were issued, and such shares were treated as outstanding as of the beginning of the period presented. | ||||||||||||||||
Real Estate Under Development — In August 2013, the Company acquired a fee simple interest in a 20-acre tract of land adjacent to the South Bay Communities in Lubbock, Texas for $3.0 million. In connection with the acquisition, the Company entered into a development agreement with a third party consisting of three potential development phases. The first phase of development is comprised of a maximum development budget of approximately $12.1 million, including the allocated purchase price of the land for the first phase of approximately $1.1 million, for the construction and development of an additional 30 independent living apartment units and 20 independent living villas on the Raider Ranch campus (“Raider Ranch Phase One Development”). The targeted construction completion date and initial occupancy for the Raider Ranch Phase One Development is scheduled for the first quarter of 2015. The remaining two phases of development are at the option of the Company; however, as of September 30, 2013, no formal undertakings have commenced with regards to these additional development phases. | |||||||||||||||||
Under a promoted interest agreement with the developer, certain net operating income targets have been established which, upon meeting such targets, result in the developer being entitled to additional payments based on enumerated percentages of the internal rate of return on the Company’s investment in the Raider Ranch Phase One Development. | |||||||||||||||||
As of September 30, 2013, the Company paid to the Advisor approximately $0.1 million of investment service fees and acquisition expenses related to the Raider Ranch Phase One Development, which have been capitalized and included in real estate under development. |
Real_Estate_Investment_Propert
Real Estate Investment Properties, net | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Real Estate Investment Properties, net | ' | ||||||||
4 | Real Estate Investment Properties, net | ||||||||
The gross carrying amount and accumulated depreciation of the Company’s real estate assets as of September 30, 2013 and December 31, 2012 are as follows: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Land and land improvements | $ | 29,265,006 | $ | 16,162,081 | |||||
Building and building improvements | 474,842,935 | 211,321,273 | |||||||
Furniture, fixtures and equipment | 10,181,405 | 4,887,313 | |||||||
Less: accumulated depreciation | (9,148,178 | ) | (1,959,708 | ) | |||||
Real estate investment properties, net | 505,141,168 | 230,410,959 | |||||||
Real estate under development, including land | 27,521,700 | 8,461,571 | |||||||
Total real estate assets, net | $ | 532,662,868 | $ | 238,872,530 | |||||
Depreciation expense on the Company’s real estate investment properties, net was approximately $3.2 million and $7.2 million for the quarter and nine months ended September 30, 2013, respectively; and approximately $0.6 million and $1.4 million for the quarter and nine months ended September 30, 2012, respectively. |
Intangibles
Intangibles | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Intangibles | ' | ||||||||
5 | Intangibles | ||||||||
The gross carrying amount and accumulated amortization of the Company’s intangible assets and liabilities as of September 30, 2013 and December 31, 2012 are as follows: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
In-place lease intangibles | $ | 33,021,427 | $ | 7,165,333 | |||||
Above-market lease intangibles | 3,157,400 | — | |||||||
Below-market ground lease intangibles | 4,153,300 | — | |||||||
Less: accumulated amortization | (2,471,556 | ) | (140,863 | ) | |||||
Intangible assets, net | $ | 37,860,571 | $ | 7,024,470 | |||||
Below-market lease intangibles | $ | 2,613,700 | $ | — | |||||
Above-market ground lease intangibles | 317,000 | — | |||||||
Less: accumulated amortization | (67,530 | ) | — | ||||||
Intangible liabilities, net | $ | 2,863,170 | $ | — | |||||
Amortization expense on the Company’s intangible assets was approximately $1.4 million and $2.4 million for the quarter and nine months ended September 30, 2013, of which approximately $0.05 million and $0.05 million, respectively, were treated as a reduction of rental income from operating leases, approximately $0.01 million and $0.01 million, respectively, were treated as a increase of property operating expenses and approximately $1.3 million and $2.3 million, respectively, were included in depreciation and amortization. Amortization expense on the Company’s intangible assets was approximately $0.04 million and $0.1 million for the quarter and nine months ended September 30, 2012, respectively, which was all included in depreciation and amortization. | |||||||||
Amortization expense on the Company’s intangible liabilities was approximately $0.07 million and $0.07 million for the quarter and nine months ended September 30, 2013, of which approximately $0.07 million and $0.07 million, respectively, were treated as an increase of rental income from operating leases and approximately $0.001 million and $0.001 million, respectively, were treated as a reduction of property operating expenses. There was no amortization expense on the Company’s intangible liabilities for the quarter and nine months ended September 30, 2012, respectively. | |||||||||
The estimated future amortization on the Company’s intangible assets and liabilities for the remainder of 2013, each of the next four years and thereafter, in the aggregate, as of September 30, 2013 is as follows: | |||||||||
Assets | Liabilities | ||||||||
2013 | $ | 2,192,947 | $ | 148,089 | |||||
2014 | 9,008,231 | 1,338,505 | |||||||
2015 | 7,281,595 | 387,891 | |||||||
2016 | 4,148,314 | 328,624 | |||||||
2017 | 2,918,697 | 220,009 | |||||||
Thereafter | 12,310,787 | 440,052 | |||||||
$ | 37,860,571 | $ | 2,863,170 | ||||||
Operating_Leases
Operating Leases | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Operating Leases | ' | ||||
6 | Operating Leases | ||||
As further described in Note 3, “Acquisitions,” during the nine months ended September 30, 2013, the Company acquired nine single-tenant properties that are 100% leased under operating leases and comprised of six SNFs, two MOBs and one specialty hospital. In addition, the Company acquired 11 MOBs that are leased under operating leases to multiple tenants with overall occupancy rates ranging between 93% and 100% as of the date of acquisition. | |||||
The Perennial SNFs are operated by a subsidiary of Arkansas SNF Operations Acquisition III, LLC (“Arkansas SNF”) under triple-net lease agreements having an initial term of ten years, with two five-year renewal options. In the initial year, the aggregate minimum annual rent for the Perennial SNFs is approximately $5.54 million, and the average effective annual rental per usable bed is approximately $7,100. Annual base rent is equal to the SNFs’ lease basis multiplied by the initial lease rate of 9.75% and will escalate thereafter pursuant to the lease agreements. Annual capital reserve income is paid to the Company based on approximately $500 per bed each year. | |||||
The LaPorte Cancer Center is leased to Michiana Hematology Oncology, P.C., the largest independent oncology practice in Indiana, under a 20-year triple-net lease, which will expire on October 31, 2030, with current annual base rent of approximately $1.04 million. Holladay Properties, an unaffiliated party, manages the building under a property management agreement having an initial term of two years, with automatic renewals of one year each unless terminated by either party. | |||||
The Knoxville MOBs are located on three hospital campuses of the Tennova Healthcare System, a subsidiary of Health Management Associates (“HMA”), and are 99.7% leased under 31 non-cancelable leases with expirations ranging from 2013 through 2021, subject to additional renewal periods at the tenant’s option. The Knoxville MOBs are leased under modified lease agreements with current aggregate annual base rents of approximately $4.2 million. The Knoxville MOBs are managed by N.T. Brinkman, an unaffiliated party, under a property management agreement having an initial term of five years with automatic renewals of one year each unless terminated earlier by either party. | |||||
The Medical Portfolio I is 92.3% leased under 35 non-cancelable leases with expirations on these leases ranging from 2013 through 2023. The portfolio consists of five MOBs and one specialty hospital operated under modified leases of which the majority have multiple tenants with varying levels of occupancy and current aggregate annual base rents of approximately $1.9 million; whereas, Doctors Specialty Hospital and Chestnut Commons Medical Office Building are leased to single tenants and have current aggregate annual base rents of approximately $0.9 million and $1.3 million, respectively. Four of the MOBs and the specialty hospital are managed by Holladay Properties under a property management agreement having an initial term of one year, with automatic renewals of one year each unless terminated by either party and the sixth MOB, Escondido Medical Arts Center, is managed by Lincoln Harris, an unaffiliated party, under a property management agreement having an initial term of three years, with automatic renewals of one year each unless terminated by either party. | |||||
The Calvert MOBs are 99.5% leased and represent a mix of either on-campus or hub-and-spoke medical facilities for the Calvert Memorial Health System. While the Calvert MOBs have multiple tenants, the majority of the leases are held by affiliates of the Calvert Memorial Health System with expirations ranging from 2013 to 2023. In addition, the Calvert MOBs have current aggregate annual base rents of approximately $3.1 million and are managed by Holladay Properties under a property management agreement having an initial term of one year, with automatic renewals of one year each unless terminated by either party | |||||
Under the terms of the aforementioned triple-net lease agreements, each tenant is responsible for the payment of property taxes, general liability insurance, utilities, repairs and maintenance, including structural and roof expenses. Each tenant is expected to pay real estate taxes directly to taxing authorities. However, if the tenant does not pay, the Company will be liable. The total annualized property tax assessed on these newly acquired properties as of September 30, 2013 was approximately $0.1 million. | |||||
Under the terms of the aforementioned medical facility lease agreements with third-party property managers, each tenant is responsible for the payment of their proportionate share of property taxes, general liability insurance, utilities, repairs and maintenance to common areas. The total annualized property tax assessed on these newly acquired properties as of September 30, 2013 was approximately $1.2 million. | |||||
As of September 30, 2013, the Company owned 30 real estate investment properties that were 97.4% leased under operating leases. The following is a schedule of future minimum lease payments to be received under non-cancellable operating leases for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of September 30, 2013: | |||||
2013 | $ | 14,972,273 | |||
2014 | 32,721,378 | ||||
2015 | 32,118,820 | ||||
2016 | 31,090,705 | ||||
2017 | 31,026,864 | ||||
Thereafter | 154,289,216 | ||||
$ | 296,219,256 | ||||
Unconsolidated_Entities
Unconsolidated Entities | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Unconsolidated Entities | ' | ||||||||||||||||
7 | Unconsolidated Entities | ||||||||||||||||
In January 2013, the Company acquired a 90% membership interest in a two-story MOB in Claremont, California with a total net rentable area of 48,984 square feet for approximately $7.0 million in equity through a joint venture (“Montecito Joint Venture”) formed by the Company and its co-venture partner, an unrelated party, that holds the remaining 10% interest. Under the terms of the venture agreement, operating cash flows will be distributed to the Company and its co-venture partner on a pro rata basis. The Company accounts for this investment under the equity method of accounting because the decisions that significantly impact the entity are shared between the Company and its co-venture partner. The total acquisition price for the MOB was approximately $19.8 million. | |||||||||||||||||
The Montecito Joint Venture obtained a five-year credit facility for a maximum aggregate principal amount of $35 million, of which $12.5 million was funded in connection with the acquisition of the MOB and an additional $0.4 million was funded upon completion of certain tenant improvements. The non-recourse loan which is collateralized by the property and future properties that may be funded under the facility matures in January 2018 and bears interest at a rate equal to the sum of LIBOR plus 2.6% per annum, payable monthly. The loan requires interest-only payments on the outstanding principal amount through July 2014 and monthly payments thereafter of principal and interest based upon a 360-month amortization schedule. In addition, the Montecito Joint Venture entered into a three-year forward starting swap with a notional amount of $12.4 million related to the credit facility balance which will bear interest at a fixed rate of 3.935% in years three through five. Refer to Note 11, “Derivative Financial Instruments” for additional information. | |||||||||||||||||
In April 2013, the Company, through its Windsor Manor joint venture, acquired a 75% membership interest in two additional senior housing properties located in Iowa collectively valued at approximately $12.2 million (the “Windsor Manor II Communities”). The Windsor Manor II Communities feature 82 living units comprised of 62 assisted living units and 20 memory care units. In connection with the acquisition, the Windsor Manor joint venture assumed two non-recourse loans encumbering the Windsor Manor II Communities with total outstanding principal balances of approximately $6.0 million. The Company accounts for this investment under the equity method of accounting because the decisions that significantly impact the entity are shared between the Company and its co-venture partner. | |||||||||||||||||
For the nine months ended September 30, 2013, the Company capitalized approximately $0.5 million of investment service fees and acquisition expenses related to the Company’s investment in the Montecito and Windsor Manor joint ventures. The acquisition fees and expenses create an outside basis difference that are allocated to the assets of the investee and, if assigned to depreciable or amortizable assets, the basis differences are then amortized as a component of equity in earnings (loss) of unconsolidated entities. | |||||||||||||||||
On July 1, 2013, pursuant to a purchase and sale agreement dated December 18, 2012, between CHTSunIV and HCN, the Company completed the sale of its joint venture membership interest for a sales price of approximately $61.8 million, net of transaction costs, which reflects an aggregate gain of approximately $4.5 million that is recorded as a gain on sale of investment in unconsolidated entity in the accompanying condensed statement of operations for the quarter and nine months ended September 30, 2013. | |||||||||||||||||
The following table presents condensed financial information for each of the Company’s unconsolidated entities as of and for the quarter and nine months ended September 30, 2013: | |||||||||||||||||
For the quarter ended September 30, 2013 | |||||||||||||||||
Montecito | CHTSunIV (4) | Windsor | Total | ||||||||||||||
Manor | |||||||||||||||||
Revenues | $ | 446,182 | $ | — | $ | 2,042,711 | $ | 2,488,893 | |||||||||
Operating income (loss) (3) | $ | 121,612 | $ | — | $ | (24,120 | ) | $ | 97,492 | ||||||||
Net income (loss) | $ | 20,439 | $ | — | $ | (250,682 | ) | $ | (230,243 | ) | |||||||
Income (loss) allocable to other venture partners (1) | $ | 2,046 | $ | — | $ | (522,993 | ) | $ | (520,947 | ) | |||||||
Income allocable to the Company (1) | $ | 18,394 | $ | — | $ | 272,310 | $ | 290,704 | |||||||||
Amortization of capitalized acquisition costs | (2,072 | ) | — | (3,988 | ) | (6,060 | ) | ||||||||||
Equity in earnings of unconsolidated entities | $ | 16,322 | $ | — | $ | 268,322 | $ | 284,644 | |||||||||
Distributions declared to the Company | $ | 356,346 | $ | — | $ | 106,802 | $ | 463,148 | |||||||||
Distributions received by the Company | $ | 342,158 | $ | 1,503,781 | $ | — | $ | 1,845,939 | |||||||||
For the nine months ended September 30, 2013 | |||||||||||||||||
Montecito (2) | CHTSunIV (4) | Windsor | Total | ||||||||||||||
Manor (2) | |||||||||||||||||
Revenues | $ | 1,254,923 | $ | 24,107,268 | $ | 5,325,932 | $ | 30,688,122 | |||||||||
Operating income (loss) (3) | $ | 66,487 | $ | 7,483,713 | $ | (18,317 | ) | $ | 7,531,883 | ||||||||
Net loss | $ | (218,120 | ) | $ | (46,380 | ) | $ | (742,697 | ) | $ | (1,007,197 | ) | |||||
Loss allocable to other venture partners (1) | $ | (21,811 | ) | $ | (1,365,855 | ) | $ | (1,417,407 | ) | $ | (2,805,073 | ) | |||||
Income (loss) allocable to the Company (1) | $ | (196,309 | ) | $ | 1,319,475 | $ | 674,710 | $ | 1,797,876 | ||||||||
Amortization of capitalized acquisition costs | (5,885 | ) | (36,347 | ) | (10,865 | ) | (53,097 | ) | |||||||||
Equity in earnings (loss) of unconsolidated entities | $ | (202,194 | ) | $ | 1,283,128 | $ | 663,845 | $ | 1,744,779 | ||||||||
Distributions declared to the Company | $ | 698,504 | $ | 2,990,282 | $ | 287,198 | $ | 3,975,984 | |||||||||
Distributions received by the Company | $ | 342,158 | $ | 4,458,420 | $ | 223,985 | $ | 5,024,563 | |||||||||
FOOTNOTES: | |||||||||||||||||
-1 | Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting. | ||||||||||||||||
-2 | Represents operating results from the date of acquisition through the end of the periods presented. | ||||||||||||||||
-3 | Includes approximately $0.3 and $0.2 million of non-recurring acquisition expenses incurred by Montecito and Windsor Manor for the nine months ended September 30, 2013. | ||||||||||||||||
-4 | In July 2013, the Company completed the sale of its joint venture membership interest in CHTSunIV. | ||||||||||||||||
The following tables present financial information for the Company’s unconsolidated entities as of and for the quarter and nine months ended September 30, 2012: | |||||||||||||||||
For the quarter ended September 30, 2012 | |||||||||||||||||
CHTSunIV | Windsor Manor | Total | |||||||||||||||
Revenues | $ | 12,085,124 | $ | 410,111 | $ | 12,495,235 | |||||||||||
Operating income | $ | 2,510,655 | $ | 38,454 | $ | 2,549,109 | |||||||||||
Net loss | $ | (730,229 | ) | $ | (20,462 | ) | $ | (750,691 | ) | ||||||||
Loss allocable to other venture partners (1) | $ | (1,010,480 | ) | $ | (66,576 | ) | $ | (1,077,056 | ) | ||||||||
Income allocable to the Company (1) | $ | 280,251 | $ | 46,114 | $ | 326,365 | |||||||||||
Amortization of capitalized acquisition costs | (18,174 | ) | (900 | ) | (19,074 | ) | |||||||||||
Equity in earnings of unconsolidated entities | $ | 262,077 | $ | 45,214 | $ | 307,291 | |||||||||||
Distributions declared to the Company | $ | 1,516,247 | $ | — | $ | 1,516,247 | |||||||||||
Distributions received by the Company | $ | — | $ | — | $ | — | |||||||||||
For the nine months ended September 30, 2012 | |||||||||||||||||
CHTSunIV (2) | Windsor Manor (2) | Total | |||||||||||||||
Revenues | $ | 12,085,124 | $ | 410,111 | $ | 12,495,235 | |||||||||||
Operating income | $ | 1,138,020 | $ | 38,454 | $ | 1,176,474 | |||||||||||
Net loss | $ | (2,164,165 | ) | $ | (20,462 | ) | $ | (2,184,627 | ) | ||||||||
Loss allocable to other venture partners (1) | $ | (1,670,788 | ) | $ | (66,576 | ) | $ | (1,737,364 | ) | ||||||||
Income (loss) allocable to the Company (1) | $ | (493,377 | ) | $ | 46,114 | $ | (447,263 | ) | |||||||||
Amortization of capitalized acquisition costs | (18,174 | ) | (900 | ) | (19,074 | ) | |||||||||||
Equity in earnings (loss) of unconsolidated entities | $ | (511,551 | ) | $ | 45,214 | $ | (466,337 | ) | |||||||||
Distributions declared to the Company | $ | 1,550,440 | $ | — | $ | 1,550,440 | |||||||||||
Distributions received by the Company | $ | — | $ | — | $ | — | |||||||||||
FOOTNOTE: | |||||||||||||||||
-1 | Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting. | ||||||||||||||||
-2 | Represents operating results from the date of acquisition through the end of the periods presented. | ||||||||||||||||
Indebtedness
Indebtedness | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Indebtedness | ' | ||||
8 | Indebtedness | ||||
In March 2013, the Company extinguished the outstanding balance of $40 million of its mezzanine loan prior to its scheduled expiration. In connection therewith, the Company wrote-off approximately $0.2 million in unamortized loan costs as interest expense and loss on the early extinguishment of debt. In addition, the Company paid an exit fee of $0.8 million or 2.0% upon extinguishment of the CHTSunIV mezzanine loan. Both the unamortized loan costs and the exit fee are included in interest expense and loan cost amortization in the accompanying condensed consolidated statement of operations for the nine months ended September 30, 2013. | |||||
During the nine months ended September 30, 2013, the Company repaid approximately $75 million (including $25.3 million that was re-advanced in March 2013 pursuant to a loan modification) on the Primrose II bridge loan of which approximately $23.5 million was funded with permanent financing obtained during the period. | |||||
In May 2013, the Company obtained long-term financing for two of the five Primrose II Communities located in Decatur, Illinois and Zanesville, Ohio. Each of these properties entered into a combined loan and security agreement with an aggregate original principal amount of approximately $23.5 million (collectively, the “Primrose II Loans”). The Company has guaranteed the Primrose II Loans pursuant to standard non-recourse carve-out guarantees. Interest on the outstanding principal balance of the Primrose II Loans accrues at a fixed rate of 3.81% per annum. Beginning on July 1, 2013, the Primrose II Loans are payable in equal monthly installments of principal and interest based on a 30-year amortization schedule, with all outstanding principal, plus all accrued and unpaid interest, due and payable on June 1, 2020. | |||||
In May 2013, in connection with the Perennial SNFs acquisition, the Company entered into a secured non-recourse loan agreement for a three-year term loan in the aggregate principal amount of $30.0 million (the “Perennial Loan”). The Perennial Loan matures on May 31, 2016 and may be prepaid in whole or in part without penalty except for any breakage costs. Interest on the outstanding principal balance of the Perennial Loan accrues at a rate equal to the London Interbank Offered Rate (“LIBOR”) plus 4.25%. In addition to each monthly interest payment, the Company is required to make monthly principal payments commencing May 10, 2015 through the maturity date in an amount sufficient to amortize the loan on a 30-year schedule at a per annum rate of 6%. | |||||
In June 2013, in connection with the LaPorte Cancer Center acquisition, the Company entered into a non-recourse loan agreement for $8.5 million, which matures on June 14, 2028 (“LaPorte Loan”). The LaPorte Loan bears interest at a rate of 4.25% for the first seven years and, thereafter, at a rate subject to changes in an independent index which is the weekly average yield on the 7-year International SWAPs and Derivatives Association mid-market par SWAP rates. | |||||
In July 2013, the Company entered into a secured non-recourse loan agreement providing for a five-year credit facility in the maximum aggregate principal amount of approximately $38.6 million of which approximately $35.4 million was funded in connection with the acquisition of the Knoxville MOBs while the remaining $3.2 million was funded in August 2013 upon receipt of a satisfactory appraisal and satisfaction of certain other required conditions, including an overall loan to value ratio of not more than 67% (the “Knoxville MOBs Loan”). The Knoxville MOBs Loan bears interest at a rate equal to the sum of LIBOR plus 2.50%, with monthly payments of interest only for the first 18 months of the term of the Knoxville MOBs Loan, and monthly payments of interest and principal for the remaining 42 months of the term of the Knoxville MOBs Loan based on a 30-year amortization schedule. In September 2013, the Company entered into an interest rate swap agreement referred to in Note 11, “Derivative Financial Instruments.” | |||||
In August 2013, the Company entered into a secured non-recourse credit agreement for a revolving line of credit facility (“CHP Credit Facility”). The CHP Credit Facility provides for a revolving line of credit in an initial aggregate principal amount of $120 million, which includes a $10 million sub-facility for stand-by letters of credit and a $10 million sub-facility for swing-line advances for intermittent borrowings, with the availability to increase the amount of such revolving line of credit facility to a maximum outstanding aggregate principal amount of $325 million. The CHP Credit Facility has an initial term of three years, with one 12-month extension option available upon payment of an extension fee equal to 0.25% of the then-outstanding principal amount of the credit facility. The Company will make monthly payments based on fluctuating LIBOR rates between 2.25% and 3.25% and base rates of 1.25% to 2.25% based on the Company’s loan to value ratio. As of September 30, 2013, the properties of Primrose Retirement Community of Council Bluffs, Primrose Retirement Community of Lima, HarborChase of Jasper, Town Village and The Club at Raider Ranch have been posted as collateral to provide for a borrowing capacity of approximately $54.8 million. | |||||
As of September 30, 2013, the Company had not drawn any of the funds available on the CHP Credit Facility. | |||||
In August 2013, in connection with our acquisition of the Medical Portfolio I, the Company entered into a secured non-recourse loan agreement for a three-year term loan with an aggregate principal amount outstanding equal to $35.7 million (“Medical Portfolio I Loan”). The Medical Portfolio I Loan is scheduled to mature in September 2016, but includes two, one-year extension options upon the Company’s request and is subject to an extension fee equal to 0.25% of the then-outstanding principal amount. Interest on the outstanding principal balance of each Medical Portfolio I Loan accrues equal to LIBOR plus 2.65% with monthly payments of principal and interest based on a 30-year amortization schedule. | |||||
In August 2013, the Company entered into a secured non-recourse credit agreement for a five-year term loan in the maximum aggregate principal amount of $29.4 million (“Calvert MOBs Loan”), of which approximately $26.3 million was funded in connection with the acquisition of the Calvert MOBs. The remaining $3.1 million of the Calvert MOBs loan agreement is available in the event the Solomons Island MOB is acquired and added to the collateral under the Calvert MOBs Loan. The Calvert MOBs Loan bears interest at a rate equal to the sum of LIBOR plus 2.50%, with monthly payments of interest only for the first 18 months and monthly payments of interest and principal for the remaining 42 months based on a 30-year amortization schedule. In September 2013, the Company entered into an interest rate swap agreement referred to in Note 11, “Derivative Financial Instruments.” | |||||
As of September 30, 2013, the Company’s loans require it to meet certain customary financial covenants and ratios including limitations on incurrence of additional indebtedness, minimum occupancy at the properties, debt service coverage and minimum tangible net worth with which the Company was in compliance. | |||||
Maturities of indebtedness for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of September 30, 2013 are as follows: | |||||
2013 | $ | 936,551 | |||
2014 | 3,546,209 | ||||
2015 | 5,870,476 | ||||
2016 | 68,529,420 | ||||
2017 | 14,179,983 | ||||
Thereafter | 181,103,416 | ||||
$ | 274,166,055 | ||||
The fair value and carrying value of mortgage and other notes payable were approximately $269.9 million and $274.2 million as of September 30, 2013, respectively, and both were approximately $193.2 million as of December 31, 2012 based on then-current rates and spreads the Company would expect to obtain for similar borrowings. Since this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair values related to the Company’s mortgage notes payable is categorized as level 3 on the three-level fair value hierarchy. The estimated fair value of accounts payable and accrued expenses approximates the carrying value as of September 30, 2013 and December 31, 2012 because of the relatively short maturities of the obligations. | |||||
Related_Party_Arrangements
Related Party Arrangements | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Related Party Arrangements | ' | ||||||||||||||||
9 | Related Party Arrangements | ||||||||||||||||
In March 2013, the Company’s board of directors approved an amendment to the advisory agreement with the Advisor that will provide for payments of asset management fees based on a percentage of the average real estate values as defined in the agreement rather than amounts as of the end of the preceding month. | |||||||||||||||||
In March 2013, the Company entered into the Advisor Expense Support Agreement pursuant to which the Advisor has agreed to accept certain payments in the form of forfeitable restricted common stock of the Company in lieu of cash for asset management fees and specified expenses owed by the Company to the Advisor under the advisory agreement. The term of the Advisor Expense Support Agreement runs from April 1, 2013 until December 31, 2013, subject to the right of the Advisor to terminate the Advisor Expense Support Agreement upon 30 days’ written notice to the Company. In November 2013, the Advisor elected to extend the Advisor Expense Support Agreement through December 31, 2014, refer to Note 17, “Subsequent Events,” for further information. | |||||||||||||||||
Commencing on April 1, 2013, the Advisor shall provide expense support to the Company through forgoing the payment of fees in cash and acceptance of restricted stock for services rendered and specified expenses incurred in an amount equal to the positive excess, if any, of (a) aggregate stockholder cash distributions declared for the applicable quarter, over (b) the Company’s aggregate modified funds from operations (as defined in the Advisor Expense Support Agreement). The Advisor expense support amount shall be determined for each calendar quarter of the Company, on a non-cumulative basis, with each such quarter-end date (“Determination Date”). | |||||||||||||||||
In August 2013, the Company entered into the Property Manager Expense Support Agreement pursuant to which the Property Manager has agreed to accept certain payments in the form of forfeitable restricted common stock of the Company in lieu of cash for property management services owed by the Company to the Property Manager under the property management and leasing agreement. The term of the Property Manager Expense Support Agreement runs from July 1, 2013 until December 31, 2013, subject to the right of the Property Manager to terminate the Property Manager Expense Support Agreement upon 30 days’ written notice to the Company. In November 2013, the Property Manager elected to extend the Property Manager Expense Support Agreement through December 31, 2014, refer to Note 17, “Subsequent Events,” for further information. | |||||||||||||||||
Commencing on July 1, 2013, the Property Manager has provided expense support to the Company through forgoing the payment of fees in cash and acceptance of restricted stock for services in an amount equal to the positive excess, if any, of (a) aggregate stockholder cash distributions declared for the applicable quarter, over (b) the Company’s aggregate modified funds from operations (as defined in the Property Manager Expense Support Agreement). The Property Manager expense support amount shall be determined, on a non-cumulative basis, after the calculation of the Advisor expense support amount pursuant to the Property Manager Expense Support Agreement on each Determination Date. | |||||||||||||||||
In exchange for services rendered and in consideration of the expense support provided, the Company shall issue, within 45 days following each Determination Date, a number of shares of restricted stock equal to the quotient of the expense support amount provided by to the Advisor and Property Manager for the preceding quarter divided by the then-current public offering price per share of common stock, on the terms and conditions and subject to the restrictions set forth in the Expense Support Agreements. Any amounts deferred, and for which restricted stock shares are issued, pursuant to the Expense Support Agreements will be permanently waived and the Company will have no obligation to pay such amounts to the Advisor or the Property Manager. The restricted stock is subordinated and forfeited to the extent that shareholders do not receive their original invested capital back with at least a 6% annualized return of investment upon ultimate liquidity of the company. Refer to Note 2, “Summary of Significant Accounting Policies” for treatment of issued restricted stock. | |||||||||||||||||
For the nine months ended September 30, 2013, approximately $0.5 million in asset management fees and specified expenses were forgone in accordance with the terms of the Advisor Expense Support Agreement. The Company’s aggregate modified funds from operations exceeded cash distributions for the quarter ended September 30, 2013 and accordingly no asset management fees and specified expenses were foregone for the quarter ended September 30, 2013. As of September 30, 2013, the Advisor had foregone a total of approximately $0.5 million in asset management fees and specified expenses under the terms of the Advisor Expense Support Agreement and the Company had issued approximately 0.05 million Restricted Stock shares to the Advisor related to three months ended June 30, 2013. | |||||||||||||||||
As of September 30, 2013, the Advisor had received approximately $1,600 and 118 shares in the form of cash and stock distributions, respectively, related to previously issued Restricted Stock shares for which approximately $1,700 of expense for the quarter and nine months ended September 30, 2013 has been recognized and included in general and administrative expense in the accompanying condensed consolidated statements of operations. | |||||||||||||||||
As noted above, the Company’s modified funds from operations exceeded cash distributions for the quarter ended September 30, 2013 and accordingly no property management fees and specified expenses were forgone for the quarter ended September 30, 2013. As of September 30, 2013, no Restricted Stock shares had been issued to the Property Manager nor was the Property Manager entitled to any dividends during the quarter and nine months ended September 30, 2013. | |||||||||||||||||
For the quarter and nine months ended September 30, 2013 and 2012, the Company incurred the following fees in connection with its Offering: | |||||||||||||||||
Quarter ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Selling commissions | $ | 3,248,049 | $ | 1,498,058 | $ | 7,165,482 | $ | 5,930,241 | |||||||||
Marketing support fees | 3,252,102 | 1,280,117 | 8,462,553 | 3,320,785 | |||||||||||||
Total offering expenses | $ | 6,500,151 | $ | 2,778,175 | $ | 15,628,035 | $ | 9,251,026 | |||||||||
For the quarter and nine months ended September 30, 2013 and 2012, the Company incurred the following fees and reimbursable expenses as follows: | |||||||||||||||||
Quarter ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Reimbursable expenses: | |||||||||||||||||
Offering costs | $ | 691,480 | $ | 2,173,419 | $ | 2,713,627 | $ | 5,600,764 | |||||||||
Operating expenses | 764,340 | 401,745 | 2,112,608 | 1,225,788 | |||||||||||||
$ | 1,455,820 | $ | 2,575,164 | $ | 4,826,235 | $ | 6,826,552 | ||||||||||
Investment services fees (1) | $ | 4,583,697 | $ | 592,326 | $ | 6,449,978 | $ | 4,448,561 | |||||||||
Disposition fee | 607,718 | — | 607,718 | — | |||||||||||||
Financing coordination fee | — | 551,910 | — | 551,910 | |||||||||||||
Property management fees (2) | 295,514 | 277,498 | 879,281 | 327,013 | |||||||||||||
Asset management fees (3) | 1,263,824 | 534,631 | 2,897,641 | 814,797 | |||||||||||||
Total reimbursable expenses, net | $ | 6,750,753 | $ | 1,956,365 | $ | 10,834,618 | $ | 6,142,281 | |||||||||
FOOTNOTES: | |||||||||||||||||
(1) | For the quarter and nine months ended September 30, 2013, the Company incurred approximately $4.6 million and $6.4 million, respectively, in investment service fees of which approximately $0.5 million was capitalized as part of its investment basis in the Montecito Joint Venture and the additional Windsor Manor II Communities for the nine months ended September 30, 2013. For the quarter and nine months ended September 30, 2012, the Company incurred approximately $0.6 million and $4.4 million, respectively, in investment services fees of which approximately $0.3 million and $2.6 million, respectively, were capitalized and included in investments in unconsolidated entities and properties held for development. | ||||||||||||||||
(2) | For the quarter and nine months ended September 30, 2013, the Company incurred approximately $0.3 million and $0.9 million, respectively, in property and construction management fees, of which approximately $0.07 million and $0.2 million, respectively, in construction management fees have been capitalized and included in real estate under development. For the quarter and nine months ended September 30, 2012, the Company incurred approximately $0.1 million in construction management fees which were capitalized and included in real estate under development. | ||||||||||||||||
(3) | For the quarter and nine months ended September 30, 2013, the Company incurred approximately $1.3 million and $2.9 million in asset management fees and specified expenses, which was net of approximately $0.5 million in asset management fees that were forgone in accordance with the terms of the Advisor Expense Support Agreement for the nine months ended September 30, 2013. For the quarter and nine months ended September 30, 2013, the Company capitalized approximately $0.2 million and $0.2 million, respectively, in asset management fees which have been included in real estate under development. There were no asset management fees forgone or capitalized for the quarter and nine months ended September 30, 2012. | ||||||||||||||||
Amounts due to related parties for fees and reimbursable costs and expenses were as follows as of: | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Due to managing dealer: | |||||||||||||||||
Selling commissions | $ | 343,501 | $ | 102,656 | |||||||||||||
Marketing support fees | 256,573 | 136,337 | |||||||||||||||
600,074 | 238,993 | ||||||||||||||||
Due to property manager: | |||||||||||||||||
Property management fees | 235,774 | 452,131 | |||||||||||||||
235,774 | 452,131 | ||||||||||||||||
Due to the Advisor, its affiliates and others: | |||||||||||||||||
Asset management fees | 1,263,824 | — | |||||||||||||||
Reimbursable operating expenses | 843,453 | 242,293 | |||||||||||||||
Reimbursable offering costs | 237,371 | 356,463 | |||||||||||||||
Interest reserve account and other advances | 293,018 | — | |||||||||||||||
2,637,666 | 598,756 | ||||||||||||||||
$ | 3,473,514 | $ | 1,289,880 | ||||||||||||||
The Company incurs operating expenses which, in general, are related to administration of the Company on an ongoing basis. Pursuant to the advisory agreement, the Advisor shall reimburse the Company the amount by which the total operating expenses paid or incurred by the Company exceed, in any four consecutive fiscal quarters (an “Expense Year”) commencing with the Expense Year ending June 30, 2013, the greater of 2% of average invested assets or 25% of net income (as defined in the advisory agreement) (the “Limitation”), unless a majority of the Company’s independent directors determines that such excess expenses are justified based on unusual and non-recurring factors (referred to as the “Expense Cap Test”). In performing the Expense Cap Test, the Company uses operating expenses on a GAAP basis after making adjustments for the benefit of expense support under the Expense Support Agreement. For the Expense Year ended September 30, 2013, the Company did not incur operating expenses in excess of the Limitation. | |||||||||||||||||
In June 2013, the Company originated an acquisition, development and construction loan in the amount of $6.2 million (“ADC Loan”) to C4 Development, LLC (“Crosland Southeast”), a related party by virtue of a family relationship between a principal of the borrower and the Company’s vice chairman who recused himself from review and approval of the investment, for the development of a 22,000 square foot MOB in Rutland, Virginia that will function as an out-patient emergency and imaging center and will be leased to Hospital Corporation of America (“HCA”). The triple-net lease with HCA is effective upon Crosland Southeast obtaining a certificate of occupancy and contains a 10 year initial term with four 5 year renewal options. As of September 30, 2013, approximately $2.5 million of the ADC Loan commitment had been funded of which approximately $1.8 million was used for the purchase of 2.8 acres of land (“HCA Rutland”) and approximately $0.7 million was used towards the development of the MOB. | |||||||||||||||||
Concurrent with the ADC Loan, the Company also entered into a right of first refusal to acquire the HCA Rutland property with a one year term from the earlier of (a) the maturity date of the ADC Loan or (b) the date that the ADC Loan is paid in full. Based on review and assessment of the transaction structure, the Company has determined that it holds a variable interest in Crosland Southeast through the ADC Loan; however, the Company further concluded that it is not the primary beneficiary of the HCA Rutland development as the Company does not have the power to direct the activities that most significantly impact economic performance of either Crosland Southeast or the HCA Rutland development. The Company’s maximum exposure to loss as a result of its involvement with this VIE is limited to the amounts funded under the ADC Loan, which totaled approximately $2.5 million as of September 30, 2013. The Company’s exposure is limited as a result of the Company’s collateralized interest in the HCA Rutland development. | |||||||||||||||||
The approximate $2.5 million of funding on the ADC Loan has been recorded as a note receivable from related party in the accompanying condensed consolidated balance sheet as of September 30, 2013 and is comprised of the following: | |||||||||||||||||
Borrower (Description of Collateral Property) | Origination | Maturity | Interest | Loan Principal Balance as of | |||||||||||||
Date | Date (1) | Rate (2) | September 30, | December 31, | |||||||||||||
2013 | 2012 | ||||||||||||||||
Crosland Southeast (land development) | 6/27/13 | 6/27/14 | 16 | % | $ | 2,527,976 | $ | — | |||||||||
Loan origination costs | 119,479 | — | |||||||||||||||
Accrued interest (3) | 52,149 | — | |||||||||||||||
Total carrying amount | $ | 2,699,604 | $ | — | |||||||||||||
FOOTNOTES: | |||||||||||||||||
-1 | The initial term of the ADC Loan is one year with an extension option of up to six months. | ||||||||||||||||
-2 | The interest rate is comprised of an 8% component that is paid monthly and an 8% component that is paid upon maturity of the ADC Loan. | ||||||||||||||||
-3 | Approximately $0.01 million of accrued interest represents monthly interest payments and approximately $0.04 million represents amounts that are due at maturity. Accrued interest is included in interest income on note receivable from related party in the accompanying condensed statements of operations for the quarter and nine months ended September 30, 2013. | ||||||||||||||||
The fair value and carrying value of the Company’s note receivable from related party were approximately $2.7 million as of September 30, 2013 based on then-current rates and spreads that a market participant would expect to obtain for similar financings. Since this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair value related to the Company’s note receivable from related party is categorized as level 3 on the three-level fair value hierarchy. | |||||||||||||||||
The following is a schedule of future principal maturities for the note receivable from related party for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of September 30, 2013: | |||||||||||||||||
2013 | $ | — | |||||||||||||||
2014 | 2,527,976 | ||||||||||||||||
2015 | — | ||||||||||||||||
2016 | — | ||||||||||||||||
2017 | — | ||||||||||||||||
Thereafter | — | ||||||||||||||||
Total | $ | 2,527,976 | |||||||||||||||
In connection with the ADC Loan agreement, Crosland Southeast established an interest reserve account at a bank in which the Company’s chairman serves as a director, which as of September 30, 2013 was approximately $0.3 million. The purpose of the interest reserve account is to pay regular interest payments that will be due and payable under the ADC Loan. Moreover, Crosland Southeast will continue to make periodic payments to the interest reserve account to ensure sufficient funds to cover monthly interest payments coming due under the ADC Loan. In addition, the Company maintains other accounts at a bank in which the Company’s chairman serves as a director. The Company had total other deposits at that bank in the amount of approximately $0.4 million and $0.1 million as of September 30, 2013 and December 31, 2012, respectively. |
Ground_and_Air_Rights_Leases
Ground and Air Rights Leases | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Ground and Air Rights Leases | ' | ||||
10 | Ground and Air Rights Leases | ||||
During the quarter and nine months ended September 30, 2013, in conjunction with the Calvert MOBs and Knoxville MOBs detailed in Note 3. “Acquisitions,” the Company acquired interests in six ground and air rights leases. The Calvert and Knoxville MOBs ground and air rights leases represent operating leases with scheduled payments over the life of the respective leases. The Company incurred approximately $0.03 million in ground and air rights lease expense for the quarter and nine months ended September 30, 2013. | |||||
The following is a schedule of future minimum lease payments to be paid under the ground and air rights leases for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of June 30, 2013: | |||||
2013 | $ | 47,543 | |||
2014 | 191,460 | ||||
2015 | 194,078 | ||||
2016 | 196,774 | ||||
2017 | 199,551 | ||||
Thereafter | 21,255,613 | ||||
$ | 22,085,019 | ||||
Derivative_Financial_Instrumen
Derivative Financial Instruments | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||
Derivative Financial Instruments | ' | ||||||||||||||||||||||||||||
11 | Derivative Financial Instruments | ||||||||||||||||||||||||||||
In January 2013, the Company, through its Montecito Joint Venture, entered into a forward interest rate swap agreement to hedge interest rate exposure related to its variable-rate debt (“Montecito Swap”). The agreement requires the Montecito Joint Venture to pay a fixed amount based on a quoted interest rate of 1.335% from January 2015 through January 2018 based on aggregate notional values of approximately $12.4 million. The agreement further provides for the Company, through its Montecito Joint Venture, to receive a variable amount based on current LIBOR and the aforementioned notional values. | |||||||||||||||||||||||||||||
In September 2013, the Company entered into an interest rate swap agreement to hedge the interest rate exposure related to the variable-rate debt associated with the Knoxville MOB Loan (“Knoxville MOB Swap”). The agreement requires the Company to pay a fixed amount based on a quoted interest rate of 2.70% from August 2015 through July 2018 based on aggregate notional values of approximately $38.2 million. The agreement further provides for the Company to receive a variable amount based on current LIBOR and the aforementioned notional values. | |||||||||||||||||||||||||||||
In September 2013, the Company entered into an interest rate swap agreement to hedge the interest rate exposure related to the variable-rate debt associated with the Calvert MOB Loan (“Calvert MOB Swap”). The agreement requires the Company to pay a fixed amount based on a quoted interest rate of 2.78% from August 2015 through August 2018 based on aggregate notional values of approximately $26.0 million. The agreement further provides for the Company to receive a variable amount based on current LIBOR and the aforementioned notional values. | |||||||||||||||||||||||||||||
The following table summarizes the terms of the aforementioned swaps and the proportion of fair value relative to the Company’s ownership percentage that has been recorded as of September 30, 2013. Amounts related to the Montecito Swap are included in investments in unconsolidated entities in the accompanying condensed consolidated balance sheet as of September 30, 2013; whereas the Knoxville MOB Swap and Calvert MOB Swap are included in other liabilities in the accompanying condensed consolidated balance sheet as of September 30, 2013: | |||||||||||||||||||||||||||||
Derivative Financial Instrument | Notional | Fixed | Trade date | Maturity date | Fair value asset (liability) | ||||||||||||||||||||||||
amount | interest | ||||||||||||||||||||||||||||
rate (1) | September 30, | December 31, | |||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||
Montecito Swap | $ | 12,421,349 | 1.335 | % | January 17, 2013 | January 15, 2018 | $ | 61,197 | $ | — | |||||||||||||||||||
Knoxville MOB Swap | $ | 38,254,947 | 2.7 | % | September 6, 2013 | 10-Jul-18 | $ | (706,379 | ) | $ | — | ||||||||||||||||||
Calvert MOB Swap | $ | 26,066,971 | 2.78 | % | 6-Sep-13 | 29-Aug-18 | $ | (522,325 | ) | $ | — | ||||||||||||||||||
FOOTNOTES: | |||||||||||||||||||||||||||||
-1 | The all-in rates also include a credit spread of 2.6% for the Montecito Swap, 2.5% for the Knoxville MOB Swap and 2.5% the Calvert MOB Swap. | ||||||||||||||||||||||||||||
The Montecito Swap, Knoxville MOB Swap and Calvert MOB Swap are valued primarily based on inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, volatilities, and credit risks), and are classified as Level 2 in the fair value hierarchy. Determining fair value requires management to make certain estimates and judgments. Changes in assumptions could have a positive or negative impact on the estimated fair values of such instruments could, in turn, impact the Montecito Joint Venture’s or the Company’s results of operations. | |||||||||||||||||||||||||||||
The following table summarizes the gross and net amounts of the Company’s share of the aforementioned swaps as presented in the accompanying condensed consolidated balance sheet as of September 30, 2013: | |||||||||||||||||||||||||||||
Derivative Financial Instrument | Notional | Gross and net amounts of asset (liability) | Gross amounts in the | ||||||||||||||||||||||||||
amount | presented in the accompanying condensed | accompanying condensed consolidated | |||||||||||||||||||||||||||
consolidated balance sheet | balance sheet as of September 30, 2013 | ||||||||||||||||||||||||||||
as of September 30, 2013 | |||||||||||||||||||||||||||||
Gross | Offset | Net | Financial | Cash | Net | ||||||||||||||||||||||||
amount | amount | amount | Instruments | Collateral | Amount | ||||||||||||||||||||||||
Montecito Swap | $ | 12,421,349 | $ | 61,197 | $ | — | $ | 61,197 | $ | 61,197 | $ | — | $ | 61,197 | |||||||||||||||
Knoxville MOB Swap | $ | 38,254,947 | $ | (706,379 | ) | $ | — | $ | (706,379 | ) | $ | (706,379 | ) | $ | — | $ | (706,379 | ) | |||||||||||
Calvert MOB Swap | $ | 26,066,971 | $ | (522,325 | ) | $ | — | $ | (522,325 | ) | $ | (522,325 | ) | $ | — | $ | (522,325 | ) | |||||||||||
The Company, or its equity method investments, did not hold any derivative financial instruments as of December 31, 2012 or for the quarter or nine months ended September 30, 2012. |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||
Stockholders' Equity | ' | ||||||||||||||||||
12 | Stockholders’ Equity | ||||||||||||||||||
Public Offering — As of September 30, 2013 and December 31, 2012, the Company had received aggregate offering proceeds of approximately $469.7 million (48.0 million shares) and $181.6 million (18.5 million shares), respectively, including approximately $6.6 million (0.7 million shares) and $1.7 million (0.2 million shares), respectively, received through its distribution reinvestment plan. | |||||||||||||||||||
Distributions — During the nine months ended September 30, 2013 and 2012, the Company declared cash distributions of approximately $9.0 million and $1.7 million, respectively. In addition, the Company declared and made stock distributions of 676,174 and 130,842 shares of common stock for the nine months ended September 30, 2013 and 2012, respectively. | |||||||||||||||||||
For the nine months ended September 30, 2013, 100% of distributions were considered taxable for federal income tax purposes. For the nine months ended September 30, 2012, 100% of distributions were considered a return of capital. No amounts distributed to stockholders for the nine months ended September 30, 2013 were required to be or have been treated by the Company as a return of capital for purposes of calculating the stockholders’ return on their invested capital as described in the Company’s advisory agreement. The distribution of new common shares to recipients is non-taxable. | |||||||||||||||||||
Refer to Note 9, “Related Party Arrangements,” for information on distributions paid to the Advisor in connection with restricted stock shares received under the Advisor Expense Support Agreement during the nine months ended September 30, 2013. | |||||||||||||||||||
Redemptions — During the nine months ended September 30, 2013, the Company received requests for the redemption of an aggregate of 76,129 shares of common stock, respectively, all of which were approved for redemption at an average price of $9.27 and for a total of approximately $0.7 million, of which $0.3 million was paid in October 2013. Similarly, during the nine months ended September 30, 2012, the Company received requests for the redemption of an aggregate of 1,049 shares of common stock, respectively, all of which were approved for redemption at an average price of $9.99 per share for a total of approximately $0.01 million. | |||||||||||||||||||
Other comprehensive loss — The following table reflects the effect of derivative financial instruments held by Company, or its equity method investments, and included in the condensed consolidated statements of comprehensive loss for the quarters and nine months ended September 30, 2013 and 2012, respectively: | |||||||||||||||||||
Derivative Financial Instrument | Loss recognized in | Location of gain | Gain (loss) reclassified from | ||||||||||||||||
other comprehensive loss on | (loss) reclassified | AOCI into earnings | |||||||||||||||||
derivative financial instrument | into earnings | (Effective Portion) | |||||||||||||||||
(Effective Portion) | (Effective Portion) | ||||||||||||||||||
Quarter ended | Quarter ended | ||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Montecito Swap | $ | (69,557 | ) | $ | — | Not applicable | $ | — | $ | — | |||||||||
Knoxville MOB Swap | (706,379 | ) | — | Not applicable | — | — | |||||||||||||
Calvert MOB Swap | (522,325 | ) | — | Not applicable | — | — | |||||||||||||
Total | $ | (1,298,261 | ) | $ | — | $ | — | $ | — | ||||||||||
Derivative Financial Instrument | Gain (loss) recognized in | Location of gain | Gain (loss) reclassified from | ||||||||||||||||
other comprehensive | (loss) reclassified | AOCI into earnings | |||||||||||||||||
loss on derivative financial | into earnings | (Effective Portion) | |||||||||||||||||
instrument | (Effective Portion) | ||||||||||||||||||
(Effective Portion) | |||||||||||||||||||
Nine months ended | Nine months ended | ||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Montecito Swap | $ | 61,197 | $ | — | Not applicable | $ | — | $ | — | ||||||||||
Knoxville MOB Swap | (706,379 | ) | — | Not applicable | — | — | |||||||||||||
Calvert MOB Swap | (522,325 | ) | — | Not applicable | — | — | |||||||||||||
Total | $ | (1,167,507 | ) | $ | — | $ | — | $ | — | ||||||||||
Income_Taxes
Income Taxes | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Income Taxes | ' | ||||||||||||||||
13 | Income Taxes | ||||||||||||||||
The components of the income tax expense for the quarter and nine months ended September 30, 2013 are as follows: | |||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Current: | |||||||||||||||||
Federal | $ | — | $ | 13,312 | |||||||||||||
State | — | — | |||||||||||||||
Total current benefit | — | 13,312 | |||||||||||||||
Deferred: | |||||||||||||||||
Federal | — | (25,450 | ) | ||||||||||||||
State | — | (5,935 | ) | ||||||||||||||
Total deferred provision | — | (31,385 | ) | ||||||||||||||
Income tax expense | $ | — | $ | (18,073 | ) | ||||||||||||
The Company recorded a valuation allowance on the deferred tax asset related to its TRS where it was deemed more likely than not that future taxable income would not be sufficient to realize the related income tax benefits. | |||||||||||||||||
Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of September 30, 2013 are as follows: | |||||||||||||||||
Carryforwards of net operating loss | $ | 72,037 | |||||||||||||||
Prepaid rent | 279,496 | ||||||||||||||||
Valuation allowance | (351,533 | ) | |||||||||||||||
Net deferred tax assets | $ | — | |||||||||||||||
A reconciliation of taxes computed at the statutory federal tax rate on income before income taxes to the benefit (provision) for income taxes is as follows: | |||||||||||||||||
Nine months ended September 30, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Tax expense computed at federal statutory rate | $ | (3,130,269 | ) | (35.00 | %) | $ | (2,039,166 | ) | (35.00 | %) | |||||||
State income tax provision, net | (5,935 | ) | (0.07 | %) | — | 0 | % | ||||||||||
Benefit of REIT election | 3,118,131 | 34.86 | % | 2,039,166 | 35 | % | |||||||||||
Income tax benefit (provision) | $ | (18,073 | ) | (0.21 | %) | $ | — | 0 | % | ||||||||
The tax years 2010-2012 remain subject to examination by taxing authorities throughout the United States. The Company analyzed its material tax positions and determined that it has not taken any uncertain tax positions. |
Variable_Interest_Entities_VIE
Variable Interest Entities (VIEs) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Variable Interest Entities (VIEs) | ' | ||||||||
14 | Variable Interest Entities (VIEs) | ||||||||
Consolidated VIEs — In conjunction with the acquisition of the Perennial SNFs described in Note 3, “Acquisitions,” the Company acquired six wholly-owned subsidiaries, designed as single property entities to own and lease their respective properties to single tenant operators, of which three of the properties are VIEs due to potential future buy-out options held by the respective tenants that are formula based. Arkansas SNF has an option to purchase the Perennial SNFs that are located in Batesville, Mine Creek and Searcy, Arkansas, which is exercisable during the period from the end of the third year through the end of the fifth year of the related lease period. | |||||||||
In conjunction with the acquisition of the Knoxville MOBs described in Note 3, “Acquisitions,” the Company acquired four MOBs that are leased to multiple tenants and subject to either a ground lease or an air rights lease. The Company determined three of these MOBs to be VIEs due to buy-out and put options held by either the tenant or landlord under the applicable lease. In the case of certain leases within the Physicians Plaza B at North Knoxville Medical Center and Jefferson Medical Commons MOBs, the Company has the option to put the leased unit back to the tenant in the event the tenant does not renew the leases through a specified date based on calculation criteria established in the respective lease. In the case of the air rights lease for Physicians Regional Medical Center — Central Wing Annex, the tenant holds a buy-out option with an exercise price of approximately $5.8 million. As of September 30, 2013, the Company determined that it is the primary beneficiary of these VIEs as a result of having the power to direct the activities that most significantly impact their economic performance, the obligation to absorb losses, and the right to receive benefits that could be potentially significant to the VIEs. | |||||||||
In conjunction with the Raider Ranch Phase One Development described in Note 3, “Acquisitions,” the Company entered into a development agreement with South Bay Partners, Ltd. (“South Bay”). The development agreement with South Bay is a VIE due to the South Bay’s opportunity to earn promoted interest payments in connection with each phase of development after certain net operating income targets and internal rate of return targets have been met. South Bay is permitted to request the calculation of the promoted interest for a phase upon a capital event occurring with respect to such phase or at any time during the first five years after the opening of the applicable phase, subject to the net operating income for such phase having reached the stabilized net operating income threshold for three consecutive months. | |||||||||
The Company determined it is the primary beneficiary and holds a controlling financial interest in each of the aforementioned entities and development due to the Company’s power to direct the activities that most significantly impact the economic performance of the entities, as well as its obligation to absorb the losses and its right to receive benefits from these entities that could potentially be significant to these entities. As such, the transactions and accounts of these VIEs are included in the accompanying condensed consolidated financial statements. The Company did not own these entities as of December 31, 2012. | |||||||||
The aggregate carrying amount and major classifications of the consolidated assets that can be used to settle obligations of the VIEs and liabilities of the consolidated VIEs that are non-recourse to the Company are as follows: | |||||||||
September 30, 2013 | December 31, 2012 | ||||||||
Assets: | |||||||||
Real estate investment properties, net | $ | 50,788,543 | $ | — | |||||
Real estate under development, including land | $ | 26,818,643 | $ | 8,399,079 | |||||
Intangibles, net | $ | 5,596,449 | $ | — | |||||
Cash | $ | 956,067 | $ | — | |||||
Loan costs, net | $ | 976,711 | $ | 548,157 | |||||
Other | $ | 301,550 | $ | 466,536 | |||||
Liabilities: | |||||||||
Mortgages and other notes payable | $ | 45,332,110 | $ | 2,000 | |||||
Accounts payable and accrued expenses | $ | 565,307 | $ | 7,072 | |||||
Accrued development costs | $ | 3,070,190 | $ | 310,975 | |||||
Other liabilities | $ | 954,508 | $ | — | |||||
Due to related parties | $ | 257,426 | $ | 71,482 | |||||
The Company’s maximum exposure to loss as a result of its involvement with these VIEs is limited to its net investment in these entities which totaled approximately $35.4 million as of September 30, 2013. The Company’s exposure is limited because of the non-recourse nature of the borrowings of the VIEs. | |||||||||
Unconsolidated VIEs — The Company determined that the borrowers under the ADC Loan on the HCA Rutland development represents a VIE due to the transaction structure; refer to Note 9, “Related Party Arrangements” for additional information. | |||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | |
Sep. 30, 2013 | ||
Commitments and Contingencies | ' | |
15 | Commitments and Contingencies | |
In the ordinary course of business, the Company may become subject to litigation or claims. There are no material legal proceedings pending or known to be contemplated against the Company. | ||
Refer to Note 9, “Related Party Arrangements,” for information on contingent restricted stock shares due to the Company’s Advisor and Property Manager in connection with the Expense Support Agreements and the Company’s commitment to fund approximately $3.6 million of additional monies to Crosland Southeast in connection with its construction loan for the HCA Rutland development. | ||
In August 2013, the Company entered into a purchase agreement to acquire a total of 19 senior housing communities located in Idaho, Nevada, Montana, Oregon and Washington (collectively, the “Pacific Northwest Senior Housing Communities”) for a total purchase price of approximately $457.4 million. The Pacific Northwest Senior Housing Communities consist of a total of 1,785 units comprised of 580 independent living units, 1,053 assisted living units and 152 memory care units. As of September 30, 2013, total deposits of approximately $18.2 million had been funded as commitments to purchase these senior housing communities and which as of the date of this filing are non-refundable. The acquisition is subject to certain contingencies, including completion of due diligence, licensing and obtaining financing satisfactory to the Company. There can be no assurance that any or all contingencies will be satisfied and that the transaction will ultimately be completed, which in either event the deposit would be applied toward the purchase price or forfeited. |
Concentration_of_Credit_Risk
Concentration of Credit Risk | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Concentration of Credit Risk | ' | ||||||||||||||||
16 | Concentration of Credit Risk | ||||||||||||||||
As of September 30, 2013 and December 31, 2012, and for the corresponding periods then ended, the Company had the following tenants that individually accounted for 10% or more of total revenues or assets: | |||||||||||||||||
Tenant | Percentage of Total Revenues (1) | Percentage of Total Assets (2) | |||||||||||||||
September 30, | December 31, | September 30, | December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
TSMM Management (“TSMM”); tenant of the Primrose Communities | 33.6 | % | 93.8 | % | 23.2 | % | 46.9 | % | |||||||||
FOOTNOTES: | |||||||||||||||||
(1) | Includes contractual rental income from operating leases, capital reserve income, straight-line rent adjustments and amortization of lease intangibles. | ||||||||||||||||
(2) | Represents net book value of real estate assets and lease intangibles associated with the property leased by the respective tenant as of the end of the period presented as a percentage of total assets. | ||||||||||||||||
Failure of this tenant to pay contractual lease payments could significantly impact the Company’s results of operations and cash flow from operations which, in turn would impact its ability to pay debt service and make distributions to stockholders. |
Subsequent_Events
Subsequent Events | 9 Months Ended | |
Sep. 30, 2013 | ||
Subsequent Events | ' | |
17 | Subsequent Events | |
In November 2013, the Expense Support Agreements were extended through December 31, 2014. | ||
The Company’s board of directors declared a monthly cash distribution of $0.03333 and a monthly stock distribution of 0.002500 shares on each outstanding share of common stock on October 1, 2013, and November 1, 2013. These distributions are to be paid and distributed by December 31, 2013. | ||
During the period from October 1, 2013 through November 1, 2013, the Company received additional subscription proceeds of approximately $36.7 million (3.7 million shares). |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Basis of Presentation and Consolidation | ' |
Basis of Presentation and Consolidation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States (“GAAP”). The unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which, in the opinion of management, are necessary for the fair statement of the Company’s results for the interim period presented. Operating results for the quarter or nine months ended September 30, 2013 may not be indicative of the results that may be expected for the year ending December 31, 2013. Amounts as of December 31, 2012 included in the unaudited condensed consolidated financial statements have been derived from audited consolidated financial statements as of that date but do not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. | |
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. | |
Reclassifications | ' |
Reclassifications — Certain prior period amounts in the unaudited condensed consolidated financial statements have been reclassified to conform to the current period presentation with no effect on previously reported total assets and total liabilities, net loss or stockholders’ equity. | |
Derivative Financial Instruments | ' |
Derivative Financial Instruments — The Company and certain unconsolidated equity method investments held by the Company use derivative financial instruments to partially offset the effect of fluctuating interest rates on the cash flows associated with its variable-rate debt. Upon entry into a derivative, the Company or its unconsolidated equity method investment formally designates and documents the financial instrument as a hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transaction. The Company or its unconsolidated equity method investment accounts for derivatives through the use of a fair value concept whereby the derivative positions are stated at fair value in the accompanying condensed consolidated balance sheets. The fair value of derivatives used to hedge or modify risk fluctuates over time. As such, the fair value amounts should not be viewed in isolation, but rather in relation to the cash flows or fair value of the underlying hedged transaction and to the overall reduction in the exposure relating to adverse fluctuations in interest rates on the Company’s or its unconsolidated equity method investment’s variable-rate debt. | |
Realized and unrealized gain (loss) on derivative financial instruments designated by either the Company or its unconsolidated equity method investment as cash flow hedges are reported as a component of other comprehensive income (loss), a component of stockholders’ equity, in the accompanying condensed consolidated statements of comprehensive income (loss) to the extent they are effective; reclassified into earnings on the same line item associated with the hedged transaction and in the same period the hedged transaction affects earnings. Any ineffective portions of cash flow hedges are reported in the accompanying condensed consolidated statements of operations as derivative gain (loss). Realized and unrealized gain (loss) on derivative financial instruments designated as cash flow hedges that are entered into by the Company’s equity method investments are reported as a component of the Company’s other comprehensive income (loss) in proportion to the Company’s ownership percentage in the investment, with reclassifications and ineffective portions being included in equity in earnings (loss) of unconsolidated entities in the accompanying condensed consolidated statements of operations. | |
Shares Based Payments to Non-Employees | ' |
Shares Based Payments to Non-Employees — In connection with the advisor expense support and restricted stock agreement (the “Advisor Expense Support Agreement”) and the property manager expense support and restricted stock agreement (the “Property Manager Expense Support Agreement”) described in Note 9, “Related Party Arrangements,” (hereinafter collectively referred to as the “Expense Support Agreements”), the Company may issue subordinated forfeitable restricted stock (“Restricted Stock”) to the Advisor or the Property Manager on a quarterly basis in exchange for providing expense support in the event that cash distributions declared exceed modified funds from operations as defined by the Expense Support Agreements. | |
The Restricted Stock is forfeited if shareholders do not ultimately receive their original invested capital back with at least a 6% annualized return of investment upon a future liquidity event of the Company. Upon issuance of Restricted Stock, the Company measures the fair value at its then-current lowest aggregate fair value pursuant to ASC 505-50. On the date in which the Advisor or the Property Manager satisfies the vesting criteria, the Company remeasures the fair value of the Restricted Stock pursuant to ASC 505-50 and records expense equal to the difference between the original fair value and that of the remeasurement date. In addition, given that performance is outside the control of the Advisor or the Property Manager and involves both market conditions and counterparty performance conditions, the shares are treated as unissued for accounting purposes and the Company only includes the Restricted Stock in the calculation of diluted earnings per share to the extent their effect is dilutive and the vesting conditions have been satisfied as of the reporting date. | |
Pursuant to the Expense Support Agreements, the Advisor or the Property Manager shall be the record owner of the Restricted Stock until the shares of common stock are sold or otherwise disposed of, and shall be entitled to all of the rights of a stockholder of the Company including, without limitation, the right to vote such shares (to the extent permitted by the Articles) and receive all dividends and other distributions paid with respect to such shares. All dividends or other distributions actually paid to the Advisor or the Property Manager in connection with the Restricted Stock shall vest immediately and will not be subject to forfeiture. The Company recognizes expense related to the dividends on the Restricted Stock shares as declared. | |
Notes Receivable | ' |
Notes Receivable — The Company evaluates impairment on its notes receivable on an individual loan basis which includes, current information and events, periodic visits and quarterly discussions on the financial results of the properties being collateralized and the financial stability of the borrowers. The Company reviews each loan to determine the risk of loss and whether the individual loan is impaired and whether an allowance is necessary. The value credit quality of the Company’s borrowers is primarily based on their payment history on an individual loan basis, as such, the Company does not assign its notes receivable in credit quality categories. | |
Adopted Accounting Pronouncements | ' |
Adopted Accounting Pronouncements — In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (AOCI).” This update clarified the guidance in subtopic 220 and requires preparers to report, in one place, information about reclassifications out of AOCI. The ASU also requires companies to report changes in AOCI balances. Effective January 1, 2013, the Company adopted this ASU. The adoption of this update did not have a material impact on the Company’s financial position, results of operations or cash flows. | |
In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (Topic 210).” This ASU also serves to amend the disclosure requirements in FASB ASU 815, “Derivatives and Hedging.” This ASU will require companies to provide both net amounts (those that are offset) and gross information (as if amounts are not offset) in notes to the financial statements. In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”, that clarifies which instruments and transactions are subject to the offsetting disclosure requirement within the scope of ASU 2011-11. This ASU is effective for interim and annual periods beginning on or after January 1, 2013. The adoption of this ASU did not have a material effect on the Company’s financial statements and disclosures. | |
In December 2011, the FASB issued ASU No. 2011-10, “Property, Plant, and Equipment (Topic 360): Derecognition of in Substance Real Estate — a Scope Clarification.” This update clarified the guidance in subtopic 360-20 as it applies to the derecognition of in substance real estate when the parent ceases to have a controlling financial interest in a subsidiary that is in substance real estate because of a default by the subsidiary on its nonrecourse debt. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. The Company has determined that the impact of this update will not have a material impact on the Company’s financial position, results of operations or cash flows. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements — In February 2013, the FASB issued ASU No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.” This update clarified the guidance in subtopic 405 and requires entities to measure obligations resulting from joint and several liability arrangements for which total obligation is fixed at the reporting date. Entities are required to measure the obligation as the amount that the reporting entity agreed to pay on the basis of its arrangement among its co-obligors plus any additional amount the reporting entity expects to pay on behalf of its co-obligors. Additionally, the guidance requires entities to disclose the nature and amount of the obligations as well as other information about those obligations. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2013 for public entities. The Company has determined that the impact of this update will not have a material impact on the Company’s financial position, results of operations or cash flows. | |
In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a similar Tax Loss, or a Tax Credit Carryforward Exists.” This update clarified the guidance in subtopic 740 and requires entities to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward to the extent one is available. The unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2013 for public entities. The Company has determined that the impact of this update will not have a material impact on the Company’s financial position, results of operations or cash flows. |
Acquisitions_Tables
Acquisitions (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Acquisitions of Properties | ' | ||||||||||||||||
Real Estate Investment Properties — During the nine months ended September 30, 2013, the Company acquired the following 24 properties, which were comprised of six skilled nursing facilities (“SNFs”), thirteen medical office buildings (“MOBs”), four senior housing communities and a specialty hospital: | |||||||||||||||||
Property/Description | Structure | Asset Type | Location | Date of | Allocated | ||||||||||||
Acquisition | Purchase Price | ||||||||||||||||
Perennial Communities (“Perennial SNFs”) | |||||||||||||||||
Batesville Healthcare Center | Triple-net Lease | Skilled Nursing | Batesville, AR | 5/31/13 | $ | 6,205,650 | |||||||||||
Broadway Healthcare Center | Triple-net Lease | Skilled Nursing | West Memphis, AR | 5/31/13 | 11,798,650 | ||||||||||||
Jonesboro Healthcare Center | Triple-net Lease | Skilled Nursing | Jonesboro, AR | 5/31/13 | 15,232,050 | ||||||||||||
Magnolia Healthcare Center | Triple-net Lease | Skilled Nursing | Magnolia, AR | 5/31/13 | 11,847,150 | ||||||||||||
Mine Creek Healthcare Center | Triple-net Lease | Skilled Nursing | Nashville, AR | 5/31/13 | 3,373,500 | ||||||||||||
Searcy Healthcare Center | Triple-net Lease | Skilled Nursing | Searcy, AR | 5/31/13 | 7,898,100 | ||||||||||||
LaPorte Cancer Center | Modified Lease | Medical Office | Westville, IN | 6/14/13 | 13,100,000 | ||||||||||||
Knoxville Medical Office Buildings (“Knoxville MOBs”) | |||||||||||||||||
Physicians Plaza A at North Knoxville Medical Center | Modified Lease | Medical Office | Powell, TN | 7/10/13 | 18,124,216 | ||||||||||||
Physicians Plaza B at North Knoxville Medical Center | Modified Lease | Medical Office | Powell, TN | 7/10/13 | 21,799,989 | ||||||||||||
Jefferson Medical Commons | Modified Lease | Medical Office | Jefferson City, TN | 7/10/13 | 11,615,715 | ||||||||||||
Physicians Regional Medical Center - Central Wing Annex | Modified Lease | Medical Office | Knoxville, TN | 7/10/13 | 5,775,000 | ||||||||||||
HarborChase of Jasper | Managed | Senior Housing | Jasper, AL | 8/1/13 | 7,300,000 | ||||||||||||
Medical Portfolio I Properties (“Medical Portfolio I”) | |||||||||||||||||
Doctors Specialty Hospital | Modified Lease | Specialty Hospital | Leawood, KS | 8/16/13 | 10,003,322 | ||||||||||||
John C. Lincoln Medical Office Plaza I | Modified Lease | Medical Office | Phoenix, AZ | 8/16/13 | 4,420,069 | ||||||||||||
John C. Lincoln Medical Office Plaza II | Modified Lease | Medical Office | Phoenix, AZ | 8/16/13 | 3,105,510 | ||||||||||||
North Mountain Medical Plaza | Modified Lease | Medical Office | Phoenix, AZ | 8/16/13 | 6,185,478 | ||||||||||||
Escondido Medical Arts Center | Modified Lease | Medical Office | Escondido, CA | 8/16/13 | 15,602,187 | ||||||||||||
Chestnut Commons Medical Office Building | Modified Lease | Medical Office | Elyria, OH | 8/16/13 | 20,711,800 | ||||||||||||
South Bay Senior Housing Communities (“South Bay Communities”) | |||||||||||||||||
The Club at Raider Ranch | Managed | Senior Housing | Lubbock, TX | 8/29/13 | $ | 30,000,000 | |||||||||||
The Isle at Raider Ranch | Managed | Senior Housing | Lubbock, TX | 8/29/13 | 25,000,000 | ||||||||||||
Town Village | Managed | Senior Housing | Oklahoma City, OK | 8/29/13 | 22,500,000 | ||||||||||||
Property/Description | Structure | Asset Type | Location | Date of | Allocated | ||||||||||||
Acquisition | Purchase Price | ||||||||||||||||
Calvert Medical Office Buildings (“Calvert MOBs”) | |||||||||||||||||
Calvert Medical Office Building I, II, III | Modified Lease | Medical Office | Prince Frederick, MD | 8/30/13 | $ | 16,409,035 | |||||||||||
Calvert Medical Arts Center | Modified Lease | Medical Office | Prince Frederick, MD | 8/30/13 | 19,319,840 | ||||||||||||
Dunkirk Medical Center | Modified Lease | Medical Office | Dunkirk, MD | 8/30/13 | 4,616,819 | ||||||||||||
$ | 311,944,080 | ||||||||||||||||
During the nine months ended September 30, 2012, the Company acquired the following five senior housing communities: | |||||||||||||||||
Primrose Retirement Communities (“Primrose I Communities”) | |||||||||||||||||
Primrose Retirement Community of Casper | Triple-net Lease | Senior Housing | Casper, WY | 2/16/12 | $ | 18,839,437 | |||||||||||
Primrose Retirement Community of Grand Island | Triple-net Lease | Senior Housing | Grand Island, NE | 2/16/12 | 13,272,744 | ||||||||||||
Primrose Retirement Community of Mansfield | Triple-net Lease | Senior Housing | Mansfield, OH | 2/16/12 | 17,993,233 | ||||||||||||
Primrose Retirement Community of Marion | Triple-net Lease | Senior Housing | Marion, OH | 2/16/12 | 17,691,462 | ||||||||||||
Sweetwater Retirement Community | Triple-net Lease | Senior Housing | Billings, MT | 2/16/12 | 16,253,124 | ||||||||||||
$ | 84,050,000 | ||||||||||||||||
Schedule of Purchase Price Allocation | ' | ||||||||||||||||
The following summarizes the allocation of the purchase price for the above properties, and the estimated fair values of the assets acquired as of September 30, 2013 and 2012: | |||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Land and land improvements | $ | 13,086,233 | $ | 5,746,081 | |||||||||||||
Buildings and building improvements | 263,516,143 | 75,680,273 | |||||||||||||||
Furniture, fixtures and equipment | 5,134,500 | 933,313 | |||||||||||||||
Intangibles (1) | 33,137,867 | 1,690,333 | |||||||||||||||
Other liabilities | (2,930,663 | ) | — | ||||||||||||||
$ | 311,944,080 | $ | 84,050,000 | ||||||||||||||
FOOTNOTES: | |||||||||||||||||
-1 | At the acquisition date, the weighted-average amortization period on the acquired lease intangibles was approximately 6.5 years and 10 years, respectively. | ||||||||||||||||
Schedule of Unaudited Proforma Results of Operations | ' | ||||||||||||||||
The following table presents the unaudited pro forma results of operations for the Company assuming each of the 2013 acquisitions noted above were acquired as of January 1, 2012 and that the 2012 acquisitions noted above were acquired as of January 1, 2011 for purposes of presenting the quarter and nine months ended September 30, 2013 and 2012: | |||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||
Quarter ended September 30, | Nine months ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenues | $ | 20,685,312 | $ | 12,371,075 | $ | 55,564,451 | $ | 35,307,044 | |||||||||
Net income (loss) (1) | $ | 4,983,508 | $ | (1,534,838 | ) | $ | 865,830 | $ | (10,583,942 | ) | |||||||
Income (loss) per share of common stock (basic and diluted) | $ | 0.1 | $ | (0.05 | ) | $ | 0.02 | $ | (0.39 | ) | |||||||
Weighted average number of shares of common stock outstanding (basic and diluted) (2) | 47,824,875 | 31,393,424 | 46,181,390 | 27,421,655 | |||||||||||||
FOOTNOTES: | |||||||||||||||||
-1 | The pro forma results for the quarter and nine months ended September 30, 2013, were adjusted to exclude approximately $8.3 million of acquisition fees and related expenses directly attributable to the acquisition of the 21 properties and were included in the condensed consolidated statement of operations for the nine months ended September 30, 2013. The pro forma results for the quarter and nine months ended September 30, 2012 were adjusted to include these charges as if the properties had been acquired on January 1, 2012. | ||||||||||||||||
-2 | As a result of the properties being treated as operational since January 1, 2012, the Company assumed approximately 20.1 million shares were issued as of January 1, 2012. Consequently the weighted average shares outstanding was adjusted to reflect this amount of shares being issued on January 1, 2012 instead of actual dates on which the shares were issued, and such shares were treated as outstanding as of the beginning of the period presented. |
Real_Estate_Investment_Propert1
Real Estate Investment Properties, net (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Schedule of Real Estate Investment Properties | ' | ||||||||
The gross carrying amount and accumulated depreciation of the Company’s real estate assets as of September 30, 2013 and December 31, 2012 are as follows: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Land and land improvements | $ | 29,265,006 | $ | 16,162,081 | |||||
Building and building improvements | 474,842,935 | 211,321,273 | |||||||
Furniture, fixtures and equipment | 10,181,405 | 4,887,313 | |||||||
Less: accumulated depreciation | (9,148,178 | ) | (1,959,708 | ) | |||||
Real estate investment properties, net | 505,141,168 | 230,410,959 | |||||||
Real estate under development, including land | 27,521,700 | 8,461,571 | |||||||
Total real estate assets, net | $ | 532,662,868 | $ | 238,872,530 | |||||
Intangibles_Tables
Intangibles (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Schedule of Net Book Value of Intangibles | ' | ||||||||
The gross carrying amount and accumulated amortization of the Company’s intangible assets and liabilities as of September 30, 2013 and December 31, 2012 are as follows: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
In-place lease intangibles | $ | 33,021,427 | $ | 7,165,333 | |||||
Above-market lease intangibles | 3,157,400 | — | |||||||
Below-market ground lease intangibles | 4,153,300 | — | |||||||
Less: accumulated amortization | (2,471,556 | ) | (140,863 | ) | |||||
Intangible assets, net | $ | 37,860,571 | $ | 7,024,470 | |||||
Below-market lease intangibles | $ | 2,613,700 | $ | — | |||||
Above-market ground lease intangibles | 317,000 | — | |||||||
Less: accumulated amortization | (67,530 | ) | — | ||||||
Intangible liabilities, net | $ | 2,863,170 | $ | — | |||||
Schedule of Estimated Future Amortization | ' | ||||||||
The estimated future amortization on the Company’s intangible assets and liabilities for the remainder of 2013, each of the next four years and thereafter, in the aggregate, as of September 30, 2013 is as follows: | |||||||||
Assets | Liabilities | ||||||||
2013 | $ | 2,192,947 | $ | 148,089 | |||||
2014 | 9,008,231 | 1,338,505 | |||||||
2015 | 7,281,595 | 387,891 | |||||||
2016 | 4,148,314 | 328,624 | |||||||
2017 | 2,918,697 | 220,009 | |||||||
Thereafter | 12,310,787 | 440,052 | |||||||
$ | 37,860,571 | $ | 2,863,170 | ||||||
Operating_Leases_Tables
Operating Leases (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Schedule of Future Minimum Lease Payments | ' | ||||
The following is a schedule of future minimum lease payments to be received under non-cancellable operating leases for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of September 30, 2013: | |||||
2013 | $ | 14,972,273 | |||
2014 | 32,721,378 | ||||
2015 | 32,118,820 | ||||
2016 | 31,090,705 | ||||
2017 | 31,026,864 | ||||
Thereafter | 154,289,216 | ||||
$ | 296,219,256 | ||||
Unconsolidated_Entities_Tables
Unconsolidated Entities (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Summarized Operating Data of Unconsolidated Entities | ' | ||||||||||||||||
The following table presents condensed financial information for each of the Company’s unconsolidated entities as of and for the quarter and nine months ended September 30, 2013: | |||||||||||||||||
For the quarter ended September 30, 2013 | |||||||||||||||||
Montecito | CHTSunIV (4) | Windsor | Total | ||||||||||||||
Manor | |||||||||||||||||
Revenues | $ | 446,182 | $ | — | $ | 2,042,711 | $ | 2,488,893 | |||||||||
Operating income (loss) (3) | $ | 121,612 | $ | — | $ | (24,120 | ) | $ | 97,492 | ||||||||
Net income (loss) | $ | 20,439 | $ | — | $ | (250,682 | ) | $ | (230,243 | ) | |||||||
Income (loss) allocable to other venture partners (1) | $ | 2,046 | $ | — | $ | (522,993 | ) | $ | (520,947 | ) | |||||||
Income allocable to the Company (1) | $ | 18,394 | $ | — | $ | 272,310 | $ | 290,704 | |||||||||
Amortization of capitalized acquisition costs | (2,072 | ) | — | (3,988 | ) | (6,060 | ) | ||||||||||
Equity in earnings of unconsolidated entities | $ | 16,322 | $ | — | $ | 268,322 | $ | 284,644 | |||||||||
Distributions declared to the Company | $ | 356,346 | $ | — | $ | 106,802 | $ | 463,148 | |||||||||
Distributions received by the Company | $ | 342,158 | $ | 1,503,781 | $ | — | $ | 1,845,939 | |||||||||
For the nine months ended September 30, 2013 | |||||||||||||||||
Montecito (2) | CHTSunIV (4) | Windsor | Total | ||||||||||||||
Manor (2) | |||||||||||||||||
Revenues | $ | 1,254,923 | $ | 24,107,268 | $ | 5,325,932 | $ | 30,688,122 | |||||||||
Operating income (loss) (3) | $ | 66,487 | $ | 7,483,713 | $ | (18,317 | ) | $ | 7,531,883 | ||||||||
Net loss | $ | (218,120 | ) | $ | (46,380 | ) | $ | (742,697 | ) | $ | (1,007,197 | ) | |||||
Loss allocable to other venture partners (1) | $ | (21,811 | ) | $ | (1,365,855 | ) | $ | (1,417,407 | ) | $ | (2,805,073 | ) | |||||
Income (loss) allocable to the Company (1) | $ | (196,309 | ) | $ | 1,319,475 | $ | 674,710 | $ | 1,797,876 | ||||||||
Amortization of capitalized acquisition costs | (5,885 | ) | (36,347 | ) | (10,865 | ) | (53,097 | ) | |||||||||
Equity in earnings (loss) of unconsolidated entities | $ | (202,194 | ) | $ | 1,283,128 | $ | 663,845 | $ | 1,744,779 | ||||||||
Distributions declared to the Company | $ | 698,504 | $ | 2,990,282 | $ | 287,198 | $ | 3,975,984 | |||||||||
Distributions received by the Company | $ | 342,158 | $ | 4,458,420 | $ | 223,985 | $ | 5,024,563 | |||||||||
FOOTNOTES: | |||||||||||||||||
-1 | Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting. | ||||||||||||||||
-2 | Represents operating results from the date of acquisition through the end of the periods presented. | ||||||||||||||||
-3 | Includes approximately $0.3 and $0.2 million of non-recurring acquisition expenses incurred by Montecito and Windsor Manor for the nine months ended September 30, 2013. | ||||||||||||||||
-4 | In July 2013, the Company completed the sale of its joint venture membership interest in CHTSunIV. | ||||||||||||||||
The following tables present financial information for the Company’s unconsolidated entities as of and for the quarter and nine months ended September 30, 2012: | |||||||||||||||||
For the quarter ended September 30, 2012 | |||||||||||||||||
CHTSunIV | Windsor Manor | Total | |||||||||||||||
Revenues | $ | 12,085,124 | $ | 410,111 | $ | 12,495,235 | |||||||||||
Operating income | $ | 2,510,655 | $ | 38,454 | $ | 2,549,109 | |||||||||||
Net loss | $ | (730,229 | ) | $ | (20,462 | ) | $ | (750,691 | ) | ||||||||
Loss allocable to other venture partners (1) | $ | (1,010,480 | ) | $ | (66,576 | ) | $ | (1,077,056 | ) | ||||||||
Income allocable to the Company (1) | $ | 280,251 | $ | 46,114 | $ | 326,365 | |||||||||||
Amortization of capitalized acquisition costs | (18,174 | ) | (900 | ) | (19,074 | ) | |||||||||||
Equity in earnings of unconsolidated entities | $ | 262,077 | $ | 45,214 | $ | 307,291 | |||||||||||
Distributions declared to the Company | $ | 1,516,247 | $ | — | $ | 1,516,247 | |||||||||||
Distributions received by the Company | $ | — | $ | — | $ | — | |||||||||||
For the nine months ended September 30, 2012 | |||||||||||||||||
CHTSunIV (2) | Windsor Manor (2) | Total | |||||||||||||||
Revenues | $ | 12,085,124 | $ | 410,111 | $ | 12,495,235 | |||||||||||
Operating income | $ | 1,138,020 | $ | 38,454 | $ | 1,176,474 | |||||||||||
Net loss | $ | (2,164,165 | ) | $ | (20,462 | ) | $ | (2,184,627 | ) | ||||||||
Loss allocable to other venture partners (1) | $ | (1,670,788 | ) | $ | (66,576 | ) | $ | (1,737,364 | ) | ||||||||
Income (loss) allocable to the Company (1) | $ | (493,377 | ) | $ | 46,114 | $ | (447,263 | ) | |||||||||
Amortization of capitalized acquisition costs | (18,174 | ) | (900 | ) | (19,074 | ) | |||||||||||
Equity in earnings (loss) of unconsolidated entities | $ | (511,551 | ) | $ | 45,214 | $ | (466,337 | ) | |||||||||
Distributions declared to the Company | $ | 1,550,440 | $ | — | $ | 1,550,440 | |||||||||||
Distributions received by the Company | $ | — | $ | — | $ | — | |||||||||||
FOOTNOTE: | |||||||||||||||||
-1 | Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting. | ||||||||||||||||
-2 | Represents operating results from the date of acquisition through the end of the periods presented. | ||||||||||||||||
Indebtedness_Tables
Indebtedness (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Schedule of Future Principal Payments and Maturity | ' | ||||
Maturities of indebtedness for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of September 30, 2013 are as follows: | |||||
2013 | $ | 936,551 | |||
2014 | 3,546,209 | ||||
2015 | 5,870,476 | ||||
2016 | 68,529,420 | ||||
2017 | 14,179,983 | ||||
Thereafter | 181,103,416 | ||||
$ | 274,166,055 | ||||
Related_Party_Arrangements_Tab
Related Party Arrangements (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Related Party Arrangement, Fees and Expenses Incurred | ' | ||||||||||||||||
For the quarter and nine months ended September 30, 2013 and 2012, the Company incurred the following fees and reimbursable expenses as follows: | |||||||||||||||||
Quarter ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Reimbursable expenses: | |||||||||||||||||
Offering costs | $ | 691,480 | $ | 2,173,419 | $ | 2,713,627 | $ | 5,600,764 | |||||||||
Operating expenses | 764,340 | 401,745 | 2,112,608 | 1,225,788 | |||||||||||||
$ | 1,455,820 | $ | 2,575,164 | $ | 4,826,235 | $ | 6,826,552 | ||||||||||
Investment services fees (1) | $ | 4,583,697 | $ | 592,326 | $ | 6,449,978 | $ | 4,448,561 | |||||||||
Disposition fee | 607,718 | — | 607,718 | — | |||||||||||||
Financing coordination fee | — | 551,910 | — | 551,910 | |||||||||||||
Property management fees (2) | 295,514 | 277,498 | 879,281 | 327,013 | |||||||||||||
Asset management fees (3) | 1,263,824 | 534,631 | 2,897,641 | 814,797 | |||||||||||||
Total reimbursable expenses, net | $ | 6,750,753 | $ | 1,956,365 | $ | 10,834,618 | $ | 6,142,281 | |||||||||
FOOTNOTES: | |||||||||||||||||
(1) | For the quarter and nine months ended September 30, 2013, the Company incurred approximately $4.6 million and $6.4 million, respectively, in investment service fees of which approximately $0.5 million was capitalized as part of its investment basis in the Montecito Joint Venture and the additional Windsor Manor II Communities for the nine months ended September 30, 2013. For the quarter and nine months ended September 30, 2012, the Company incurred approximately $0.6 million and $4.4 million, respectively, in investment services fees of which approximately $0.3 million and $2.6 million, respectively, were capitalized and included in investments in unconsolidated entities and properties held for development. | ||||||||||||||||
(2) | For the quarter and nine months ended September 30, 2013, the Company incurred approximately $0.3 million and $0.9 million, respectively, in property and construction management fees, of which approximately $0.07 million and $0.2 million, respectively, in construction management fees have been capitalized and included in real estate under development. For the quarter and nine months ended September 30, 2012, the Company incurred approximately $0.1 million in construction management fees which were capitalized and included in real estate under development. | ||||||||||||||||
(3) | For the quarter and nine months ended September 30, 2013, the Company incurred approximately $1.3 million and $2.9 million in asset management fees and specified expenses, which was net of approximately $0.5 million in asset management fees that were forgone in accordance with the terms of the Advisor Expense Support Agreement for the nine months ended September 30, 2013. For the quarter and nine months ended September 30, 2013, the Company capitalized approximately $0.2 million and $0.2 million, respectively, in asset management fees which have been included in real estate under development. There were no asset management fees forgone or capitalized for the quarter and nine months ended September 30, 2012. | ||||||||||||||||
Funding on ADC Loan as Note Receivable from Related Parties | ' | ||||||||||||||||
The approximate $2.5 million of funding on the ADC Loan has been recorded as a note receivable from related party in the accompanying condensed consolidated balance sheet as of September 30, 2013 and is comprised of the following: | |||||||||||||||||
Borrower (Description of Collateral Property) | Origination | Maturity | Interest | Loan Principal Balance as of | |||||||||||||
Date | Date (1) | Rate (2) | September 30, | December 31, | |||||||||||||
2013 | 2012 | ||||||||||||||||
Crosland Southeast (land development) | 6/27/13 | 6/27/14 | 16 | % | $ | 2,527,976 | $ | — | |||||||||
Loan origination costs | 119,479 | — | |||||||||||||||
Accrued interest (3) | 52,149 | — | |||||||||||||||
Total carrying amount | $ | 2,699,604 | $ | — | |||||||||||||
FOOTNOTES: | |||||||||||||||||
-1 | The initial term of the ADC Loan is one year with an extension option of up to six months. | ||||||||||||||||
-2 | The interest rate is comprised of an 8% component that is paid monthly and an 8% component that is paid upon maturity of the ADC Loan. | ||||||||||||||||
-3 | Approximately $0.01 million of accrued interest represents monthly interest payments and approximately $0.04 million represents amounts that are due at maturity. Accrued interest is included in interest income on note receivable from related party in the accompanying condensed statements of operations for the quarter and nine months ended September 30, 2013. | ||||||||||||||||
Schedule of Future Principal Maturities | ' | ||||||||||||||||
The following is a schedule of future principal maturities for the note receivable from related party for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of September 30, 2013: | |||||||||||||||||
2013 | $ | — | |||||||||||||||
2014 | 2,527,976 | ||||||||||||||||
2015 | — | ||||||||||||||||
2016 | — | ||||||||||||||||
2017 | — | ||||||||||||||||
Thereafter | — | ||||||||||||||||
Total | $ | 2,527,976 | |||||||||||||||
Public Offering | ' | ||||||||||||||||
Related Party Arrangement, Fees and Expenses Incurred | ' | ||||||||||||||||
For the quarter and nine months ended September 30, 2013 and 2012, the Company incurred the following fees in connection with its Offering: | |||||||||||||||||
Quarter ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Selling commissions | $ | 3,248,049 | $ | 1,498,058 | $ | 7,165,482 | $ | 5,930,241 | |||||||||
Marketing support fees | 3,252,102 | 1,280,117 | 8,462,553 | 3,320,785 | |||||||||||||
Total offering expenses | $ | 6,500,151 | $ | 2,778,175 | $ | 15,628,035 | $ | 9,251,026 | |||||||||
Property manager | ' | ||||||||||||||||
Related Party Arrangement, Fees and Expenses Incurred | ' | ||||||||||||||||
Amounts due to related parties for fees and reimbursable costs and expenses were as follows as of: | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Due to managing dealer: | |||||||||||||||||
Selling commissions | $ | 343,501 | $ | 102,656 | |||||||||||||
Marketing support fees | 256,573 | 136,337 | |||||||||||||||
600,074 | 238,993 | ||||||||||||||||
Due to property manager: | |||||||||||||||||
Property management fees | 235,774 | 452,131 | |||||||||||||||
235,774 | 452,131 | ||||||||||||||||
Due to the Advisor, its affiliates and others: | |||||||||||||||||
Asset management fees | 1,263,824 | — | |||||||||||||||
Reimbursable operating expenses | 843,453 | 242,293 | |||||||||||||||
Reimbursable offering costs | 237,371 | 356,463 | |||||||||||||||
Interest reserve account and other advances | 293,018 | — | |||||||||||||||
2,637,666 | 598,756 | ||||||||||||||||
$ | 3,473,514 | $ | 1,289,880 | ||||||||||||||
Ground_and_Air_Rights_Leases_T
Ground and Air Rights Leases (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Schedule of Future Minimum Lease Payments to be Paid Under Ground and Air Rights Leases | ' | ||||
The following is a schedule of future minimum lease payments to be paid under the ground and air rights leases for the remainder of 2013 and each of the next four years and thereafter, in the aggregate, as of June 30, 2013: | |||||
2013 | $ | 47,543 | |||
2014 | 191,460 | ||||
2015 | 194,078 | ||||
2016 | 196,774 | ||||
2017 | 199,551 | ||||
Thereafter | 21,255,613 | ||||
$ | 22,085,019 | ||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||
Interest Rate Swap and Proportion of Fair Value Relative to Company's Ownership Percentage | ' | ||||||||||||||||||||||||||||
The following table summarizes the terms of the aforementioned swaps and the proportion of fair value relative to the Company’s ownership percentage that has been recorded as of September 30, 2013. Amounts related to the Montecito Swap are included in investments in unconsolidated entities in the accompanying condensed consolidated balance sheet as of September 30, 2013; whereas the Knoxville MOB Swap and Calvert MOB Swap are included in other liabilities in the accompanying condensed consolidated balance sheet as of September 30, 2013: | |||||||||||||||||||||||||||||
Derivative Financial Instrument | Notional | Fixed | Trade date | Maturity date | Fair value asset (liability) | ||||||||||||||||||||||||
amount | interest | ||||||||||||||||||||||||||||
rate (1) | September 30, | December 31, | |||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||
Montecito Swap | $ | 12,421,349 | 1.335 | % | January 17, 2013 | January 15, 2018 | $ | 61,197 | $ | — | |||||||||||||||||||
Knoxville MOB Swap | $ | 38,254,947 | 2.7 | % | September 6, 2013 | 10-Jul-18 | $ | (706,379 | ) | $ | — | ||||||||||||||||||
Calvert MOB Swap | $ | 26,066,971 | 2.78 | % | 6-Sep-13 | 29-Aug-18 | $ | (522,325 | ) | $ | — | ||||||||||||||||||
FOOTNOTES: | |||||||||||||||||||||||||||||
-1 | The all-in rates also include a credit spread of 2.6% for the Montecito Swap, 2.5% for the Knoxville MOB Swap and 2.5% the Calvert MOB Swap. | ||||||||||||||||||||||||||||
Summary of Gross and Net Amounts of Interest Rate Swap Derivatives Presented in Condensed Consolidated Balance Sheet | ' | ||||||||||||||||||||||||||||
The following table summarizes the gross and net amounts of the Company’s share of the aforementioned swaps as presented in the accompanying condensed consolidated balance sheet as of September 30, 2013: | |||||||||||||||||||||||||||||
Derivative Financial Instrument | Notional | Gross and net amounts of asset (liability) | Gross amounts in the | ||||||||||||||||||||||||||
amount | presented in the accompanying condensed | accompanying condensed consolidated | |||||||||||||||||||||||||||
consolidated balance sheet | balance sheet as of September 30, 2013 | ||||||||||||||||||||||||||||
as of September 30, 2013 | |||||||||||||||||||||||||||||
Gross | Offset | Net | Financial | Cash | Net | ||||||||||||||||||||||||
amount | amount | amount | Instruments | Collateral | Amount | ||||||||||||||||||||||||
Montecito Swap | $ | 12,421,349 | $ | 61,197 | $ | — | $ | 61,197 | $ | 61,197 | $ | — | $ | 61,197 | |||||||||||||||
Knoxville MOB Swap | $ | 38,254,947 | $ | (706,379 | ) | $ | — | $ | (706,379 | ) | $ | (706,379 | ) | $ | — | $ | (706,379 | ) | |||||||||||
Calvert MOB Swap | $ | 26,066,971 | $ | (522,325 | ) | $ | — | $ | (522,325 | ) | $ | (522,325 | ) | $ | — | $ | (522,325 | ) |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||
Effect of Derivative Financial Instruments | ' | ||||||||||||||||||
The following table reflects the effect of derivative financial instruments held by Company, or its equity method investments, and included in the condensed consolidated statements of comprehensive loss for the quarters and nine months ended September 30, 2013 and 2012, respectively: | |||||||||||||||||||
Derivative Financial Instrument | Loss recognized in | Location of gain | Gain (loss) reclassified from | ||||||||||||||||
other comprehensive loss on | (loss) reclassified | AOCI into earnings | |||||||||||||||||
derivative financial instrument | into earnings | (Effective Portion) | |||||||||||||||||
(Effective Portion) | (Effective Portion) | ||||||||||||||||||
Quarter ended | Quarter ended | ||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Montecito Swap | $ | (69,557 | ) | $ | — | Not applicable | $ | — | $ | — | |||||||||
Knoxville MOB Swap | (706,379 | ) | — | Not applicable | — | — | |||||||||||||
Calvert MOB Swap | (522,325 | ) | — | Not applicable | — | — | |||||||||||||
Total | $ | (1,298,261 | ) | $ | — | $ | — | $ | — | ||||||||||
Derivative Financial Instrument | Gain (loss) recognized in | Location of gain | Gain (loss) reclassified from | ||||||||||||||||
other comprehensive | (loss) reclassified | AOCI into earnings | |||||||||||||||||
loss on derivative financial | into earnings | (Effective Portion) | |||||||||||||||||
instrument | (Effective Portion) | ||||||||||||||||||
(Effective Portion) | |||||||||||||||||||
Nine months ended | Nine months ended | ||||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Montecito Swap | $ | 61,197 | $ | — | Not applicable | $ | — | $ | — | ||||||||||
Knoxville MOB Swap | (706,379 | ) | — | Not applicable | — | — | |||||||||||||
Calvert MOB Swap | (522,325 | ) | — | Not applicable | — | — | |||||||||||||
Total | $ | (1,167,507 | ) | $ | — | $ | — | $ | — | ||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Components of Benefit or Provision for Income Taxes | ' | ||||||||||||||||
The components of the income tax expense for the quarter and nine months ended September 30, 2013 are as follows: | |||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2013 | ||||||||||||||||
Current: | |||||||||||||||||
Federal | $ | — | $ | 13,312 | |||||||||||||
State | — | — | |||||||||||||||
Total current benefit | — | 13,312 | |||||||||||||||
Deferred: | |||||||||||||||||
Federal | — | (25,450 | ) | ||||||||||||||
State | — | (5,935 | ) | ||||||||||||||
Total deferred provision | — | (31,385 | ) | ||||||||||||||
Income tax expense | $ | — | $ | (18,073 | ) | ||||||||||||
Significant Components of Deferred Tax Assets | ' | ||||||||||||||||
Significant components of the Company’s deferred tax assets as of September 30, 2013 are as follows: | |||||||||||||||||
Carryforwards of net operating loss | $ | 72,037 | |||||||||||||||
Prepaid rent | 279,496 | ||||||||||||||||
Valuation allowance | (351,533 | ) | |||||||||||||||
Net deferred tax assets | $ | — | |||||||||||||||
Reconciliation of Income Taxes | ' | ||||||||||||||||
A reconciliation of taxes computed at the statutory federal tax rate on income before income taxes to the benefit (provision) for income taxes is as follows: | |||||||||||||||||
Nine months ended September 30, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Tax expense computed at federal statutory rate | $ | (3,130,269 | ) | (35.00 | %) | $ | (2,039,166 | ) | (35.00 | %) | |||||||
State income tax provision, net | (5,935 | ) | (0.07 | %) | — | 0 | % | ||||||||||
Benefit of REIT election | 3,118,131 | 34.86 | % | 2,039,166 | 35 | % | |||||||||||
Income tax benefit (provision) | $ | (18,073 | ) | (0.21 | %) | $ | — | 0 | % | ||||||||
Variable_Interest_Entities_VIE1
Variable Interest Entities (VIEs) (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Aggregate Carrying Amount and Major Classifications of Consolidated Assets | ' | ||||||||
The aggregate carrying amount and major classifications of the consolidated assets that can be used to settle obligations of the VIEs and liabilities of the consolidated VIEs that are non-recourse to the Company are as follows: | |||||||||
September 30, 2013 | December 31, 2012 | ||||||||
Assets: | |||||||||
Real estate investment properties, net | $ | 50,788,543 | $ | — | |||||
Real estate under development, including land | $ | 26,818,643 | $ | 8,399,079 | |||||
Intangibles, net | $ | 5,596,449 | $ | — | |||||
Cash | $ | 956,067 | $ | — | |||||
Loan costs, net | $ | 976,711 | $ | 548,157 | |||||
Other | $ | 301,550 | $ | 466,536 | |||||
Liabilities: | |||||||||
Mortgages and other notes payable | $ | 45,332,110 | $ | 2,000 | |||||
Accounts payable and accrued expenses | $ | 565,307 | $ | 7,072 | |||||
Accrued development costs | $ | 3,070,190 | $ | 310,975 | |||||
Other liabilities | $ | 954,508 | $ | — | |||||
Due to related parties | $ | 257,426 | $ | 71,482 | |||||
Concentration_of_Credit_Risk_T
Concentration of Credit Risk (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Tenants that Individually Accounted for 10% or More of Total Revenues or Assets | ' | ||||||||||||||||
As of September 30, 2013 and December 31, 2012, and for the corresponding periods then ended, the Company had the following tenants that individually accounted for 10% or more of total revenues or assets: | |||||||||||||||||
Tenant | Percentage of Total Revenues (1) | Percentage of Total Assets (2) | |||||||||||||||
September 30, | December 31, | September 30, | December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
TSMM Management (“TSMM”); tenant of the Primrose Communities | 33.6 | % | 93.8 | % | 23.2 | % | 46.9 | % | |||||||||
FOOTNOTES: | |||||||||||||||||
(1) | Includes contractual rental income from operating leases, capital reserve income, straight-line rent adjustments and amortization of lease intangibles. | ||||||||||||||||
(2) | Represents net book value of real estate assets and lease intangibles associated with the property leased by the respective tenant as of the end of the period presented as a percentage of total assets. |
Organization_Additional_Inform
Organization - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | 1 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | Jun. 27, 2011 | Jun. 30, 2011 | |
IPO | ||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ' | ' | ' | ' |
CNL properties Trust, Inc. organized date | 8-Jun-10 | ' | ' | ' |
Property management agreement period | '6 years | ' | ' | ' |
Common stock shares initial public offering | $288,699,252 | $168,266,307 | ' | $3,000,000,000 |
Common stock offering price per share | ' | ' | $10 | ' |
Offering price for reinvestment plan | ' | ' | $9.50 | ' |
Initial public offering termination date | 27-Jun-14 | ' | ' | ' |
Extension period of current offering | '180 days | ' | ' | ' |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2013 | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | ' |
Annualized return of investment | 6.00% |
Acquisitions_of_Properties_Det
Acquisitions of Properties (Detail) (USD $) | 9 Months Ended | ||||||||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2012 | |
Batesville Healthcare Center | Broadway Healthcare Center | Jonesboro Healthcare Center | Magnolia Healthcare Center | Mine Creek Healthcare Center | Searcy Healthcare Center | LaPorte Cancer Center | Physicians Plaza A at North Knoxville Medical Center | Physicians Plaza B at North Knoxville Medical Center | Jefferson Medical Commons | Physicians Regional Medical Center - Central Wing Annex | HarborChase of Jasper | Doctors Specialty Hospital | John C. Lincoln Medical Office Plaza I | John C. Lincoln Medical Office Plaza II | North Mountain Medical Plaza | Escondido Medical Arts Center | Chestnut Commons Medical Office Building | The Club at Raider Ranch | The Isle at Raider Ranch | Town Village | Calvert Medical Office Building I, II, III | Calvert Medical Arts Center | Dunkirk Medical Center | Primrose Retirement Community Of Casper | Primrose Retirement Community Of Grand Island | Primrose Retirement Community Of Mansfield | Primrose Retirement Community Of Marion | Sweetwater Retirement Community | Primrose I Communities | ||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Structure | ' | 'Triple-net Lease | 'Triple-net Lease | 'Triple-net Lease | 'Triple-net Lease | 'Triple-net Lease | 'Triple-net Lease | 'Modified Lease | 'Modified Lease | 'Modified Lease | 'Modified Lease | 'Modified Lease | 'Managed | 'Modified Lease | 'Modified Lease | 'Modified Lease | 'Modified Lease | 'Modified Lease | 'Modified Lease | 'Managed | 'Managed | 'Managed | 'Modified Lease | 'Modified Lease | 'Modified Lease | 'Triple-net Lease | 'Triple-net Lease | 'Triple-net Lease | 'Triple-net Lease | 'Triple-net Lease | ' |
Asset Type | ' | 'Skilled Nursing | 'Skilled Nursing | 'Skilled Nursing | 'Skilled Nursing | 'Skilled Nursing | 'Skilled Nursing | 'Medical Office | 'Medical Office | 'Medical Office | 'Medical Office | 'Medical Office | 'Senior Housing | 'Specialty Hospital | 'Medical Office | 'Medical Office | 'Medical Office | 'Medical Office | 'Medical Office | 'Senior Housing | 'Senior Housing | 'Senior Housing | 'Medical Office | 'Medical Office | 'Medical Office | 'Senior Housing | 'Senior Housing | 'Senior Housing | 'Senior Housing | 'Senior Housing | ' |
Location | ' | 'Batesville, AR | 'West Memphis, AR | 'Jonesboro, AR | 'Magnolia, AR | 'Nashville, AR | 'Searcy, AR | 'Westville, IN | 'Powell, TN | 'Powell, TN | 'Jefferson City, TN | 'Knoxville, TN | 'Jasper, AL | 'Leawood, KS | 'Phoenix, AZ | 'Phoenix, AZ | 'Phoenix, AZ | 'Escondido, CA | 'Elyria, OH | 'Lubbock, TX | 'Lubbock, TX | 'Oklahoma City, OK | 'Prince Frederick, MD | 'Prince Frederick, MD | 'Dunkirk, MD | 'Casper, WY | 'Grand Island, NE | 'Mansfield, OH | 'Marion, OH | 'Billings, MT | ' |
Date of Acquisition | ' | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 31-May-13 | 14-Jun-13 | 10-Jul-13 | 10-Jul-13 | 10-Jul-13 | 10-Jul-13 | 1-Aug-13 | 16-Aug-13 | 16-Aug-13 | 16-Aug-13 | 16-Aug-13 | 16-Aug-13 | 16-Aug-13 | 29-Aug-13 | 29-Aug-13 | 29-Aug-13 | 30-Aug-13 | 30-Aug-13 | 30-Aug-13 | 16-Feb-12 | 16-Feb-12 | 16-Feb-12 | 16-Feb-12 | 16-Feb-12 | ' |
Allocated Purchase Price | $311,944,080 | $6,205,650 | $11,798,650 | $15,232,050 | $11,847,150 | $3,373,500 | $7,898,100 | $13,100,000 | $18,124,216 | $21,799,989 | $11,615,715 | $5,775,000 | $7,300,000 | $10,003,322 | $4,420,069 | $3,105,510 | $6,185,478 | $15,602,187 | $20,711,800 | $30,000,000 | $25,000,000 | $22,500,000 | $16,409,035 | $19,319,840 | $4,616,819 | $18,839,437 | $13,272,744 | $17,993,233 | $17,691,462 | $16,253,124 | $84,050,000 |
Schedule_of_Purchase_Price_All
Schedule of Purchase Price Allocation (Detail) (USD $) | Sep. 30, 2013 | Aug. 31, 2013 | Sep. 30, 2012 | ||
Schedule of Business Acquisitions, Purchase Price Allocation [Line Items] | ' | ' | ' | ||
Land and land improvements | $13,086,233 | $1,100,000 | $5,746,081 | ||
Buildings and building improvements | 263,516,143 | ' | 75,680,273 | ||
Furniture, fixtures and equipment | 5,134,500 | ' | 933,313 | ||
Intangibles | 33,137,867 | [1] | ' | 1,690,333 | [1] |
Other liabilities | -2,930,663 | ' | ' | ||
Total Purchase Price Allocation | $311,944,080 | ' | $84,050,000 | ||
[1] | (1) At the acquisition date, the weighted-average amortization period on the acquired lease intangibles was approximately 6.5 years and 10 years, respectively. |
Schedule_of_Purchase_Price_All1
Schedule of Purchase Price Allocation (Parenthetical) (Detail) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Schedule of Business Acquisitions, Purchase Price Allocation [Line Items] | ' | ' |
Weighted-average amortization period on the acquired lease intangibles | '6 years 6 months | '10 years |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
acre | sqft | ||||
Property | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Revenues attributable to properties | ' | $5,900,000 | $1,900,000 | $6,500,000 | $4,800,000 |
Net income (loss) attributable to properties | ' | -2,300,000 | 100,000 | -3,900,000 | 1,700,000 |
Acquisition related expenses | ' | 6,694,011 | 73,526 | 9,638,318 | 2,048,710 |
Additional space that could be leased by the tenant | ' | ' | ' | 10,000 | ' |
Percentages used to calculate earn out fee | ' | 50.00% | ' | 50.00% | ' |
Contingent purchase consideration | ' | 500,000 | ' | 500,000 | ' |
Area of land acquired | 20 | ' | ' | ' | ' |
Purchase price of land | 3,000,000 | ' | ' | 1,800,000 | ' |
Maximum development budget | 12,100,000 | ' | ' | ' | ' |
Number of independent living apartment units | 30 | ' | ' | ' | ' |
Number of independent living villas | 20 | ' | ' | ' | ' |
Allocated purchase price of land for the first phase | 1,100,000 | 13,086,233 | 5,746,081 | 13,086,233 | 5,746,081 |
Investment service fee and acquisition expense | ' | ' | ' | 100,000 | ' |
Base Rent | ' | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Percentages used to calculate earn out fee | ' | 8.00% | ' | 8.00% | ' |
Perennial Communities | ' | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Acquisition related expenses | ' | ' | ' | $5,800,000 | ' |
Schedule_of_Unaudited_Proforma
Schedule of Unaudited Proforma Results of Operations (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ' | ' | ' | ' | ||||
Revenues | $20,685,312 | $12,371,075 | $55,564,451 | $35,307,044 | ||||
Net income (loss) | $4,983,508 | [1] | ($1,534,838) | [1] | $865,830 | [1] | ($10,583,942) | [1] |
Income (loss) per share of common stock (basic and diluted) | $0.10 | ($0.05) | $0.02 | $0.39 | ||||
Weighted average number of shares of common stock outstanding (basic and diluted) | 47,824,875 | [2] | 31,393,424 | [2] | 46,181,390 | [2] | 27,421,655 | [2] |
[1] | The pro forma results for the quarter and nine months ended September 30, 2013, were adjusted to exclude approximately $8.3 million of acquisition fees and related expenses directly attributable to the acquisition of the 21 properties and were included in the condensed consolidated statement of operations for the quarter and nine months ended September 30, 2013. The pro forma results for the quarter and nine months ended September 30, 2012 were adjusted to include these charges as if the properties had been acquired on January 1, 2012. | |||||||
[2] | As a result of the properties being treated as operational since January 1, 2012, the Company assumed approximately 20.1 million shares were issued as of January 1, 2012. Consequently the weighted average shares outstanding was adjusted to reflect this amount of shares being issued on January 1, 2012 instead of actual dates on which the shares were issued, and such shares were treated as outstanding as of the beginning of the period presented. |
Schedule_of_Unaudited_Proforma1
Schedule of Unaudited Proforma Results of Operations (Parenthetical) (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Share data in Millions, unless otherwise specified | Jan. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ' | ' | ' | ' | ' |
Acquisition fee and related expenses | ' | $6,694,011 | $73,526 | $9,638,318 | $2,048,710 |
Shares issued to fund acquisition | 20.1 | ' | ' | ' | ' |
Eliminations | ' | ' | ' | ' | ' |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ' | ' | ' | ' | ' |
Acquisition fee and related expenses | ' | $8,300,000 | ' | $8,300,000 | ' |
Schedule_of_Real_Estate_Invest
Schedule of Real Estate Investment Properties (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Real Estate Properties [Line Items] | ' | ' |
Real estate investment properties, net | $505,141,168 | $230,410,959 |
Real estate under development, including land | 27,521,700 | 8,461,571 |
Total real estate assets, net | 532,662,868 | 238,872,530 |
Real Estate Investment Properties | ' | ' |
Real Estate Properties [Line Items] | ' | ' |
Land and land improvements | 29,265,006 | 16,162,081 |
Building and building improvements | 474,842,935 | 211,321,273 |
Furniture, fixtures and equipment | 10,181,405 | 4,887,313 |
Less: accumulated depreciation | -9,148,178 | -1,959,708 |
Real estate investment properties, net | 505,141,168 | 230,410,959 |
Real estate under development, including land | 27,521,700 | 8,461,571 |
Total real estate assets, net | $532,662,868 | $238,872,530 |
Real_Estate_Investment_Propert2
Real Estate Investment Properties Net - Additional Information (Detail) (Real Estate Investment Properties, USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Real Estate Investment Properties | ' | ' | ' | ' |
Real Estate Properties [Line Items] | ' | ' | ' | ' |
Depreciation expense | $3.20 | $0.60 | $7.20 | $1.40 |
Schedule_of_Net_Book_Value_of_
Schedule of Net Book Value of Intangibles (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' |
Less: accumulated amortization, assets | ($2,471,556) | ($140,863) |
Intangible assets, net | 37,860,571 | 7,024,470 |
Less: accumulated amortization, liabilities | -67,530 | ' |
Intangible liabilities, net | 2,863,170 | ' |
In place lease intangibles | ' | ' |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' |
Gross carrying amount, assets | 33,021,427 | 7,165,333 |
Above-market lease intangibles | ' | ' |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' |
Gross carrying amount, assets | 3,157,400 | ' |
Gross carrying amount, liabilities | 317,000 | ' |
Below-market ground lease intangibles | ' | ' |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' |
Gross carrying amount, assets | 4,153,300 | ' |
Gross carrying amount, liabilities | $2,613,700 | ' |
Intangibles_Additional_Informa
Intangibles - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ' | ' |
Amortization expense on intangible assets | $1,400,000 | $40,000 | $2,400,000 | $100,000 |
Amortization expense on intangible liabilities | 70,000 | ' | 70,000 | ' |
Lease Rental Income | ' | ' | ' | ' |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ' | ' |
Amortization expense on intangible assets | 50,000 | ' | 50,000 | ' |
Amortization expense on intangible liabilities | 70,000 | ' | 70,000 | ' |
Property Operating Expenses | ' | ' | ' | ' |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ' | ' |
Amortization expense on intangible assets | 10,000 | ' | 10,000 | ' |
Depreciation And Amortization | ' | ' | ' | ' |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ' | ' |
Amortization expense on intangible assets | 1,300,000 | ' | 2,300,000 | ' |
Operating expenses | ' | ' | ' | ' |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' | ' | ' | ' |
Amortization expense on intangible liabilities | $1,000 | ' | $1,000 | ' |
Schedule_of_Estimated_Future_A
Schedule of Estimated Future Amortization (Detail) (USD $) | Sep. 30, 2013 |
Finite-Lived Intangible Assets And Liabilities [Line Items] | ' |
2013 | $2,192,947 |
2014 | 9,008,231 |
2015 | 7,281,595 |
2016 | 4,148,314 |
2017 | 2,918,697 |
Thereafter | 12,310,787 |
Finite-Lived Intangible Assets, Net, Total | 37,860,571 |
2013 | 148,089 |
2014 | 1,338,505 |
2015 | 387,891 |
2016 | 328,624 |
2017 | 220,009 |
Thereafter | 440,052 |
Intangible liabilities, net | $2,863,170 |
Operating_Leases_Additional_In
Operating Leases - Additional Information (Detail) (USD $) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2013 | Sep. 30, 2013 | |
Property | ||
Contract | ||
Operating Leased Assets [Line Items] | ' | ' |
Percentage leased under operating leases | ' | 97.40% |
Initial term of lease | ' | '10 years |
Automatic renewal options | ' | 2 |
Period of renewal options | '5 years | '5 years |
Aggregate minimum annual rent | ' | $5,540,000 |
Average effective annual rental per usable bed | ' | 7,100 |
Lease rate in initial lease year | ' | 9.75% |
Annual capital reserve income paid to the company, per bed | ' | 500 |
Number of real estate investment properties owned | ' | 30 |
Minimum | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Initial term of lease | '10 years | ' |
Single Tenant Properties | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Number of real estate investment properties acquired | ' | 9 |
Percentage leased under operating leases | ' | 100.00% |
Multi Tenant Properties | Minimum | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Percentage leased under operating leases | ' | 93.00% |
Multi Tenant Properties | Maximum | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Percentage leased under operating leases | ' | 100.00% |
Triple-net lease agreements | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Total annualized property tax | ' | 100,000 |
Medical facility lease agreements | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Total annualized property tax | ' | 1,200,000 |
LaPorte Cancer Center | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Initial term of lease | ' | '20 years |
Lease, expiration date | ' | 31-Oct-30 |
Initial term of property management | ' | '2 years |
Period of automatic renewal | ' | '1 year |
Base rent of operating lease | ' | 1,040,000 |
Skilled Nursing Facilities | Single Tenant Properties | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Number of real estate investment properties acquired | ' | 6 |
Knoxville Medical Office Buildings | Single Tenant Properties | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Number of real estate investment properties acquired | ' | 2 |
Knoxville Medical Office Buildings | Multi Tenant Properties | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Number of real estate investment properties acquired | ' | 11 |
Speciality | Single Tenant Properties | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Number of real estate investment properties acquired | ' | 1 |
Knoxville MOB | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Percentage leased under operating leases | ' | 99.70% |
Initial term of lease | ' | '5 years |
Automatic renewal options | ' | 1 |
Base rent of operating lease | ' | 4,200,000 |
Number of locations Knoxville MOB's are located | ' | 3 |
Number of non cancelable leases | ' | 31 |
Knoxville MOB | Minimum | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Non-cancelable lease, expiration year | ' | '2013 |
Knoxville MOB | Maximum | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Non-cancelable lease, expiration year | ' | '2021 |
Medical Portfolio I Properties | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Percentage leased under operating leases | ' | 92.30% |
Initial term of lease | ' | '1 year |
Automatic renewal options | ' | 1 |
Base rent of operating lease | ' | 1,900,000 |
Number of non cancelable leases | ' | 35 |
Doctors Specialty Hospital | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Base rent of operating lease | ' | 900,000 |
Chestnut Commons Medical Office Building | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Base rent of operating lease | ' | 1,300,000 |
Escondido Medical Arts Center | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Initial term of lease | ' | '3 years |
Automatic renewal options | ' | 1 |
Calvert MOBs Loan | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Percentage leased under operating leases | ' | 99.50% |
Initial term of property management | ' | '1 year |
Period of automatic renewal | ' | '1 year |
Base rent of operating lease | ' | $3,100,000 |
Calvert MOBs Loan | Minimum | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Non-cancelable lease, expiration year | ' | '2013 |
Calvert MOBs Loan | Maximum | ' | ' |
Operating Leased Assets [Line Items] | ' | ' |
Non-cancelable lease, expiration year | ' | '2023 |
Schedule_of_Future_Minimum_Lea
Schedule of Future Minimum Lease Payments (Detail) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
Long-term Purchase Commitment [Line Items] | ' | ' |
2013 | $14,972,273 | $47,543 |
2014 | 32,721,378 | 191,460 |
2015 | 32,118,820 | 194,078 |
2016 | 31,090,705 | 196,774 |
2017 | 31,026,864 | 199,551 |
Thereafter | 154,289,216 | 21,255,613 |
Total | $296,219,256 | $22,085,019 |
Unconsolidated_Entities_Additi
Unconsolidated Entities - Additional Information (Detail) (USD $) | 1 Months Ended | 9 Months Ended | 1 Months Ended | ||||
Jul. 31, 2013 | Jan. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 30, 2013 | Sep. 30, 2013 | Jan. 31, 2013 | |
CHTSunIV | Montecito Joint Venture | Montecito Joint Venture | Montecito Joint Venture | Windsor Manor II Communities | Montecito and Windsor Manor Joint Ventures | Interest Rate Swap | |
sqft | Funded upon completion of certain tenant improvements | Property | Montecito Joint Venture | ||||
Loan | |||||||
Variable Interest Entity [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, ownership interest acquired | ' | 90.00% | ' | ' | 75.00% | ' | ' |
Capital of joint venture | ' | $7,000,000 | ' | ' | ' | ' | ' |
Co-venture partner's interest in the acquired business | ' | 10.00% | ' | ' | ' | ' | ' |
Business acquisition, total acquisition price | ' | 19,800,000 | ' | ' | 12,200,000 | ' | ' |
Total rentable area | ' | 48,984 | ' | ' | ' | ' | ' |
Credit facility, term period | ' | ' | '5 years | ' | ' | ' | ' |
Credit facility, maximum borrowing capacity | ' | 35,000,000 | ' | ' | ' | ' | ' |
Proceed from credit facility | ' | ' | 12,500,000 | 400,000 | ' | ' | ' |
Credit facility maturity date | ' | ' | '2018-01 | ' | ' | ' | ' |
Interest accrues on loan in addition to LIBOR | ' | ' | 2.60% | ' | ' | ' | ' |
Loan payable period | ' | ' | '360 months | ' | ' | ' | ' |
Notional amount of derivative contract | ' | ' | ' | ' | ' | ' | 12,400,000 |
Derivative contract, fixed interest rate | ' | ' | ' | ' | ' | ' | 3.94% |
Number of properties acquired | ' | ' | ' | ' | 2 | ' | ' |
Number of living units in acquisition | ' | ' | ' | ' | 82 | ' | ' |
Number of assisted living units in acquisition | ' | ' | ' | ' | 62 | ' | ' |
Number of memory living units in acquisition | ' | ' | ' | ' | 20 | ' | ' |
Number of loans assumed | ' | ' | ' | ' | 2 | ' | ' |
Loans current outstanding principal amount | ' | ' | ' | ' | 6,000,000 | ' | ' |
Acquisition fees and expenses capitalized as investment unconsolidated entities | ' | ' | ' | ' | ' | 500,000 | ' |
Sale of joint venture membership interest | 61,800,000 | ' | ' | ' | ' | ' | ' |
Gain from sale of joint venture membership interest | $4,500,000 | ' | ' | ' | ' | ' | ' |
Summarized_Operating_Data_of_U
Summarized Operating Data of Unconsolidated Entities Income Statement (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ||||
Revenues | $2,488,893 | $12,495,235 | $30,688,122 | $12,495,235 | ||||
Operating income | 97,492 | [1] | 2,549,109 | 7,531,883 | [1] | 1,176,474 | ||
Net income (loss) | -230,243 | -750,691 | -1,007,197 | -2,184,627 | ||||
Income (loss) allocable to other venture partners | -520,947 | [2] | -1,077,056 | [2] | -2,805,073 | [2] | -1,737,364 | [2] |
Income (loss) allocable to the Company | 290,704 | [2] | 326,365 | [2] | 1,797,876 | [2] | -447,263 | [2] |
Amortization of capitalized acquisition costs | -6,060 | -19,074 | -53,097 | -19,074 | ||||
Equity (loss) in earnings of unconsolidated entities | 284,644 | 307,291 | 1,744,779 | -466,337 | ||||
Distributions declared to the Company | 463,148 | 1,516,247 | 3,975,984 | 1,550,440 | ||||
Distributions received by the Company | 1,845,939 | ' | 5,024,563 | ' | ||||
Montecito Joint Venture | ' | ' | ' | ' | ||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ||||
Revenues | 446,182 | ' | 1,254,923 | [3] | ' | |||
Operating income | 121,612 | [1] | ' | 66,487 | [1],[3] | ' | ||
Net income (loss) | 20,439 | ' | -218,120 | [3] | ' | |||
Income (loss) allocable to other venture partners | 2,046 | [2] | ' | -21,811 | [2],[3] | ' | ||
Income (loss) allocable to the Company | 18,394 | [2] | ' | -196,309 | [2],[3] | ' | ||
Amortization of capitalized acquisition costs | -2,072 | ' | -5,885 | [3] | ' | |||
Equity (loss) in earnings of unconsolidated entities | 16,322 | ' | -202,194 | [3] | ' | |||
Distributions declared to the Company | 356,346 | ' | 698,504 | [3] | ' | |||
Distributions received by the Company | 342,158 | ' | 342,158 | [3] | ' | |||
CHTSunIV | ' | ' | ' | ' | ||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ||||
Revenues | ' | 12,085,124 | 24,107,268 | [4] | 12,085,124 | [3] | ||
Operating income | ' | 2,510,655 | 7,483,713 | [1],[4] | 1,138,020 | [3] | ||
Net income (loss) | ' | -730,229 | -46,380 | [4] | -2,164,165 | [3] | ||
Income (loss) allocable to other venture partners | ' | -1,010,480 | [2] | -1,365,855 | [2],[4] | -1,670,788 | [2],[3] | |
Income (loss) allocable to the Company | ' | 280,251 | [2] | 1,319,475 | [2],[4] | -493,377 | [2],[3] | |
Amortization of capitalized acquisition costs | ' | -18,174 | -36,347 | [4] | -18,174 | [3] | ||
Equity (loss) in earnings of unconsolidated entities | ' | 262,077 | 1,283,128 | [4] | -511,551 | [3] | ||
Distributions declared to the Company | ' | 1,516,247 | 2,990,282 | [4] | 1,550,440 | [3] | ||
Distributions received by the Company | 1,503,781 | [4] | ' | 4,458,420 | [4] | ' | ||
Windsor Manor | ' | ' | ' | ' | ||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ||||
Revenues | 2,042,711 | 410,111 | 5,325,932 | [3] | 410,111 | [3] | ||
Operating income | -24,120 | [1] | 38,454 | -18,317 | [1],[3] | 38,454 | [3] | |
Net income (loss) | -250,682 | -20,462 | -742,697 | [3] | -20,462 | [3] | ||
Income (loss) allocable to other venture partners | -522,993 | [2] | -66,576 | [2] | -1,417,407 | [2],[3] | -66,576 | [2],[3] |
Income (loss) allocable to the Company | 272,310 | [2] | 46,114 | [2] | 674,710 | [2],[3] | 46,114 | [2],[3] |
Amortization of capitalized acquisition costs | -3,988 | -900 | -10,865 | [3] | -900 | [3] | ||
Equity (loss) in earnings of unconsolidated entities | 268,322 | 45,214 | 663,845 | [3] | 45,214 | [3] | ||
Distributions declared to the Company | 106,802 | ' | 287,198 | [3] | ' | |||
Distributions received by the Company | ' | ' | $223,985 | [3] | ' | |||
[1] | Includes approximately $0.3 and $0.2 million of non-recurring acquisition expenses incurred by Montecito and Windsor Manor for the nine months ended September 30, 2013. | |||||||
[2] | Income (loss) is allocated between the Company and its joint venture partner using the HLBV method of accounting. | |||||||
[3] | Represents operating results from the date of acquisition through the end of the periods presented. | |||||||
[4] | In July 2013, the Company completed the sale of its joint venture membership interest in CHTSunIV. |
Summarized_Operating_Data_of_U1
Summarized Operating Data of Unconsolidated Entities Income Statement (Parenthetical) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' |
Acquisition fees and expenses | $6,694,011 | $73,526 | $9,638,318 | $2,048,710 |
Montecito Joint Venture | ' | ' | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' |
Acquisition fees and expenses | ' | ' | 300,000 | ' |
Windsor Manor | ' | ' | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' |
Acquisition fees and expenses | ' | ' | $200,000 | ' |
Indebtedness_Additional_Inform
Indebtedness - Additional Information (Detail) (USD $) | 1 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | ||||||||||||||||||||
In Millions, unless otherwise specified | Aug. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | 31-May-13 | Jun. 30, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 31, 2013 | 31-May-13 |
Mezzanine Loan Agreement | LIBOR Based Rate | LIBOR Based Rate | Base Rate | Base Rate | CHP Credit Facility | Secured Non-Recourse Loan | Secured Non-Recourse Loan | Secured Non-Recourse Loan | Mortgage Note Payable | Other notes | Secured Term Loan | Term Loan Agreement | Five-year credit facility | Five-year credit facility | Five-year credit facility | Five-year credit facility | Five-year credit facility | Five-year credit facility | Primrose II Communities | ||||||
Minimum | Maximum | Minimum | Maximum | Extension | Calvert MOBs Loan | Calvert MOBs Loan | Calvert MOBs Loan | Knoxville MOBs | Funded upon final lender approval | Medical Portfolio I Loan | Medical Portfolio I Loan | Medical Portfolio I Loan | Bridge Loan | ||||||||||||
Calvert MOBs | Solomons Island MOB | Extension | Medical Portfolio I Properties | LIBOR Based Rate | |||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Extinguishment of debt | ' | ' | ' | ' | ' | $40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized loan costs - Wrote off | ' | ' | ' | ' | ' | 0.2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exit fee upon repayment of loan | ' | ' | ' | ' | ' | 0.8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Prepaid principal balance of loan | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of loan advances | ' | 75 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan advances | ' | ' | 6.2 | 25.3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan obtained | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29.4 | ' | ' | ' | ' | 30 | 8.5 | ' | ' | ' | ' | ' | ' | 23.5 |
Interest on Loan accrues-Fixed rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.81% |
Credit facility , period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | '3 years | ' | '5 years | ' | ' | ' | '3 years | ' | '30 years |
Debt instrument, maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 31-May-16 | 14-Jun-28 | ' | ' | ' | ' | ' | ' | 1-Jun-20 |
Credit facility, interest rate | ' | ' | ' | ' | ' | ' | 2.25% | 3.25% | ' | ' | ' | 2.50% | ' | ' | ' | ' | 4.25% | ' | 2.50% | ' | ' | ' | ' | 2.65% | ' |
Principal payment commencement date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10-May-15 | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 years | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization rate of loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Interest accrued on loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.25% | ' | ' | ' | ' | ' | ' | ' |
Debt instrument,interest rate terms | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The LaPorte Loan bears interest at a rate of 4.25% for the first seven years and, thereafter, at a rate subject to changes in an independent index which is the weekly average yield on the 7-year International SWAPs and Derivatives Association mid-market par SWAP rates. | ' | ' | ' | ' | ' | ' | ' |
Credit facility, aggregate principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 38.6 | ' | ' | ' | 35.7 | ' | ' |
Proceed from credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 26.3 | 3.1 | ' | ' | ' | ' | ' | 35.4 | 3.2 | ' | ' | ' | ' |
Loan to value ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 67.00% | ' | ' | ' | ' | ' | ' |
Debt instrument interest payment term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '18 months | ' | ' | ' | ' | ' | ' |
Period for payment of interest and principal | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '42 months | ' | ' | ' | ' | ' | ' | '42 months | ' | ' | ' | ' | ' | ' |
Loan payable period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 years | ' | ' | ' | ' | ' | ' | '30 years | ' | ' | '30 years | ' | ' | ' |
Principal amount of revolving line of credit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 120 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sub facility for stand by letters of credit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sub facility for swing line advances for intermittent borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revolving line of credit maximum outstanding principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 325 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of revolving credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of extension options available | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' |
Revolving line of credit extension period | '12 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of extension fee to outstanding principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.25% | ' | ' | ' |
Base rate based on loan to value | ' | ' | ' | ' | ' | ' | ' | ' | 1.25% | 2.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowing capacity | ' | 54.8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Credit facility, maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30-Sep-16 | ' | ' | ' |
Loan extension period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' |
Period for payment of interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '18 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying value of notes payable | ' | ' | ' | ' | $193.20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $269.90 | $274.20 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Schedule_of_Future_Principal_P
Schedule of Future Principal Payments and Maturity (Detail) (USD $) | Sep. 30, 2013 |
Debt Instrument [Line Items] | ' |
2013 | $936,551 |
2014 | 3,546,209 |
2015 | 5,870,476 |
2016 | 68,529,420 |
2017 | 14,179,983 |
Thereafter | 181,103,416 |
Future principal payments and maturity | $274,166,055 |
Related_Party_Arrangements_Add
Related Party Arrangements - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Aug. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Jun. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2013 | Dec. 31, 2012 | |
RenewalOptions | acre | |||||||
sqft | ||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Annualized return of investment | ' | ' | ' | ' | 6.00% | ' | ' | ' |
Asset management fees | ' | $1,207,931 | $532,839 | ' | $2,794,585 | $813,006 | ' | ' |
Expense under Support Agreement | ' | 500,000 | ' | ' | 500,000 | ' | ' | ' |
Dividends received by advisor in cash | ' | ' | ' | ' | 4,208,609 | 790,622 | ' | ' |
Compensation expense recognized | ' | 1,700 | ' | ' | 1,700 | ' | ' | ' |
Operating expenses reimbursement as percentage average invested assets | ' | ' | ' | 2.00% | ' | ' | ' | ' |
Operating expenses reimbursement as percentage of net income | ' | ' | ' | 25.00% | ' | ' | ' | ' |
Area of land acquired for development | ' | ' | ' | 22,000 | ' | ' | ' | ' |
Initial term of triple net lease agreements | ' | ' | ' | ' | '10 years | ' | ' | ' |
Additional five-year renewal options | ' | ' | ' | 4 | ' | ' | ' | ' |
Number of years under each renewal option | ' | ' | ' | '5 years | '5 years | ' | ' | ' |
Purchase of land | 3,000,000 | ' | ' | ' | 1,800,000 | ' | ' | ' |
Total construction loan | ' | ' | ' | 6,200,000 | ' | ' | 25,300,000 | ' |
Acres of Land purchased for development | ' | ' | ' | ' | 2.8 | ' | ' | ' |
Development cost | ' | ' | ' | ' | 700,000 | ' | ' | ' |
Operating Losses due to involvement with VIE | ' | 2,500,000 | ' | ' | 2,500,000 | ' | ' | ' |
Note receivable from related party | ' | 2,699,604 | ' | ' | 2,699,604 | ' | ' | ' |
Establishment of interest reserve account | ' | 2,104,325 | ' | ' | 2,104,325 | ' | ' | 609,908 |
Bank Deposits | ' | 400,000 | ' | ' | 400,000 | ' | ' | 100,000 |
Deferred Amount | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Asset management fees | ' | ' | ' | ' | 500,000 | ' | ' | ' |
Interest Reserve | ADC Loan | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Establishment of interest reserve account | ' | 300,000 | ' | ' | 300,000 | ' | ' | ' |
Fair Value | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Note receivable from related party | ' | 2,700,000 | ' | ' | 2,700,000 | ' | ' | ' |
Restricted Stock | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Shares Based Payments to Non-Employees | ' | ' | ' | ' | 50,000 | ' | ' | ' |
Restricted Stock | Advisor | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends received by advisor in cash | ' | $1,600 | ' | ' | $1,600 | ' | ' | ' |
Dividends received by advisor in shares | ' | ' | ' | ' | 118 | ' | ' | ' |
Minimum | ' | ' | ' | ' | ' | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Initial term of triple net lease agreements | ' | ' | ' | '10 years | ' | ' | ' | ' |
Fees_in_Connection_with_Offeri
Fees in Connection with Offering (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Selling commissions | $3,248,049 | $1,498,058 | $7,165,482 | $5,930,241 |
Marketing support fees | 3,252,102 | 1,280,117 | 8,462,553 | 3,320,785 |
Total offering expenses | $6,500,151 | $2,778,175 | $15,628,035 | $9,251,026 |
Schedule_of_Fees_and_Reimbursa
Schedule of Fees and Reimbursable Expenses (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ||||
Offering costs | $691,480 | $2,173,419 | $2,713,627 | $5,600,764 | ||||
Operating expenses | 764,340 | 401,745 | 2,112,608 | 1,225,788 | ||||
Total reimbursable expenses | 1,455,820 | 2,575,164 | 4,826,235 | 6,826,552 | ||||
Investment services fees | 4,583,697 | [1] | 592,326 | [1] | 6,449,978 | [1] | 4,448,561 | [1] |
Disposition fee | 607,718 | ' | 607,718 | ' | ||||
Financing coordination fee | ' | 551,910 | ' | 551,910 | ||||
Property management fees | 681,690 | 168,064 | 1,623,065 | 217,579 | ||||
Asset management fees | 1,207,931 | 532,839 | 2,794,585 | 813,006 | ||||
Total reimbursable expenses, net | 6,750,753 | 1,956,365 | 10,834,618 | 6,142,281 | ||||
Reimbursable expenses | ' | ' | ' | ' | ||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ||||
Property management fees | 295,514 | [2] | 277,498 | [2] | 879,281 | [2] | 327,013 | [2] |
Asset management fees | $1,263,824 | [3] | $534,631 | [3] | $2,897,641 | [3] | $814,797 | [3] |
[1] | For the quarter and nine months ended September 30, 2013, the Company incurred approximately $4.6 million and $6.4 million, respectively, in investment service fees of which approximately $0.5 million was capitalized as part of its investment basis in the Montecito Joint Venture and the additional Windsor Manor II Communities for the nine months ended September 30, 2013. For the quarter and nine months ended September 30, 2012, the Company incurred approximately $0.6 million and $4.4 million, respectively, in investment services fees of which approximately $0.3 million and $2.6 million, respectively, were capitalized and included in investments in unconsolidated entities and properties held for development. | |||||||
[2] | For the quarter and nine months ended September 30, 2013, the Company incurred approximately $0.3 million and $0.9 million, respectively, in property and construction management fees, of which approximately $0.07 million and $0.2 million, respectively, in construction management fees have been capitalized and included in real estate under development. For the quarter and nine months ended September 30, 2012, the Company incurred approximately $0.1 million in construction management fees which were capitalized and included in real estate under development. | |||||||
[3] | For the quarter and nine months ended September 30, 2013, the Company incurred approximately $1.3 million and $2.9 million in asset management fees and specified expenses, which was net of approximately $0.5 million in asset management fees that were forgone in accordance with the terms of the Advisor Expense Support Agreement for the nine months ended September 30, 2013. For the quarter and nine months ended September 30, 2013, the Company capitalized approximately $0.2 million and $0.2 million, respectively, in asset management fees which have been included in real estate under development. There were no asset management fees forgone or capitalized for the quarter and nine months ended September 30, 2012. |
Schedule_of_Fees_and_Reimbursa1
Schedule of Fees and Reimbursable Expenses (Parenthetical) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ||||
Investment services fees | $4,583,697 | [1] | $592,326 | [1] | $6,449,978 | [1] | $4,448,561 | [1] |
Asset management fees | 1,207,931 | 532,839 | 2,794,585 | 813,006 | ||||
Expense under Support Agreement | 500,000 | ' | 500,000 | ' | ||||
Reimbursable expenses | ' | ' | ' | ' | ||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ||||
Property management fees capitalized | 300,000 | ' | 900,000 | ' | ||||
Asset management fees | 1,263,824 | [2] | 534,631 | [2] | 2,897,641 | [2] | 814,797 | [2] |
Investment service fees capitalized as part of investment | ' | ' | ' | ' | ||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ||||
Investment service fees capitalized | ' | 300,000 | 500,000 | 2,600,000 | ||||
Construction management fees capitalized | 70,000 | 100,000 | 200,000 | 100,000 | ||||
Asset management fees capitalized | $200,000 | ' | $200,000 | ' | ||||
[1] | For the quarter and nine months ended September 30, 2013, the Company incurred approximately $4.6 million and $6.4 million, respectively, in investment service fees of which approximately $0.5 million was capitalized as part of its investment basis in the Montecito Joint Venture and the additional Windsor Manor II Communities for the nine months ended September 30, 2013. For the quarter and nine months ended September 30, 2012, the Company incurred approximately $0.6 million and $4.4 million, respectively, in investment services fees of which approximately $0.3 million and $2.6 million, respectively, were capitalized and included in investments in unconsolidated entities and properties held for development. | |||||||
[2] | For the quarter and nine months ended September 30, 2013, the Company incurred approximately $1.3 million and $2.9 million in asset management fees and specified expenses, which was net of approximately $0.5 million in asset management fees that were forgone in accordance with the terms of the Advisor Expense Support Agreement for the nine months ended September 30, 2013. For the quarter and nine months ended September 30, 2013, the Company capitalized approximately $0.2 million and $0.2 million, respectively, in asset management fees which have been included in real estate under development. There were no asset management fees forgone or capitalized for the quarter and nine months ended September 30, 2012. |
Schedule_of_Amounts_Due_to_Rel
Schedule of Amounts Due to Related Parties (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Transactions with Third Party [Line Items] | ' | ' |
Selling commissions | $343,501 | $102,656 |
Marketing support fees | 256,573 | 136,337 |
Due To Related Party Fees And Commissions, Total | 600,074 | 238,993 |
Asset management fees | 1,263,824 | ' |
Reimbursable operating expenses | 843,453 | 242,293 |
Reimbursable offering costs | 237,371 | 356,463 |
Interest reserve account and other advances | 293,018 | ' |
Due To Related Party Reimbursable Costs Current And Noncurrent, Total | 2,637,666 | 598,756 |
Due to related parties | 3,473,514 | 1,289,880 |
Property manager | ' | ' |
Transactions with Third Party [Line Items] | ' | ' |
Property management fees | 235,774 | 452,131 |
Property management fees | $235,774 | $452,131 |
Funding_on_ADC_Loan_as_Note_Re
Funding on ADC Loan as Note Receivable from Related Parties (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | ||
Related Party Transaction [Line Items] | ' | |
Note receivable from related party | $2,699,604 | |
Loan origination costs | 119,479 | |
Accrued interest | 52,149 | [1] |
Crosland Southeast (land development) | ' | |
Related Party Transaction [Line Items] | ' | |
Origination Date | 27-Jun-13 | |
Maturity Date | 27-Jun-14 | [2] |
Interest Rate | 16.00% | [3] |
Note receivable from related party | $2,527,976 | |
[1] | Approximately $0.01 million of accrued interest represents monthly interest payments and approximately $0.04 million represents amounts that are due at maturity. Accrued interest is included in interest income on note receivable from related party in the accompanying condensed statements of operations for the quarter and nine months ended September 30, 2013. | |
[2] | The initial term of the ADC Loan is one year with an extension option of up to six months. | |
[3] | The interest rate is comprised of an 8% component that is paid monthly and an 8% component that is paid upon maturity of the ADC Loan. |
Funding_on_ADC_Loan_as_Note_Re1
Funding on ADC Loan as Note Receivable from Related Parties (Parenthetical) (Detail) (USD $) | Sep. 30, 2013 |
In Millions, unless otherwise specified | |
Related Party Transaction [Line Items] | ' |
Accrued interest | $0.01 |
Interest payment due at maturity period | $0.04 |
Paid monthly | ' |
Related Party Transaction [Line Items] | ' |
Interest Rate | 8.00% |
Paid up on maturity | ' |
Related Party Transaction [Line Items] | ' |
Interest Rate | 8.00% |
Schedule_of_Future_Principal_M
Schedule of Future Principal Maturities (Detail) (USD $) | Sep. 30, 2013 |
Schedule Of Future Minimum Rental Payments For Operating Leases [Line Items] | ' |
Total | $2,699,604 |
Crosland Southeast (land development) | ' |
Schedule Of Future Minimum Rental Payments For Operating Leases [Line Items] | ' |
2013 | ' |
2014 | 2,527,976 |
2015 | ' |
2016 | ' |
2017 | ' |
Thereafter | ' |
Total | $2,527,976 |
Ground_and_Air_Rights_Leases_A
Ground and Air Rights Leases - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Operating Leased Assets [Line Items] | ' | ' |
Lease expense | $0.03 | $0.03 |
Number of ground and air rights owned | 6 | 6 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |||
Montecito Joint Venture | Montecito Joint Venture | Montecito Joint Venture | Montecito Joint Venture | Knoxville MOBs Loan | Knoxville MOBs Loan | Knoxville MOBs Loan | Knoxville MOBs Loan | Calvert MOBs Loan | Calvert MOBs Loan | Calvert MOBs Loan | Calvert MOBs Loan | ||||
Interest Rate Swap | Interest Rate Swap | Interest Rate Swap | Interest Rate Swap | Interest Rate Swap | Interest Rate Swap | Interest Rate Swap | Interest Rate Swap | Interest Rate Swap | |||||||
Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | ||||||||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Derivative contract, inception date | ' | 17-Jan-13 | ' | ' | ' | 6-Sep-13 | ' | ' | ' | 6-Sep-13 | ' | ' | |||
Derivative contract, fixed interest rate | ' | 1.34% | [1] | ' | ' | ' | 2.70% | [1] | ' | ' | ' | 2.78% | [1] | ' | ' |
Notional amount of derivative contract | $12,421,349 | $12,421,349 | ' | ' | $38,254,947 | $38,254,947 | ' | ' | $26,066,971 | $26,066,971 | ' | ' | |||
Fixed interest rate, base period | ' | ' | '2015-01 | '2018-01 | ' | ' | '2015-08 | '2018-07 | ' | ' | '2015-08 | '2018-08 | |||
[1] | The all-in rates also include a credit spread of 2.6% for the Montecito Swap, 2.5% for the Knoxville MOB Swap and 2.5% the Calvert MOB Swap. |
Amounts_Related_to_Interest_Ra
Amounts Related to Interest Rate Swap Included in Unconsolidated Entities in Condensed Consolidated Balance Sheet (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | ||
Montecito Joint Venture | ' | |
Derivative [Line Items] | ' | |
Notional amount | $12,421,349 | |
Fair value asset (liability) | 61,197 | |
Montecito Joint Venture | Interest Rate Swap | ' | |
Derivative [Line Items] | ' | |
Notional amount | 12,421,349 | |
Fixed interest rate | 1.34% | [1] |
Trade date | 17-Jan-13 | |
Maturity date | 15-Jan-18 | |
Fair value asset (liability) | 61,197 | |
Knoxville MOBs Loan | ' | |
Derivative [Line Items] | ' | |
Notional amount | 38,254,947 | |
Fair value asset (liability) | -706,379 | |
Knoxville MOBs Loan | Interest Rate Swap | ' | |
Derivative [Line Items] | ' | |
Notional amount | 38,254,947 | |
Fixed interest rate | 2.70% | [1] |
Trade date | 6-Sep-13 | |
Maturity date | 10-Jul-18 | |
Fair value asset (liability) | -706,379 | |
Calvert MOBs Loan | ' | |
Derivative [Line Items] | ' | |
Notional amount | 26,066,971 | |
Fair value asset (liability) | -522,325 | |
Calvert MOBs Loan | Interest Rate Swap | ' | |
Derivative [Line Items] | ' | |
Notional amount | 26,066,971 | |
Fixed interest rate | 2.78% | [1] |
Trade date | 6-Sep-13 | |
Maturity date | 29-Aug-18 | |
Fair value asset (liability) | ($522,325) | |
[1] | The all-in rates also include a credit spread of 2.6% for the Montecito Swap, 2.5% for the Knoxville MOB Swap and 2.5% the Calvert MOB Swap. |
Amounts_Related_to_Interest_Ra1
Amounts Related to Interest Rate Swap Included in Unconsolidated Entities in Condensed Consolidated Balance Sheet (Parenthetical) (Detail) | Sep. 30, 2013 |
Montecito Joint Venture | ' |
Derivative [Line Items] | ' |
Total interest rate | 2.60% |
Knoxville MOBs Loan | ' |
Derivative [Line Items] | ' |
Total interest rate | 2.50% |
Calvert MOBs Loan | ' |
Derivative [Line Items] | ' |
Total interest rate | 2.50% |
Summary_of_Gross_and_Net_Amoun
Summary of Gross and Net Amounts of Interest Rate Swap Presented in Condensed Consolidated Balance Sheet (Detail) (USD $) | Sep. 30, 2013 |
Montecito Joint Venture | ' |
Derivative [Line Items] | ' |
Notional amount | $12,421,349 |
Amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet, Gross amount | 61,197 |
Amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet, Offset amount | ' |
Amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet, Net amount | 61,197 |
Gross Amounts in Accompanying Condensed Consolidated Balance Sheet, Financial Instruments | 61,197 |
Gross Amounts in Accompanying Condensed Consolidated Balance Sheet, Cash Collateral | ' |
Gross Amounts in Accompanying Condensed Consolidated Balance Sheet, Net Amount | 61,197 |
Knoxville MOBs Loan | ' |
Derivative [Line Items] | ' |
Notional amount | 38,254,947 |
Amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet, Gross amount | -706,379 |
Amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet, Offset amount | ' |
Amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet, Net amount | -706,379 |
Gross Amounts in Accompanying Condensed Consolidated Balance Sheet, Financial Instruments | -706,379 |
Gross Amounts in Accompanying Condensed Consolidated Balance Sheet, Cash Collateral | ' |
Gross Amounts in Accompanying Condensed Consolidated Balance Sheet, Net Amount | -706,379 |
Calvert MOBs Loan | ' |
Derivative [Line Items] | ' |
Notional amount | 26,066,971 |
Amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet, Gross amount | -522,325 |
Amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet, Offset amount | ' |
Amounts of asset (liability) presented in the accompanying condensed consolidated balance sheet, Net amount | -522,325 |
Gross Amounts in Accompanying Condensed Consolidated Balance Sheet, Financial Instruments | -522,325 |
Gross Amounts in Accompanying Condensed Consolidated Balance Sheet, Cash Collateral | ' |
Gross Amounts in Accompanying Condensed Consolidated Balance Sheet, Net Amount | ($522,325) |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Oct. 01, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Common Stock Redemption | Common Stock Redemption | Subsequent Event | Reinvestment Plan | Reinvestment Plan | Common Stock | Common Stock | Common Stock | ||||
Common Stock Redemption | |||||||||||
Stockholders Equity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate offering proceeds received from public offering | $469,700,000 | ' | $181,600,000 | ' | ' | ' | $6,600,000 | $1,700,000 | ' | ' | ' |
Shares issued from public offering | 48,000,000 | ' | 18,500,000 | ' | ' | ' | 700,000 | 200,000 | ' | ' | ' |
Cash distribution declared | 9,015,210 | 1,700,000 | 3,197,400 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock distributions, shares | ' | ' | ' | ' | ' | ' | ' | ' | 676,174 | 130,842 | ' |
Percentage of taxable cash distribution | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of cash distribution considered as return of capital | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption of common stock, shares | ' | ' | ' | -76,129 | -1,049 | ' | ' | ' | -76,129 | ' | -1,049 |
Redemption of common stock, per share | ' | ' | ' | $9.27 | $9.99 | ' | ' | ' | ' | ' | ' |
Redemptions of common stock | $705,341 | ' | $10,474 | $700,000 | $10,000 | $300,000 | ' | ' | $761 | ' | $10 |
Effect_of_Derivative_Financial
Effect of Derivative Financial Instruments (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gain (loss) reclassified from AOCI into earnings (Effective Portion) | ' | ' | ' | ' |
Derivative instruments, loss recognized in other comprehensive income, effective portion | -1,298,261 | ' | -1,167,507 | ' |
Interest Rate Swap | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gain (loss) reclassified from AOCI into earnings (Effective Portion) | ' | ' | ' | ' |
Derivative instruments, loss recognized in other comprehensive income, effective portion | -69,557 | ' | 61,197 | ' |
Knoxville Medical Office Buildings | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gain (loss) reclassified from AOCI into earnings (Effective Portion) | ' | ' | ' | ' |
Derivative instruments, loss recognized in other comprehensive income, effective portion | -706,379 | ' | -706,379 | ' |
Calvert MOBs Loan | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Gain (loss) reclassified from AOCI into earnings (Effective Portion) | ' | ' | ' | ' |
Derivative instruments, loss recognized in other comprehensive income, effective portion | ($522,325) | ' | ($522,325) | ' |
Components_of_Benefit_or_Provi
Components of Benefit or Provision for Income Taxes (Detail) (USD $) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 | |
Current: | ' | ' |
Federal | ' | $13,312 |
State | ' | ' |
Total current benefit | ' | 13,312 |
Deferred: | ' | ' |
Federal | ' | -25,450 |
State | ' | -5,935 |
Total deferred provision | ' | -31,385 |
Income tax benefit (provision) | ' | ($18,073) |
Significant_Components_of_Defe
Significant Components of Deferred Tax Assets (Detail) (USD $) | Sep. 30, 2013 |
Schedule of Deferred Tax Assets and Liabilities [Line Items] | ' |
Carryforwards of net operating loss | $72,037 |
Prepaid rent | 279,496 |
Valuation allowance | -351,533 |
Net deferred tax assets | ' |
Reconciliation_of_Income_Taxes
Reconciliation of Income Taxes (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Reconciliation Of Income Taxes [Line Items] | ' | ' |
Tax expense computed at federal statutory rate | ($3,130,269) | ($2,039,166) |
State income tax provision, net | -5,935 | ' |
Benefit of REIT election | 3,118,131 | 2,039,166 |
Income tax benefit (provision) | ($18,073) | ' |
Tax expense computed at federal statutory rate | -35.00% | -35.00% |
State income tax provision, net | -0.07% | 0.00% |
Benefit of REIT election | 34.86% | 35.00% |
Income tax benefit (provision) | -0.21% | 0.00% |
Variable_Interest_Entities_VIE2
Variable Interest Entities (VIEs) - Additional Information (Detail) (USD $) | Sep. 30, 2013 |
In Millions, unless otherwise specified | |
Variable Interest Entity [Line Items] | ' |
Lease agreement buyout option | $5.80 |
Maximum exposure to loss VIEs limits | $35.40 |
Aggregate_Carrying_Amount_and_
Aggregate Carrying Amount and Major Classifications of Consolidated Assets and Liabilities (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 |
Variable Interest Entity [Line Items] | ' | ' | ' | ' |
Real estate investment properties, net | $505,141,168 | $230,410,959 | ' | ' |
Real estate under development, including land | 27,521,700 | 8,461,571 | ' | ' |
Intangibles, net | 37,860,571 | 7,024,470 | ' | ' |
Cash | 45,481,757 | 18,261,750 | 39,208,866 | 10,001,872 |
Accrued development costs | 3,070,190 | 310,975 | ' | ' |
Other liabilities | 6,637,195 | 158,801 | ' | ' |
Due to related parties | 3,473,514 | 1,289,880 | ' | ' |
VIEs | ' | ' | ' | ' |
Variable Interest Entity [Line Items] | ' | ' | ' | ' |
Real estate investment properties, net | 50,788,543 | 0 | ' | ' |
Real estate under development, including land | 26,818,643 | 8,399,079 | ' | ' |
Intangibles, net | 5,596,449 | 0 | ' | ' |
Cash | 956,067 | 8,734 | ' | ' |
Loan costs, net | 976,711 | 548,157 | ' | ' |
Other | 301,550 | 466,536 | ' | ' |
Mortgages and other notes payable | 45,332,110 | 2,000 | ' | ' |
Accounts payable and accrued expenses | 565,307 | 7,072 | ' | ' |
Accrued development costs | 3,070,190 | 310,975 | ' | ' |
Other liabilities | 954,508 | 0 | ' | ' |
Due to related parties | $257,426 | $71,482 | ' | ' |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Aug. 31, 2013 |
In Millions, unless otherwise specified | Pacific Northwest Senior Housing Communities | |
Property | ||
Facility | ||
Commitments and Contingencies [Line Items] | ' | ' |
Amount of additional money to fund to construction loan | $3.60 | ' |
Business acquisition total acquisition price | ' | 457.4 |
Number of senior housing facility acquired | ' | 19 |
Number of living units in acquisition | ' | 1,785 |
Number of independent living units in acquisition | ' | 580 |
Number of assisted living units in acquisition | ' | 1,053 |
Number of memory living units in acquisition | ' | 152 |
Total deposits funded as commitments to purchase | ' | $18.20 |
Tenants_that_Individually_Acco
Tenants that Individually Accounted for 10% or More of Total Revenues or Assets (Detail) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2012 | |||
Concentration Risk [Line Items] | ' | ' | ||
Percentage of Total Revenues | 33.60% | [1] | 93.80% | [1] |
Percentage of Total Assets | 23.20% | [2] | 46.90% | [2] |
[1] | Includes contractual rental income from operating leases, capital reserve income, straight-line rent adjustments and amortization of lease intangibles. | |||
[2] | Represents net book value of real estate assets and lease intangibles associated with the property leased by the respective tenant as of the end of the period presented as a percentage of total assets. |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 1 Months Ended | 9 Months Ended | |
In Millions, except Share data, unless otherwise specified | Nov. 01, 2013 | Oct. 01, 2013 | Sep. 30, 2013 |
Distribution Declared | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' |
Monthly cash distribution | $0.03 | $0.03 | ' |
Monthly stock distribution, shares | 0.0025 | 0.0025 | ' |
Cash and stock distribution to be paid and distributed, date | ' | ' | 31-Dec-13 |
Subsequent Event | Additional Subscription Proceeds | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' |
Additional subscription received | $36.70 | ' | ' |
Additional subscription proceeds received, shares | 3,700,000 | ' | ' |