Cover Page
Cover Page | 9 Months Ended |
Sep. 30, 2019 | |
Cover page. | |
Document Type | S-11/A |
Document Period End Date | Sep. 30, 2019 |
Entity Registrant Name | Healthcare Trust, Inc. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0001561032 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Real estate investments, at cost: | ||
Land | $ 210,064 | $ 209,284 |
Buildings, fixtures and improvements | 1,970,133 | 2,006,745 |
Construction in progress | 85,960 | 80,598 |
Acquired intangible assets | 263,447 | 256,452 |
Total real estate investments, at cost | 2,529,604 | 2,553,079 |
Less: accumulated depreciation and amortization | (421,532) | (381,909) |
Total real estate investments, net | 2,108,072 | 2,171,170 |
Cash and cash equivalents | 52,425 | 77,264 |
Restricted cash | 19,160 | 14,094 |
Assets held for sale | 70,674 | 52,397 |
Derivative assets, at fair value | 0 | 4,633 |
Straight-line rent receivable, net | 20,362 | 17,351 |
Prepaid expenses and other assets (including $257 and $154 due from related parties as of September 31, 2019 and December 31, 2018, respectively) | 46,745 | 28,785 |
Deferred costs, net | 13,087 | 11,752 |
Total assets | 2,330,525 | 2,377,446 |
LIABILITIES AND EQUITY | ||
Mortgage notes payable, net | 436,715 | 462,839 |
Long-term line of credit | 667,989 | 602,622 |
Market lease intangible liabilities, net | 12,449 | 17,104 |
Derivative liabilities, at fair value | 8,933 | 0 |
Accounts payable and accrued expenses (including $474 and $764 due to related parties as of September 30, 2019 and December 31, 2018, respectively) | 53,159 | 40,298 |
Deferred rent | 8,013 | 7,011 |
Distributions payable | 6,530 | 6,638 |
Total liabilities | 1,193,788 | 1,136,512 |
Stockholders’ Equity | ||
Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding as of September 30, 2019 and December 31, 2018 | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized, 92,430,992 and 91,963,532 shares of common stock issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 924 | 919 |
Additional paid-in capital | 2,041,993 | 2,031,967 |
Accumulated other comprehensive (loss) income | (8,933) | 4,582 |
Distributions in excess of accumulated earnings | (903,083) | (804,331) |
Total stockholders’ equity | 1,130,901 | 1,233,137 |
Non-controlling interests | 5,836 | 7,797 |
Total equity | 1,136,737 | 1,240,934 |
Total liabilities and equity | 2,330,525 | 2,377,446 |
Revolving Credit Facility | ||
LIABILITIES AND EQUITY | ||
Long-term line of credit | 163,618 | 243,300 |
Term Loan | ||
LIABILITIES AND EQUITY | ||
Long-term line of credit | 145,049 | 0 |
Fannie Mae Master Credit Facility | ||
LIABILITIES AND EQUITY | ||
Long-term line of credit | $ 359,322 | $ 359,322 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Due from related parties | $ 257 | $ 154 |
Due to Related Parties, Current | $ 474 | $ 764 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 92,430,992 | 91,963,532 |
Common stock, shares outstanding (in shares) | 92,430,992 | 91,963,532 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue from tenants | $ 95,440 | $ 90,191 | $ 280,445 | $ 270,586 |
Operating expenses: | ||||
Property operating and maintenance | 60,655 | 172,258 | ||
Property operating and maintenance | 59,298 | 166,161 | ||
Impairment charges | 22,615 | 17,837 | 22,634 | 18,570 |
Operating fees to related parties | 5,941 | 5,743 | 17,535 | 17,233 |
Acquisition and transaction related | 112 | 40 | 161 | 333 |
General and administrative | 4,782 | 4,441 | 15,394 | 12,705 |
Depreciation and amortization | 20,140 | 20,466 | 61,124 | 62,099 |
Total expenses | 114,245 | 107,825 | 289,106 | 277,101 |
Operating loss before gain on sale of real estate investments | (18,805) | (17,634) | (8,661) | (6,515) |
Gain on sale of real estate investments | 2,715 | 0 | 8,793 | 0 |
Operating (loss) income | (16,090) | (17,634) | 132 | (6,515) |
Other (expense) income: | ||||
Interest expense | (12,990) | (12,597) | (39,739) | (35,962) |
Interest and other income | 11 | 16 | 15 | 21 |
Loss (gain) on non-designated derivatives | (2) | 18 | (50) | 46 |
Total other expenses | (12,981) | (12,563) | (39,774) | (35,895) |
Loss before income taxes | (29,071) | (30,197) | (39,642) | (42,410) |
Income tax benefit (expense) | 271 | 550 | (364) | (225) |
Net loss | (28,800) | (29,647) | (40,006) | (42,635) |
Net loss attributable to non-controlling interests | 11 | 40 | 52 | 87 |
Net loss attributable to stockholders | (28,789) | (29,607) | (39,954) | (42,548) |
Other comprehensive (loss) income: | ||||
Unrealized (loss) gain on designated derivatives | (2,680) | (13,515) | ||
Unrealized (loss) gain on designated derivatives | 998 | 6,544 | ||
Comprehensive loss attributable to stockholders | $ (31,469) | $ (28,609) | $ (53,469) | $ (36,004) |
Basic and diluted weighted-average shares outstanding (in shares) | 91,992,963 | 90,203,311 | 91,884,495 | 90,983,620 |
Basic and diluted net loss per share (in usd per share) | $ (0.31) | $ (0.33) | $ (0.43) | $ (0.47) |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Total Stockholders' Equity | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Distributions in excess of accumulated earnings | Non-controlling Interests |
Beginning Balance (in shares) at Dec. 31, 2017 | 91,002,766 | ||||||
Beginning balance at Dec. 31, 2017 | $ 1,356,059 | $ 1,347,554 | $ 910 | $ 2,009,197 | $ 2,473 | $ (665,026) | $ 8,505 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock repurchases (in shares) | (759,867) | ||||||
Common stock repurchases | (14,202) | (14,202) | $ (7) | (14,195) | |||
Share-based compensation | 921 | 921 | 921 | ||||
Distributions declared | (66,867) | (66,867) | (66,867) | ||||
Common stock issued through distribution reinvestment plan (in shares) | 1,365,726 | ||||||
Common stock issued through distribution reinvestment plan | 28,551 | 28,551 | $ 14 | 28,537 | |||
Distributions to non-controlling interest holders | (406) | (406) | |||||
Other comprehensive income (loss) | 6,544 | 6,544 | 6,544 | ||||
Net loss | (42,635) | (42,548) | (42,548) | (87) | |||
Ending Balance (in shares) at Sep. 30, 2018 | 91,608,625 | ||||||
Ending balance at Sep. 30, 2018 | $ 1,267,965 | 1,259,953 | $ 917 | 2,024,460 | 9,017 | (774,441) | 8,012 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Distributions declared per share (in usd per share) | $ 0.73 | ||||||
Beginning Balance (in shares) at Jun. 30, 2018 | 91,395,825 | ||||||
Beginning balance at Jun. 30, 2018 | $ 1,311,711 | 1,303,572 | $ 914 | 2,019,874 | 8,019 | (725,235) | 8,139 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock repurchases (in shares) | (155,904) | ||||||
Common stock repurchases | (3,150) | (3,150) | $ (1) | (3,149) | |||
Share-based compensation | 282 | 282 | 282 | ||||
Distributions declared | (19,599) | (19,599) | (19,599) | ||||
Common stock issued through distribution reinvestment plan (in shares) | 368,704 | ||||||
Common stock issued through distribution reinvestment plan | 7,457 | 7,457 | $ 4 | 7,453 | |||
Distributions to non-controlling interest holders | (87) | (87) | |||||
Other comprehensive income (loss) | 998 | 998 | 998 | ||||
Net loss | (29,647) | (29,607) | (29,607) | (40) | |||
Ending Balance (in shares) at Sep. 30, 2018 | 91,608,625 | ||||||
Ending balance at Sep. 30, 2018 | $ 1,267,965 | 1,259,953 | $ 917 | 2,024,460 | 9,017 | (774,441) | 8,012 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Distributions declared per share (in usd per share) | $ 0.22 | ||||||
Beginning Balance (in shares) at Dec. 31, 2018 | 91,963,532 | ||||||
Beginning balance at Dec. 31, 2018 | $ 1,240,934 | 1,233,137 | $ 919 | 2,031,967 | 4,582 | (804,331) | 7,797 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock repurchases (in shares) | (656,433) | ||||||
Common stock repurchases | (13,293) | (13,293) | $ (7) | (13,286) | |||
Share-based compensation (in shares) | 15,000 | ||||||
Share-based compensation | 978 | 978 | 978 | ||||
Distributions declared | $ (58,711) | (58,711) | (58,711) | ||||
Common stock issued through distribution reinvestment plan (in shares) | 1,100,000 | 1,108,893 | |||||
Common stock issued through distribution reinvestment plan | $ 20,698 | 20,698 | $ 12 | 20,686 | |||
Distributions to non-controlling interest holders | (261) | (261) | |||||
Other comprehensive income (loss) | (13,515) | (13,515) | (13,515) | ||||
Net loss | (40,006) | (39,954) | (39,954) | (52) | |||
Rebalancing of ownership percentage | 0 | 1,648 | 1,648 | (1,648) | |||
Ending Balance (in shares) at Sep. 30, 2019 | 92,430,992 | ||||||
Ending balance at Sep. 30, 2019 | $ 1,136,737 | 1,130,901 | $ 924 | 2,041,993 | (8,933) | (903,083) | 5,836 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Distributions declared per share (in usd per share) | $ 0.63 | ||||||
Beginning Balance (in shares) at Jun. 30, 2019 | 92,030,344 | ||||||
Beginning balance at Jun. 30, 2019 | $ 1,180,859 | 1,174,924 | $ 919 | 2,034,918 | (6,253) | (854,660) | 5,935 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation (in shares) | 15,000 | ||||||
Share-based compensation | 333 | 333 | 333 | ||||
Distributions declared | (19,634) | (19,634) | (19,634) | ||||
Common stock issued through distribution reinvestment plan (in shares) | 385,648 | ||||||
Common stock issued through distribution reinvestment plan | 6,747 | 6,747 | $ 5 | 6,742 | |||
Distributions to non-controlling interest holders | (88) | (88) | |||||
Other comprehensive income (loss) | (2,680) | (2,680) | (2,680) | ||||
Net loss | (28,800) | (28,789) | (28,789) | (11) | |||
Rebalancing of ownership percentage | 0 | ||||||
Ending Balance (in shares) at Sep. 30, 2019 | 92,430,992 | ||||||
Ending balance at Sep. 30, 2019 | $ 1,136,737 | $ 1,130,901 | $ 924 | $ 2,041,993 | $ (8,933) | $ (903,083) | $ 5,836 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Distributions declared per share (in usd per share) | $ 0.21 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (40,006) | $ (42,635) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 61,124 | 62,099 |
Amortization of deferred financing costs | 4,888 | 6,448 |
Amortization of mortgage premiums and discounts, net | (135) | (200) |
(Accretion) amortization of market lease and other intangibles, net | (25) | 205 |
Bad debt expense | 4,797 | 9,227 |
Share-based compensation | 978 | 921 |
Gain on sale of real estate investments, net | (8,793) | 0 |
Gain on non-designated derivatives | 50 | (46) |
Impairment charges | 22,634 | 18,570 |
Changes in assets and liabilities: | ||
Straight-line rent receivable | (3,011) | (6,302) |
Prepaid expenses and other assets | (7,653) | (12,934) |
Due from related party | 0 | 14 |
Accounts payable, accrued expenses and other liabilities | 3,585 | 2,875 |
Deferred rent | 1,002 | 41 |
Net cash provided by operating activities | 39,435 | 38,283 |
Cash flows from investing activities: | ||
Investments in real estate | (91,638) | (73,536) |
Capital expenditures | (10,910) | (6,968) |
Proceeds from sale of real estate | 62,468 | 0 |
Net cash used in investing activities | (40,080) | (80,504) |
Cash flows from financing activities: | ||
Payments on credit facilities | (243,300) | (80,000) |
Proceeds from credit facilities | 163,618 | 94,153 |
Proceeds from term loan | 150,000 | 0 |
Proceeds from mortgage notes payable | 0 | 118,700 |
Payments on mortgage notes payable | (27,416) | (62,872) |
Payments for derivative instruments | 0 | (131) |
Payments of deferred financing costs | (10,290) | (3,307) |
Common stock repurchases | (13,293) | (14,202) |
Distributions paid on common stock | (38,186) | (43,096) |
Distributions to non-controlling interest holders | (261) | (406) |
Net cash (used in) provided by financing activities | (19,128) | 8,839 |
Net change in cash, cash equivalents and restricted cash | (19,773) | (33,382) |
Cash, cash equivalents and restricted cash, beginning of period | 91,358 | 102,588 |
Cash, cash equivalents and restricted cash, end of period | 71,585 | 69,206 |
Cash, cash equivalents and restricted cash, end of period | 91,358 | 102,588 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest, net of amounts capitalized | 34,949 | 31,192 |
Cash paid for income taxes | 447 | 328 |
Non-cash investing and financing activities: | ||
Common stock issued through distribution reinvestment plan | $ 20,698 | $ 28,551 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Healthcare Trust, Inc. (including, as required by context, Healthcare Trust Operating Partnership, L.P. (the “OP”) and its subsidiaries, the “Company”) invests in healthcare real estate, focusing on seniors housing and medical office buildings (“MOB”) located in the United States. As of September 30, 2019 , the Company owned 193 properties (all references to number of properties and square footage are unaudited) located in 31 states and comprised of 9.1 million rentable square feet. The Company, which was incorporated on October 15, 2012, is a Maryland corporation that elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2013. Substantially all of the Company’s business is conducted through the OP. The Company has no |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies The accompanying unaudited consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results for the interim periods. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results for the entire year or any subsequent interim period. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2018 , which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2019 . Except for those required by new accounting pronouncements discussed below, there have been no significant changes to the Company’s significant accounting policies during the nine months ended September 30, 2019 other than the updates described below. Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP. Reclassifications Certain prior year amounts have been reclassified to conform with the current year presentation. The Company has aggregated revenue from its lease components and non-lease components (tenant operating expense reimbursements) into one line. See — Recently Issued Accounting Pronouncements — ASU No. 2016-02 — Leases. Purchase Accounting The Company evaluates the inputs, processes and outputs of each asset acquired to determine if the transaction is a business combination or an asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized as part of the overall purchase price. In both a business combination and an asset acquisition, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, fixtures and tenant improvements. Intangible assets or liabilities may include the value of in-place leases, above- and below- market leases and other identifiable assets or liabilities based on lease or property specific characteristics. In addition, any assumed mortgages receivable or payable and any assumed or issued non-controlling interests (in a business combination) are recorded at their estimated fair values. In allocating the fair value to assumed mortgages, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above or below-market interest rates. In a business combination, the difference between the purchase price and the fair value of identifiable net assets acquired is either recorded as goodwill or as a bargain purchase gain. In an asset acquisition, the difference between the acquisition price (including capitalized transaction costs) and the fair value of identifiable net assets acquired is allocated to the non-current assets. All acquisitions during the three- month periods ended December 31, 2019 and 2018 were asset acquisitions. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and fixtures are based on cost segregation studies performed by independent third parties or on the Company’s analysis of comparable properties in the Company’s portfolio. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates and the value of in-place leases as applicable. Factors considered in the analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at contract rates during the expected lease-up period, which typically ranges from six to 24 months. The Company also estimates costs to execute similar leases including leasing commissions, legal and other related expenses. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The capitalized above-market lease values are amortized as a reduction of base rental revenue over the remaining terms of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases. If a tenant with a below-market rent renewal does not renew, any remaining unamortized amount will be taken into income at that time. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. Impairment of Long-Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the property for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If an impairment exists, due to the inability to recover the carrying value of a property, the Company would recognize an impairment loss in the consolidated statement of operations and comprehensive income to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss recorded would equal the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net earnings. Revenue Recognition The Company’s revenues, which are derived primarily from lease contracts, which include rent received from tenants in MOBs and triple-net leased healthcare facilities. As of September 30, 2019 , these leases had a weighted average remaining lease term of 5.7 years . Rent from tenants in the Company’s MOB and triple-net leased healthcare facilities operating segments (as discussed below) is recorded in accordance with the terms of each lease on a straight-line basis over the initial term of the lease. Because many of the leases provide for rental increases at specified intervals, GAAP requires the Company to record a receivable for, and include in revenues on a straight-line basis, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation. The Company’s revenues also include resident services and fee income primarily related to rent derived from lease contracts with residents in the Company’s Seniors Housing — Operating Properties (“SHOP”) held using a structure permitted by the REIT rules and to fees for ancillary services performed for SHOP residents, which are generally variable in nature. Rental income from residents in the Company’s SHOP segment is recognized as earned. Residents pay monthly rent that covers occupancy of their unit and basic services, including utilities, meals and some housekeeping services. The terms of the rent are short term in nature, primarily month-to-month. Fees for ancillary services are recorded in the period in which the services are performed. The Company defers the revenue related to lease payments received from tenants and residents in advance of their due dates. Pursuant to certain of the Company’s lease agreements, tenants are required to reimburse the Company for certain property operating expenses related to non-SHOP assets (recorded in revenue from tenants), in addition to paying base rent, whereas under certain other lease agreements, the tenants are directly responsible for all operating costs of the respective properties. Under ASC 842, the Company has elected to report combined lease and non-lease components in a single line “Revenue from tenants”. For comparative purposes, the Company has also elected to reflect prior revenue and reimbursements previously reported under ASC 842 also on a single line. For expenses paid directly by the tenant, under both ASC 842 and 840, the Company has reflected them on a net basis. The following tables present future base rent payments on a cash basis due to the Company over the periods indicated. These amounts exclude tenant reimbursements and contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes, among other items. As of September 30, 2019 : (In thousands) Future 2019 (remainder) $ 22,201 2020 85,858 2021 80,125 2022 71,692 2023 60,793 Thereafter 250,220 Total $ 570,889 The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Under the new leasing standard (see Recently Issued Accounting Pronouncements section below), the Company is required to assess, based on credit risk only, if it is probable that it will collect virtually all of the lease payments at the lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant. Partial reserves, or the ability to assume partial recovery are no longer permitted. If the Company determines that it is probable it will collect virtually all of the lease payments (rent and common area maintenance), the lease will continue to be accounted for on an accrual basis (i.e. straight-line). However, if the Company determines it’s not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and a full reserve would be recorded on previously accrued amounts in cases where it was subsequently concluded that collection was not probable. Cost recoveries from tenants are included in revenue from tenants in the accompanying consolidated statements of operations and comprehensive loss in the period the related costs are incurred, as applicable. Under ASC 842, uncollectable amounts are reflected as reductions in revenue. Under ASC 840, the Company recorded such amounts as bad debt expense as part of property operating expenses. During the three month periods ended September 30, 2019 and 2018 such amounts were $1.2 million and $4.9 million , respectively. During the nine months ended September 30, 2019 and 2018 , such amounts were $4.8 million and $9.2 million , respectively. Recently Issued Accounting Pronouncements Adopted as of January 1, 2019 ASU No. 2016-02 - Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) which provides new guidance related to the accounting for leases, as well as the related disclosures. For lessors of real estate, leases are accounted for using an approach substantially the same as previous accounting guidance for operating leases and direct financing leases. For lessees, the new standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. Lease expense for operating leases is recognized on a straight-line basis over the term of the lease, while lease expense for finance leases is recognized based on an effective interest method over the term of the lease. Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease, may now be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction. Upon adoption, lessors were allowed a practical expedient, which the Company has elected, by class of underlying assets to account for lease and non-lease components (such as tenant reimbursements of property operating expenses) as a single lease component as an operating lease because (a) the non-lease components have the same timing and pattern of transfer as the associated lease component; and (b) the lease component, if accounted for separately, would be classified as an operating lease. Additionally, only incremental direct leasing costs may be capitalized under this new guidance, which is consistent with the Company’s existing policies. Also, upon adoption, companies were allowed a practical expedient package, which the Company has elected, that allowed the Company: (a) to not reassess whether any expired or existing contracts entered into prior to January 1, 2019 are or contain leases; (b) to not reassess the lease classification for any expired or existing leases entered into prior to January 1, 2019 (including assessing sale-leaseback transactions); and (c) to not reassess initial direct costs for any expired or existing leases entered into prior to January 1, 2019. As a result, all of the Company’s existing leases will continue to be classified as operating leases under the new standard. Further, any existing leases for which the property is the leased to a tenant in a transaction that at inception was a sale-leaseback transaction will continue to be treated (absent a modification) as operating lease.The Company did not have any leases that would be considered financing leases as of January 1, 2019. The Company assessed the impact of adoption from both a lessor and lessee perspective, which is discussed in more detail below, and adopted the new guidance prospectively on January 1, 2019, using a prospective transition approach under which the Company elected to apply the guidance effective January 1, 2019 and not adjust prior comparative reporting periods (except for the Company’s presentation of lease revenue discussed below). Lessor Accounting As discussed above, the Company was not required to re-assess the classification of its leases, which are considered operating leases under ASU 2016-02. The following is a summary of the most significant impacts to the Company of the new accounting guidance, as lessor: • Because the Company elected the practical expedient noted above to not separate non-lease component revenue from the associated lease component, the Company has aggregated revenue from its lease components and non-lease components (tenant operating expense reimbursements) into one line. The prior period has been conformed to this new presentation. • Changes in the Company’s assessment of receivables that result in bad debt expense is now required to be recorded as an adjustment to revenue, rather than a charge to bad debt expense. This new classification applies for the first quarter of 2019 and reclassification of prior period amounts is not permitted. At transition on January 1, 2019, after assessing its reserve balances at December 31, 2018 under the new guidance, the Company wrote off accounts receivable of $0.1 million and straight-line rents receivable of $0.1 million as an adjustment to the opening balance of accumulated deficit, and accordingly rent for these tenants is currently recorded on a cash basis. • Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed. Under prior accounting guidance, the recognition would have been deferred. Lessee Accounting The Company was a lessee under ground leases for 17 properties as of January 1, 2019 and because the Company has elected the practical expedients described above, it determined that 11 of these leases would continue to be classified as operating leases under the new standard. The following is a summary of the most significant impacts to the Company of the new accounting guidance, as lessee: • Upon adoption of the new standard, the Company recorded ROU assets and lease liabilities equal to $10.2 million for the present value of the lease payments related to its ground leases. These amounts are included in prepaid expenses and other assets and accounts payable and accrued expenses on the consolidated balance sheet. • The Company also reclassified $0.5 million related to amounts previously reported as a straight-line rent liability, $4.8 million , net related to amounts previously reported as above and below market ground lease intangibles to the ROU assets. For additional information and disclosures related to these operating leases, see Note 16 — Commitments and Contingencies. Other Accounting Pronouncements In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) : (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception guidance that changes the method to determine the classification of certain financial instruments with a down round feature as liabilities or equity instruments and clarify existing disclosure requirements for equity-classified instruments. A down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. As a result, a freestanding equity-linked financial instrument no longer would be accounted for as a derivative liability, rather, an entity that presents earnings per share is required to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common stockholders in basic earnings per share. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features. The revised guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2018. Adoption should be applied retrospectively to outstanding financial instruments with a down round feature with a cumulative-effect adjustment to the statement of financial position. The Company adopted the new guidance on January 1, 2019 and it did not have an impact on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The Company adopted ASU 2017-12 on January 1, 2019, as required under the guidance, using a modified retrospective transition method and the adoption did not have a material impact on its consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation- Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting as an amendment and update expanding the scope of Topic 718. The amendment specifies that Topic 718 now applies to all share-based payment transactions, even nonemployee awards, in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. Under the new guidance, awards to nonemployees are measured on the grant date, rather than on the earlier of the performance commitment date or the date at which the nonemployee’s performance is complete. Also, the awards would be measured by estimating the fair value of the equity instruments to be issued, rather than the fair value of the goods or services received or the fair value of the equity instruments issued, whichever can be measured more reliably. In addition, entities may use the expected term to measure nonemployee awards or elect to use the contractual term as the expected term, on an award-by-award basis. The new guidance is effective for the Company in annual periods beginning after December 15, 2018, and interim periods within those annual periods. As of June 30, 2019 the Company did not have any nonemployee awards outstanding that would be impacted by the new guidance, however the Company will apply this new guidance prospectively to grants of nonemployee awards, if any. The Company has adopted ASU 2018-07 on January 1, 2019. Pending Adoption as of September 30, 2019 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the update requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. On July 25, 2018, the FASB proposed an amendment to ASU 2016-13 to clarify that operating lease receivables recorded by lessors (including unbilled straight-line rent) are explicitly excluded from the scope of ASU 2016-13. The new guidance is effective for reporting periods beginning after December 15, 2019, with early adoption permitted for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . The objective of ASU 2018-13 is to improve the effectiveness of disclosures in the notes to the financial statements by removing, modifying, and adding certain fair value disclosure requirements to facilitate clear communication of the information required by generally accepted accounting principles. The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 with early adoption permitted upon issuance of this ASU. The Company is currently evaluating the potential impact of this new guidance. |
Real Estate Investments
Real Estate Investments | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate Investments, Net [Abstract] | |
Real Estate Investments | Note 3 — Real Estate Investments The Company owned 193 properties as of September 30, 2019 . The Company invests in MOBs, seniors housing communities and other healthcare-related facilities primarily to expand and diversify its portfolio and revenue base. During the nine months ended September 30, 2019 , the Company, through wholly-owned subsidiaries of the OP, completed its acquisitions of five multi-tenant MOBs, three single tenant MOBs and one SHOP for an aggregate contract purchase price of $86.3 million . Additionally, the Company incurred construction in progress costs during the period of $5.4 million , inclusive of capitalized interest totaling $2.8 million . The following table presents the allocation of real estate assets acquired and liabilities assumed, as well as capitalized construction in progress, during the nine months ended September 30, 2019 and 2018 : Nine Months Ended September 30, (In thousands) 2019 2018 Real estate investments, at cost: Land $ 6,356 $ 7,870 Buildings, fixtures and improvements 68,903 53,614 Construction in progress 5,362 6,685 Total tangible assets 80,621 68,169 Acquired intangibles: In-place leases and other intangible assets (1) 11,777 5,440 Market lease and other intangible assets (1) 723 276 Market lease liabilities (1) (1,483 ) (286 ) Total intangible assets and liabilities 11,017 5,430 Cash paid for real estate investments, including acquisitions $ 91,638 $ 73,599 Number of properties purchased 9 11 _______________ (1) Weighted-average remaining amortization periods for in-place leases, an above-market lease and a below-market lease liability acquired were 9.9 years and 7.7 years as of September 30, 2019 and 2018 , respectively. As of September 30, 2019 and 2018 , the Company did not have any tenants (including for this purpose, all affiliates of such tenants) whose annualized rental income on a straight-line basis represented 10% or greater of total annualized rental income for the portfolio on a straight-line basis. The following table lists the states where the Company had concentrations of properties where annualized rental income on a straight-line basis represented 10% or more of consolidated annualized rental income on a straight-line basis for all properties as of September 30, 2019 and 2018 : September 30, State 2019 2018 Florida 23.9% 16.8% Michigan 11.0% 12.9% Georgia * 10.2% Pennsylvania * 10.2% _______________ * State’s annualized rental income on a straight-line basis was not greater than 10% of total annualized rental income for all portfolio properties as of the date specified. Intangible Assets and Liabilities The following table discloses amounts recognized within the consolidated statements of operations and comprehensive loss related to amortization of in-place leases and other intangible assets, amortization and accretion of above- and below-market lease assets and liabilities, net and the amortization and accretion of above- and below-market ground leases, for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Amortization of in-place leases and other intangible assets (1) $ 3,872 $ 4,632 $ 11,832 $ 14,382 (Accretion) and Amortization of above-and below-market leases, net (2) $ 13 $ (30 ) $ (142 ) $ (30 ) Amortization of above-and below-market ground leases, net (3) $ 74 $ 37 $ 117 $ 110 _______________ (1) Reflected within depreciation and amortization expense (2) Reflected within rental income (3) Reflected within property operating and maintenance expense The following table provides the projected amortization expense and adjustments to revenues for the next five years: (In thousands) Remainder 2019 2020 2021 2022 2023 In-place lease assets $ 3,610 $ 13,115 $ 10,650 $ 8,644 $ 6,770 Other intangible assets 109 414 414 414 414 Total to be added to amortization expense $ 3,719 $ 13,529 $ 11,064 $ 9,058 $ 7,184 Above-market lease assets $ (346 ) $ (1,295 ) $ (993 ) $ (645 ) $ (307 ) Below-market lease liabilities 324 1,488 1,269 1,208 1,095 Total to be (deducted from) added to revenue from tenants $ (22 ) $ 193 $ 276 $ 563 $ 788 Below market ground leases $ 63 $ 222 $ 214 $ 212 $ 212 Above market ground leases (13 ) (53 ) (53 ) (52 ) (35 ) Total to be added to property operating and maintenance $ 50 $ 169 $ 161 $ 160 $ 177 Dispositions On February 6, 2019, the Company sold five of the MOB properties within the State of New York (the “New York Six MOBs”) for a contract sales price of $45.0 million , resulting in a gain on sale of real estate investments of $6.1 million which is included on the Consolidated Statement of Operations for the nine months ended September 30, 2019 . The Company had reconsidered the intended holding period for all six of the New York Six MOBs due to various market conditions and the potential to reinvest in properties generating a higher yield. On July 26, 2018, the Company had originally entered into a purchase and sale agreement for the sale of the New York Six MOBs, for an aggregate contract sale price of approximately $68.0 million and subsequently, on September 25, 2018, the Company further amended the purchase and sale agreement to decrease the aggregate contract sale price to $58.8 million . The one remaining New York Six MOB was sold for a contract sales price of $13.6 million on August 22, 2019, resulting in a gain on sale of real estate investments of $2.9 million recorded in the Consolidated Statement of Operations for the three and nine months ended September 30, 2019 . During the first quarter of 2019, the Company reconsidered the intended holding period for one of its SHOP properties located in Brookings, OR (“Ocean Park”) due to various market conditions and the potential to reinvest in properties generating a higher yield. On March 21, 2019, the Company entered into a purchase and sale agreement for the sale of Ocean Park, for an aggregate contract sale price of approximately $3.6 million . On April 1, 2019, the Company amended the purchase and sale agreement to decrease the aggregate contract sale price to $3.5 million . In connection with this amendment, the Company recognized an impairment charge of approximately $19,000 on Ocean Park during the second quarter of 2019, which is included on the consolidated statement of operations and comprehensive loss. On August 1, 2019, the Company closed its disposition of Ocean Park resulting in a loss on sale of real estate investments of $0.2 million recorded in the Consolidated Statement of Operations for the three and nine months ended September 30, 2019 . Assets Held for Sale and Related Impairment When assets are identified by management as held for sale, the Company reflects them separately on its balance sheet and stops recognizing depreciation and amortization expense on the identified assets and estimates the sales price, net of costs to sell, of those assets. If the carrying amount of the assets classified as held for sale exceeds the estimated net sales price, the Company records an impairment charge equal to the amount by which the carrying amount of the assets exceeds the Company’s estimate of the net sales price of the assets. In April 2019, the Company began marketing for a possible sale a portfolio of 14 SHOP properties located in Michigan (the “Michigan SHOPs”). During the three months ended September 30, 2019 , the Company received multiple bids and has accepted a non-binding letter of intent from a prospective buyer to purchase the Michigan SHOPs as a single portfolio for $71.8 million . The Company is currently finalizing definitive sale agreements with the prospective buyer contemplating a potential sale of the properties in the near term. The Company determined that the Michigan SHOPs should be classified as held for sale as of September 30, 2019 . There can be no guarantee that the sale of these properties will close under the proposed terms, or at all. The Company recognized an impairment charge of $22.6 million in the three and nine months ended September 30, 2019 , representing the amount by which the carrying amount of the Michigan SHOPs exceeds the Company’s estimate of the net sales price of the Michigan SHOPs. As of September 30, 2019 , all but three of these properties are either part of the borrowing base of the Credit Facility or mortgaged under the Bridge Loan or Fannie Mae Master Credit Facilities. The following table details the major classes of assets associated with the properties that are classified as held for sale as of September 30, 2019 and December 31, 2018: (In thousands) September 30, 2019 December 31, 2018 Land $ 4,051 $ 5,285 Buildings, fixtures and improvements 66,623 47,112 Assets held for sale $ 70,674 $ 52,397 Impairment of Held for Use Real Estate Investments When circumstances indicate the carrying value of a property classified as held for use may not be recoverable, the Company reviews the property for impairment. For the Company, the most common triggering events are (i) concerns regarding the tenant (i.e., credit or expirations) in the Company’s single tenant properties or significant vacancy in the Company’s multi-tenant properties and (ii) changes to the Company’s expected holding period as a result of business decisions or non-recourse debt maturities. If a triggering event is identified, the Company considered the projected cash flows due to various performance indicators, and where appropriate, the Company evaluated the impact on its ability to recover the carrying value of the properties based on the expected cash flows on an undiscounted basis over its intended holding period. The Company made certain assumptions in this approach including, among others, the market and economic conditions, expected cash flow projections, intended holding periods and assessments of terminal values. Where more than one possible scenario exists, the Company uses a probability weighted approach in estimating cash flows. As these factors are difficult to predict and are subject to future events that may alter management's assumptions, the future cash flows estimated by management in its impairment analysis may not be achieved, and actual losses for impairment may be realized in the future. If the undiscounted cash flows over the expected hold period are less than the carrying value, the Company reflects an impairment charge to write the asset down to its fair value. As of September 30, 2019 , the Company owned held for use properties for which the Company had reconsidered the projected cash flows due to various performance indicators, and where appropriate, the Company evaluated the impact on its ability to recover the carrying value of such properties based on the expected cash flows over its intended holding period. The Company made certain assumptions in this approach including, among others, the market and economic conditions, expected cash flow projections, intended holding periods and assessments of terminal values. Where more than one possible scenario exists, the Company uses a probability weighted approach. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analysis may not be achieved, and actual losses for impairment may be realized in the future. In connection with the amendment of the Ocean Park purchase and sale agreement, the Company recognized an impairment charge of approximately $19,000 , which was recorded in the nine months ended September 30, 2019 . As a result of its consideration of impairment of held for use assets, the Company also determined that the carrying value of one held for use property exceeded its estimated undiscounted cash flows and recognized an aggregate impairment charge of $1.3 million and $2.0 million , which is included on the consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2018 . The estimated undiscounted cash flows of the remaining properties evaluated were greater than their carrying value. The LaSalle Tenant The Company is currently exploring options to replace tenants at four triple-net leased properties in Texas (collectively, the “LaSalle Tenant”). In January 2018, the Company entered into an agreement with the LaSalle Tenant in which the Company agreed to forbear from exercising legal remedies, including staying a lawsuit against the LaSalle Tenant, as long as the LaSalle Tenant pays the amounts due for rent and property taxes on an updated payment schedule pursuant to a forbearance agreement. The LaSalle Tenant is currently in default of the forbearance agreement and owes the Company $8.2 million of rent, property taxes, late fees, and interest receivable thereunder. The Company has the entire receivable balance, including any monetary damages, and related income from the LaSalle Tenant fully reserved as of September 30, 2019 . The Company incurred $1.2 million and $3.1 million of bad debt expense, including straight-line rent write-offs, related to the LaSalle Tenant during the three and nine months ended September 30, 2019 , respectively, which is included in revenue from tenants on the consolidated statement of operations and comprehensive loss. The Company incurred $3.3 million and $3.6 million of bad debt expense, including straight-line rent write-offs, related to the LaSalle Tenant during the three and nine months ended September 30, 2018 . On February 15, 2019, the Company filed an amended petition in Texas state court seeking the appointment of a receiver to manage the operations at these properties and for recovery of damages for the various breaches by the LaSalle Tenant. In April 2019, the Company and the LaSalle Tenant participated in a mediation of the claims. Subsequent to the mediation, The LaSalle Group Inc., a guarantor of certain of the LaSalle Tenant’s lease obligations (the “LaSalle Guarantor”), filed for voluntarily relief under chapter 11 of the United States Bankruptcy Code. The Company severed its claims against the LaSalle Guarantor from the action against the LaSalle Tenant. On August 27, 2019, the court awarded the Company monetary damages on its claims against the LaSalle Tenant in an amount equal to $7.7 million plus interest. The Company continues to have the receivables relating to the LaSalle Tenant fully reserved as of September 30, 2019 . On October 30, 2019, the court entered into an order appointing a receiver. The Company and the receiver are currently evaluating the management structure and operational strategy of these properties. This receiver is empowered to replace the LaSalle Tenant with a new tenant and operator at the properties. The NuVista Tenant The Company had tenants at two of its properties in Florida (collectively, the “NuVista Tenant”) that were in default under its leases beginning from July 2017 and collectively owe the Company $10.1 million of rent, property taxes, late fees, and interest receivable under its leases as of September 30, 2019 . There can be no guarantee on the collectability of these receivables, and as such, the Company has the entire receivable balance and related income from the NuVista Tenant fully reserved as of September 30, 2019 . The Company did not incur bad debt expense related to the NuVista Tenant during the three months ended September 30, 2019 and incurred $1.1 million during the nine months ended September 30, 2019 , which is included in revenue from tenants in the consolidated statement of operations and comprehensive loss. The Company incurred bad debt expense related to the NuVista Tenant of $1.6 million and $5.4 million during the three and nine months ended September 30, 2018 , respectively, which is included in property operating and maintenance expense in the consolidated statement of operations and comprehensive loss. The NuVista Tenant is related to Palm Health Partners, LLC (“Palm”), the developer of the Company’s development property in Jupiter, Florida which is also currently in default to the Company (see Note 16 — Commitments and Contingencies for more information on the status of the relationship with Palm). At one of the properties which was occupied by the NuVista Tenant, located in Wellington, Florida, the Company and the tenant entered into an operations transfer agreement (the “OTA”) pursuant to which the Company and the tenant agreed to cooperate in transitioning operations at the property to a third party operator selected by the Company. On February 19, 2019, in response to litigation commenced by the Company against the NuVista Tenant to enforce the OTA, the United States District Court for the Southern District of Florida entered into an agreed order (the “Order”) pursuant to which it found that the NuVista Tenant was in default under the lease for the property and that the OTA was valid, binding and in full force and effect, as modified by the Order. Subsequent to the entry into the Order, the Company, its designated manager and NuVista Tenant transitioned operations at the property to the Company’s designated manager. The Company’s designated manager received its license to operate the facility on April 1, 2019 and is in operational control of the property. On May 20, 2019, the court entered into a final order from the court terminating the existing lease with the NuVista Tenant. Following entry into the order, the Company signed a lease with a taxable REIT subsidiary (“TRS”) and engaged its designated manager, a third party, to operate the property. This structure is permitted by the REIT rules, under which a REIT may lease “qualified health care” properties on an arm’s length basis to a TRS if the property is operated on behalf of such subsidiary by an eligible independent contractor. During the three months ended September 30, 2019 the Company received $1.6 million under the OTA for periods prior to the lease termination, which amounts had previously been fully reserved. This payment under the OTA is included in revenue from tenants in the consolidated statement of operations and comprehensive loss. |
Mortgage Notes Payable, Net
Mortgage Notes Payable, Net | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable, Net | Mortgage Notes Payable, Net The following table reflects the Company’s mortgage notes payable as of September 30, 2019 and December 31, 2018 : Outstanding Loan Amount as of Effective Interest Rate (1) as of Portfolio Encumbered Properties (2) September 30, December 31, 2018 September 30, December 31, 2018 Interest Rate Maturity (In thousands) (In thousands) Countryside Medical Arts - Safety Harbor, FL — $ — $ 5,690 — % 6.20 % Variable (6) Apr. 2019 (5) St. Andrews Medical Park - Venice, FL — — 6,289 — % 6.20 % Variable (6) Apr. 2019 (5) Palm Valley Medical Plaza - Goodyear, AZ 1 3,140 3,222 4.15 % 4.15 % Fixed Jun. 2023 Medical Center V - Peoria, AZ 1 2,907 2,977 4.75 % 4.75 % Fixed Sep. 2023 Courtyard Fountains - Gresham, OR 1 23,545 23,905 3.87 % 3.87 % Fixed Jan. 2020 (8) Fox Ridge Bryant - Bryant, AR 1 7,319 7,427 3.98 % 3.98 % Fixed May 2047 Fox Ridge Chenal - Little Rock, AR 1 16,769 16,988 3.98 % 3.98 % Fixed May 2049 Fox Ridge North Little Rock - North Little Rock, AR 1 10,405 10,541 3.98 % 3.98 % Fixed May 2049 Philip Professional Center - Lawrenceville, GA — — 4,793 — % 4.00 % Fixed Oct. 2019 (5) Capital One MOB Loan 31 241,987 250,000 4.44 % 4.44 % Fixed (3) Jun. 2022 Bridge Loan 15 18,613 20,271 4.57 % 4.87 % Variable (7) Dec. 2019 (9) Multi-Property CMBS Loan 21 118,700 118,700 4.60 % 4.60 % Fixed May 2028 Gross mortgage notes payable 73 443,385 470,803 4.43 % 4.48 % Deferred financing costs, net of accumulated amortization (4) (4,991 ) (6,591 ) Mortgage premiums and discounts, net (1,503 ) (1,373 ) Mortgage notes payable, net $ 436,891 $ 462,839 _____________ (1) Calculated on a weighted average basis for all mortgages outstanding as of September 30, 2019 and December 31, 2018 . (2) Does not include real estate assets mortgaged to secure advances under the Fannie Mae Master Credit Facilities (as defined below) or eligible unencumbered real estate assets comprising the borrowing base of the Credit Facility (as defined in Note 5 — Credit Facilities ). The equity interests and related rights in the Company’s wholly owned subsidiaries that directly own or lease the real estate assets comprising the borrowing base have been pledged for the benefit of the lenders thereunder ( see Note 5 — Credit Facilities for additional details). (3) Variable rate loan, based on 30-day LIBOR, which is fixed as a result of entering into “pay-fixed” interest rate swap agreements ( see Note 7 — Derivatives and Hedging Activities for additional details). (4) Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining financing. These costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method for fixed rate loans and the straight-line method for variable rate loans. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined it is probable the financing will not close. (5) The loan was repaid and the property was added to the borrowing base under the Credit Facility in April 2019. (6) Based on 30-day LIBOR. (7) Variable rate loan, based on 30-day LIBOR, of which $8.0 million was fixed as a result of entering into “pay-fixed” interest rate swap agreements at September 30, 2019 ( see Note 7 — Derivatives and Hedging Activities for additional details). (8) Loan was repaid in October 2019, in advance of its scheduled maturity, and the property was added to the borrowing base of the revolving credit facility ( see Note 17 — Subsequent Events for additional details). (9) Loan was repaid in October 2019, in advance of its scheduled maturity, and nine the properties were added to the borrowing base of the revolving credit facility ( see Note 17 — Subsequent Events for additional details). As of September 30, 2019 , the Company had pledged $1.0 billion in total real estate investments, at cost, as collateral for its $443.4 million of gross mortgage notes payable. This real estate is not available to satisfy other debts and obligations unless first satisfying the mortgage notes payable secured by these properties. The Company makes payments of principal and interest, or interest only, depending upon the specific requirements of each mortgage note, on a monthly basis. Some of the Company’s mortgage note agreements require compliance with certain property-level financial covenants, including debt service coverage ratios. As of September 30, 2019 , the Company was in compliance with these financial covenants. Future Principal Payments The following table summarizes the scheduled aggregate principal payments on mortgage notes payable for the five years subsequent to September 30, 2019 and thereafter: (In thousands) Future Principal Payments 2019 (remainder) $ 18,945 2020 24,279 2021 892 2022 242,916 2023 6,056 Thereafter 150,297 Total $ 443,385 The Company plans to refinance or exercise extension options for the remaining mortgages due in 2019 prior to their maturity. |
Credit Facilities
Credit Facilities | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Credit Facilities | Note 5 — Credit Facilities The Company had the following credit facilities outstanding as of September 30, 2019 and December 31, 2018 : Outstanding Facility Amount as of Effective Interest Rate Credit Facility Encumbered Properties (1) September 30, December 31, 2018 September 30, December 31, 2018 Interest Rate Maturity (In thousands) (In thousands) Prior Credit Facility — $ — $ 243,300 — % 4.62 % — — Credit Facility: Revolving Credit Facility $ 163,618 $ — 4.26 % — % Variable Mar. 2024 Term Loan 150,000 — 4.25 % — % Variable (6) Mar. 2024 Deferred financing costs (4,951 ) — Term Loan, net 145,049 — Total Credit Facility 81 (2) $ 308,667 $ — Fannie Mae Master Credit Facilities: Capital One Facility 12 (3) $ 216,614 $ 216,614 4.70 % 4.83 % Variable (7) Nov. 2026 KeyBank Facility 10 (4) 142,708 142,708 4.72 % 4.88 % Variable (7) Nov. 2026 Total Fannie Mae Master Credit Facilities 22 $ 359,322 $ 359,322 Total Credit Facilities 103 $ 667,989 $ 602,622 4.50 % 4.76 % (5) _______________ (1) Encumbered properties are as of September 30, 2019 . (2) The equity interests and related rights in the Company’s wholly owned subsidiaries that directly own or lease the eligible unencumbered real estate assets comprising the borrowing base of the Credit Facility (as defined below) have been pledged for the benefit of the lenders thereunder. (3) Secured by first-priority mortgages on 12 of the Company’s seniors housing properties located in Florida, Georgia, Iowa and Michigan as of September 30, 2019 with a carrying value of $348.9 million . (4) Secured by first-priority mortgages on ten of the Company’s seniors housing properties located in Michigan, Missouri, Kansas, California, Florida, Georgia and Iowa as of September 30, 2019 with a carrying value of $250.9 million . (5) Calculated on a weighted average basis for all credit facilities outstanding as of September 30, 2019 and December 31, 2018 . (6) Variable rate loan, based on LIBOR, all of which was fixed as a result of entering into “pay-fixed” interest rate swap agreements ( see Note 7 — Derivatives and Hedging Activities for additional details). (7) Variable rate loan which is capped as a result of entering into interest rate cap agreements ( see Note 7 — Derivatives and Hedging Activities for additional details). In October 2019, the Company replaced two maturing interest rate cap agreements ( see Note 17 — Subsequent Events for additional details). Credit Facility On March 21, 2014, the Company, through the OP, entered into a senior secured revolving credit facility (as amended from time to time, the “Prior Credit Facility”). On March 13, 2019, the Company entered into a new senior secured credit facility (the ‘‘Credit Facility’’) by amending and restating the Prior Credit Facility prior to its maturity on March 21, 2019. The total commitments under the Credit Facility are $630.0 million and include an uncommitted “accordion feature” whereby, upon the Company’s request, but at the sole discretion of the participating lenders, the commitments under the Credit Facility may be increased by up to an additional $370.0 million up to a total of $1.0 billion . The Credit Facility consists of two components, a revolving credit facility (the “Revolving Credit Facility”) and a term loan (the “Term Loan”). The Revolving Credit Facility is interest-only and matures on March 13, 2023, subject to a one -year extension at the Company’s option. The Term Loan is interest-only and matures on March 13, 2024. The Revolving Credit Facility has total commitments of up to $480.0 million , and the Term Loan has total commitments of up to $150.0 million (both excluding the accordion feature). The amount available for borrowings under the Credit Facility is based on the lesser of (1) 55% ( 60% from and after January 1, 2020) of the value (or in certain cases cost) of the pool of eligible unencumbered real estate assets comprising the borrowing base, and (2) a maximum amount permitted to maintain a minimum debt service coverage ratio with respect to the borrowing base, in each case, as of the determination date. Like the Prior Credit Facility, the Credit Facility is secured by a pledged pool of the equity interests and related rights in the Company’s wholly owned subsidiaries that directly own or lease the eligible unencumbered real estate assets comprising the borrowing base thereunder. After the closing of the Credit Facility, the 65 properties that had comprised the borrowing base under the Prior Credit Facility comprised the borrowing base under the Credit Facility. The Company has the option to have amounts outstanding under the Revolving Credit Facility bear interest at a rate per annum equal to either: (a) LIBOR, plus an applicable margin that ranges, depending on the Company’s leverage, from 1.60% to 2.20% ; or (b) the Base Rate (as defined in the Credit Facility), plus an applicable margin that ranges, depending on the Company’s leverage, from 0.35% to 0.95% . The Base Rate is defined in the Credit Facility as the greatest of (a) the fluctuating annual rate of interest announced from time to time by the agent as its “prime rate”, (b) 0.5% above the Federal Funds Effective Rate or (c) the then applicable LIBOR for a one-month interest period plus 1.0% per annum. The Company has the option to have amounts outstanding under the Term Loan bear interest at a rate per annum equal to either: (a) LIBOR, plus an applicable margin that ranges, depending on the Company’s leverage, from 1.55% to 2.15% ; or (b) the Base Rate (as defined in the paragraph above), plus an applicable margin that ranges, depending on the Company’s leverage, from 0.30% to 0.90% . On April 15, 2019, the Company entered into “pay-fixed” interest rate swaps on the Term Loan, resulting in a weighted average fixed rate of 2.3% plus applicable margin under the Credit Facility. As of September 30, 2019 , the Revolving Credit Facility and the Term Loan had an effective interest rate per annum equal to 4.26% and 4.25% , respectively. The Credit Facility contains customary representations, warranties, as well as affirmative and negative covenants. As of September 30, 2019 , the Company was in compliance with the financial covenants under the Credit Facility, and, as of the date of the closing thereunder, the Company was in compliance with the financial covenants under the Prior Credit Facility. As of September 30, 2019 , $150.0 million was outstanding under the Term Loan, while $163.6 million was outstanding under the Revolving Credit Facility and the unused borrowing capacity under the Revolving Credit Facility was $19.8 million . Availability of borrowings is based on a pool of eligible otherwise unencumbered real estate assets comprising the borrowing base thereunder. The equity interests and related rights in the Company’s wholly owned subsidiaries that directly own or lease the eligible unencumbered real estate assets comprising the borrowing base of the Revolving Credit Facility have been pledged for the benefit of the lenders thereunder. Pursuant to the Credit Facility, until January 1, 2020, the Company is not permitted to increase distributions the Company pays to its stockholders. From and after January 1, 2020, provisions in the Credit Facility will restrict the Company from paying distributions (including dividends to holders of any preferred stock the Company may issue) in any fiscal quarter that, when added to the aggregate amount of all other distributions paid in the same fiscal quarter and the preceding three fiscal quarters (calculated on an annualized basis during the first three fiscal quarters for which the provisions are in effect), exceed 95% of Modified FFO (as defined in the Credit Facility and which is similar but not identical to MFFO as discussed in this Quarterly Report on Form 10-Q) during the applicable period. Until the Company becomes subject to these distribution restrictions, the Company is subject to a covenant requiring the Company to maintain a combination of cash, cash equivalents and availability for future borrowings under the Revolving Credit Facility totaling at least $50.0 million , and the amount available for borrowings under the Credit Facility based on the same borrowing base properties is lower. Fannie Mae Master Credit Facilities On October 31, 2016, the Company, through wholly-owned subsidiaries of the OP, entered into a master credit facility agreement relating to a secured credit facility with KeyBank (the “KeyBank Facility”) and a master credit facility agreement with Capital One for a secured credit facility with Capital One Multifamily Finance LLC, an affiliate of Capital One (the “Capital One Facility”; the Capital One Facility and the KeyBank Facility are referred to herein individually as a “Fannie Mae Master Credit Facility” and together as the “Fannie Mae Master Credit Facilities”). Advances made under these agreements are assigned by Capital One and KeyBank to Fannie Mae at closing for inclusion in Fannie Mae’s Multifamily MBS program. Effective October 31, 2016, in conjunction with the execution of the Fannie Mae Master Credit Facilities, the OP entered into two interest rate cap agreements with an unrelated third party, which caps LIBOR interest paid (not giving effect to the applicable margin) on amounts outstanding under the Fannie Mae Master Credit Facilities at a maximum of 3.5% ( see Note 7 — Derivatives and Hedging Activities for additional disclosure regarding the Company’s derivatives). In October 2019, the Company replaced two maturing interest rate cap agreements ( see Note 17 — Subsequent Events for additional details). The Company may request future advances under the Fannie Mae Master Credit Facilities by borrowing against the value of the initial mortgaged properties, or by adding eligible properties to the collateral pool, subject to customary conditions, including satisfaction of minimum debt service coverage and maximum loan-to-value tests. During the year ended December 31, 2017, the Company increased its advances under the Capital One Facility and the KeyBank Facility to $152.5 million and $142.7 million , respectively. On March 2, 2018, the Company, increased its advances under the Capital One Facility by $64.2 million . The advance was secured by the addition of seven mortgaged properties subject to the Capital One Facility. All of the $61.7 million of the net proceeds, after closing costs, of the advance was used by the Company to prepay a portion of the Bridge Loan (see Note 4 — Mortgage Notes Payable, Net |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 6 — Fair Value of Financial Instruments GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring assets and liabilities at fair value. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below: Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 — Unobservable inputs that reflect the entity’s own assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare. Financial Instruments Measured at Fair Value on a Recurring Basis Derivative Instruments Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of September 30, 2019 , the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments, are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties. The following table presents information about the Company’s assets and liabilities measured at fair value as of September 30, 2019 and December 31, 2018 , aggregated by the level in the fair value hierarchy within which those instruments fall. (In thousands) Quoted Prices in Active Markets Significant Significant Unobservable Inputs Total September 30, 2019 Derivative assets, at fair value $ — $ — $ — $ — Derivative liabilities, at fair value — (8,933 ) — (8,933 ) Total $ — $ (8,933 ) $ — $ (8,933 ) December 31, 2018 Derivative assets, at fair value $ — $ 4,633 $ — $ 4,633 Total $ — $ 4,633 $ — $ 4,633 A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the nine months ended September 30, 2019 . Real Estate Investments Measured at Fair Value on a Non-Recurring Basis Real Estate Investments - Held for Use The Company also had impaired real estate investments held for use, which were carried at fair value on a non-recurring basis on the consolidated balance sheet as of September 30, 2019 . As of September 30, 2019 , the Company owned held for use properties for which the Company had reconsidered the projected cash flows due to various performance indicators. As a result, the Company evaluated the impact on its ability to recover the carrying value of such properties based on the expected cash flows over its intended holding period. As a result of this evaluation and its consideration of impairment, the Company determined that the carrying value of one held for use property exceeded its estimated undiscounted cash flows. The Company primarily uses a market approach to estimate the future cash flows expected to be generated. Impaired real estate investments held for use are generally classified in Level 3 of the fair value hierarchy. Real Estate Investments - Held for Sale The Company has impaired real estate investments held for sale, which are carried at fair value on a non-recurring basis on the consolidated balance sheets as of September 30, 2019 and December 31, 2018 . Impaired real estate investments held for sale are generally classified in Level 3 of the fair value hierarchy. Financial Instruments Not Measured at Fair Value The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate that value. The fair values of short-term financial instruments such as cash and cash equivalents, restricted cash, straight-line rent receivable, net, prepaid expenses and other assets, deferred costs, net, accounts payable and accrued expenses, deferred rent and distributions payable approximate their carrying value on the consolidated balance sheets due to their short-term nature. The fair values of the Company’s remaining financial instruments that are not reported at fair value on the consolidated balance sheets are reported below: September 30, 2019 December 31, 2018 (In thousands) Level Carrying Amount Fair Value Carrying Amount Fair Value Gross mortgage notes payable and mortgage premium and discounts, net (1) 3 $ 441,882 $ 456,607 $ 469,430 $ 472,585 Revolving Credit Facility 3 $ 163,618 $ 161,750 $ 243,300 $ 243,300 Term Loan 3 $ 150,000 $ 147,632 $ — $ — Fannie Mae Master Credit Facilities 3 $ 359,322 $ 361,320 $ 359,322 $ 360,675 (1) Carrying value includes mortgage notes payable of $443.4 million and $470.8 million and mortgage premiums and (discounts), net of $1.5 million and $1.4 million as of September 30, 2019 and December 31, 2018 , respectively. The fair value of the mortgage notes payable is estimated using a discounted cash flow analysis, based on the Advisor’s experience with similar types of borrowing arrangements, excluding the value of derivatives. Advances under the Revolving Credit Facility and Fannie Mae Master Credit Facilities are considered to be reported at fair value, because their interest rates vary with changes in LIBOR and there has not been a significant change in credit risk of the Company or credit markets since origination. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Note 7 — Derivatives and Hedging Activities Risk Management Objective of Using Derivatives The Company may use derivative financial instruments, including interest rate swaps, caps, collars, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. Additionally, in using interest rate derivatives, the Company aims to add stability to interest expense and to manage its exposure to interest rate movements. The Company does not intend to utilize derivatives for speculative purposes or purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company, and its affiliates, may also have other financial relationships. The Company does not anticipate that any of its counterparties will fail to meet their obligations. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of September 30, 2019 and December 31, 2018 : (In thousands) Balance Sheet Location September 30, December 31, 2018 Derivatives designated as hedging instruments: Interest rate “pay-fixed” swaps Derivative assets, at fair value $ — $ 4,582 Interest rate “pay-fixed” swaps Derivative liabilities, at fair value $ 8,933 $ — Derivatives not designated as hedging instruments: Interest rate caps Derivative assets, at fair value $ — $ 51 Cash Flow Hedges of Interest Rate Risk The Company currently has ten interest rate swaps that are designated as cash flow hedges. The interest rate swaps are used as part of the Company’s interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During 2019 and 2018, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months, from October 1, 2019 through September 30, 2020, the Company estimates that $1.5 million will be reclassified from other comprehensive loss as an increase to interest expense. As of September 30, 2019 and December 31, 2018 , the Company had the following derivatives that were designated as cash flow hedges of interest rate risk: September 30, 2019 December 31, 2018 Interest Rate Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate “pay-fixed” swaps 10 $ 400,000 2 $ 250,000 The table below details the location in the financial statements of the loss recognized on interest rate derivatives designated as cash flow hedges for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Amount of (loss) gain recognized in accumulated other comprehensive income on interest rate derivatives $ (2,469 ) $ 1,133 $ (12,496 ) $ 6,533 Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense $ 211 $ 135 $ 1,019 $ (11 ) Total amount of interest expense presented in the consolidated income statements $ (12,990 ) $ (12,597 ) $ (39,739 ) $ (35,962 ) Non-Designated Derivatives These derivatives are used to manage the Company’s exposure to interest rate movements, but do not meet the strict hedge accounting requirements to be classified as hedging instruments. Changes in the fair value of derivatives not designated as hedges under a qualifying hedging relationship are recorded directly to net income (loss) and were losses of $2,000 and $50,000 for the three and nine months ended September 30, 2019 , respectively and gains of $18,000 and $46,000 for the three and nine months ended September 30, 2018 , respectively. The Company had the following outstanding interest rate derivatives that were not designated as hedges in qualified hedging relationships as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Interest Rate Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate caps 7 $ 359,322 7 $ 359,322 Offsetting Derivatives The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of September 30, 2019 and December 31, 2018 . The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheet. Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Received Net Amount September 30, 2019 $ — $ (8,933 ) $ — $ (8,933 ) $ — $ — $ (8,933 ) December 31, 2018 $ 4,633 $ — $ — $ 4,633 $ — $ — $ 4,633 Credit-risk-related Contingent Features The Company has agreements in place with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of September 30, 2019 , the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $9.3 million . As of September 30, 2019 , the Company has not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of $9.3 million at September 30, 2019 . |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Common Stock | Common Stock As of September 30, 2019 and December 31, 2018 , the Company had 92,430,992 and 91,963,532 shares of common stock outstanding, respectively, including unvested restricted shares and shares issued pursuant to the Company’s distribution reinvestment plan (“DRIP”), net of share repurchases. In April 2013, the Company’s board of directors (the “Board”) authorized, and the Company began paying distributions on a monthly basis at a rate equivalent to $1.70 per annum, per share of common stock, which began in May 2013. In March 2017, the Board authorized a decrease in the rate at which the Company pays monthly distributions to stockholders, effective as of April 1, 2017, to a rate equivalent to $1.45 per annum per share of common stock. On February 20, 2018, the Board authorized a further decrease in the rate at which the Company pays monthly distributions to stockholders, effective as of March 1, 2018, to a rate equivalent to $0.85 per annum per share of common stock. Distributions are payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month. Distribution payments are dependent on the availability of funds. The Board may further reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured. On April 1, 2019, the independent directors of the Board, who comprise a majority of the Board, unanimously approved an updated estimate of per-share net asset value (“Estimated Per-Share NAV”) as of December 31, 2018 , which was published on April 3, 2019. The Company intends to publish Estimated Per-Share NAV periodically at the discretion of the Board, provided that such estimates will be made at least once annually. Tender Offer On March 13, 2018, the Company announced a tender offer (the “Tender Offer”) to purchase up to 2.0 million shares of the Company’s common stock for cash at a purchase price equal to $13.15 per share with the proration period and withdrawal rights expiring on April 12, 2018. On April 4, 2018 and April 16, 2018, the Tender Offer was amended to reduce the number of shares the Company was offering to purchase to 230,000 shares and extend the expiration date to May 1, 2018. The Tender Offer expired in accordance with its terms on May 1, 2018. During May 2018, in accordance with the terms of the Tender Offer, the Company accepted for purchase 229,999 shares for a total cost of approximately $3.0 million . The Company has not conducted any tender offers since the Tender Offer. Share Repurchase Program Under the Company’s share repurchase program (the “SRP”), as amended from time to time, qualifying stockholders are able to sell their shares to the Company in limited circumstances. The SRP permits investors to sell their shares back to the Company after they have held them for at least one year, subject to significant conditions and limitations. Repurchases of shares of the Company’s common stock, when requested, are at the sole discretion of the Board. Under the SRP, subject to certain conditions, only repurchase requests made following the death or qualifying disability of stockholders that purchased shares of the Company’s common stock or received their shares from the Company (directly or indirectly) through one or more non-cash transactions are considered for repurchase. Additionally, pursuant to the SRP, the repurchase price per share equals 100% of the Estimated Per-Share NAV in effect on the last day of the fiscal semester, or the six-month period ending June 30 or December 31. The Company suspended the SRP during the pendency of the Tender Offer. On June 29, 2018, the Company announced the Board unanimously determined to reactivate the SRP, effective June 30, 2018. In connection with reactivating the SRP, the Board approved all repurchase requests received during the period from January 1, 2018 through the suspension of the SRP on March 13, 2018 (see table below for additional details). On January 29, 2019, the Company announced that the Board approved an amendment to the SRP changing the date on which any repurchases are to be made in respect of requests made during the period commencing March 13, 2018 up to and including December 31, 2018 to no later than March 31, 2019, rather than on or before the 31st day following December 31, 2018. This SRP amendment became effective on January 30, 2019. Additionally, on March 27, 2019, the Company announced that the Board approved an amendment to the SRP further extending the date on which any repurchases are to be made in respect of requests made during the period commencing March 13, 2018 up to and including December 31, 2018 to no later than April 30, 2019. This SRP amendment became effective on March 28, 2019 (see table below for details on cumulative shares repurchased pursuant to the SRP, including shares repurchased during 2019). On July 23, 2019, the Company announced that the Board approved a third amendment to the SRP, effective July 24, 2019, extending the date on which repurchases are able to be made in respect of requests made during the period commencing January 1, 2019 up to and including June 30, 2019 to no later than August 31, 2019, rather than on or before July 31, 2019. On August 20, 2019, the Company announced that the Board approved a fourth amendment to the SRP, effective August 22, 2019 extending the date on which repurchases are able to be made in respect of requests made during the period commencing January 1, 2019 up to and including June 30, 2019 to no later than October 31, 2019, rather than on or before August 31, 2019. The Company completed the repurchases in October 2019 (see Note 17 — Subsequent Events). When a stockholder requests redemption and redemption is approved by the Board, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP have the status of authorized but unissued shares. The table below reflects the number of shares repurchased, under the SRP, cumulatively through September 30, 2019 . Number of Shares Repurchased Average Price per Share Cumulative repurchases as of December 31, 2018 (1) 3,288,256 $ 21.56 Nine months ended September 30, 2019 (2) 656,433 $ 20.25 Cumulative repurchases as of September 30, 2019 3,944,689 $ 21.34 _______________ (1) Repurchases made in 2018 include: (i) 373,967 shares repurchased during January 2018 with respect to requests received following the death or qualifying disability of stockholders during the six months ended December 31, 2017 for approximately $8.0 million at a weighted average price per share of $21.45 , and (ii) 155,904 shares that were repurchased for $3.2 million at an average price per share of $20.25 on July 31, 2018, representing 100% of the repurchase requests made following the death or qualifying disability of stockholders during the period from January 1, 2018 through the suspension of the SRP on March 13, 2018. No repurchase requests received during the SRP suspension were accepted. (2) Includes shares repurchased on April 30, 2019 with respect to repurchase requests made in good order following the death or qualifying disability of stockholders during the period commencing March 13, 2018 up to and including December 31, 2018 for $13.3 million . Does not include repurchases of 446,830 shares of common stock repurchased for $7.8 million at an average price per share of $17.50 on October 30, 2019 with respect to repurchase requests made in good order following the death or qualifying disability of stockholders during the period commencing January 1, 2019 up to and including June 30, 2019 (see Note 17 — Subsequent Events). Distribution Reinvestment Plan Pursuant to the DRIP, stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased under the DRIP. The shares purchased pursuant to the DRIP have the same rights and are treated in the same manner as all of the other shares of outstanding common stock. The Board may designate that certain cash or other distributions be excluded from reinvestment pursuant to the DRIP. The Company has the right to amend the DRIP or terminate the DRIP with ten days ’ notice to participants. Shares issued under the DRIP are recorded as equity in the accompanying consolidated balance sheet in the period distributions are declared. During the nine months ended September 30, 2019 , the Company issued 1.1 million shares of common stock pursuant to the DRIP, generating aggregate proceeds of $20.7 million . The following table illustrates the changes in accumulated other comprehensive income as of and for the period presented: (In thousands) Unrealized Gain on Designated Derivative Balance, December 31, 2018 $ 4,582 Other comprehensive income, before reclassifications (12,496 ) Amount of gain reclassified from accumulated other comprehensive income (1,019 ) Balance, September 30, 2019 $ (8,933 ) |
Related Party Transactions and
Related Party Transactions and Arrangements | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Arrangements | Related Party Transactions and Arrangements As of September 30, 2019 and December 31, 2018 , the Special Limited Partner owned 8,888 shares of the Company’s outstanding common stock. The Advisor and its affiliates may incur and pay costs and fees on behalf of the Company. As of September 30, 2019 and December 31, 2018 , the Advisor held 90 partnership units in the OP designated as “OP Units” (“OP Units”). The limited partnership agreement of the OP allows for the special allocation, solely for tax purposes, of excess depreciation deductions of up to $10.0 million to the Advisor, a limited partner of the OP. In connection with this special allocation, the Advisor has agreed to restore a deficit balance in its capital account in the event of a liquidation of the OP and has agreed to provide a guaranty or indemnity of indebtedness of the OP. Fees Incurred in Connection with the Operations of the Company On February 17, 2017, the members of a special committee of the Board unanimously approved certain amendments to and a restatement of the then-effective advisory agreement, by and among the Company, the OP and the Advisor (the “Second A&R Advisory Agreement”). The Second A&R Advisory Agreement, which superseded, amended and restated the previously effective advisory agreement (the “Original A&R Advisory Agreement”), took effect on February 17, 2017. The initial term of the Second A&R Advisory Agreement is ten years beginning on February 17, 2017, and is automatically renewable for another ten -year term upon each ten -year anniversary unless the Second A&R Advisory Agreement is terminated (i) with notice of an election not to renew at least 365 days prior to the applicable tenth anniversary, (ii) in accordance with a change of control or a transition to self-management, (iii) by 67% of the independent directors of the Board for cause, without penalty, with 45 days’ notice or (iv) with 60 days prior written notice by the Advisor for (a) a failure to obtain a satisfactory agreement for any successor to the Company to assume and agree to perform obligations under the Second A&R Advisory Agreement or (b) any material breach of the Second A&R Advisory Agreement of any nature whatsoever by the Company. On July 25, 2019, the Company entered into Amendment No. 1 to the Second Amended and Restated Advisory Agreement (the “Advisory Agreement Amendment”) among the Company, the OP, and the Advisor. The Advisory Agreement Amendment was unanimously approved by the Company’s independent directors. Additional information on the Advisory Agreement Amendment is included later in this footnote. Acquisition Expense Reimbursements The Second A&R Advisory Agreement does not provide for an acquisition fee, however the Advisor may be reimbursed for services provided for which it incurs investment-related expenses, or insourced expenses. The amount reimbursed for insourced expenses may not exceed 0.5% of the contract purchase price of each acquired property or 0.5% of the amount advanced for a loan or other investment. Additionally, the Company reimburses the Advisor for third party acquisition expenses. Asset Management Fees and Variable Management/Incentive Fees Under the limited partnership agreement of the OP and the advisory agreement that was superseded by the Original A&R Advisory Agreement and until March 31, 2015, for its asset management services, the Company issued the Advisor an asset management subordinated participation by causing the OP to issue (subject to periodic approval by the Board) to the Advisor partnership units of the OP designated as “Class B Units” (“Class B Units”). The Class B Units were intended to be profit interests and vest, and no longer are subject to forfeiture, at such time as: (x) the value of the OP’s assets plus all distributions made equals or exceeds the total amount of capital contributed by investors plus a 6.0% cumulative, pre-tax, non-compounded annual return thereon (the “Economic Hurdle”); (y) any one of the following occurs: (1) a listing; (2) another liquidity event or (3) the termination of the advisory agreement by an affirmative vote of a majority of the Company’s independent directors without cause; and (z) the Advisor is still providing advisory services to the Company (the “Performance Condition”). Unvested Class B Units will be forfeited immediately if: (a) the advisory agreement is terminated for any reason other than a termination without cause; or (b) the advisory agreement is terminated by an affirmative vote of a majority of the Company’s independent directors without cause before the Economic Hurdle has been met. Subject to approval by the Board, the Class B Units were issued to the Advisor quarterly in arrears pursuant to the terms of the limited partnership agreement of the OP. The number of Class B Units issued in any quarter was equal to: (i) the excess of (A) the product of (y) the cost of assets multiplied by (z) 0.1875% over (B) any amounts payable as an oversight fee (as described below) for such calendar quarter; divided by (ii) the value of one share of common stock as of the last day of such calendar quarter, which was initially equal to $22.50 (the IPO price minus the selling commissions and dealer manager fees). The value of issued Class B Units will be determined and expensed when the Company deems the achievement of the Performance Condition to be probable. As of September 30, 2019 , the Company cannot determine the probability of achieving the Performance Condition. The Advisor receives cash distributions on each issued Class B Unit equal to the distribution rate received on the Company’s common stock. These distributions on Class B Units are included in general and administrative expenses in the consolidated statement of operations and comprehensive loss until the Performance Condition is considered probable to occur. The Board has previously approved the issuance of 359,250 Class B Units to the Advisor in connection with this arrangement. The Board determined in February 2018 that Economic Hurdle had been satisfied, however none of the events have occurred, including the Listing, which would have satisfied the other vesting requirement of the Class B Units. Therefore, no expense has ever been recognized in connection with the Class B Units. On May 12, 2015, the Company, the OP and the Advisor entered into an amendment to the then-current advisory agreement, which, among other things, provided that the Company would cease causing the OP to issue Class B Units to the Advisor with respect to any period ending after March 31, 2015. Effective February 17, 2017, the Second A&R Advisory Agreement requires the Company to pay the Advisor a base management fee, which is payable on the first business day of each month. The fixed portion of the base management fee is equal to $1.625 million per month, while the variable portion of the base management fee is equal to one-twelfth of 1.25% of the cumulative net proceeds of any equity (including convertible equity and certain convertible debt but excluding proceeds from the DRIP) raised subsequent to February 17, 2017 per month. The base management fee is payable to the Advisor or its assignees in cash, OP Units or shares, or a combination thereof, the form of payment to be determined at the discretion of the Advisor and the value of any OP Unit or share to be determined by the Advisor acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate. In addition, the Second A&R Advisory Agreement requires the Company to pay the Advisor a variable management/incentive fee quarterly in arrears equal to (1) the product of fully diluted shares of common stock outstanding multiplied by (2) (x) 15.0% of the applicable prior quarter’s Core Earnings (as defined below) per share in excess of $0.375 per share plus (y) 10.0% of the applicable prior quarter’s Core Earnings per share in excess of $0.47 per share. Core Earnings is defined as, for the applicable period, net income or loss, computed in accordance with GAAP, excluding non-cash equity compensation expense, the variable management/incentive fee, acquisition and transaction related fees and expenses, financing related fees and expenses, depreciation and amortization, realized gains and losses on the sale of assets, any unrealized gains or losses or other non-cash items recorded in net income or loss for the applicable period, regardless of whether such items are included in other comprehensive income or loss, or in net income, one-time events pursuant to changes in GAAP and certain non-cash charges, impairment losses on real estate related investments and other than temporary impairments of securities, amortization of deferred financing costs, amortization of tenant inducements, amortization of straight-line rent and any associated bad debt reserves, amortization of market lease intangibles, provision for loss loans, and other non-recurring revenue and expenses (in each case after discussions between the Advisor and the independent directors and approved by a majority of the independent directors). The variable management/incentive fee is payable to the Advisor or its assignees in cash or shares, or a combination of both, the form of payment to be determined in the sole discretion of the Advisor and the value of any share to be determined by the Advisor acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate. Property Management Fees Unless the Company contracts with a third party, the Company pays the Property Manager a property management fee of 1.5% of gross revenues from the Company’s stand-alone single-tenant net leased properties and 2.5% of gross revenues from all other types of properties, respectively. The Company also reimburses the Property Manager for property level expenses incurred by the Property Manager. If the Company contracts directly with third parties for such services, the Company will pay them customary market fees and will pay the Property Manager an oversight fee of up to 1.0% of the gross revenues of the property managed. In no event will the Company pay the Property Manager or any affiliate of the Property Manager both a property management fee and an oversight fee with respect to any particular property. On February 17, 2017, the Company entered into the Amended and Restated Property Management and Leasing Agreement (the “A&R Property Management Agreement”) with the OP and the Property Manager. The A&R Property Management Agreement was entered into to reflect amendments to the original agreement between the parties and further amends the original agreement by extending the term of the agreement from one to two years , or until February 17, 2019. The A&R Property Management Agreement automatically renews for successive one -year terms unless any party provides written notice of its intention to terminate the A&R Property Management Agreement at least 90 days prior to the end of the term. Neither party provided notice of intent to terminate. Thus, the current term of the A&R Property Management Agreement now expires February 17, 2020. The Property Manager may assign the A&R Property Management Agreement to any party with expertise in commercial real estate which has, together with its affiliates, over $100.0 million in assets under management. On April 10, 2018, in connection with the Multi-Property CMBS Loan, the Company and the OP entered into a further amendment to the A&R Property Management Agreement confirming, consistent with the intent of the parties, that the borrowers under the Multi-Property CMBS Loan and other subsidiaries of the OP that own or lease the Company’s properties are the direct obligors under the arrangements pursuant to which the Company’s properties are managed by either the Property Manager or a third party overseen by the Property Manager pursuant to the A&R Property Management Agreement. Professional Fees and Other Reimbursements The Company reimburses the Advisor’s costs of providing administrative services. The Company reimburses the Advisor for personnel costs, except for costs to the extent that the employees perform services for which the Advisor receives a separate fee. This reimbursement includes reasonable overhead expenses for employees of the Advisor or its affiliates directly involved in the performance of services on behalf of the Company, including the reimbursement of rent expense at certain properties that are both occupied by employees of the Advisor or its affiliates and owned by affiliates of the Advisor. During the three and nine months ended September 30, 2019 , the Company incurred $2.2 million and $7.2 million , respectively, of reimbursement expenses from the Advisor for providing administrative services. During the three and nine months ended September 30, 2018 , the Company incurred $2.0 million and $5.9 million , respectively, of reimbursement expenses from the Advisor for providing administrative services. These reimbursement expenses are included in general and administrative expense on the consolidated statements of operations and comprehensive income (loss). On July 25, 2019, the Company entered into the Advisory Agreement Amendment. Under the Second A&R Advisory Agreement, including prior to the Advisory Agreement Amendment, the Company has been required to reimburse the Advisor for, among other things, reasonable salaries and wages, benefits and overhead of all employees of the Advisor or its affiliates, except for costs of employees to the extent that the employees perform services for which the Advisor receives a separate fee. The Advisory Agreement Amendment clarifies that, with respect to executive officers of the Advisor, the Company is required to reimburse the Advisor or its affiliates for the reasonable salaries and wages, benefits and overhead of the Company’s executive officers, other than for any executive officer that is also a partner, member or equity owner of AR Global, an affiliate of the Advisor. Further, under the Advisory Agreement Amendment, the aggregate amount of expenses relating to salaries, wages and benefits, including for executive officers and all other employees of the Advisor or its affiliates (the “Capped Reimbursement Amount”), is limited to the greater of: (a) $6.8 million (the “Fixed Component”) and (b) the variable component (the “Variable Component”), which is defined in the Advisory Agreement Amendment as, for any fiscal year: (i) the sum of the total real estate investments, at cost as recorded on the balance sheet dated as of the last day of each fiscal quarter (the “Real Estate Cost”) in the year divided by four , which amount will be (ii) multiplied by 0.29% . In the event of a reduction in the Real Estate Cost by 25.0% or more pursuant to instructions from the Company’s board of directors, in one or a series of related dispositions in which the proceeds of the disposition(s) are not reinvested in Investments (as defined in the Advisory Agreement Amendment), then within 12 months following the disposition(s), the Advisor and the Company will enter into good faith negotiations to reset the Fixed Component; provided that if the proceeds of the disposition(s) are paid to shareholders of the Company as a special distribution or used to repay loans with no intent of subsequently re-financing and re-investing the proceeds thereof in Investments, the Advisor and the Company will enter into good faith negotiations to reset the Fixed Component within 90 days thereof, in each case taking into account reasonable projections of reimbursable costs in light of the reduced assets of the Company. Both the Fixed Component and the Variable Component will also be increased by an annual cost of living adjustment equal to the portion of the Capped Reimbursement Amount (as determined above) multiplied by the greater of (x) 3.0% and (y) the CPI for the prior year ended December 31st. For these purposes, CPI will be calculated by reference to the United States Department of Labor’s Bureau of Labor Statistics Consumer Price Index, All Urban Consumer Price Index, New York-Newark-Jersey City with reference date (1982-1984) that equals 100.0 or the successor of this index. Summary of fees, expenses and related payables The following table details amounts incurred, forgiven and payable in connection with the Company’s operations-related services described above as of and for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, Payable (Receivable) as of 2019 2018 2019 2018 (In thousands) Incurred (1) Incurred (1) Incurred (1) Incurred (1) September 30, December 31, 2018 Non-recurring fees and reimbursements: Acquisition cost reimbursements $ 6 $ 34 $ 39 $ 144 $ 6 $ 32 Due from HT III related to Asset Purchase (2) — — — — — (154 ) Ongoing fees and reimbursements: Asset management fees 4,875 4,875 14,625 14,625 — — Property management fees 1,067 868 2,910 2,608 271 58 Professional fees and other reimbursements 2,313 (4) 2,121 7,623 (4) 6,330 (61 ) (5) (6) 674 (5) (6) Distributions on Class B Units (3) 76 77 228 263 — — Total related party operation fees and reimbursements $ 8,337 $ 7,975 $ 25,425 $ 23,970 $ 216 $ 610 _______________ (1) There were no fees or reimbursements forgiven during the three and nine months ended September 30, 2019 or 2018 . (2) On December 22, 2017, the Company purchased substantially all the assets (the “Asset Purchase”) of American Realty Capital Healthcare Trust III, Inc. (“HT III”). Certain proration estimates were included within the closing. The purchase agreement calls for a final purchase price adjustment. The Company had a $154,000 net receivable related to the Asset Purchase included on its consolidated balance sheet as of December 31, 2018. Please see below for additional information related to the Asset Purchase. (3) Prior to April 1, 2015, the Company caused the OP to issue (subject to periodic approval by the Board) to the Advisor restricted performance based Class B Units for asset management services. As of September 30, 2019 , the Board had approved the issuance of 359,250 Class B Units to the Advisor in connection with this arrangement. Effective April 1, 2015, the Company began paying an asset management fee to the Advisor or its assignees in cash, in shares, or a combination of both and no longer issues any Class B Units. (4) Includes $1.6 million and $5.1 million related to the Capped Reimbursement Amount for the three and nine months ended September 30, 2019 . (5) Balance includes costs which were incurred and accrued due to American National Stock Transfer, LLC, a subsidiary of RCS Capital Corporation (“RCAP”) which were related parties of the Company. (6) Balance includes a receivable of $0.5 million from the Advisor as of September 30, 2019 previously recorded in the fourth quarter of 2018, which, pursuant to authorization by the independent members of the Company’s board of directors, is payable over time during 2020. Fees and Participations Incurred in Connection with a Listing or the Liquidation of the Company’s Real Estate Assets Fees Incurred in Connection with a Listing If the common stock of the Company is listed on a national exchange, the Special Limited Partner will be entitled to receive a subordinated incentive listing distribution from the OP equal to 15% of the amount by which the market value of all issued and outstanding shares of common stock plus distributions exceeds the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax non-compounded annual return to investors. The Special Limited Partner will not be entitled to the subordinated incentive listing distribution unless investors have received a 6.0% cumulative, pre-tax non-compounded annual return on their capital contributions. No such distribution was incurred during the nine months ended September 30, 2019 or 2018 . Neither the Special Limited Partner nor any of its affiliates can earn both the subordinated participation in net sales proceeds and the subordinated incentive listing distribution. Subordinated Participation in Real Estate Sales The Special Limited Partner is entitled to receive a subordinated participation in the net sales proceeds of the sale of real estate assets from the OP equal to 15.0% of remaining net sale proceeds after return of capital contributions to investors plus payment to investors of a 6.0% cumulative, pre-tax non-compounded annual return on the capital contributed by investors. The Special Limited Partner is not entitled to the subordinated participation in net sale proceeds unless the Company’s investors have received their capital contributions, plus a 6.0% cumulative, pre-tax non-compounded annual return on their capital contributions. No such participation in net sales proceeds became due and payable during the nine months ended September 30, 2019 or 2018 . Neither the Special Limited Partner nor any of its affiliates can earn both the subordinated participation in net sales proceeds and the subordinated incentive listing distribution described above. Termination Fees Under the operating partnership agreement of the OP, upon termination or non-renewal of the advisory agreement with the Advisor, with or without cause, the Special Limited Partner is entitled to receive distributions from the OP equal to 15.0% of the amount by which the sum of the Company’s market value plus distributions exceeds the sum of the aggregate capital contributed by investors plus an amount equal to an annual 6.0% cumulative, pre-tax, non-compounded annual return to investors. The Special Limited Partner is able to elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or other liquidity event occurs. Under the Second A&R Advisory Agreement, upon the termination or non-renewal of the agreement, the Advisor will be entitled to receive from the Company all amounts due to the Advisor, including any change in control fee and transition fee (both described below), as well as the then-present fair market value of the Advisor’s interest in the Company. All fees will be due within 30 days after the effective date of the termination of the Second A&R Advisory Agreement. Upon a termination by either party in connection with a change of control (as defined in the Second A&R Advisory Agreement), the Company would pay the Advisor a change of control fee equal to the product of four (4) and the “Subject Fees.” Upon a termination by the Company in connection with transition to self-management, the Company would pay the Advisor a transition fee equal to (i) $15.0 million plus (ii) the product of four multiplied by the Subject Fees, provided that the transition fee shall not exceed an amount equal (i) 4.5 multiplied by (ii) the Subject Fees. The Subject Fees are equal to (i) the product of four multiplied by the actual base management fee plus (ii) the product of four multiplied by the actual variable management/incentive fee, in each of clauses (i) and (ii), payable for the fiscal quarter immediately prior to the fiscal quarter in which the change of control or the transition to self-management is consummated, as applicable, plus (iii) without duplication, the annual increase in the base management fee resulting from the cumulative net proceeds of any equity raised in respect to the fiscal quarter immediately prior to the fiscal quarter in which the change of control or the transition to self-management is consummated, as applicable. The right to termination of the Second A&R Advisory Agreement in connection with a change of control or transition to self-management is subject to a lockout period that requires the notice of any termination in connection with a change of control or transition to self-management to be delivered after February 14, 2019. American Realty Capital Healthcare Trust III, Inc. Asset Purchase On December 22, 2017, the Company, the OP and its subsidiary, ARHC TRS Holdco II, LLC, completed the Asset Purchase, purchasing all of the membership interests in indirect subsidiaries of HT III that owned the 19 properties which comprised substantially all of HT III’s assets, pursuant to a purchase agreement, dated as of June 16, 2017. HT III was sponsored and advised by an affiliate of the Advisor. As of December 31, 2018 the Company had a $0.2 million net receivable to HT III included on its consolidated balance sheet. |
Economic Dependency
Economic Dependency | 9 Months Ended |
Sep. 30, 2019 | |
Economic Dependency [Abstract] | |
Economic Dependency | Economic Dependency Under various agreements, the Company has engaged or will engage the Advisor, its affiliates and entities under common control with the Advisor to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company and asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that the Advisor and its affiliates are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Restricted Share Plan The Company has adopted an employee and director incentive restricted share plan (as amended from time to time, the “RSP”), which provides the Company with the ability to grant awards of restricted shares of common stock (“restricted shares”) to the Company’s directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The total number of shares of common stock that may be subject to awards granted under the RSP may not exceed 5.0% of the Company’s outstanding shares of common stock on a fully diluted basis at any time and in any event will not exceed 3.4 million shares (as such number may be adjusted for stock splits, stock dividends, combinations and similar events). Prior to August 2017, the RSP provided for an automatic grant of 1,333 restricted shares to each of the independent directors, without any further approval by the Board or the stockholders, on the date of his or her initial election to the Board and thereafter on the date of each annual stockholder meeting. The restricted shares granted as annual automatic awards prior to August 2017 were subject to vesting over a five -year period following the date of grant. In August 2017, the Board amended the RSP to provide that the number of restricted shares comprising the automatic annual award to each of the independent directors would be equal to the quotient of $30,000 divided by the then-current Estimated Per-Share NAV and subsequently amended and restated the RSP to eliminate the automatic annual awards and to make other revisions related to the implementation of a new independent director equity compensation program. As part of this new independent director equity compensation program, the Board approved a one-time grant of restricted share awards to the independent directors as follows: (i) 300,000 restricted shares to the chairman, with one-seventh of the shares vesting annually in equal increments over a seven -year period with initial vesting on August 4, 2018; and (ii) 25,000 restricted shares to each of the three other independent directors, with one-fifth of the shares vesting annually in equal increments over a five -year period with initial vesting on August 4, 2018. In connection with these one-time grants, the restricted shares granted as automatic annual awards in connection with the Company’s 2017 annual meeting of stockholders on July 21, 2017 were forfeited. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of common stock are subject to the same restrictions as the underlying restricted shares. On July 29, 2019, the Board elected B.J. Penn as a member of the Board to serve as a director effective immediately. Mr. Penn, like the Company’s other independent directors, participates in the Company’s independent director compensation program. During the three months ended September 30, 2019, the Company paid to Mr. Penn an annual cash retainer effective as of July 29, 2019 pro-rated for the remaining portion of the current annual period, and he was awarded 15,000 restricted shares of common stock of the Company, par value $0.01 per share, which vest annually over a three-year period in equal installments. The following table reflects the amount of restricted shares outstanding as of September 30, 2019 and activity for the period presented: Number of Shares of Common Stock Weighted Average Issue Price Unvested, December 31, 2018 322,242 $ 21.41 Granted 15,000 17.50 Vested (59,199 ) 21.47 Unvested, September 30, 2019 278,043 — As of September 30, 2019 , the Company had $5.9 million of unrecognized compensation cost related to unvested restricted share awards granted under the RSP. That cost is expected to be recognized over a weighted-average period of 4.4 years . Compensation expense related to restricted shares was approximately $0.3 million and $1.0 million for the three and nine months ended September 30, 2019 , respectively. Compensation expense related to restricted shares was approximately $282,000 and $921,000 for the three and nine months ended September 30, 2018 , respectively. Compensation expense related to restricted shares is recorded as general and administrative expense in the accompanying consolidated statements of operations and comprehensive loss. Other Share-Based Compensation The Company may issue common stock in lieu of cash to pay fees earned by the Company’s directors at the respective director’s election. There are no restrictions on shares issued in lieu of cash compensation since these payments in lieu of cash relate to fees earned for services performed. No such shares were issued during the three and nine months ended September 30, 2019 or 2018 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Common Stock As of September 30, 2019 and December 31, 2018 , the Company had 92,430,992 and 91,963,532 shares of common stock outstanding, respectively, including unvested restricted shares and shares issued pursuant to the Company’s distribution reinvestment plan (“DRIP”), net of share repurchases. In April 2013, the Company’s board of directors (the “Board”) authorized, and the Company began paying distributions on a monthly basis at a rate equivalent to $1.70 per annum, per share of common stock, which began in May 2013. In March 2017, the Board authorized a decrease in the rate at which the Company pays monthly distributions to stockholders, effective as of April 1, 2017, to a rate equivalent to $1.45 per annum per share of common stock. On February 20, 2018, the Board authorized a further decrease in the rate at which the Company pays monthly distributions to stockholders, effective as of March 1, 2018, to a rate equivalent to $0.85 per annum per share of common stock. Distributions are payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month. Distribution payments are dependent on the availability of funds. The Board may further reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured. On April 1, 2019, the independent directors of the Board, who comprise a majority of the Board, unanimously approved an updated estimate of per-share net asset value (“Estimated Per-Share NAV”) as of December 31, 2018 , which was published on April 3, 2019. The Company intends to publish Estimated Per-Share NAV periodically at the discretion of the Board, provided that such estimates will be made at least once annually. Tender Offer On March 13, 2018, the Company announced a tender offer (the “Tender Offer”) to purchase up to 2.0 million shares of the Company’s common stock for cash at a purchase price equal to $13.15 per share with the proration period and withdrawal rights expiring on April 12, 2018. On April 4, 2018 and April 16, 2018, the Tender Offer was amended to reduce the number of shares the Company was offering to purchase to 230,000 shares and extend the expiration date to May 1, 2018. The Tender Offer expired in accordance with its terms on May 1, 2018. During May 2018, in accordance with the terms of the Tender Offer, the Company accepted for purchase 229,999 shares for a total cost of approximately $3.0 million . The Company has not conducted any tender offers since the Tender Offer. Share Repurchase Program Under the Company’s share repurchase program (the “SRP”), as amended from time to time, qualifying stockholders are able to sell their shares to the Company in limited circumstances. The SRP permits investors to sell their shares back to the Company after they have held them for at least one year, subject to significant conditions and limitations. Repurchases of shares of the Company’s common stock, when requested, are at the sole discretion of the Board. Under the SRP, subject to certain conditions, only repurchase requests made following the death or qualifying disability of stockholders that purchased shares of the Company’s common stock or received their shares from the Company (directly or indirectly) through one or more non-cash transactions are considered for repurchase. Additionally, pursuant to the SRP, the repurchase price per share equals 100% of the Estimated Per-Share NAV in effect on the last day of the fiscal semester, or the six-month period ending June 30 or December 31. The Company suspended the SRP during the pendency of the Tender Offer. On June 29, 2018, the Company announced the Board unanimously determined to reactivate the SRP, effective June 30, 2018. In connection with reactivating the SRP, the Board approved all repurchase requests received during the period from January 1, 2018 through the suspension of the SRP on March 13, 2018 (see table below for additional details). On January 29, 2019, the Company announced that the Board approved an amendment to the SRP changing the date on which any repurchases are to be made in respect of requests made during the period commencing March 13, 2018 up to and including December 31, 2018 to no later than March 31, 2019, rather than on or before the 31st day following December 31, 2018. This SRP amendment became effective on January 30, 2019. Additionally, on March 27, 2019, the Company announced that the Board approved an amendment to the SRP further extending the date on which any repurchases are to be made in respect of requests made during the period commencing March 13, 2018 up to and including December 31, 2018 to no later than April 30, 2019. This SRP amendment became effective on March 28, 2019 (see table below for details on cumulative shares repurchased pursuant to the SRP, including shares repurchased during 2019). On July 23, 2019, the Company announced that the Board approved a third amendment to the SRP, effective July 24, 2019, extending the date on which repurchases are able to be made in respect of requests made during the period commencing January 1, 2019 up to and including June 30, 2019 to no later than August 31, 2019, rather than on or before July 31, 2019. On August 20, 2019, the Company announced that the Board approved a fourth amendment to the SRP, effective August 22, 2019 extending the date on which repurchases are able to be made in respect of requests made during the period commencing January 1, 2019 up to and including June 30, 2019 to no later than October 31, 2019, rather than on or before August 31, 2019. The Company completed the repurchases in October 2019 (see Note 17 — Subsequent Events). When a stockholder requests redemption and redemption is approved by the Board, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP have the status of authorized but unissued shares. The table below reflects the number of shares repurchased, under the SRP, cumulatively through September 30, 2019 . Number of Shares Repurchased Average Price per Share Cumulative repurchases as of December 31, 2018 (1) 3,288,256 $ 21.56 Nine months ended September 30, 2019 (2) 656,433 $ 20.25 Cumulative repurchases as of September 30, 2019 3,944,689 $ 21.34 _______________ (1) Repurchases made in 2018 include: (i) 373,967 shares repurchased during January 2018 with respect to requests received following the death or qualifying disability of stockholders during the six months ended December 31, 2017 for approximately $8.0 million at a weighted average price per share of $21.45 , and (ii) 155,904 shares that were repurchased for $3.2 million at an average price per share of $20.25 on July 31, 2018, representing 100% of the repurchase requests made following the death or qualifying disability of stockholders during the period from January 1, 2018 through the suspension of the SRP on March 13, 2018. No repurchase requests received during the SRP suspension were accepted. (2) Includes shares repurchased on April 30, 2019 with respect to repurchase requests made in good order following the death or qualifying disability of stockholders during the period commencing March 13, 2018 up to and including December 31, 2018 for $13.3 million . Does not include repurchases of 446,830 shares of common stock repurchased for $7.8 million at an average price per share of $17.50 on October 30, 2019 with respect to repurchase requests made in good order following the death or qualifying disability of stockholders during the period commencing January 1, 2019 up to and including June 30, 2019 (see Note 17 — Subsequent Events). Distribution Reinvestment Plan Pursuant to the DRIP, stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased under the DRIP. The shares purchased pursuant to the DRIP have the same rights and are treated in the same manner as all of the other shares of outstanding common stock. The Board may designate that certain cash or other distributions be excluded from reinvestment pursuant to the DRIP. The Company has the right to amend the DRIP or terminate the DRIP with ten days ’ notice to participants. Shares issued under the DRIP are recorded as equity in the accompanying consolidated balance sheet in the period distributions are declared. During the nine months ended September 30, 2019 , the Company issued 1.1 million shares of common stock pursuant to the DRIP, generating aggregate proceeds of $20.7 million . The following table illustrates the changes in accumulated other comprehensive income as of and for the period presented: (In thousands) Unrealized Gain on Designated Derivative Balance, December 31, 2018 $ 4,582 Other comprehensive income, before reclassifications (12,496 ) Amount of gain reclassified from accumulated other comprehensive income (1,019 ) Balance, September 30, 2019 $ (8,933 ) |
Non-controlling Interests
Non-controlling Interests | 9 Months Ended |
Sep. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interests | Non-controlling Interests Non-Controlling Interests in the Operating Partnership The Company is the sole general partner and holds substantially all of the OP Units. As of September 30, 2019 and December 31, 2018 , the Advisor held 90 OP Units, which represents a nominal percentage of the aggregate ownership in the OP. In November 2014, the Company partially funded the purchase of a MOB from an unaffiliated third party by causing the OP to issue 405,908 OP Units, with a value of $10.1 million , or $25.00 per unit, to the unaffiliated third party. A holder of OP Units has the right to distributions. After holding the OP Units for a period of one year, a holder of OP Units has the right to redeem OP Units for, at the option of the OP, the cash value of a corresponding number of shares of the Company’s common stock or a corresponding number of shares of the Company’s common stock. The remaining rights of the limited partners in the OP are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP’s assets. During the nine months ended September 30, 2019 and 2018 , OP Unit non-controlling interest holders were paid distributions of $0.3 million and $0.4 million , respectively. Non-Controlling Interests in Property Owning Subsidiaries The Company also has investment arrangements with other unaffiliated third parties whereby such investors receive an ownership interest in certain of the Company’s property-owning subsidiaries and are entitled to receive a proportionate share of the net operating cash flow derived from the subsidiaries’ property. Upon disposition of a property subject to non-controlling interest, the investor will receive a proportionate share of the net proceeds from the sale of the property. The investor has no recourse to any other assets of the Company. Due to the nature of the Company’s involvement with these arrangements and the significance of its investment in relation to the investment of the third party, the Company has determined that it controls each entity in these arrangements and therefore the entities related to these arrangements are consolidated within the Company’s financial statements. A non-controlling interest is recorded for the investor’s ownership interest in the properties. The following table summarizes the activity related to investment arrangements with the unaffiliated third parties: Distributions (2) Distributions (2) Third Party Net Investment Amount Non-Controlling Ownership Percentage Net Real Estate Assets Subject to Investment Arrangement (1) Three Months Ended September 30, Nine Months Ended September 30, Property Name (Dollar amounts in thousands) Investment Date As of September 30, 2019 As of September 30, 2019 As of September 30, 2019 As of December 31, 2018 2019 2018 2019 2018 Plaza Del Rio Medical Office Campus Portfolio May 2015 $ 416 2.4 % $ 14,289 $ 14,747 $ — $ — $ — $ 87 UnityPoint Clinic Portfolio (2) December 2017 $ 493 5.0 % $ 8,941 $ 9,241 $ — $ — $ — $ — ______________ (1) One property within the Plaza Del Rio Medical Office Campus Portfolio was pledged to secure the Multi-Property CMBS Loan. See Note 4 - Mortgage Notes Payable for additional information. (2) Assumed as part of the HT III Asset Purchase. See Note 9 - Related Party Transactions and Arrangements for further information on the Asset Purchase. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The following is a summary of the basic and diluted net loss per share computation for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net loss attributable to stockholders (in thousands) $ (28,789 ) $ (29,607 ) $ (39,954 ) $ (42,548 ) Basic and diluted weighted-average shares outstanding 91,992,963 90,203,311 91,884,495 90,983,620 Basic and diluted net loss per share $ (0.31 ) $ (0.33 ) $ (0.43 ) $ (0.47 ) Diluted net loss per share assumes the conversion of all common stock equivalents into an equivalent number of shares of common stock, unless the effect is antidilutive. The Company considers unvested restricted shares, OP Units and Class B Units to be common share equivalents. The Company had the following common stock equivalents on a weighted-average basis that were excluded from the calculation of diluted net loss per share attributable to stockholders as their effect would have been antidilutive for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Unvested restricted shares (1) 299,953 341,976 315,872 369,946 OP Units (2) 405,998 405,998 405,998 405,998 Class B Units (3) 359,250 359,250 359,250 359,250 Total weighted average antidilutive common stock equivalents 1,065,201 1,107,224 1,081,120 1,135,194 _______________ (1) Weighted average number of antidilutive unvested restricted shares outstanding for the periods presented. There were 278,043 and 323,045 unvested restricted shares outstanding as of September 30, 2019 and 2018 , respectively. (2) Weighted average number of antidilutive OP Units outstanding for the periods presented. There were 405,998 OP Units outstanding as of September 30, 2019 and 2018 . (3) Weighted average number of antidilutive Class B Units outstanding for the periods presented. There were 359,250 Class B Units outstanding as of September 30, 2019 and 2018 . These Class B Units are unvested as of September 30, 2019 and 2018 (see Note 9 — Related Party Transactions |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting During the nine months ended September 30, 2019 and 2018 , the Company operated in three reportable business segments for management and internal financial reporting purposes: MOBs, triple-net leased healthcare facilities, and SHOPs. The Company evaluates performance and makes resource allocations based on its three business segments. The medical office building segment primarily consists of MOBs leased to healthcare-related tenants under long-term leases, which may require such tenants to pay a pro rata share of property-related expenses. The triple-net leased healthcare facilities segment primarily consists of investments in seniors housing communities, hospitals, inpatient rehabilitation facilities and skilled nursing facilities under long-term leases, under which tenants are generally responsible to directly pay property-related expenses. The SHOP segment consists of direct investments in seniors housing communities, primarily providing assisted living, independent living and memory care services, which are operated through engaging independent third-party managers. There were no intersegment sales or transfers during the periods presented. As described in more detail below, on April 1, 2019 the Company transitioned one property located in Wellington, Florida (the “Transition Property”) from its triple-net leased healthcare facilities segment to its Seniors Housing — Operating Properties segment. See Note 3 — Real Estate Investments for further information about this property and the transition. The results of operations from the Transition Property are presented within the Seniors Housing — Operating Properties segment for the three and nine months ended September 30, 2019 and 2018 . Net Operating Income The Company evaluates the performance of the combined properties in each segment based on net operating income (“NOI”). NOI is defined as total revenues from tenants less property operating and maintenance expense. NOI excludes all other items of expense and income included in the financial statements in calculating net income (loss). The Company uses NOI to assess and compare property level performance and to make decisions concerning the operation of the properties. The Company believes that NOI is useful as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from net income (loss). NOI excludes certain components from net income (loss) in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by the Company may not be comparable to NOI reported by other REITs that define NOI differently. The Company believes that in order to facilitate a clear understanding of the Company’s operating results, NOI should be examined in conjunction with net income (loss) as presented in the Company’s consolidated financial statements. NOI should not be considered as an alternative to net income (loss) as an indication of the Company’s performance or to cash flows as a measure of the Company’s liquidity or ability to pay distributions. The following tables reconcile the segment activity to consolidated net loss for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties (1) Consolidated Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties (1) Consolidated Revenue from tenants $ 25,672 $ 3,783 $ 65,985 $ 95,440 $ 75,997 $ 10,780 $ 193,668 $ 280,445 Property operating and maintenance 8,733 608 51,314 60,655 23,702 1,420 147,136 172,258 NOI $ 16,939 $ 3,175 $ 14,671 34,785 $ 52,295 $ 9,360 $ 46,532 108,187 Impairment charges (22,615 ) (22,634 ) Operating fees to related parties (5,941 ) (17,535 ) Acquisition and transaction related (112 ) (161 ) General and administrative (4,782 ) (15,394 ) Depreciation and amortization (20,140 ) (61,124 ) Interest expense (12,990 ) (39,739 ) Interest and other income 11 15 Loss on sale of real estate investments 2,715 8,793 (Loss) gain on non-designated derivatives (2 ) (50 ) Income tax expense (benefit) 271 (364 ) Net loss attributable to non-controlling interests 11 52 Net loss attributable to stockholders $ (28,789 ) $ (39,954 ) _______________ (1) The results of operations from the Transition Property are presented within the Seniors Housing — Operating Properties segment for the three and nine months ended September 30, 2019 . Three Months Ended September 30, Nine Months Ended September 30, 2018 2018 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties (1) Consolidated Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties (1) Consolidated Revenue from tenants $ 24,186 $ 4,836 $ 61,169 $ 90,191 $ 73,383 $ 14,779 $ 182,424 $ 270,586 Property operating and maintenance 6,982 5,840 46,476 59,298 22,327 6,197 137,637 166,161 NOI $ 17,204 $ (1,004 ) $ 14,693 30,893 $ 51,056 $ 8,582 $ 44,787 104,425 Impairment charges (17,837 ) (18,570 ) Operating fees to related parties (5,743 ) (17,233 ) Acquisition and transaction related (40 ) (333 ) General and administrative (4,441 ) (12,705 ) Depreciation and amortization (20,466 ) (62,099 ) Interest expense (12,597 ) (35,962 ) Interest and other income 16 21 (Loss) gain on non-designated derivative instruments 18 46 Income tax expense (benefit) 550 (225 ) Net loss attributable to non-controlling interests 40 87 Net loss attributable to stockholders $ (29,607 ) $ (42,548 ) _______________ (1) The results of operations from the Transition Property are presented within the Seniors Housing — Operating Properties segment for the three and nine months ended September 30, 2018 . The following table reconciles the segment activity to consolidated total assets as of the periods presented: (In thousands) September 30, 2019 December 31, 2018 ASSETS Investments in real estate, net: Medical office buildings $ 899,280 $ 878,703 Triple-net leased healthcare facilities (1) 237,366 289,686 Construction in progress (2) 95,960 90,829 Seniors housing — operating properties (1) 875,466 911,952 Total investments in real estate, net 2,108,072 2,171,170 Cash and cash equivalents 52,425 77,264 Restricted cash 19,160 14,094 Assets held for sale 70,674 52,397 Derivative assets, at fair value — 4,633 Straight-line rent receivable, net 20,362 17,351 Prepaid expenses and other assets 46,745 28,785 Deferred costs, net 13,087 11,752 Total assets $ 2,330,525 $ 2,377,446 ______________________ (1) The Transition Property is presented within the Seniors Housing — Operating Properties segment as of September 30, 2019 and December 31, 2018 . (2) Included in the triple net leased healthcare facilities segment. The following table reconciles capital expenditures by reportable business segment, excluding corporate non-real estate expenditures, for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Medical office buildings $ 1,385 $ 1,834 $ 3,139 $ 4,060 Triple-net leased healthcare facilities — 425 17 493 Seniors housing — operating properties (1) 3,244 489 7,754 2,415 Total capital expenditures $ 4,629 $ 2,748 $ 10,910 $ 6,968 ______________________ (1) The results of operations from the Transition Property are presented within the Seniors Housing — Operating Properties segment for the three and nine months ended September 30, 2019 and 2018 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies On January 1, 2019, the Company adopted ASU 2016- 02 and recorded ROU assets and lease liabilities related to 11 ground operating leases (see Note 2 — Summary of Significant Accounting Policies for additional information on the impact of adopting the new standard). As of September 30, 2019 , the Company has eight operating and six direct financing lease agreements related to certain acquisitions under leasehold interests arrangements. The eight operating leases have durations, including assumed renewals, ranging from 13.1 to 88.0 years . As of September 30, 2019 , the Company’s balance sheet includes ROU assets and liabilities of $7.2 million and $9.1 million , respectively, which are included in prepaid expenses and other assets and accounts payable and accrued expenses, respectively. In determining operating ROU assets and lease liabilities for the Company’s existing operating leases upon the adoption of the new lease guidance as well as for new operating leases in the current period, the Company was required to estimate an appropriate incremental borrowing rate on a fully-collateralized basis for the terms of the leases. Since the terms of the Company’s ground leases are significantly longer than the terms of borrowings available to the Company on a fully-collateralized basis, the Company’s estimate of this rate required significant judgment. The Company’s ground operating leases have a weighted-average remaining lease term, including assumed renewals, of 42.4 years and a weighted-average discount rate of 7.34% as of September 30, 2019 . For the three and nine months ended September 30, 2019 , the Company paid cash of $0.2 million and $0.6 million , respectively, for amounts included in the measurement of lease liabilities and recorded expense of $0.2 million and $0.7 million , respectively, on a straight-line basis in accordance with the standard. The lease expense is recorded in property operating expenses in the consolidated statements of operations and comprehensive loss. The Company did not enter into any additional ground leases during the quarter ended September 30, 2019 . The following table reflects the base cash rental payments due from the Company as of September 30, 2019 : Future Base Rent Payments (In thousands) Operating Leases Direct Financing Leases 2019 (remainder) $ 162 $ 20 2020 651 82 2021 663 84 2022 682 86 2023 684 88 Thereafter 30,067 7,590 Total lease payments 32,909 7,950 Less: Effects of discounting (23,782 ) (3,117 ) Total present value of lease payments $ 9,127 $ 4,833 The following table reflects the base cash rental payments due from the Company as of December 31, 2018: Future Base Rent Payments (In thousands) Operating Leases Capital Leases 2019 $ 780 $ 80 2020 781 82 2021 774 84 2022 790 86 2023 760 88 Thereafter 34,344 7,590 Total lease payments $ 38,229 8,010 Less: Effects of discounting (3,202 ) Total present value of lease payments $ 4,808 Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company or its properties. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of September 30, 2019 , the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations. Development Project Funding In August 2015, the Company entered into an asset purchase agreement and development agreement to acquire land and construction in progress, and subsequently fund the remaining construction, of a development property in Jupiter, Florida for $82.0 million . As of September 30, 2019 , the Company had funded $96.0 million , including $10.0 million for the land and $86.0 million for construction in progress. As a result, the Company believes that it has satisfied its funding commitments for the construction. As of September 30, 2019 , the Company had funded $14.0 million in excess of its $72.0 million funding commitment for the construction. The Company has and may continue to, at its election, provide additional funding to ensure completion of the construction. To the extent the Company funds additional monies for the completion of the development, Palm, the developer of the facility, is responsible for reimbursing the Company for any amounts funded. Entities related to Palm, referred to herein as the NuVista Tenant, owe the Company significant amounts due to defaults under leases with the Company at other properties in the Company’s portfolio (see Note 3 — Real Estate Investments for more information). The Company currently does not expect that Palm will reimburse the Company for construction overruns funded and there can be no assurance that they will do so, in whole or in part. Palm is also responsible for completing the development and obtaining a final certificate of occupancy for the facility (the “CO”). However, Palm is in default of the development agreement and has ceased providing services under the development agreement. There is no assurance as to when and if Palm will comply with its obligations, and this has resulted in delays in obtaining the CO. The Company is currently working to obtain the CO, but there can be no assurance as to how long this process will take, or if the Company will be able to complete it at all. Under the development agreement, the targeted completion date was December 31, 2016. Additionally, the estimated rent commencement date was expected to be no later than April 1, 2017 with entities related to Palm operating the property as the tenants (the “Jupiter Tenant”). The Company does not expect entities related to Palm to become the tenant and is working to find a replacement tenant once it obtains the CO, although there can be no assurance the Company will be able to do so on a timely basis, or at all. Pursuant to an agreement between the Company and the Jupiter Tenant, the Jupiter Tenant agreed to transfer all contracts, licenses and permits (including all operational permissions and certificates of need) to a replacement tenant designated by the Company. Until a replacement tenant is identified, there can be no assurance that this transfer will take place or that the Jupiter Tenant will comply with its obligations when required to do so. Moreover, until the CO is obtained and a replacement tenant is identified, the Company will not receive income from the property, and the amount of cash the Company is able to generate to fund distributions to its stockholders will continue to be adversely affected. Although the Company is still working to obtain the CO, the Company may consider other alternatives for this property. If the Company were to pursue other alternatives, there can be no assurance as to the ultimate outcome of this development property. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except the following disclosures: Share Repurchases On October 30, 2019, the Company repurchased 446,830 shares of common stock for approximately $7.8 million , at an average price per share of $17.50 pursuant to the SRP. The repurchases reflect all repurchase requests made in good order following the death or qualifying disability of stockholders during the period commencing January 1, 2019 up to and including June 30, 2019. See Note 8 — Common Stock for additional information on the SRP. Fannie Mae Master Credit Facilities Interest Rate Caps On October 30, 2019, the Company entered into two new interest rate cap agreements, effective November 1, 2019 for a total notional amount of $88.7 million . The two interest rate caps agreements extend three existing interest rate caps set to mature on the same date and are not designated as hedges. Mortgage Repayments In October 2019, the Company repaid its Courtyard Fountains - Gresham, OR mortgage with a gross outstanding loan amount of $23.5 million and added the property to the borrowing base under the Credit Facility. Additionally, the Company repaid the Bridge Loan mortgage with a gross outstanding loan amount of $18.6 million and added nine of the 15 properties securing the Bridge Loan to the borrowing base under the Credit Facility. These repayments were financed using proceeds from a $42.1 million |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP. |
Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP. |
Reclassifications | Reclassifications |
Purchase Accounting | Purchase Accounting The Company evaluates the inputs, processes and outputs of each asset acquired to determine if the transaction is a business combination or an asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized as part of the overall purchase price. In both a business combination and an asset acquisition, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, fixtures and tenant improvements. Intangible assets or liabilities may include the value of in-place leases, above- and below- market leases and other identifiable assets or liabilities based on lease or property specific characteristics. In addition, any assumed mortgages receivable or payable and any assumed or issued non-controlling interests (in a business combination) are recorded at their estimated fair values. In allocating the fair value to assumed mortgages, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above or below-market interest rates. In a business combination, the difference between the purchase price and the fair value of identifiable net assets acquired is either recorded as goodwill or as a bargain purchase gain. In an asset acquisition, the difference between the acquisition price (including capitalized transaction costs) and the fair value of identifiable net assets acquired is allocated to the non-current assets. All acquisitions during the three- month periods ended December 31, 2019 and 2018 were asset acquisitions. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and fixtures are based on cost segregation studies performed by independent third parties or on the Company’s analysis of comparable properties in the Company’s portfolio. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates and the value of in-place leases as applicable. Factors considered in the analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at contract rates during the expected lease-up period, which typically ranges from six to 24 months. The Company also estimates costs to execute similar leases including leasing commissions, legal and other related expenses. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The capitalized above-market lease values are amortized as a reduction of base rental revenue over the remaining terms of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases. If a tenant with a below-market rent renewal does not renew, any remaining unamortized amount will be taken into income at that time. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the property for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If an impairment exists, due to the inability to recover the carrying value of a property, the Company would recognize an impairment loss in the consolidated statement of operations and comprehensive income to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss recorded would equal the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net earnings. |
Revenue Recognition | Revenue Recognition The Company’s revenues, which are derived primarily from lease contracts, which include rent received from tenants in MOBs and triple-net leased healthcare facilities. As of September 30, 2019 , these leases had a weighted average remaining lease term of 5.7 years . Rent from tenants in the Company’s MOB and triple-net leased healthcare facilities operating segments (as discussed below) is recorded in accordance with the terms of each lease on a straight-line basis over the initial term of the lease. Because many of the leases provide for rental increases at specified intervals, GAAP requires the Company to record a receivable for, and include in revenues on a straight-line basis, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation. The Company’s revenues also include resident services and fee income primarily related to rent derived from lease contracts with residents in the Company’s Seniors Housing — Operating Properties (“SHOP”) held using a structure permitted by the REIT rules and to fees for ancillary services performed for SHOP residents, which are generally variable in nature. Rental income from residents in the Company’s SHOP segment is recognized as earned. Residents pay monthly rent that covers occupancy of their unit and basic services, including utilities, meals and some housekeeping services. The terms of the rent are short term in nature, primarily month-to-month. Fees for ancillary services are recorded in the period in which the services are performed. The Company defers the revenue related to lease payments received from tenants and residents in advance of their due dates. Pursuant to certain of the Company’s lease agreements, tenants are required to reimburse the Company for certain property operating expenses related to non-SHOP assets (recorded in revenue from tenants), in addition to paying base rent, whereas under certain other lease agreements, the tenants are directly responsible for all operating costs of the respective properties. Under ASC 842, the Company has elected to report combined lease and non-lease components in a single line “Revenue from tenants”. For comparative purposes, the Company has also elected to reflect prior revenue and reimbursements previously reported under ASC 842 also on a single line. For expenses paid directly by the tenant, under both ASC 842 and 840, the Company has reflected them on a net basis. The following tables present future base rent payments on a cash basis due to the Company over the periods indicated. These amounts exclude tenant reimbursements and contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes, among other items. As of September 30, 2019 : (In thousands) Future 2019 (remainder) $ 22,201 2020 85,858 2021 80,125 2022 71,692 2023 60,793 Thereafter 250,220 Total $ 570,889 The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Under the new leasing standard (see Recently Issued Accounting Pronouncements section below), the Company is required to assess, based on credit risk only, if it is probable that it will collect virtually all of the lease payments at the lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant. Partial reserves, or the ability to assume partial recovery are no longer permitted. If the Company determines that it is probable it will collect virtually all of the lease payments (rent and common area maintenance), the lease will continue to be accounted for on an accrual basis (i.e. straight-line). However, if the Company determines it’s not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and a full reserve would be recorded on previously accrued amounts in cases where it was subsequently concluded that collection was not probable. Cost recoveries from tenants are included in revenue from tenants in the accompanying consolidated statements of operations and comprehensive loss in the period the related costs are incurred, as applicable. |
Recently Issued and Recently Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted as of January 1, 2019 ASU No. 2016-02 - Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) which provides new guidance related to the accounting for leases, as well as the related disclosures. For lessors of real estate, leases are accounted for using an approach substantially the same as previous accounting guidance for operating leases and direct financing leases. For lessees, the new standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. Lease expense for operating leases is recognized on a straight-line basis over the term of the lease, while lease expense for finance leases is recognized based on an effective interest method over the term of the lease. Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease, may now be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction. Upon adoption, lessors were allowed a practical expedient, which the Company has elected, by class of underlying assets to account for lease and non-lease components (such as tenant reimbursements of property operating expenses) as a single lease component as an operating lease because (a) the non-lease components have the same timing and pattern of transfer as the associated lease component; and (b) the lease component, if accounted for separately, would be classified as an operating lease. Additionally, only incremental direct leasing costs may be capitalized under this new guidance, which is consistent with the Company’s existing policies. Also, upon adoption, companies were allowed a practical expedient package, which the Company has elected, that allowed the Company: (a) to not reassess whether any expired or existing contracts entered into prior to January 1, 2019 are or contain leases; (b) to not reassess the lease classification for any expired or existing leases entered into prior to January 1, 2019 (including assessing sale-leaseback transactions); and (c) to not reassess initial direct costs for any expired or existing leases entered into prior to January 1, 2019. As a result, all of the Company’s existing leases will continue to be classified as operating leases under the new standard. Further, any existing leases for which the property is the leased to a tenant in a transaction that at inception was a sale-leaseback transaction will continue to be treated (absent a modification) as operating lease.The Company did not have any leases that would be considered financing leases as of January 1, 2019. The Company assessed the impact of adoption from both a lessor and lessee perspective, which is discussed in more detail below, and adopted the new guidance prospectively on January 1, 2019, using a prospective transition approach under which the Company elected to apply the guidance effective January 1, 2019 and not adjust prior comparative reporting periods (except for the Company’s presentation of lease revenue discussed below). Lessor Accounting As discussed above, the Company was not required to re-assess the classification of its leases, which are considered operating leases under ASU 2016-02. The following is a summary of the most significant impacts to the Company of the new accounting guidance, as lessor: • Because the Company elected the practical expedient noted above to not separate non-lease component revenue from the associated lease component, the Company has aggregated revenue from its lease components and non-lease components (tenant operating expense reimbursements) into one line. The prior period has been conformed to this new presentation. • Changes in the Company’s assessment of receivables that result in bad debt expense is now required to be recorded as an adjustment to revenue, rather than a charge to bad debt expense. This new classification applies for the first quarter of 2019 and reclassification of prior period amounts is not permitted. At transition on January 1, 2019, after assessing its reserve balances at December 31, 2018 under the new guidance, the Company wrote off accounts receivable of $0.1 million and straight-line rents receivable of $0.1 million as an adjustment to the opening balance of accumulated deficit, and accordingly rent for these tenants is currently recorded on a cash basis. • Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed. Under prior accounting guidance, the recognition would have been deferred. Lessee Accounting The Company was a lessee under ground leases for 17 properties as of January 1, 2019 and because the Company has elected the practical expedients described above, it determined that 11 of these leases would continue to be classified as operating leases under the new standard. The following is a summary of the most significant impacts to the Company of the new accounting guidance, as lessee: • Upon adoption of the new standard, the Company recorded ROU assets and lease liabilities equal to $10.2 million for the present value of the lease payments related to its ground leases. These amounts are included in prepaid expenses and other assets and accounts payable and accrued expenses on the consolidated balance sheet. • The Company also reclassified $0.5 million related to amounts previously reported as a straight-line rent liability, $4.8 million , net related to amounts previously reported as above and below market ground lease intangibles to the ROU assets. For additional information and disclosures related to these operating leases, see Note 16 — Commitments and Contingencies. Other Accounting Pronouncements In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) : (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception guidance that changes the method to determine the classification of certain financial instruments with a down round feature as liabilities or equity instruments and clarify existing disclosure requirements for equity-classified instruments. A down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. As a result, a freestanding equity-linked financial instrument no longer would be accounted for as a derivative liability, rather, an entity that presents earnings per share is required to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common stockholders in basic earnings per share. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features. The revised guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2018. Adoption should be applied retrospectively to outstanding financial instruments with a down round feature with a cumulative-effect adjustment to the statement of financial position. The Company adopted the new guidance on January 1, 2019 and it did not have an impact on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The Company adopted ASU 2017-12 on January 1, 2019, as required under the guidance, using a modified retrospective transition method and the adoption did not have a material impact on its consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation- Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting as an amendment and update expanding the scope of Topic 718. The amendment specifies that Topic 718 now applies to all share-based payment transactions, even nonemployee awards, in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. Under the new guidance, awards to nonemployees are measured on the grant date, rather than on the earlier of the performance commitment date or the date at which the nonemployee’s performance is complete. Also, the awards would be measured by estimating the fair value of the equity instruments to be issued, rather than the fair value of the goods or services received or the fair value of the equity instruments issued, whichever can be measured more reliably. In addition, entities may use the expected term to measure nonemployee awards or elect to use the contractual term as the expected term, on an award-by-award basis. The new guidance is effective for the Company in annual periods beginning after December 15, 2018, and interim periods within those annual periods. As of June 30, 2019 the Company did not have any nonemployee awards outstanding that would be impacted by the new guidance, however the Company will apply this new guidance prospectively to grants of nonemployee awards, if any. The Company has adopted ASU 2018-07 on January 1, 2019. Pending Adoption as of September 30, 2019 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the update requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. On July 25, 2018, the FASB proposed an amendment to ASU 2016-13 to clarify that operating lease receivables recorded by lessors (including unbilled straight-line rent) are explicitly excluded from the scope of ASU 2016-13. The new guidance is effective for reporting periods beginning after December 15, 2019, with early adoption permitted for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . The objective of ASU 2018-13 is to improve the effectiveness of disclosures in the notes to the financial statements by removing, modifying, and adding certain fair value disclosure requirements to facilitate clear communication of the information required by generally accepted accounting principles. The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 with early adoption permitted upon issuance of this ASU. The Company is currently evaluating the potential impact of this new guidance. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Payments to be Received, Maturity | The following tables present future base rent payments on a cash basis due to the Company over the periods indicated. These amounts exclude tenant reimbursements and contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes, among other items. As of September 30, 2019 : (In thousands) Future 2019 (remainder) $ 22,201 2020 85,858 2021 80,125 2022 71,692 2023 60,793 Thereafter 250,220 Total $ 570,889 |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate Investments, Net [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table presents the allocation of real estate assets acquired and liabilities assumed, as well as capitalized construction in progress, during the nine months ended September 30, 2019 and 2018 : Nine Months Ended September 30, (In thousands) 2019 2018 Real estate investments, at cost: Land $ 6,356 $ 7,870 Buildings, fixtures and improvements 68,903 53,614 Construction in progress 5,362 6,685 Total tangible assets 80,621 68,169 Acquired intangibles: In-place leases and other intangible assets (1) 11,777 5,440 Market lease and other intangible assets (1) 723 276 Market lease liabilities (1) (1,483 ) (286 ) Total intangible assets and liabilities 11,017 5,430 Cash paid for real estate investments, including acquisitions $ 91,638 $ 73,599 Number of properties purchased 9 11 _______________ (1) Weighted-average remaining amortization periods for in-place leases, an above-market lease and a below-market lease liability acquired were 9.9 years and 7.7 years as of September 30, 2019 and 2018 , respectively. |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following table lists the states where the Company had concentrations of properties where annualized rental income on a straight-line basis represented 10% or more of consolidated annualized rental income on a straight-line basis for all properties as of September 30, 2019 and 2018 : September 30, State 2019 2018 Florida 23.9% 16.8% Michigan 11.0% 12.9% Georgia * 10.2% Pennsylvania * 10.2% _______________ * State’s annualized rental income on a straight-line basis was not greater than 10% of total annualized rental income for all portfolio properties as of the date specified. |
Schedule of Finite-Lived Intangible Assets | The following table discloses amounts recognized within the consolidated statements of operations and comprehensive loss related to amortization of in-place leases and other intangible assets, amortization and accretion of above- and below-market lease assets and liabilities, net and the amortization and accretion of above- and below-market ground leases, for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Amortization of in-place leases and other intangible assets (1) $ 3,872 $ 4,632 $ 11,832 $ 14,382 (Accretion) and Amortization of above-and below-market leases, net (2) $ 13 $ (30 ) $ (142 ) $ (30 ) Amortization of above-and below-market ground leases, net (3) $ 74 $ 37 $ 117 $ 110 _______________ (1) Reflected within depreciation and amortization expense (2) Reflected within rental income (3) Reflected within property operating and maintenance expense |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table provides the projected amortization expense and adjustments to revenues for the next five years: (In thousands) Remainder 2019 2020 2021 2022 2023 In-place lease assets $ 3,610 $ 13,115 $ 10,650 $ 8,644 $ 6,770 Other intangible assets 109 414 414 414 414 Total to be added to amortization expense $ 3,719 $ 13,529 $ 11,064 $ 9,058 $ 7,184 Above-market lease assets $ (346 ) $ (1,295 ) $ (993 ) $ (645 ) $ (307 ) Below-market lease liabilities 324 1,488 1,269 1,208 1,095 Total to be (deducted from) added to revenue from tenants $ (22 ) $ 193 $ 276 $ 563 $ 788 Below market ground leases $ 63 $ 222 $ 214 $ 212 $ 212 Above market ground leases (13 ) (53 ) (53 ) (52 ) (35 ) Total to be added to property operating and maintenance $ 50 $ 169 $ 161 $ 160 $ 177 |
Real Estate Sales | The following table details the major classes of assets associated with the properties that are classified as held for sale as of September 30, 2019 and December 31, 2018: (In thousands) September 30, 2019 December 31, 2018 Land $ 4,051 $ 5,285 Buildings, fixtures and improvements 66,623 47,112 Assets held for sale $ 70,674 $ 52,397 |
Mortgage Notes Payable, Net (Ta
Mortgage Notes Payable, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table reflects the Company’s mortgage notes payable as of September 30, 2019 and December 31, 2018 : Outstanding Loan Amount as of Effective Interest Rate (1) as of Portfolio Encumbered Properties (2) September 30, December 31, 2018 September 30, December 31, 2018 Interest Rate Maturity (In thousands) (In thousands) Countryside Medical Arts - Safety Harbor, FL — $ — $ 5,690 — % 6.20 % Variable (6) Apr. 2019 (5) St. Andrews Medical Park - Venice, FL — — 6,289 — % 6.20 % Variable (6) Apr. 2019 (5) Palm Valley Medical Plaza - Goodyear, AZ 1 3,140 3,222 4.15 % 4.15 % Fixed Jun. 2023 Medical Center V - Peoria, AZ 1 2,907 2,977 4.75 % 4.75 % Fixed Sep. 2023 Courtyard Fountains - Gresham, OR 1 23,545 23,905 3.87 % 3.87 % Fixed Jan. 2020 (8) Fox Ridge Bryant - Bryant, AR 1 7,319 7,427 3.98 % 3.98 % Fixed May 2047 Fox Ridge Chenal - Little Rock, AR 1 16,769 16,988 3.98 % 3.98 % Fixed May 2049 Fox Ridge North Little Rock - North Little Rock, AR 1 10,405 10,541 3.98 % 3.98 % Fixed May 2049 Philip Professional Center - Lawrenceville, GA — — 4,793 — % 4.00 % Fixed Oct. 2019 (5) Capital One MOB Loan 31 241,987 250,000 4.44 % 4.44 % Fixed (3) Jun. 2022 Bridge Loan 15 18,613 20,271 4.57 % 4.87 % Variable (7) Dec. 2019 (9) Multi-Property CMBS Loan 21 118,700 118,700 4.60 % 4.60 % Fixed May 2028 Gross mortgage notes payable 73 443,385 470,803 4.43 % 4.48 % Deferred financing costs, net of accumulated amortization (4) (4,991 ) (6,591 ) Mortgage premiums and discounts, net (1,503 ) (1,373 ) Mortgage notes payable, net $ 436,891 $ 462,839 _____________ (1) Calculated on a weighted average basis for all mortgages outstanding as of September 30, 2019 and December 31, 2018 . (2) Does not include real estate assets mortgaged to secure advances under the Fannie Mae Master Credit Facilities (as defined below) or eligible unencumbered real estate assets comprising the borrowing base of the Credit Facility (as defined in Note 5 — Credit Facilities ). The equity interests and related rights in the Company’s wholly owned subsidiaries that directly own or lease the real estate assets comprising the borrowing base have been pledged for the benefit of the lenders thereunder ( see Note 5 — Credit Facilities for additional details). (3) Variable rate loan, based on 30-day LIBOR, which is fixed as a result of entering into “pay-fixed” interest rate swap agreements ( see Note 7 — Derivatives and Hedging Activities for additional details). (4) Deferred financing costs represent commitment fees, legal fees and other costs associated with obtaining financing. These costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method for fixed rate loans and the straight-line method for variable rate loans. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined it is probable the financing will not close. (5) The loan was repaid and the property was added to the borrowing base under the Credit Facility in April 2019. (6) Based on 30-day LIBOR. (7) Variable rate loan, based on 30-day LIBOR, of which $8.0 million was fixed as a result of entering into “pay-fixed” interest rate swap agreements at September 30, 2019 ( see Note 7 — Derivatives and Hedging Activities for additional details). (8) Loan was repaid in October 2019, in advance of its scheduled maturity, and the property was added to the borrowing base of the revolving credit facility ( see Note 17 — Subsequent Events for additional details). (9) Loan was repaid in October 2019, in advance of its scheduled maturity, and nine the properties were added to the borrowing base of the revolving credit facility ( see Note 17 — Subsequent Events for additional details). |
Schedule of Maturities of Long-term Debt | The following table summarizes the scheduled aggregate principal payments on mortgage notes payable for the five years subsequent to September 30, 2019 and thereafter: (In thousands) Future Principal Payments 2019 (remainder) $ 18,945 2020 24,279 2021 892 2022 242,916 2023 6,056 Thereafter 150,297 Total $ 443,385 |
Credit Facilities (Tables)
Credit Facilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Credit Facilities | The Company had the following credit facilities outstanding as of September 30, 2019 and December 31, 2018 : Outstanding Facility Amount as of Effective Interest Rate Credit Facility Encumbered Properties (1) September 30, December 31, 2018 September 30, December 31, 2018 Interest Rate Maturity (In thousands) (In thousands) Prior Credit Facility — $ — $ 243,300 — % 4.62 % — — Credit Facility: Revolving Credit Facility $ 163,618 $ — 4.26 % — % Variable Mar. 2024 Term Loan 150,000 — 4.25 % — % Variable (6) Mar. 2024 Deferred financing costs (4,951 ) — Term Loan, net 145,049 — Total Credit Facility 81 (2) $ 308,667 $ — Fannie Mae Master Credit Facilities: Capital One Facility 12 (3) $ 216,614 $ 216,614 4.70 % 4.83 % Variable (7) Nov. 2026 KeyBank Facility 10 (4) 142,708 142,708 4.72 % 4.88 % Variable (7) Nov. 2026 Total Fannie Mae Master Credit Facilities 22 $ 359,322 $ 359,322 Total Credit Facilities 103 $ 667,989 $ 602,622 4.50 % 4.76 % (5) _______________ (1) Encumbered properties are as of September 30, 2019 . (2) The equity interests and related rights in the Company’s wholly owned subsidiaries that directly own or lease the eligible unencumbered real estate assets comprising the borrowing base of the Credit Facility (as defined below) have been pledged for the benefit of the lenders thereunder. (3) Secured by first-priority mortgages on 12 of the Company’s seniors housing properties located in Florida, Georgia, Iowa and Michigan as of September 30, 2019 with a carrying value of $348.9 million . (4) Secured by first-priority mortgages on ten of the Company’s seniors housing properties located in Michigan, Missouri, Kansas, California, Florida, Georgia and Iowa as of September 30, 2019 with a carrying value of $250.9 million . (5) Calculated on a weighted average basis for all credit facilities outstanding as of September 30, 2019 and December 31, 2018 . (6) Variable rate loan, based on LIBOR, all of which was fixed as a result of entering into “pay-fixed” interest rate swap agreements ( see Note 7 — Derivatives and Hedging Activities for additional details). (7) Variable rate loan which is capped as a result of entering into interest rate cap agreements ( see Note 7 — Derivatives and Hedging Activities for additional details). In October 2019, the Company replaced two maturing interest rate cap agreements ( see Note 17 — Subsequent Events for additional details). |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | The following table presents information about the Company’s assets and liabilities measured at fair value as of September 30, 2019 and December 31, 2018 , aggregated by the level in the fair value hierarchy within which those instruments fall. (In thousands) Quoted Prices in Active Markets Significant Significant Unobservable Inputs Total September 30, 2019 Derivative assets, at fair value $ — $ — $ — $ — Derivative liabilities, at fair value — (8,933 ) — (8,933 ) Total $ — $ (8,933 ) $ — $ (8,933 ) December 31, 2018 Derivative assets, at fair value $ — $ 4,633 $ — $ 4,633 Total $ — $ 4,633 $ — $ 4,633 |
Fair Value, by Balance Sheet Grouping | The fair values of the Company’s remaining financial instruments that are not reported at fair value on the consolidated balance sheets are reported below: September 30, 2019 December 31, 2018 (In thousands) Level Carrying Amount Fair Value Carrying Amount Fair Value Gross mortgage notes payable and mortgage premium and discounts, net (1) 3 $ 441,882 $ 456,607 $ 469,430 $ 472,585 Revolving Credit Facility 3 $ 163,618 $ 161,750 $ 243,300 $ 243,300 Term Loan 3 $ 150,000 $ 147,632 $ — $ — Fannie Mae Master Credit Facilities 3 $ 359,322 $ 361,320 $ 359,322 $ 360,675 (1) Carrying value includes mortgage notes payable of $443.4 million and $470.8 million and mortgage premiums and (discounts), net of $1.5 million and $1.4 million as of September 30, 2019 and December 31, 2018 , respectively. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Balance Sheet Location | The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of September 30, 2019 and December 31, 2018 : (In thousands) Balance Sheet Location September 30, December 31, 2018 Derivatives designated as hedging instruments: Interest rate “pay-fixed” swaps Derivative assets, at fair value $ — $ 4,582 Interest rate “pay-fixed” swaps Derivative liabilities, at fair value $ 8,933 $ — Derivatives not designated as hedging instruments: Interest rate caps Derivative assets, at fair value $ — $ 51 |
Summary of Derivative Instruments | The Company had the following outstanding interest rate derivatives that were not designated as hedges in qualified hedging relationships as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Interest Rate Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate caps 7 $ 359,322 7 $ 359,322 As of September 30, 2019 and December 31, 2018 , the Company had the following derivatives that were designated as cash flow hedges of interest rate risk: September 30, 2019 December 31, 2018 Interest Rate Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate “pay-fixed” swaps 10 $ 400,000 2 $ 250,000 |
Schedule of Derivatives Included in AOCI | The table below details the location in the financial statements of the loss recognized on interest rate derivatives designated as cash flow hedges for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Amount of (loss) gain recognized in accumulated other comprehensive income on interest rate derivatives $ (2,469 ) $ 1,133 $ (12,496 ) $ 6,533 Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense $ 211 $ 135 $ 1,019 $ (11 ) Total amount of interest expense presented in the consolidated income statements $ (12,990 ) $ (12,597 ) $ (39,739 ) $ (35,962 ) |
Offsetting Assets | The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of September 30, 2019 and December 31, 2018 . The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheet. Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Received Net Amount September 30, 2019 $ — $ (8,933 ) $ — $ (8,933 ) $ — $ — $ (8,933 ) December 31, 2018 $ 4,633 $ — $ — $ 4,633 $ — $ — $ 4,633 |
Common Stock (Tables)
Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Class of Treasury Stock | The table below reflects the number of shares repurchased, under the SRP, cumulatively through September 30, 2019 . Number of Shares Repurchased Average Price per Share Cumulative repurchases as of December 31, 2018 (1) 3,288,256 $ 21.56 Nine months ended September 30, 2019 (2) 656,433 $ 20.25 Cumulative repurchases as of September 30, 2019 3,944,689 $ 21.34 _______________ (1) Repurchases made in 2018 include: (i) 373,967 shares repurchased during January 2018 with respect to requests received following the death or qualifying disability of stockholders during the six months ended December 31, 2017 for approximately $8.0 million at a weighted average price per share of $21.45 , and (ii) 155,904 shares that were repurchased for $3.2 million at an average price per share of $20.25 on July 31, 2018, representing 100% of the repurchase requests made following the death or qualifying disability of stockholders during the period from January 1, 2018 through the suspension of the SRP on March 13, 2018. No repurchase requests received during the SRP suspension were accepted. (2) Includes shares repurchased on April 30, 2019 with respect to repurchase requests made in good order following the death or qualifying disability of stockholders during the period commencing March 13, 2018 up to and including December 31, 2018 for $13.3 million . Does not include repurchases of 446,830 shares of common stock repurchased for $7.8 million at an average price per share of $17.50 on October 30, 2019 with respect to repurchase requests made in good order following the death or qualifying disability of stockholders during the period commencing January 1, 2019 up to and including June 30, 2019 (see Note 17 — Subsequent Events). |
Related Party Transactions an_2
Related Party Transactions and Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services | The following table details amounts incurred, forgiven and payable in connection with the Company’s operations-related services described above as of and for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, Payable (Receivable) as of 2019 2018 2019 2018 (In thousands) Incurred (1) Incurred (1) Incurred (1) Incurred (1) September 30, December 31, 2018 Non-recurring fees and reimbursements: Acquisition cost reimbursements $ 6 $ 34 $ 39 $ 144 $ 6 $ 32 Due from HT III related to Asset Purchase (2) — — — — — (154 ) Ongoing fees and reimbursements: Asset management fees 4,875 4,875 14,625 14,625 — — Property management fees 1,067 868 2,910 2,608 271 58 Professional fees and other reimbursements 2,313 (4) 2,121 7,623 (4) 6,330 (61 ) (5) (6) 674 (5) (6) Distributions on Class B Units (3) 76 77 228 263 — — Total related party operation fees and reimbursements $ 8,337 $ 7,975 $ 25,425 $ 23,970 $ 216 $ 610 _______________ (1) There were no fees or reimbursements forgiven during the three and nine months ended September 30, 2019 or 2018 . (2) On December 22, 2017, the Company purchased substantially all the assets (the “Asset Purchase”) of American Realty Capital Healthcare Trust III, Inc. (“HT III”). Certain proration estimates were included within the closing. The purchase agreement calls for a final purchase price adjustment. The Company had a $154,000 net receivable related to the Asset Purchase included on its consolidated balance sheet as of December 31, 2018. Please see below for additional information related to the Asset Purchase. (3) Prior to April 1, 2015, the Company caused the OP to issue (subject to periodic approval by the Board) to the Advisor restricted performance based Class B Units for asset management services. As of September 30, 2019 , the Board had approved the issuance of 359,250 Class B Units to the Advisor in connection with this arrangement. Effective April 1, 2015, the Company began paying an asset management fee to the Advisor or its assignees in cash, in shares, or a combination of both and no longer issues any Class B Units. (4) Includes $1.6 million and $5.1 million related to the Capped Reimbursement Amount for the three and nine months ended September 30, 2019 . (5) Balance includes costs which were incurred and accrued due to American National Stock Transfer, LLC, a subsidiary of RCS Capital Corporation (“RCAP”) which were related parties of the Company. (6) Balance includes a receivable of $0.5 million from the Advisor as of September 30, 2019 previously recorded in the fourth quarter of 2018, which, pursuant to authorization by the independent members of the Company’s board of directors, is payable over time during 2020. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Restricted Share Award Activity | The following table reflects the amount of restricted shares outstanding as of September 30, 2019 and activity for the period presented: Number of Shares of Common Stock Weighted Average Issue Price Unvested, December 31, 2018 322,242 $ 21.41 Granted 15,000 17.50 Vested (59,199 ) 21.47 Unvested, September 30, 2019 278,043 — |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | The following table illustrates the changes in accumulated other comprehensive income as of and for the period presented: (In thousands) Unrealized Gain on Designated Derivative Balance, December 31, 2018 $ 4,582 Other comprehensive income, before reclassifications (12,496 ) Amount of gain reclassified from accumulated other comprehensive income (1,019 ) Balance, September 30, 2019 $ (8,933 ) |
Non-controlling Interests (Tabl
Non-controlling Interests (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interest | The following table summarizes the activity related to investment arrangements with the unaffiliated third parties: Distributions (2) Distributions (2) Third Party Net Investment Amount Non-Controlling Ownership Percentage Net Real Estate Assets Subject to Investment Arrangement (1) Three Months Ended September 30, Nine Months Ended September 30, Property Name (Dollar amounts in thousands) Investment Date As of September 30, 2019 As of September 30, 2019 As of September 30, 2019 As of December 31, 2018 2019 2018 2019 2018 Plaza Del Rio Medical Office Campus Portfolio May 2015 $ 416 2.4 % $ 14,289 $ 14,747 $ — $ — $ — $ 87 UnityPoint Clinic Portfolio (2) December 2017 $ 493 5.0 % $ 8,941 $ 9,241 $ — $ — $ — $ — ______________ (1) One property within the Plaza Del Rio Medical Office Campus Portfolio was pledged to secure the Multi-Property CMBS Loan. See Note 4 - Mortgage Notes Payable for additional information. (2) Assumed as part of the HT III Asset Purchase. See Note 9 - Related Party Transactions and Arrangements for further information on the Asset Purchase. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a summary of the basic and diluted net loss per share computation for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net loss attributable to stockholders (in thousands) $ (28,789 ) $ (29,607 ) $ (39,954 ) $ (42,548 ) Basic and diluted weighted-average shares outstanding 91,992,963 90,203,311 91,884,495 90,983,620 Basic and diluted net loss per share $ (0.31 ) $ (0.33 ) $ (0.43 ) $ (0.47 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The Company had the following common stock equivalents on a weighted-average basis that were excluded from the calculation of diluted net loss per share attributable to stockholders as their effect would have been antidilutive for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Unvested restricted shares (1) 299,953 341,976 315,872 369,946 OP Units (2) 405,998 405,998 405,998 405,998 Class B Units (3) 359,250 359,250 359,250 359,250 Total weighted average antidilutive common stock equivalents 1,065,201 1,107,224 1,081,120 1,135,194 _______________ (1) Weighted average number of antidilutive unvested restricted shares outstanding for the periods presented. There were 278,043 and 323,045 unvested restricted shares outstanding as of September 30, 2019 and 2018 , respectively. (2) Weighted average number of antidilutive OP Units outstanding for the periods presented. There were 405,998 OP Units outstanding as of September 30, 2019 and 2018 . (3) Weighted average number of antidilutive Class B Units outstanding for the periods presented. There were 359,250 Class B Units outstanding as of September 30, 2019 and 2018 . These Class B Units are unvested as of September 30, 2019 and 2018 (see Note 9 — Related Party Transactions |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables reconcile the segment activity to consolidated net loss for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties (1) Consolidated Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties (1) Consolidated Revenue from tenants $ 25,672 $ 3,783 $ 65,985 $ 95,440 $ 75,997 $ 10,780 $ 193,668 $ 280,445 Property operating and maintenance 8,733 608 51,314 60,655 23,702 1,420 147,136 172,258 NOI $ 16,939 $ 3,175 $ 14,671 34,785 $ 52,295 $ 9,360 $ 46,532 108,187 Impairment charges (22,615 ) (22,634 ) Operating fees to related parties (5,941 ) (17,535 ) Acquisition and transaction related (112 ) (161 ) General and administrative (4,782 ) (15,394 ) Depreciation and amortization (20,140 ) (61,124 ) Interest expense (12,990 ) (39,739 ) Interest and other income 11 15 Loss on sale of real estate investments 2,715 8,793 (Loss) gain on non-designated derivatives (2 ) (50 ) Income tax expense (benefit) 271 (364 ) Net loss attributable to non-controlling interests 11 52 Net loss attributable to stockholders $ (28,789 ) $ (39,954 ) _______________ (1) The results of operations from the Transition Property are presented within the Seniors Housing — Operating Properties segment for the three and nine months ended September 30, 2019 . Three Months Ended September 30, Nine Months Ended September 30, 2018 2018 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties (1) Consolidated Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties (1) Consolidated Revenue from tenants $ 24,186 $ 4,836 $ 61,169 $ 90,191 $ 73,383 $ 14,779 $ 182,424 $ 270,586 Property operating and maintenance 6,982 5,840 46,476 59,298 22,327 6,197 137,637 166,161 NOI $ 17,204 $ (1,004 ) $ 14,693 30,893 $ 51,056 $ 8,582 $ 44,787 104,425 Impairment charges (17,837 ) (18,570 ) Operating fees to related parties (5,743 ) (17,233 ) Acquisition and transaction related (40 ) (333 ) General and administrative (4,441 ) (12,705 ) Depreciation and amortization (20,466 ) (62,099 ) Interest expense (12,597 ) (35,962 ) Interest and other income 16 21 (Loss) gain on non-designated derivative instruments 18 46 Income tax expense (benefit) 550 (225 ) Net loss attributable to non-controlling interests 40 87 Net loss attributable to stockholders $ (29,607 ) $ (42,548 ) _______________ (1) The results of operations from the Transition Property are presented within the Seniors Housing — Operating Properties segment for the three and nine months ended September 30, 2018 . The following table reconciles the segment activity to consolidated total assets as of the periods presented: (In thousands) September 30, 2019 December 31, 2018 ASSETS Investments in real estate, net: Medical office buildings $ 899,280 $ 878,703 Triple-net leased healthcare facilities (1) 237,366 289,686 Construction in progress (2) 95,960 90,829 Seniors housing — operating properties (1) 875,466 911,952 Total investments in real estate, net 2,108,072 2,171,170 Cash and cash equivalents 52,425 77,264 Restricted cash 19,160 14,094 Assets held for sale 70,674 52,397 Derivative assets, at fair value — 4,633 Straight-line rent receivable, net 20,362 17,351 Prepaid expenses and other assets 46,745 28,785 Deferred costs, net 13,087 11,752 Total assets $ 2,330,525 $ 2,377,446 ______________________ (1) The Transition Property is presented within the Seniors Housing — Operating Properties segment as of September 30, 2019 and December 31, 2018 . (2) Included in the triple net leased healthcare facilities segment. The following table reconciles capital expenditures by reportable business segment, excluding corporate non-real estate expenditures, for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2019 2018 2019 2018 Medical office buildings $ 1,385 $ 1,834 $ 3,139 $ 4,060 Triple-net leased healthcare facilities — 425 17 493 Seniors housing — operating properties (1) 3,244 489 7,754 2,415 Total capital expenditures $ 4,629 $ 2,748 $ 10,910 $ 6,968 ______________________ (1) The results of operations from the Transition Property are presented within the Seniors Housing — Operating Properties segment for the three and nine months ended September 30, 2019 and 2018 . |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Operating Lease, Liability, Maturity | The following table reflects the base cash rental payments due from the Company as of September 30, 2019 : Future Base Rent Payments (In thousands) Operating Leases Direct Financing Leases 2019 (remainder) $ 162 $ 20 2020 651 82 2021 663 84 2022 682 86 2023 684 88 Thereafter 30,067 7,590 Total lease payments 32,909 7,950 Less: Effects of discounting (23,782 ) (3,117 ) Total present value of lease payments $ 9,127 $ 4,833 The following table reflects the base cash rental payments due from the Company as of December 31, 2018: Future Base Rent Payments (In thousands) Operating Leases Capital Leases 2019 $ 780 $ 80 2020 781 82 2021 774 84 2022 790 86 2023 760 88 Thereafter 34,344 7,590 Total lease payments $ 38,229 8,010 Less: Effects of discounting (3,202 ) Total present value of lease payments $ 4,808 |
Finance Lease, Liability, Maturity | The following table reflects the base cash rental payments due from the Company as of September 30, 2019 : Future Base Rent Payments (In thousands) Operating Leases Direct Financing Leases 2019 (remainder) $ 162 $ 20 2020 651 82 2021 663 84 2022 682 86 2023 684 88 Thereafter 30,067 7,590 Total lease payments 32,909 7,950 Less: Effects of discounting (23,782 ) (3,117 ) Total present value of lease payments $ 9,127 $ 4,833 The following table reflects the base cash rental payments due from the Company as of December 31, 2018: Future Base Rent Payments (In thousands) Operating Leases Capital Leases 2019 $ 780 $ 80 2020 781 82 2021 774 84 2022 790 86 2023 760 88 Thereafter 34,344 7,590 Total lease payments $ 38,229 8,010 Less: Effects of discounting (3,202 ) Total present value of lease payments $ 4,808 |
Organization (Narrative) (Detai
Organization (Narrative) (Details) - Sep. 30, 2019 ft² in Millions | property | ft² | employee | encumbered_property | state |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Number of properties | 193 | 103 | |||
Number of states properties are located in | state | 31 | ||||
Rentable square feet | ft² | 9.1 | ||||
Number of employees | employee | 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands | Jan. 01, 2019USD ($)propertylease | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)lease | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Lessee, Lease, Description [Line Items] | ||||||
Remaining lease term | 5 years 8 months 12 days | |||||
Operating lease impairment loss | $ 1,200 | $ 4,800 | ||||
Bad debt expense | $ 4,900 | $ 4,797 | $ 9,227 | |||
Number of operating lease contracts | lease | 11 | 8 | ||||
Operating lease, right-of-use asset | 7,200 | $ 7,200 | ||||
Operating lease liability | $ 200 | $ 700 | ||||
Present value of lease payments | $ 4,808 | |||||
Land | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number of operating lease contracts | property | 17 | |||||
Accounting Standards Update 2016-02 | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Written off accounts receivable | $ 100 | |||||
Straight-line rents receivable | 100 | |||||
Operating lease, right-of-use asset | 10,200 | |||||
Operating lease liability | $ 500 |
(Lessor Maturity Schedule) (Det
(Lessor Maturity Schedule) (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Lease, Payments, After Adoption of 842 | |
2019 (remainder) | $ 22,201 |
2020 | 85,858 |
2021 | 80,125 |
2022 | 71,692 |
2023 | 60,793 |
Thereafter | 250,220 |
Total | $ 570,889 |
Real Estate Investments (Narrat
Real Estate Investments (Narrative) (Details) | Aug. 27, 2019USD ($) | Aug. 22, 2019USD ($)property | Aug. 01, 2019USD ($) | Feb. 06, 2019USD ($)property | Sep. 30, 2019USD ($)property | Sep. 30, 2018USD ($)property | Sep. 30, 2019USD ($)property | Sep. 30, 2018USD ($)property | Sep. 30, 2019USD ($) | Sep. 30, 2019encumbered_property | Apr. 01, 2019USD ($) | Mar. 31, 2019property | Mar. 21, 2019USD ($) | Sep. 25, 2018USD ($) | Jul. 26, 2018USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Number of properties | 193 | 193 | 103 | ||||||||||||
Gain on sale of real estate investments | $ 2,715,000 | $ 0 | $ 8,793,000 | $ 0 | |||||||||||
Impairment charges | 22,615,000 | 17,837,000 | 22,634,000 | 18,570,000 | |||||||||||
Bad debt expense | 4,900,000 | 4,797,000 | 9,227,000 | ||||||||||||
Revenues from tenants under OTA | $ 95,440,000 | 90,191,000 | $ 280,445,000 | 270,586,000 | |||||||||||
LaSalle Tenant | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Number of properties | property | 4 | 4 | |||||||||||||
Receivable | $ 8,200,000 | ||||||||||||||
Bad debt expense | $ 1,200,000 | 3,300,000 | $ 3,100,000 | 3,600,000 | |||||||||||
NuVista Tenants | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Number of properties | property | 2 | 2 | |||||||||||||
Receivable | 10,100,000 | ||||||||||||||
Bad debt expense | $ 0 | 1,600,000 | $ 1,100,000 | $ 5,400,000 | |||||||||||
Number of real estate properties under OTA | property | 1 | 1 | |||||||||||||
Revenues from tenants under OTA | $ 1,600,000 | ||||||||||||||
Individual business acquisitions | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Number of properties acquired | property | 9 | 11 | |||||||||||||
Construction in progress | $ 5,362,000 | $ 6,685,000 | |||||||||||||
Capitalized interest | $ 2,800,000 | ||||||||||||||
Multi-tenant MOB | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Number of properties acquired | property | 5 | ||||||||||||||
Single Tenant MOB | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Number of properties acquired | property | 3 | ||||||||||||||
Purchase price | $ 86,300,000 | ||||||||||||||
Seniors Housing Communities | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Number of properties acquired | property | 1 | ||||||||||||||
Impairment charges | $ 19,000 | ||||||||||||||
Loss on sale of real estate investments | $ 200,000 | ||||||||||||||
Seniors Housing Communities | Assets Held-for-sale | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Aggregate contract sale price | $ 71,800,000 | $ 3,500,000 | $ 3,600,000 | ||||||||||||
Number of properties held for sale | property | 14 | 14 | 1 | ||||||||||||
Impairment charges | $ 22,600,000 | $ 22,600,000 | |||||||||||||
Number of real estate properties, not encumbered | property | 3 | 3 | |||||||||||||
Medical Office Buildings | Assets Held-for-sale | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Number of properties | property | 6 | 6 | |||||||||||||
Number of properties disposed | property | 1 | 5 | |||||||||||||
Aggregate contract sale price | $ 13,600,000 | $ 45,000,000 | $ 58,800,000 | $ 68,000,000 | |||||||||||
Gain on sale of real estate investments | $ 2,900,000 | $ 6,100,000 | |||||||||||||
Held-for-use | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Impairment charges | $ 1,300,000 | $ 2,000,000 | |||||||||||||
Number of properties held for sale, impairment charge | property | 1 | 1 | |||||||||||||
LaSalle Guarantor vs LaSalle Tenant | Settled Litigation | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Litigation settlement, amount awarded from other party | $ 7,700,000 |
Real Estate Investments (Acquir
Real Estate Investments (Acquired Assets) (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019USD ($)property | Sep. 30, 2018USD ($)property | |
Real estate investments, at cost: | ||
Weighted-average remaining amortization periods | 9 years 10 months 24 days | 7 years 8 months 12 days |
Individual business acquisitions | ||
Real estate investments, at cost: | ||
Land | $ 6,356 | $ 7,870 |
Buildings, fixtures and improvements | 68,903 | 53,614 |
Construction in progress | 5,362 | 6,685 |
Total tangible assets | 80,621 | 68,169 |
Market lease liabilities | (1,483) | (286) |
Total intangible assets and liabilities | 11,017 | 5,430 |
Cash paid for real estate investments, including acquisitions | $ 91,638 | $ 73,599 |
Number of properties purchased | property | 9 | 11 |
Individual business acquisitions | In-place leases | ||
Real estate investments, at cost: | ||
In-place leases, market leases, and other intangible assets | $ 11,777 | $ 5,440 |
Individual business acquisitions | Market lease and other intangible assets | ||
Real estate investments, at cost: | ||
In-place leases, market leases, and other intangible assets | $ 723 | $ 276 |
Real Estate Investments (Geogra
Real Estate Investments (Geographic Concentrations) (Details) - Annualized Rental Income - Geographic Concentration Risk | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Florida | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 23.90% | 16.80% |
Michigan | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.00% | 12.90% |
Georgia | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.20% | |
Pennsylvania | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.20% |
Real Estate Investments (Summar
Real Estate Investments (Summary of Amortization and Accretion Recognized) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
(Accretion) and Amortization of above-and below-market leases, net (2) | $ (25) | $ 205 | ||
Depreciation and Amortization Expense | In-place Leases and Other Intangible Assets | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of market least intangibles | $ 3,872 | $ 4,632 | 11,832 | 14,382 |
Rental Income | Above and Below Market Leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
(Accretion) and Amortization of above-and below-market leases, net (2) | 13 | (30) | (142) | (30) |
Property Operating and Maintenance Expense | Above market ground leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of market least intangibles | $ 74 | $ 37 | $ 117 | $ 110 |
Real Estate Investments (Summ_2
Real Estate Investments (Summary of Intangible Assets and Liabilities Future Amortization Expense) (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Amortization Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, Remainder 2019 | $ 3,719 |
Finite-lived intangible assets, amortization expense, 2020 | 13,529 |
Finite-lived intangible assets, amortization expense, 2021 | 11,064 |
Finite-lived intangible assets, amortization expense, 2022 | 9,058 |
Finite-lived intangible assets, amortization expense, 2023 | 7,184 |
Rental Income | |
Finite-Lived Intangible Assets [Line Items] | |
Below market leases, amortization income, Remainder 2019 | (22) |
Below market leases, amortization income, 2020 | 193 |
Below market leases, amortization income, 2021 | 276 |
Below market leases, amortization income, 2022 | 563 |
Below market leases, amortization income, 2023 | 788 |
Property Operating and Maintenance Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, Remainder 2019 | 50 |
Finite-lived intangible assets, amortization expense, 2020 | 169 |
Finite-lived intangible assets, amortization expense, 2021 | 161 |
Finite-lived intangible assets, amortization expense, 2022 | 160 |
Finite-lived intangible assets, amortization expense, 2023 | 177 |
In-place leases | Amortization Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, Remainder 2019 | 3,610 |
Finite-lived intangible assets, amortization expense, 2020 | 13,115 |
Finite-lived intangible assets, amortization expense, 2021 | 10,650 |
Finite-lived intangible assets, amortization expense, 2022 | 8,644 |
Finite-lived intangible assets, amortization expense, 2023 | 6,770 |
Other intangible assets | Amortization Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, Remainder 2019 | 109 |
Finite-lived intangible assets, amortization expense, 2020 | 414 |
Finite-lived intangible assets, amortization expense, 2021 | 414 |
Finite-lived intangible assets, amortization expense, 2022 | 414 |
Finite-lived intangible assets, amortization expense, 2023 | 414 |
Market lease and other intangible assets | Rental Income | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, Remainder 2019 | (346) |
Finite-lived intangible assets, amortization expense, 2020 | (1,295) |
Finite-lived intangible assets, amortization expense, 2021 | (993) |
Finite-lived intangible assets, amortization expense, 2022 | (645) |
Finite-lived intangible assets, amortization expense, 2023 | (307) |
Below-market lease liabilities | Rental Income | |
Finite-Lived Intangible Assets [Line Items] | |
Below market leases, amortization income, Remainder 2019 | 324 |
Below market leases, amortization income, 2020 | 1,488 |
Below market leases, amortization income, 2021 | 1,269 |
Below market leases, amortization income, 2022 | 1,208 |
Below market leases, amortization income, 2023 | 1,095 |
Below market ground leases | Property Operating and Maintenance Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, Remainder 2019 | 63 |
Finite-lived intangible assets, amortization expense, 2020 | 222 |
Finite-lived intangible assets, amortization expense, 2021 | 214 |
Finite-lived intangible assets, amortization expense, 2022 | 212 |
Finite-lived intangible assets, amortization expense, 2023 | 212 |
Above market ground leases | Property Operating and Maintenance Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible liability, amortization income, Remainder 2019 | (13) |
Finite-lived intangible liability, amortization income, 2020 | (53) |
Finite-lived intangible liability, amortization income, 2021 | (53) |
Finite-lived intangible liability, amortization income, 2022 | (52) |
Finite-lived intangible liability, amortization income, 2023 | $ (35) |
Real Estate Investments (Proper
Real Estate Investments (Properties Sold and Assets Held-for-sale) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets held for sale | $ 70,674 | $ 52,397 |
Assets Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Land | 4,051 | 5,285 |
Buildings, fixtures and improvements | 66,623 | 47,112 |
Assets held for sale | $ 70,674 | $ 52,397 |
Mortgage Notes Payable, Net (Mo
Mortgage Notes Payable, Net (Mortgage Notes) (Details) $ in Thousands | Oct. 31, 2019property | Sep. 30, 2019USD ($)property | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | |||
Effective Interest Rate | 4.50% | 4.76% | |
Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 73 | ||
Outstanding loan amount | $ 443,385 | $ 470,803 | |
Effective Interest Rate | 4.43% | 4.48% | |
Deferred financing costs | $ (4,991) | $ (6,591) | |
Mortgage premiums and discounts, net | (1,503) | (1,373) | |
Mortgage notes payable, net | $ 436,891 | 462,839 | |
Mortgages | Capital One MOB Loan | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 31 | ||
Outstanding loan amount | $ 241,987 | $ 250,000 | |
Effective Interest Rate | 4.44% | 4.44% | |
Mortgages | Bridge Loan | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 15 | ||
Outstanding loan amount | $ 18,613 | $ 20,271 | |
Effective Interest Rate | 4.57% | 4.87% | |
Long-term debt, percentage bearing fixed interest, amount | $ 8,000 | ||
Mortgages | Multi-Property CMBS Loan | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 21 | ||
Outstanding loan amount | $ 118,700 | $ 118,700 | |
Effective Interest Rate | 4.60% | 4.60% | |
Mortgages | Countryside Medical Arts - Safety Harbor, FL | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 0 | ||
Outstanding loan amount | $ 0 | $ 5,690 | |
Effective Interest Rate | 0.00% | 6.20% | |
Mortgages | St. Andrews Medical Park, Venice, FL | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 0 | ||
Outstanding loan amount | $ 0 | $ 6,289 | |
Effective Interest Rate | 0.00% | 6.20% | |
Mortgages | Palm Valley Medical Plaza - Goodyear, AZ | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Outstanding loan amount | $ 3,140 | $ 3,222 | |
Effective Interest Rate | 4.15% | 4.15% | |
Mortgages | Medical Center V - Peoria, AZ | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Outstanding loan amount | $ 2,907 | $ 2,977 | |
Effective Interest Rate | 4.75% | 4.75% | |
Mortgages | Courtyard Fountains - Gresham, OR | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Outstanding loan amount | $ 23,545 | $ 23,905 | |
Effective Interest Rate | 3.87% | 3.87% | |
Mortgages | Fox Ridge Senior Living at Bryant - Bryant | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Outstanding loan amount | $ 7,319 | $ 7,427 | |
Effective Interest Rate | 3.98% | 3.98% | |
Mortgages | Fox Ridge Senior Living at Chenal - Little Rock | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Outstanding loan amount | $ 16,769 | $ 16,988 | |
Effective Interest Rate | 3.98% | 3.98% | |
Mortgages | Fox Ridge Senior Living at Parkstone - North Little Rock | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Outstanding loan amount | $ 10,405 | $ 10,541 | |
Effective Interest Rate | 3.98% | 3.98% | |
Mortgages | Philip Professional Center - Lawrenceville, GA | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 0 | ||
Outstanding loan amount | $ 0 | $ 4,793 | |
Effective Interest Rate | 0.00% | 4.00% | |
Subsequent Event | Mortgages | Bridge Loan | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 9 |
Mortgage Notes Payable, Net (Na
Mortgage Notes Payable, Net (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Real estate investment, at cost relating to notes payable | $ 1,000,000 | |
Mortgages | ||
Debt Instrument [Line Items] | ||
Outstanding loan amount | $ 443,385 | $ 470,803 |
Mortgage Notes Payable, Net (_2
Mortgage Notes Payable, Net (Mortgage Principal Payments) (Details) - Mortgages - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
2019 (remainder) | $ 18,945 | |
2020 | 24,279 | |
2021 | 892 | |
2022 | 242,916 | |
2023 | 6,056 | |
Thereafter | 150,297 | |
Total | $ 443,385 | $ 470,803 |
Credit Facilities (Summary of C
Credit Facilities (Summary of Credit Facilities) (Details) $ in Thousands | Sep. 30, 2019property | Sep. 30, 2019 | Sep. 30, 2019USD ($) | Sep. 30, 2019encumbered_property | Mar. 13, 2019property | Dec. 31, 2018USD ($) | Mar. 02, 2018property | Dec. 31, 2017USD ($) |
Line of Credit Facility [Line Items] | ||||||||
Number of properties | 193 | 103 | ||||||
Outstanding balance | $ 667,989 | $ 602,622 | ||||||
Effective Interest Rate | 4.50% | 4.76% | ||||||
Capital One Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Number of properties | property | 7 | |||||||
Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Outstanding balance | 308,667 | $ 0 | ||||||
Credit Facility | Prior Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Number of properties | property | 0 | |||||||
Outstanding balance | 0 | $ 243,300 | ||||||
Effective Interest Rate | 0.00% | 4.62% | ||||||
Credit Facility | Fannie Mae Master Credit Facilities | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Number of properties | property | 22 | |||||||
Outstanding balance | 359,322 | $ 359,322 | ||||||
Credit Facility | Fannie Mae Master Credit Facilities | Capital One Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Number of properties | property | 12 | |||||||
Outstanding balance | 216,614 | $ 216,614 | $ 152,500 | |||||
Effective Interest Rate | 4.70% | 4.83% | ||||||
Credit Facility | Fannie Mae Master Credit Facilities | KeyBank Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Number of properties | property | 10 | |||||||
Outstanding balance | 142,708 | $ 142,708 | ||||||
Effective Interest Rate | 4.72% | 4.88% | ||||||
Revolving Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Number of properties | property | 65 | |||||||
Outstanding balance | 163,618 | $ 243,300 | ||||||
Credit Facility | Revolving Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Number of properties | property | 81 | |||||||
Outstanding balance | 163,618 | $ 0 | ||||||
Effective Interest Rate | 4.26% | 0.00% | ||||||
Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Effective Interest Rate | 4.25% | |||||||
Term Loan | Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Outstanding balance | 150,000 | $ 0 | ||||||
Deferred financing costs | (4,951) | 0 | ||||||
Outstanding balance, net | $ 145,049 | $ 0 | ||||||
Effective Interest Rate | 0.00% |
Credit Facilities (Narrative) (
Credit Facilities (Narrative) (Details) | Jan. 01, 2020 | Mar. 13, 2019USD ($)property | Mar. 02, 2018USD ($)property | Oct. 31, 2019USD ($) | Sep. 30, 2019USD ($)property | Sep. 30, 2018USD ($) | Oct. 30, 2019instrument | Sep. 30, 2019 | Sep. 30, 2019USD ($) | Sep. 30, 2019encumbered_property | Apr. 15, 2019 | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 31, 2016instrument |
Line of Credit Facility [Line Items] | ||||||||||||||
Number of properties | 193 | 103 | ||||||||||||
Line of credit facility, current borrowing capacity base percent | 55.00% | |||||||||||||
Effective interest rate | 4.50% | 4.76% | ||||||||||||
Outstanding balance | $ 667,989,000 | $ 602,622,000 | ||||||||||||
Proceeds from credit facilities | $ 163,618,000 | $ 94,153,000 | ||||||||||||
Payments of credit facilities | $ 243,300,000 | $ 80,000,000 | ||||||||||||
Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Outstanding balance | 308,667,000 | 0 | ||||||||||||
Secured Debt | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | $ 630,000,000 | |||||||||||||
Unused borrowing capacity | 19,800,000 | |||||||||||||
Revolving Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Number of properties | property | 65 | |||||||||||||
Outstanding balance | 163,618,000 | 243,300,000 | ||||||||||||
Minimum | Secured Debt | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Line of credit, increase | $ 370,000,000 | |||||||||||||
Maximum | Secured Debt | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Line of credit, increase | 1,000,000,000 | |||||||||||||
Fannie Mae Master Credit Facilities | Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Number of properties | property | 22 | |||||||||||||
Outstanding balance | 359,322,000 | $ 359,322,000 | ||||||||||||
New Credit Facilities | Minimum | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Long-term debt, covenant requirements, amount | 50,000,000 | |||||||||||||
Fannie Mae Master Credit Facility | Bridge Loan | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Payments of credit facilities | $ 61,700,000 | |||||||||||||
Credit Facility | Revolving Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Number of properties | property | 81 | |||||||||||||
Maximum borrowing capacity | $ 480,000,000 | |||||||||||||
Effective interest rate | 4.26% | 0.00% | ||||||||||||
Outstanding balance | 163,618,000 | $ 0 | ||||||||||||
Credit Facility | Revolving Credit Facility | LIBOR | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Basis spread on variable rate, base rate calculation | 1.00% | |||||||||||||
Credit Facility | Revolving Credit Facility | Federal Funds Effective Rate | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Basis spread on variable rate | 0.50% | |||||||||||||
Credit Facility | Minimum | Revolving Credit Facility | LIBOR | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Basis spread on variable rate | 1.60% | |||||||||||||
Credit Facility | Minimum | Revolving Credit Facility | Base Rate | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Basis spread on variable rate | 0.35% | |||||||||||||
Credit Facility | Maximum | Revolving Credit Facility | LIBOR | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Basis spread on variable rate | 2.20% | |||||||||||||
Credit Facility | Maximum | Revolving Credit Facility | Base Rate | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Basis spread on variable rate | 0.95% | |||||||||||||
Term Loan | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Maximum borrowing capacity | $ 150,000,000 | |||||||||||||
Effective interest rate | 4.25% | |||||||||||||
Long-term Debt | 150,000,000 | |||||||||||||
Term Loan | Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Effective interest rate | 0.00% | |||||||||||||
Outstanding balance | 150,000,000 | $ 0 | ||||||||||||
Term Loan | Minimum | LIBOR | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Basis spread on variable rate | 1.55% | |||||||||||||
Term Loan | Minimum | Base Rate | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Basis spread on variable rate | 0.30% | |||||||||||||
Term Loan | Maximum | LIBOR | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Basis spread on variable rate | 2.15% | |||||||||||||
Term Loan | Maximum | Base Rate | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Basis spread on variable rate | 0.90% | |||||||||||||
Term Loan | New Credit Facilities | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Weighted average rate | 2.30% | |||||||||||||
Mortgages | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Effective interest rate | 4.43% | 4.48% | ||||||||||||
Long-term Debt | 436,891,000 | $ 462,839,000 | ||||||||||||
Mortgages | Bridge Loan | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Effective interest rate | 4.57% | 4.87% | ||||||||||||
Proceeds from credit facilities | $ 64,200,000 | |||||||||||||
Interest rate caps | Fannie Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Number of Instruments | instrument | 2 | |||||||||||||
Interest rate cap | 3.50% | |||||||||||||
Capital One Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Number of properties | property | 7 | |||||||||||||
Capital One Facility | Fannie Mae Master Credit Facilities | Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Number of properties | property | 12 | |||||||||||||
Secured first-priority mortgages | 348,900,000 | |||||||||||||
Effective interest rate | 4.70% | 4.83% | ||||||||||||
Outstanding balance | 216,614,000 | $ 216,614,000 | $ 152,500,000 | |||||||||||
KeyBank Facility | Fannie Mae Master Credit Facilities | Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Number of properties | property | 10 | |||||||||||||
Secured first-priority mortgages | 250,900,000 | |||||||||||||
Effective interest rate | 4.72% | 4.88% | ||||||||||||
Outstanding balance | $ 142,708,000 | $ 142,708,000 | ||||||||||||
Subsequent Event | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Line of credit facility, current borrowing capacity base percent | 60.00% | |||||||||||||
Subsequent Event | Credit Facility | Revolving Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Proceeds from credit facilities | $ 42,100,000 | |||||||||||||
Subsequent Event | Interest rate caps | Fannie Credit Facility | ||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||
Number of Instruments | instrument | 2 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Assets Measured at Fair Value) (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets, at fair value | $ 0 | $ 4,633 |
Derivative liabilities, at fair value | (8,933) | |
Total | (8,933) | |
Total | 4,633 | |
Quoted Prices in Active Markets Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets, at fair value | 0 | 0 |
Derivative liabilities, at fair value | 0 | |
Total | 0 | |
Total | 0 | |
Significant Other Observable Inputs Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets, at fair value | 0 | 4,633 |
Derivative liabilities, at fair value | (8,933) | |
Total | (8,933) | |
Total | 4,633 | |
Significant Unobservable Inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets, at fair value | 0 | 0 |
Derivative liabilities, at fair value | 0 | |
Total | $ 0 | |
Total | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments (Carrying Amounts and Fair Values of Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable, net | $ 436,715 | $ 462,839 |
Gross mortgage notes payable and mortgage premium and discounts, net (1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable, net | 443,400 | 470,800 |
Mortgage premiums and discounts, net | 1,503 | 1,373 |
Significant Unobservable Inputs Level 3 | Gross mortgage notes payable and mortgage premium and discounts, net (1) | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value disclosure | 441,882 | 469,430 |
Significant Unobservable Inputs Level 3 | Gross mortgage notes payable and mortgage premium and discounts, net (1) | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value disclosure | 456,607 | 472,585 |
Significant Unobservable Inputs Level 3 | Credit Facility | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value disclosure | 243,300 | |
Significant Unobservable Inputs Level 3 | Credit Facility | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value disclosure | 161,750 | 243,300 |
Significant Unobservable Inputs Level 3 | Term Loan | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value disclosure | 150,000 | 0 |
Significant Unobservable Inputs Level 3 | Term Loan | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value disclosure | 147,632 | 0 |
Fannie Credit Facility | Significant Unobservable Inputs Level 3 | Credit Facility | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value disclosure | 359,322 | 359,322 |
Fannie Credit Facility | Significant Unobservable Inputs Level 3 | Credit Facility | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value disclosure | 361,320 | $ 360,675 |
Revolving Credit Facility | Significant Unobservable Inputs Level 3 | Credit Facility | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value disclosure | $ 163,618 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities (Balance Sheet Classification) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Gross Amounts of Recognized Assets | $ 4,633 | |
Gross Amounts of Recognized (Liabilities) | $ 0 | 0 |
Derivative assets, at fair value | Derivatives designated as hedging instruments: | Interest rate “pay-fixed” swaps | ||
Derivative [Line Items] | ||
Gross Amounts of Recognized Assets | 0 | 4,582 |
Derivative assets, at fair value | Derivatives not designated as hedging instruments: | Interest rate caps | ||
Derivative [Line Items] | ||
Gross Amounts of Recognized Assets | 0 | 51 |
Derivative liabilities, at fair value | Derivatives designated as hedging instruments: | Interest rate “pay-fixed” swaps | ||
Derivative [Line Items] | ||
Gross Amounts of Recognized (Liabilities) | $ 8,933 | $ 0 |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)instrument | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)instrument | Sep. 30, 2018USD ($) | Dec. 31, 2018instrument | |
Derivative [Line Items] | |||||
Loss (gain) on non-designated derivatives | $ (2) | $ 18 | $ (50) | $ 46 | |
Derivative, net liability position, aggregate fair value | 9,300 | 9,300 | |||
Aggregate termination value | $ 9,300 | $ 9,300 | |||
Derivatives designated as hedging instruments: | Interest rate “pay-fixed” swaps | |||||
Derivative [Line Items] | |||||
Number of Instruments | instrument | 10 | 10 | 2 | ||
Derivatives designated as hedging instruments: | Interest Expense | Interest Rate Contract | |||||
Derivative [Line Items] | |||||
Cash flow hedge reclassification in next twelve months | $ 1,500 | $ 1,500 |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities (Summary of Derivative Instruments) (Details) | Sep. 30, 2019USD ($)instrument | Dec. 31, 2018USD ($)instrument |
Derivatives designated as hedging instruments: | Interest rate “pay-fixed” swaps | ||
Derivative [Line Items] | ||
Number of Instruments | instrument | 10 | 2 |
Notional Amount | $ | $ 400,000,000 | $ 250,000,000 |
Derivatives not designated as hedging instruments: | Interest rate caps | ||
Derivative [Line Items] | ||
Number of Instruments | instrument | 7 | 7 |
Notional Amount | $ | $ 359,322,000 | $ 359,322,000 |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activities (Derivatives Included in AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative [Line Items] | ||||
Amount of (loss) gain recognized in accumulated other comprehensive income on interest rate derivatives | $ (2,680) | $ (13,515) | ||
Amount of (loss) gain recognized in accumulated other comprehensive income on interest rate derivatives | $ 998 | $ 6,544 | ||
Total amount of interest expense presented in the consolidated income statements | 12,990 | 12,597 | 39,739 | 35,962 |
Derivatives designated as hedging instruments: | Interest rate “pay-fixed” swaps | ||||
Derivative [Line Items] | ||||
Amount of (loss) gain recognized in accumulated other comprehensive income on interest rate derivatives | (2,469) | (12,496) | ||
Amount of (loss) gain recognized in accumulated other comprehensive income on interest rate derivatives | 1,133 | 6,533 | ||
Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense | $ 211 | $ 1,019 | ||
Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense | $ 135 | $ (11) |
Derivatives and Hedging Activ_7
Derivatives and Hedging Activities (Offsetting Derivatives) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 4,633 | |
Gross Amounts of Recognized (Liabilities) | $ (8,933) | 0 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Assets presented in the Consolidated Balance Sheet | 0 | 4,633 |
Net Amounts of Assets presented in the Consolidated Balance Sheet | (8,933) | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received | 0 | 0 |
Net Amount | $ (8,933) | |
Net Amount | $ 4,633 |
Common Stock (Schedule of Stock
Common Stock (Schedule of Stock by Class) (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 30, 2019 | Apr. 16, 2018 | Mar. 13, 2018 | Mar. 01, 2018 | Apr. 01, 2017 | Feb. 17, 2017 | Apr. 30, 2019 | Jul. 31, 2018 | May 31, 2018 | Jan. 31, 2018 | Apr. 30, 2013 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Sep. 30, 2019 |
Class of Stock [Line Items] | |||||||||||||||||
Common stock, shares outstanding (in shares) | 92,430,992 | 92,430,992 | 91,963,532 | 92,430,992 | |||||||||||||
Common stock dividends (in usd per share) | $ 0.85 | $ 1.45 | $ 1.70 | $ 0.21 | $ 0.22 | $ 0.63 | $ 0.73 | ||||||||||
Per share price (in usd per share) | $ 20.25 | $ 21.45 | $ 20.25 | $ 21.56 | $ 21.34 | ||||||||||||
Number of shares repurchased (in shares) | 155,904 | 373,967 | 656,433 | 3,288,256 | 3,944,689 | ||||||||||||
Common stock issuances repurchases | $ 3,200 | $ 8,000 | $ 13,293 | $ 14,202 | |||||||||||||
Stock repurchase, value | $ 13,300 | $ 3,000 | |||||||||||||||
DRIP period of notice to alter agreement | 10 days | ||||||||||||||||
Common stock issued through distribution reinvestment plan (in shares) | 1,100,000 | ||||||||||||||||
Common stock issued through distribution reinvestment plan | $ 20,700 | ||||||||||||||||
Tender Offer | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Shares authorized for repurchase (in shares) | 2,000,000 | ||||||||||||||||
Per share price (in usd per share) | $ 13.15 | ||||||||||||||||
Reduction in shares authorized for repurchase (in shares) | 230,000 | ||||||||||||||||
Number of shares repurchased (in shares) | 229,999 | ||||||||||||||||
Subsequent Event | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Per share price (in usd per share) | $ 17.50 | ||||||||||||||||
Number of shares repurchased (in shares) | 446,830 | ||||||||||||||||
Stock repurchase, value | $ 7,800 |
Common Stock (Cumulative Share
Common Stock (Cumulative Share Repurchases) (Details) - $ / shares | 1 Months Ended | 9 Months Ended | 75 Months Ended | 84 Months Ended | |
Jul. 31, 2018 | Jan. 31, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Equity [Abstract] | |||||
Number of Shares Repurchased (in shares) | 155,904 | 373,967 | 656,433 | 3,288,256 | 3,944,689 |
Weighted-Average Price per Share (in usd per share) | $ 20.25 | $ 21.45 | $ 20.25 | $ 21.56 | $ 21.34 |
Related Party Transactions an_3
Related Party Transactions and Arrangements (Narrative) (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | ||
Common stock, shares outstanding (in shares) | 92,430,992 | 91,963,532 |
Limited partner units (in units) | 90 | 90 |
Tax Depreciation Deduction | Advisor | ||
Related Party Transaction [Line Items] | ||
Excess depreciation deductions maximum | $ 10,000,000 | |
American Realty Capital Healthcare II Special Limited Partnership, LLC | Special Limited Partner | ||
Related Party Transaction [Line Items] | ||
Common stock, shares outstanding (in shares) | 8,888 | 8,888 |
Related Party Transactions an_4
Related Party Transactions and Arrangements (Fees Paid in Connection With the Operations of the Company) (Details) | Jul. 25, 2019USD ($) | Feb. 17, 2017 | Sep. 30, 2019USD ($)$ / shares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) |
Related Party Transaction [Line Items] | ||||||
Term of agreement | 10 years | |||||
Renewal period | 10 years | |||||
Percent of board approval required for early termination | 67.00% | |||||
Period to terminate early with board approval | 45 days | |||||
Equity instruments, net of selling commissions (in usd per share) | $ / shares | $ 22.50 | $ 22.50 | ||||
Advisor | ||||||
Related Party Transaction [Line Items] | ||||||
Shares approved for issuance (in shares) | shares | 359,250 | |||||
Capped Reimbursement Amount | ||||||
Related Party Transaction [Line Items] | ||||||
Fixed component | $ 1,600,000 | $ 5,100,000 | ||||
American Realty Capital Healthcare Advisors, LLC | Advisor | ||||||
Related Party Transaction [Line Items] | ||||||
Assets under management threshold | $ 100,000,000 | |||||
American Realty Capital Healthcare Advisors, LLC | Contract Purchase Price | Advisor | ||||||
Related Party Transaction [Line Items] | ||||||
Quarterly asset management earned by related party, percentage of benchmark | 0.1875% | 0.1875% | ||||
American Realty Capital Healthcare Advisors, LLC | Advance on Loan or Other Investment | Advisor | ||||||
Related Party Transaction [Line Items] | ||||||
Reimbursed fees to related party, percentage of benchmark | 0.50% | 0.50% | ||||
American Realty Capital Healthcare Advisors, LLC | Gross Revenue, Stand-alone Single-tenant Net Leased Properties | Advisor | ||||||
Related Party Transaction [Line Items] | ||||||
Property management fees | 1.50% | 1.50% | ||||
American Realty Capital Healthcare Advisors, LLC | Gross Revenue, Excluding Stand-alone Single-tenant Net Leased Properties | Advisor | ||||||
Related Party Transaction [Line Items] | ||||||
Property management fees | 2.50% | 2.50% | ||||
Maximum | American Realty Capital Healthcare Advisors, LLC | Gross Revenue, Managed Properties | Advisor | ||||||
Related Party Transaction [Line Items] | ||||||
Oversight fees earned by related party | 1.00% | 1.00% | ||||
American Realty Capital Healthcare Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Period to terminate early with board approval | 60 days | |||||
Second Amended and Restated Advisory Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Period of notice of termination | 365 days | |||||
Monthly Base Management Fee | American Realty Capital Healthcare Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Transaction amount | $ 1,625,000 | |||||
Base management fee of net proceeds | 1.25% | |||||
Quarterly Variable Management Fee, Benchmark One | American Realty Capital Healthcare Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Basis of core earnings, percent | 15.00% | |||||
Basis of core earnings, share basis (in usd per share) | $ / shares | $ 0.375 | |||||
Quarterly Variable Management Fee, Benchmark Two | American Realty Capital Healthcare Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Basis of core earnings, percent | 10.00% | |||||
Basis of core earnings, share basis (in usd per share) | $ / shares | $ 0.47 | |||||
Amended and Restated Property Management and Leasing Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Renewal period | 1 year | |||||
Period of notice of termination | 90 days | |||||
Amended and Restated Property Management and Leasing Agreement | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Term of agreement | 2 years | |||||
Amended and Restated Property Management and Leasing Agreement | Minimum | ||||||
Related Party Transaction [Line Items] | ||||||
Term of agreement | 1 year | |||||
Reimbursements of Administrative Services | American Realty Capital Healthcare Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Transaction amount | $ 2,200,000 | $ 2,000,000 | $ 7,200,000 | $ 5,900,000 | ||
Third Amended And Restated Advisory Agreement | American Realty Capital Healthcare Advisors, LLC | Advisor | ||||||
Related Party Transaction [Line Items] | ||||||
Contingent good faith negotiations of fixed component, term | 12 months | |||||
Third Amended And Restated Advisory Agreement | American Realty Capital Healthcare Advisors, LLC | Advisor And Company | ||||||
Related Party Transaction [Line Items] | ||||||
Contingent good faith negotiations of fixed component, term | 90 days | |||||
Third Amended And Restated Advisory Agreement | American Realty Capital Healthcare Advisors, LLC | Capped Reimbursement Amount | ||||||
Related Party Transaction [Line Items] | ||||||
Fixed component | $ 6,800,000 | |||||
Third Amended And Restated Advisory Agreement | American Realty Capital Healthcare Advisors, LLC | Real Estate Cost | ||||||
Related Party Transaction [Line Items] | ||||||
Fee multiplier | 4 | |||||
Real estate cost percent multiplier | 0.0029 | |||||
Reduction of real estate cost percent | 0.250 | |||||
Third Amended And Restated Advisory Agreement | American Realty Capital Healthcare Advisors, LLC | Cost Of Living | ||||||
Related Party Transaction [Line Items] | ||||||
Cost of living percent multiplier | 0.030 | |||||
CPI benchmark | 100 |
Related Party Transactions an_5
Related Party Transactions and Arrangements (Fees Paid in Connection With the Operations of the Company, Incurred, Forgiven and Payable) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Total related party operation fees and reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | $ 8,337 | $ 7,975 | $ 25,425 | $ 23,970 | |
Payable (Receivable) | 216 | 216 | $ 610 | ||
Acquisition cost reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 6 | 34 | 39 | 144 | |
Payable (Receivable) | 6 | 6 | 32 | ||
Due to (from) HT III related to Asset Purchase | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 0 | 0 | 0 | 0 | |
Payable (Receivable) | 0 | 0 | (154) | ||
Asset management fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 4,875 | 4,875 | 14,625 | 14,625 | |
Payable (Receivable) | 0 | 0 | 0 | ||
Property management and leasing fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 1,067 | 868 | 2,910 | 2,608 | |
Payable (Receivable) | 271 | 271 | 58 | ||
Transfer agent and other professional services | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 2,313 | 2,121 | 7,623 | 6,330 | |
Payable (Receivable) | (61) | (61) | 674 | ||
Distributions on Class B Units | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 76 | $ 77 | 228 | $ 263 | |
Payable (Receivable) | 0 | $ 0 | $ 0 | ||
Advisor | |||||
Related Party Transaction [Line Items] | |||||
Shares approved for issuance (in shares) | 359,250 | ||||
Advisor | Professional Fees and Reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Due from affiliates | 500 | $ 500 | |||
Capped Reimbursement Amount | |||||
Related Party Transaction [Line Items] | |||||
Fixed component | $ 1,600 | $ 5,100 |
Related Party Transactions an_6
Related Party Transactions and Arrangements (Fees and Participations Paid in Connection with the Liquidation or Listing of the Company's Real Estate Assets) (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Healthcare Trust Special Limited Partnership, LLC | Net Sale Proceeds, after Return of Capital Contributions and Annual Targeted Investor Return | Special Limited Partner | |
Related Party Transaction [Line Items] | |
Subordinated performance fee as a percentage of benchmark | 15.00% |
Healthcare Trust Special Limited Partnership, LLC | Excess of Adjusted Market Value of Real Estate Assets Plus Distributions Over Aggregate Contributed Investor Capital | Special Limited Partner | |
Related Party Transaction [Line Items] | |
Subordinated incentive listing distribution | 15.00% |
Distribution upon nonrenewal of advisory agreement | 15.00% |
Annual Targeted Investor Return | Healthcare Trust Special Limited Partnership, LLC | Pre-tax Non-compounded Return on Capital Contribution | Special Limited Partner | |
Related Party Transaction [Line Items] | |
Cumulative capital investment return to investors as a percentage of benchmark | 6.00% |
Asset management fees | |
Related Party Transaction [Line Items] | |
Fee multiplier | 4 |
Change in Control Fee | |
Related Party Transaction [Line Items] | |
Fee multiplier | 4 |
Variable Management - Incentive Fee | |
Related Party Transaction [Line Items] | |
Fee multiplier | 4 |
Transition Fee | |
Related Party Transaction [Line Items] | |
Transaction amount | $ 15,000,000 |
Subject Fees (Transition Fee Not in Excess of the Product) | |
Related Party Transaction [Line Items] | |
Fee multiplier | 4 |
Subject Fees (Transition Fee Not in Excess of the Product) | Maximum | |
Related Party Transaction [Line Items] | |
Fee multiplier | 4.5 |
Related Party Transactions an_7
Related Party Transactions and Arrangements (American Realty Capital Healthcare Trust III, Inc. Asset Purchase) (Details) $ in Thousands | Dec. 22, 2017property | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Due to (from) HT III related to Asset Purchase | |||
Related Party Transaction [Line Items] | |||
Payable (Receivable) | $ | $ 0 | $ 154 | |
Due to (from) HT III related to Asset Purchase | |||
Related Party Transaction [Line Items] | |||
Number of properties purchased | property | 19 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) | Jul. 29, 2019 | Aug. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jul. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Director | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock issued during period, issued for services (in shares) | 0 | 0 | 0 | 0 | ||||
Amended and Restated RSP | Unvested Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Benchmark for RSP issuance (in shares) | $ 30,000 | |||||||
Amended and Restated RSP | Unvested Restricted Stock | Chairman | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted share vesting period | 7 years | |||||||
Granted (in shares) | 300,000 | |||||||
Amended and Restated RSP | Unvested Restricted Stock | Independent Directors | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Restricted share vesting period | 5 years | |||||||
Granted (in shares) | 25,000 | |||||||
Restricted Share Plan | Unvested Restricted Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Maximum authorized amount as a percentage of shares authorized | 5.00% | |||||||
Number of shares authorized (in shares) | 3,400,000 | 3,400,000 | ||||||
Shares granted automatically upon election to board of directors, in shares | 1,333 | |||||||
Restricted share vesting period | 5 years | |||||||
Granted (in shares) | 15,000 | |||||||
Nonvested awards, compensation cost not yet recognized | $ 5,900,000 | $ 5,900,000 | ||||||
Nonvested awards, compensation cost not yet recognized, period for recognition | 4 years 4 months 24 days | |||||||
Share-based Payment Arrangement, Expense | $ 300,000 | $ 282,000 | $ 1,000,000 | $ 921,000 | ||||
Restricted Share Plan | Unvested Restricted Stock | Director | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 15,000 | |||||||
Common stock, par value (in usd per share) | $ 0.01 |
Share-Based Compensation (Summa
Share-Based Compensation (Summary of Activity) (Details) - Restricted Share Plan - Unvested Restricted Stock | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Number of Shares of Common Stock | |
Beginning Balance (in shares) | shares | 322,242 |
Granted (in shares) | shares | 15,000 |
Vested (in shares) | shares | (59,199) |
Ending Balance (in shares) | shares | 278,043 |
Weighted Average Issue Price | |
Beginning Balance, Weighted-Average Issue Price (in usd per share) | $ / shares | $ 21.41 |
Granted, Weighted-Average Issue Price (in usd per share) | $ / shares | 17.50 |
Vested, Weighted-Average Issue Price (in usd per share) | $ / shares | 21.47 |
Ending Balance, Weighted-Average Issue Price (in usd per share) | $ / shares | $ 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Summary of Changes in AOCI) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | $ 1,240,934 |
Ending balance | 1,136,737 |
Unrealized Gain on Designated Derivative | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | 4,582 |
Other comprehensive income, before reclassifications | (12,496) |
Amount of gain reclassified from accumulated other comprehensive income | (1,019) |
Ending balance | $ (8,933) |
Non-controlling Interests (Narr
Non-controlling Interests (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Nov. 30, 2014 | |
Noncontrolling Interest [Line Items] | ||||
Limited partner units (in units) | 90 | 90 | ||
Distributions to non-controlling interest holders | $ 261 | $ 406 | ||
Non-controlling Interests | ||||
Noncontrolling Interest [Line Items] | ||||
Limited partner units (in units) | 405,908 | |||
Units issued | $ 10,100 | |||
Units issued (in usd per share) | $ 25 |
Non-controlling Interests (Summ
Non-controlling Interests (Summary of Non-controlling Interests) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Noncontrolling Interest [Line Items] | |||||
Third Party Net Investment Amount | $ 5,836 | $ 5,836 | $ 7,797 | ||
Net Real Estate Assets Subject to Investment Arrangement | 2,108,072 | 2,108,072 | 2,171,170 | ||
Distributions | 88 | $ 87 | 261 | $ 406 | |
Non-controlling Interests | |||||
Noncontrolling Interest [Line Items] | |||||
Distributions | 88 | 87 | 261 | 406 | |
Plaza Del Rio Medical Office Campus Portfolio - Peoria, AZ | Non-controlling Interests | |||||
Noncontrolling Interest [Line Items] | |||||
Third Party Net Investment Amount | 416 | 416 | |||
Net Real Estate Assets Subject to Investment Arrangement | 14,289 | 14,289 | 14,747 | ||
Distributions | 0 | 0 | 0 | 87 | |
UnityPoint Clinic Portfolio | Non-controlling Interests | |||||
Noncontrolling Interest [Line Items] | |||||
Third Party Net Investment Amount | 493 | 493 | |||
Net Real Estate Assets Subject to Investment Arrangement | 8,941 | 8,941 | $ 9,241 | ||
Distributions | $ 0 | $ 0 | $ 0 | $ 0 | |
Healthcare Trust Operating Partnership, L.P. | Plaza Del Rio Medical Office Campus Portfolio - Peoria, AZ | Non-controlling Interests | |||||
Noncontrolling Interest [Line Items] | |||||
Non-Controlling Ownership Percentage | 2.40% | 2.40% | |||
Healthcare Trust Operating Partnership, L.P. | UnityPoint Clinic Portfolio | Non-controlling Interests | |||||
Noncontrolling Interest [Line Items] | |||||
Non-Controlling Ownership Percentage | 5.00% | 5.00% |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||||
Net loss attributable to stockholders | $ (28,789) | $ (29,607) | $ (39,954) | $ (42,548) | |
Basic and diluted weighted-average shares outstanding (in shares) | 91,992,963 | 90,203,311 | 91,884,495 | 90,983,620 | |
Basic and diluted net loss per share (in usd per share) | $ (0.31) | $ (0.33) | $ (0.43) | $ (0.47) | |
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,065,201 | 1,107,224 | 1,081,120 | 1,135,194 | |
Limited partner units (in units) | 90 | 90 | 90 | ||
Class B units (in units) | 359,250 | 359,250 | 359,250 | 359,250 | |
Unvested restricted shares | |||||
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 299,953 | 341,976 | 315,872 | 369,946 | |
OP Units | |||||
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 405,998 | 405,998 | 405,998 | 405,998 | |
Class B Units | |||||
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 359,250 | 359,250 | 359,250 | 359,250 | |
Restricted Share Plan | Unvested restricted shares | |||||
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Unvested restricted stock (in shares) | 278,043 | 323,045 | 278,043 | 323,045 | 322,242 |
Advisor | American Realty Capital Healthcare III Advisors, LLC | |||||
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Limited partner units (in units) | 405,998 | 405,998 | 405,998 | 405,998 |
Segment Reporting (Narrative) (
Segment Reporting (Narrative) (Details) | 9 Months Ended | ||
Sep. 30, 2019propertysegment | Sep. 30, 2018segment | Sep. 30, 2019encumbered_property | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 3 | 3 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Number of properties | 193 | 103 | |
NuVista Tenants | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Number of properties | 2 | ||
Transition Property | NuVista Tenants | |||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||
Number of properties | 1 |
Segment Reporting (Reconciliati
Segment Reporting (Reconciliation of Segment Activity) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenue from tenants | $ 95,440 | $ 90,191 | $ 280,445 | $ 270,586 |
Property operating and maintenance | 60,655 | 172,258 | ||
Property operating and maintenance | 59,298 | 166,161 | ||
Net operating income | 34,785 | 30,893 | 108,187 | 104,425 |
Impairment charges | (22,615) | (17,837) | (22,634) | (18,570) |
Operating fees to related parties | (5,941) | (5,743) | (17,535) | (17,233) |
Acquisition and transaction related | (112) | (40) | (161) | (333) |
General and administrative | (4,782) | (4,441) | (15,394) | (12,705) |
Depreciation and amortization | (20,140) | (20,466) | (61,124) | (62,099) |
Interest expense | (12,990) | (12,597) | (39,739) | (35,962) |
Interest and other income | 11 | 16 | 15 | 21 |
Gain on sale of real estate investments | 2,715 | 0 | 8,793 | 0 |
Loss (gain) on non-designated derivatives | (2) | 18 | (50) | 46 |
Income tax expense (benefit) | 271 | 550 | (364) | (225) |
Net loss attributable to non-controlling interests | 11 | 40 | 52 | 87 |
Net loss attributable to stockholders | (28,789) | (29,607) | (39,954) | (42,548) |
Medical Office Buildings | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from tenants | 25,672 | 24,186 | 75,997 | 73,383 |
Property operating and maintenance | 8,733 | 23,702 | ||
Property operating and maintenance | 6,982 | 22,327 | ||
Net operating income | 16,939 | 17,204 | 52,295 | 51,056 |
Triple-Net Leased Healthcare Facilities | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from tenants | 3,783 | 4,836 | 10,780 | 14,779 |
Property operating and maintenance | 608 | 1,420 | ||
Property operating and maintenance | 5,840 | 6,197 | ||
Net operating income | 3,175 | (1,004) | 9,360 | 8,582 |
Seniors Housing Communities | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from tenants | 65,985 | 61,169 | 193,668 | 182,424 |
Property operating and maintenance | 51,314 | 147,136 | ||
Property operating and maintenance | 46,476 | 137,637 | ||
Net operating income | $ 14,671 | $ 14,693 | $ 46,532 | $ 44,787 |
Segment Reporting (Reconcilia_2
Segment Reporting (Reconciliation of Segment Activity to Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Real estate investments, at cost: | |||
Investments in real estate: | $ 2,108,072 | $ 2,171,170 | |
Construction in progress | 95,960 | 90,829 | |
Cash and cash equivalents | 52,425 | 77,264 | $ 52,109 |
Restricted cash | 19,160 | 14,094 | $ 17,097 |
Assets held for sale | 70,674 | 52,397 | |
Derivative assets, at fair value | 0 | 4,633 | |
Straight-line rent receivable, net | 20,362 | 17,351 | |
Prepaid expenses and other assets | 46,745 | 28,785 | |
Deferred costs, net | 13,087 | 11,752 | |
Total assets | 2,330,525 | 2,377,446 | |
Medical Office Buildings | |||
Real estate investments, at cost: | |||
Investments in real estate: | 899,280 | 878,703 | |
Triple-Net Leased Healthcare Facilities | |||
Real estate investments, at cost: | |||
Investments in real estate: | 237,366 | 289,686 | |
Seniors Housing Communities | |||
Real estate investments, at cost: | |||
Investments in real estate: | $ 875,466 | $ 911,952 |
Segment Reporting (Reconcilia_3
Segment Reporting (Reconciliation of Capital Expenditures by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | $ 10,910 | $ 6,968 | ||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | $ 4,629 | $ 2,748 | 10,910 | 6,968 |
Operating Segments | Medical Office Buildings | ||||
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | 1,385 | 1,834 | 3,139 | 4,060 |
Operating Segments | Triple-Net Leased Healthcare Facilities | ||||
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | 0 | 425 | 17 | 493 |
Operating Segments | Seniors Housing Communities | ||||
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | $ 3,244 | $ 489 | $ 7,754 | $ 2,415 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) $ in Thousands | Jan. 01, 2019propertylease | Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($)lease | Dec. 31, 2018USD ($) | Aug. 31, 2015USD ($) |
Lessee, Lease, Description [Line Items] | |||||
Number of operating lease contracts | lease | 11 | 8 | |||
Number of finance lease contracts | lease | 6 | ||||
Operating lease, right-of-use asset | $ 7,200 | $ 7,200 | |||
Operating lease, liability | $ 9,127 | $ 9,127 | |||
Remaining lease term | 42 years 4 months 24 days | 42 years 4 months 24 days | |||
Weighted average discount rate, percent | 7.34% | 7.34% | |||
Operating lease payments | $ 200 | $ 600 | |||
Operating lease liability | 200 | 700 | |||
Asset purchase and development agreement | $ 82,000 | ||||
Amount funded | 96,000 | 96,000 | |||
Construction in progress | 85,960 | 85,960 | $ 80,598 | ||
Funding in excess of original obligation | 14,000 | 14,000 | |||
Funding commitment | 72,000 | $ 72,000 | |||
Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Renewal term | 13 years 1 month 6 days | ||||
Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Renewal term | 88 years | ||||
Land | |||||
Lessee, Lease, Description [Line Items] | |||||
Number of operating lease contracts | property | 17 | ||||
Construction in progress | 10,000 | $ 10,000 | |||
Construction in Progress | |||||
Lessee, Lease, Description [Line Items] | |||||
Construction in progress | $ 86,000 | $ 86,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Schedule of Future Minimum Rental Payments) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2019 (remainder) | $ 162 | |
2020 | 651 | |
2021 | 663 | |
2022 | 682 | |
2023 | 684 | |
Thereafter | 30,067 | |
Total lease payments | 32,909 | |
Less: Effects of discounting | (23,782) | |
Total present value of lease payments | 9,127 | |
Finance Leases, After Adoption of 842 | ||
2019 (remainder) | 20 | |
2020 | 82 | |
2021 | 84 | |
2022 | 86 | |
2023 | 88 | |
Thereafter | 7,590 | |
Total lease payments | 7,950 | |
Less: Effects of discounting | (3,117) | |
Total present value of lease payments | $ 4,833 | |
Operating Leases, Before Adoption of 842 | ||
2019 | $ 780 | |
2020 | 781 | |
2021 | 774 | |
2022 | 790 | |
2023 | 760 | |
Thereafter | 34,344 | |
Total lease payments | 38,229 | |
Capital Leases, Before Adoption of 842 | ||
2019 | 80 | |
2020 | 82 | |
2021 | 84 | |
2022 | 86 | |
2023 | 88 | |
Thereafter | 7,590 | |
Total lease payments | 8,010 | |
Less: Effects of discounting | (3,202) | |
Total present value of lease payments | $ 4,808 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) | Oct. 30, 2019USD ($)instrument$ / sharesshares | Mar. 02, 2018USD ($) | Oct. 31, 2019USD ($)property | Apr. 30, 2019USD ($) | Jul. 31, 2018$ / sharesshares | May 31, 2018USD ($) | Jan. 31, 2018$ / sharesshares | Sep. 30, 2019USD ($)property$ / sharesshares | Sep. 30, 2018USD ($) | Dec. 31, 2018$ / sharesshares | Sep. 30, 2019property$ / sharesshares | Oct. 31, 2016instrument |
Subsequent Event [Line Items] | ||||||||||||
Number of shares repurchased (in shares) | shares | 155,904 | 373,967 | 656,433 | 3,288,256 | 3,944,689 | |||||||
Stock repurchase, value | $ 13,300,000 | $ 3,000,000 | ||||||||||
Per share price (in usd per share) | $ / shares | $ 20.25 | $ 21.45 | $ 20.25 | $ 21.56 | $ 21.34 | |||||||
Proceeds from credit facilities | $ 163,618,000 | $ 94,153,000 | ||||||||||
Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Number of shares repurchased (in shares) | shares | 446,830 | |||||||||||
Stock repurchase, value | $ 7,800,000 | |||||||||||
Per share price (in usd per share) | $ / shares | $ 17.50 | |||||||||||
Mortgages | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Encumbered properties | property | 73 | 73 | ||||||||||
Courtyard Fountains - Gresham, OR | Mortgages | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Encumbered properties | property | 1 | 1 | ||||||||||
Courtyard Fountains - Gresham, OR | Mortgages | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Repayments of long-term debt | $ 23,500,000 | |||||||||||
Bridge Loan | Mortgages | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Encumbered properties | property | 15 | 15 | ||||||||||
Proceeds from credit facilities | $ 64,200,000 | |||||||||||
Bridge Loan | Mortgages | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Repayments of long-term debt | $ 18,600,000 | |||||||||||
Encumbered properties | property | 9 | |||||||||||
Interest rate caps | Fannie Credit Facility | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Number of Instruments | instrument | 2 | |||||||||||
Interest rate caps | Fannie Credit Facility | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Number of Instruments | instrument | 2 | |||||||||||
Notional Amount | $ 88,700,000 | |||||||||||
Revolving Credit Facility | Credit Facility | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Proceeds from credit facilities | $ 42,100,000 |
Uncategorized Items - hct-20190
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (87,000) |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (87,000) |
Accumulated Distributions in Excess of Net Income [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (87,000) |