Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 31, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Healthcare Trust, Inc. | |
Entity Central Index Key | 1,561,032 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 89,541,661 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Real estate investments, at cost: | ||
Land | $ 186,040 | $ 187,868 |
Buildings, fixtures and improvements | 1,846,673 | 1,872,590 |
Construction in progress | 66,021 | 60,055 |
Acquired intangible assets | 234,743 | 234,749 |
Total real estate investments, at cost | 2,333,477 | 2,355,262 |
Less: accumulated depreciation and amortization | (275,497) | (241,027) |
Total real estate investments, net | 2,057,980 | 2,114,235 |
Cash and cash equivalents | 158,127 | 29,225 |
Restricted cash | 4,849 | 3,962 |
Assets held for sale | 37,822 | 0 |
Derivative assets, at fair value | 42 | 61 |
Straight-line rent receivable, net | 13,512 | 12,026 |
Prepaid expenses and other assets (including $163 due from related party as of December 31, 2016) | 22,181 | 22,073 |
Deferred costs, net | 13,087 | 12,123 |
Total assets | 2,307,600 | 2,193,705 |
LIABILITIES AND EQUITY | ||
Mortgage notes payable, net | 385,225 | 142,754 |
Credit facilities | 422,616 | 481,500 |
Market lease intangible liabilities, net | 18,988 | 20,187 |
Derivative liabilities, at fair value | 296 | 0 |
Accounts payable and accrued expenses (including $685 and $1,025 due to related parties as of June 30, 2017 and December 31, 2016, respectively) | 34,052 | 27,080 |
Deferred rent | 7,740 | 4,986 |
Distributions payable | 10,679 | 12,872 |
Total liabilities | 879,596 | 689,379 |
Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding as of June 30, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized, 89,577,910 and 89,368,899 shares of common stock issued and outstanding as of June 30, 2017 and December 31, 2016, respectively | 896 | 894 |
Additional paid-in capital | 1,986,254 | 1,981,136 |
Accumulated other comprehensive income (loss) | (296) | 0 |
Accumulated deficit | (567,310) | (486,574) |
Total stockholders' equity | 1,419,544 | 1,495,456 |
Non-controlling interests | 8,460 | 8,870 |
Total equity | 1,428,004 | 1,504,326 |
Total liabilities and equity | $ 2,307,600 | $ 2,193,705 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Due from affiliates | $ 163 | |
Due to affiliates | $ 685 | $ 1,025 |
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) | 89,577,910 | 89,368,899 |
Common stock, shares outstanding (in shares) | 89,577,910 | 89,368,899 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Rental income | $ 24,081 | $ 26,412 | $ 48,103 | $ 53,004 |
Operating expense reimbursements | 3,886 | 3,772 | 7,990 | 7,481 |
Resident services and fee income | 47,799 | 45,454 | 94,288 | 90,656 |
Contingent purchase price consideration | 0 | 219 | 0 | 225 |
Total revenues | 75,766 | 75,857 | 150,381 | 151,366 |
Expenses: | ||||
Property operating and maintenance | 44,360 | 40,694 | 86,971 | 79,486 |
Impairment charges | 0 | 389 | 35 | 389 |
Operating fees to related parties | 5,637 | 5,172 | 10,938 | 10,327 |
Acquisition and transaction related | 1,743 | 2,059 | 4,588 | 2,101 |
General and administrative | 3,419 | 2,416 | 7,576 | 6,403 |
Depreciation and amortization | 19,339 | 24,283 | 39,822 | 48,898 |
Total expenses | 74,498 | 75,013 | 149,930 | 147,604 |
Operating income | 1,268 | 844 | 451 | 3,762 |
Other income (expense): | ||||
Interest expense | (6,588) | (4,876) | (12,070) | (9,860) |
Interest and other income | 2 | 21 | 3 | 43 |
Gain on sale of real estate investment | 438 | 0 | 438 | 0 |
Loss on non-designated derivatives | (43) | 0 | (107) | 0 |
Total other expenses | (6,191) | (4,855) | (11,736) | (9,817) |
Loss before income taxes | (4,923) | (4,011) | (11,285) | (6,055) |
Income tax benefit | 202 | 992 | 397 | 1,475 |
Net loss | (4,721) | (3,019) | (10,888) | (4,580) |
Net loss attributable to non-controlling interests | 5 | 19 | 33 | 25 |
Net loss attributable to stockholders | (4,716) | (3,000) | (10,855) | (4,555) |
Other comprehensive income (loss): | ||||
Unrealized loss on designated derivative | (296) | 0 | (296) | 0 |
Unrealized gain on investment securities, net | 0 | 43 | 0 | 36 |
Comprehensive loss attributable to stockholders | $ (5,012) | $ (2,957) | $ (11,151) | $ (4,519) |
Basic and diluted weighted-average shares outstanding (in shares) | 89,335,489 | 87,465,569 | 89,486,742 | 87,062,123 |
Basic and diluted net loss per share (in usd per share) | $ (0.05) | $ (0.03) | $ (0.12) | $ (0.05) |
Distributions declared per share (in usd per share) | $ 0.36 | $ 0.43 | $ 0.78 | $ 0.85 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Total | Total Stockholders' Equity | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Non-controlling Interests |
Beginning Balance (in shares) at Dec. 31, 2016 | 89,368,899 | ||||||
Beginning balance at Dec. 31, 2016 | $ 1,504,326 | $ 1,495,456 | $ 894 | $ 1,981,136 | $ 0 | $ (486,574) | $ 8,870 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued through distribution reinvestment plan (in shares) | 1,500,000 | 1,496,056 | |||||
Common stock issued through distribution reinvestment plan | $ 32,944 | 32,944 | $ 15 | 32,929 | |||
Common stock repurchases (in shares) | (1,287,045) | ||||||
Common stock repurchases | (27,851) | (27,851) | $ (13) | (27,838) | |||
Share-based compensation | 27 | 27 | 27 | ||||
Distributions declared | (69,881) | (69,881) | (69,881) | ||||
Distributions to non-controlling interest holders | (377) | (377) | |||||
Other comprehensive loss | (296) | (296) | (296) | ||||
Net loss | (10,888) | (10,855) | (10,855) | (33) | |||
Ending Balance (in shares) at Jun. 30, 2017 | 89,577,910 | ||||||
Ending balance at Jun. 30, 2017 | $ 1,428,004 | $ 1,419,544 | $ 896 | $ 1,986,254 | $ (296) | $ (567,310) | $ 8,460 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (10,888,000) | $ (4,580,000) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 39,822,000 | 48,898,000 |
Amortization of deferred financing costs | 2,636,000 | 2,257,000 |
Amortization of mortgage premiums and discounts, net | (879,000) | (1,002,000) |
Amortization of market lease and other intangibles, net | 195,000 | 61,000 |
Bad debt expense | 7,220,000 | 3,490,000 |
Share-based compensation | 27,000 | 30,000 |
Gain on sale of real estate investment | (438,000) | 0 |
Loss on non-designated derivatives | 107,000 | 0 |
Impairment charges | 35,000 | 389,000 |
Changes in assets and liabilities: | ||
Straight-line rent receivable | (3,106,000) | (5,922,000) |
Prepaid expenses and other assets | (4,451,000) | 1,764,000 |
Accounts payable, accrued expenses and other liabilities | 4,471,000 | 1,364,000 |
Deferred rent | 1,861,000 | 553,000 |
Restricted cash | (887,000) | 404,000 |
Net cash provided by operating activities | 35,725,000 | 47,706,000 |
Cash flows from investing activities: | ||
Investments in real estate | (18,432,000) | (10,671,000) |
Deposits paid for real estate acquisitions | (1,020,000) | 0 |
Deposits received for unconsummated dispositions | 325,000 | 100,000 |
Capital expenditures | (3,313,000) | (3,428,000) |
Cash received in asset acquisition | 859,000 | 0 |
Proceeds from sale of real estate investment | 757,000 | 8,750,000 |
Net cash used in investing activities | (20,824,000) | (5,249,000) |
Cash flows from financing activities: | ||
Proceeds from credit facilities | 128,116,000 | 31,500,000 |
Payments of credit facilities | (187,000,000) | 0 |
Proceeds from mortgage notes payable | 250,000,000 | 0 |
Payments on mortgage notes payable | (1,170,000) | (8,654,000) |
Payments for derivative instruments | (163,000) | 0 |
Payments of deferred financing costs | (8,455,000) | (543,000) |
Common stock repurchases | (27,851,000) | (12,184,000) |
Distributions paid | (39,130,000) | (36,060,000) |
Distributions to non-controlling interest holders | (346,000) | (345,000) |
Net cash provided by (used in) financing activities | 114,001,000 | (26,286,000) |
Net change in cash and cash equivalents | 128,902,000 | 16,171,000 |
Cash and cash equivalents, beginning of period | 29,225,000 | 24,474,000 |
Cash and cash equivalents, end of period | 158,127,000 | 40,645,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 10,999,000 | 9,261,000 |
Cash paid for income taxes | 64,000 | 84,000 |
Non-cash investing and financing activities: | ||
Common stock issued through distribution reinvestment plan | 32,944,000 | 37,839,000 |
Proceeds from sale of real estate investments payable to non-controlling interest holder | 31,000 | 0 |
Capital expenditures assumed in asset acquisition | $ 772,000 | $ 0 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Note 1 — Organization Healthcare Trust, Inc. (including, as required by context, Healthcare Trust Operating Partnership, LP (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 June 30, 2017 , the Company owned 163 properties located in 29 states and comprised of 8.5 million rentable square feet. The Company, which was incorporated on October 15, 2012, is a Maryland corporation that elected and qualified 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. In February 2013, the Company commenced its initial public offering (the "IPO") on a "reasonable best efforts" basis of up to $1.7 billion of common stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts. The Company closed its IPO in November 2014. As of June 30, 2017 , the Company had 89.6 million shares of common stock outstanding, including unvested restricted shares of common stock ("restricted shares") and shares issued pursuant to the Company's distribution reinvestment plan (the "DRIP"), and had received total proceeds from the IPO and DRIP of $2.2 billion , net of share repurchases. The Company has no employees. Healthcare Trust Advisors, LLC (the "Advisor") has been retained by the Company to manage the Company's affairs on a day-to-day basis. The Company has retained Healthcare Trust Properties, LLC (the "Property Manager") to serve as the Company's property manager. The Advisor and Property Manager are under common control with AR Global Investments, LLC (the successor business to AR Capital, LLC, "AR Global"), the parent of the Company's sponsor, American Realty Capital VII, LLC (the "Sponsor"), as a result of which they are related parties, and each have received or will receive compensation, fees and expense reimbursements from the Company for services related to managing its business. The Advisor, Healthcare Trust Special Limited Partnership, LLC (the "Special Limited Partner") and Property Manager also have received or will receive compensation, fees and expense reimbursements related to the investment and management of the Company's real estate assets. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
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 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 presentation of results for the interim periods. The results of operations for the three and six months ended June 30, 2017 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, 2016 , which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 20, 2017 . There have been no significant changes to the Company's significant accounting policies during the six months ended June 30, 2017 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. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued revised guidance relating to revenue recognition. Under the revised guidance, an entity is required to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The revised guidance is to become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company will adopt this guidance effective January 1, 2018 and currently expect to utilize the modified retrospective transition method upon adoption. The Company has progressed with its project plan for adopting this standard, including gathering and evaluating the inventory of our revenue streams. The Company expects that this revised guidance will have an impact on the timing of gains on certain sales of real estate. The Company is in the process of evaluating any differences in the timing, measurement or presentation of revenue recognition and the impact on the Company's consolidated financial statements and internal accounting processes. In January 2016, the FASB issued an update that amends the recognition and measurement of financial instruments. The new guidance revises an entity’s accounting related to equity investments and the presentation of certain fair value changes for financial liabilities measured at fair value. Among other things, it also amends the presentation and disclosure requirements associated with the fair value of financial instruments. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is not permitted for most of the amendments in the update. The Company is currently evaluating the impact of this new guidance. In February 2016, the FASB issued an update that sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The revised guidance supersedes previous leasing standards and is effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The Company has ground leases, which it will be required to record a right-of-use asset and lease liability equal to the present value of the remaining lease payments upon adoption of this update. The Company also expects this revised guidance to impact the presentation of these lease and non-lease components of revenue from leases for lessors. The Company has progressed in its project plan for adopting this revised guidance for lessors, including developing an inventory of leases as well as the lease and non-lease components contained therein. The Company is continuing to evaluate the impact of this new guidance and the allowable methods of adoption. In March 2016, the FASB issued guidance which requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. This guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In August 2016, the FASB issued guidance on how certain transactions should be classified and presented in the statement of cash flows as either operating, investing or financing activities. Among other things, the update provides specific guidance on where to classify debt prepayment and extinguishment costs, payments for contingent consideration made after a business combination and distributions received from equity method investments. The revised guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In November 2016, the FASB issued guidance on the classification of restricted cash in the statement of cash flows. The amendment requires restricted cash to be included in the beginning-of-period and end-of-period total cash amounts. Therefore, transfers between cash and restricted cash will no longer be shown on the statement of cash flows. The guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In January 2017, the FASB issued guidance on simplifying subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The amendments in this update modify the concept of impairment from the condition that exists to when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. The revised guidance is effective for reporting periods beginning after December 15, 2019, and the amendments will be applied prospectively. Early application is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of this new guidance. In February 2017, the FASB issued guidance on other income, specifically gains and losses from the derecognition of nonfinancial assets. The guidance clarifies the definition of ‘in substance non-financial assets’, unifies guidance related to partial sales of non-financial assets, eliminates rules specifically addressing the sales of real estate, removes exception to the financial asset derecognition model and clarifies the accounting for contributions of non-financial assets to joint ventures. The revised guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted but only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the impact of this new guidance. In May 2017, the FASB issued guidance that clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The update states that modification accounting should be used unless the fair value of the award, the vesting terms of the award and the classification of the award as either equity or liability, does not change as a result of the modification. The revised guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted for reporting periods for which financial statements have not yet been issued. The Company is currently evaluating the impact of this new guidance. Recently Adopted Accounting Pronouncements In October 2016, the FASB issued guidance where a reporting entity will need to evaluate if it should consolidate a VIE. The amendments change the evaluation of whether a reporting entity is the primary beneficiary of a VIE by changing how a single decision maker of a VIE treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The revised guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company has adopted the provisions of this guidance beginning January 1, 2017 and determined that there is no impact to our consolidated financial position, results of operations and cash flows. In January 2017, the FASB issued guidance that revises the definition of a business. This new guidance is applicable when evaluating whether an acquisition should be treated as either a business acquisition or an asset acquisition. Under the revised guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset or group of similar assets, the assets acquired would not be considered a business. The revised guidance is effective for reporting periods beginning after December 15, 2017, and the amendments will be applied prospectively. Early application is permitted only for transactions that have not previously been reported in issued financial statements. The Company has assessed this revised guidance and expects, based on historical acquisitions, that, in most cases, a future property acquisition would be treated as an asset acquisition rather than a business acquisition, which would result in the capitalization of related transaction costs. The Company has adopted the provisions of this guidance beginning January 1, 2017. |
Real Estate Investments
Real Estate Investments | 6 Months Ended |
Jun. 30, 2017 | |
Real Estate Investments, Net [Abstract] | |
Real Estate Investments | Note 3 — Real Estate Investments The Company owned 163 properties as of June 30, 2017 . The Company invests in medical office buildings ("MOB"), seniors housing communities and other healthcare-related facilities primarily to expand and diversify its portfolio and revenue base. On April 7, 2017, the Company, through a wholly-owned subsidiary of the OP, completed its acquisition of a single tenant, triple-net leased MOB for a contract purchase price of $12.5 million . The property is located in Lancaster, California and comprises approximately 77,000 square feet. The following table presents the allocation of real estate assets acquired and liabilities assumed during the six months ended June 30, 2017 as well as capitalized construction in progress during the six months ended June 30, 2017 and 2016 : Six Months Ended June 30, (Dollar amounts in thousands) 2017 2016 Real estate investments, at cost: Land $ 1,459 $ — Buildings, fixtures and improvements 9,300 — Construction in progress 5,966 10,671 Total tangible assets 16,725 10,671 Acquired intangibles: In-place leases (1) 1,780 — Below-market lease liabilities (1) (13 ) — Total assets and liabilities acquired, net 18,492 10,671 Other assets and liabilities, net (60 ) — Cash paid for real estate investments $ 18,432 $ 10,671 Number of properties purchased 1 — _______________ (1) Weighted-average remaining amortization periods for in-place leases and below-market lease assets acquired during the six months ended June 30, 2017 were 8.9 years . The following table presents future minimum base rental cash payments due to the Company over the next five years and thereafter as of June 30, 2017 . These amounts exclude 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. (In thousands) Future Minimum July 1, 2017 — December 31, 2017 $ 42,548 2018 81,857 2019 76,353 2020 71,099 2021 66,086 Thereafter 363,437 Total $ 701,380 As of June 30, 2017 and 2016 , 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 June 30, 2017 and 2016 : June 30, State 2017 2016 Florida 17.4% 18.7% Iowa 9.3% 10.1% Michigan 15.9% * Pennsylvania 10.8% 11.8% _______________ * 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 Acquired intangible assets and liabilities consisted of the following as of the periods presented: June 30, 2017 December 31, 2016 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: In-place leases $ 195,944 $ 123,308 $ 72,636 $ 195,940 $ 115,641 $ 80,299 Intangible market lease assets 28,210 6,920 21,290 28,220 5,798 22,422 Other intangible assets 10,589 706 9,883 10,589 574 10,015 Total acquired intangible assets $ 234,743 $ 130,934 $ 103,809 $ 234,749 $ 122,013 $ 112,736 Intangible market lease liabilities $ 25,080 $ 6,092 $ 18,988 $ 25,614 $ 5,427 $ 20,187 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 accretion of above-market ground leases, for the periods presented: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2017 2016 2017 2016 Amortization of in-place leases and other intangible assets (1) $ 4,029 $ 9,203 $ 9,565 $ 18,748 Amortization and (accretion) of above- and below-market leases, net (2) $ (12 ) $ (65 ) $ (165 ) $ (127 ) Amortization and (accretion) of above- and below-market ground leases, net (3) $ 43 $ 43 $ 86 $ 86 _______________ (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) July 1, 2017 — December 31, 2017 2018 2019 2020 2021 In-place lease assets $ 7,547 $ 13,358 $ 10,813 $ 8,882 $ 7,341 Other intangible assets 132 265 265 265 265 Total to be added to amortization expense $ 7,679 $ 13,623 $ 11,078 $ 9,147 $ 7,606 Above-market lease assets $ (850 ) $ (1,357 ) $ (1,068 ) $ (742 ) $ (532 ) Below-market lease liabilities 1,015 1,852 1,572 1,415 1,266 Total to be added to rental income $ 165 $ 495 $ 504 $ 673 $ 734 Below-market ground lease assets $ 106 $ 212 $ 212 $ 212 $ 212 Above-market ground lease liabilities (20 ) (40 ) (40 ) (40 ) (40 ) Total to be added to property operating and maintenance expense $ 86 $ 172 $ 172 $ 172 $ 172 Transfer of Operations On June 8, 2017, the Company's taxable REIT subsidiary, through 12 separately executed membership interest or stock transfer agreements, acquired 12 operating entities that leased 12 healthcare facilities included in the Company's triple-net leased healthcare facilities segment. Concurrently with the acquisition of the 12 operating entities, the Company transitioned the management of the healthcare facilities to a third-party management company that manages other healthcare facilities in the Company's seniors housing — operating properties ("SHOP") operating segment. As a part of the transition, the Company's subsidiary property companies executed leases with the acquired operating entities and the acquired operating entities executed management agreements with the management company under a structure permitted by the REIT Investment Diversification and Empowerment Act of 2007 ("RIDEA"). As a part of the transition of operations, the Company now controls the operating entities that hold the operating licenses for the healthcare facilities. The Company determined the transition of operations to be an asset acquisition and accounted for such transfer accordingly. At closing of the transfer of operations, the Company assumed the following assets and liabilities which are included in the consolidated balance sheet within the line items as shown below. The Company determined the fair value of assets acquired was equal to the fair value of liabilities assumed and provisionally assigned the amounts to the appropriate financial statement line as shown below. The amounts below are subject to adjustment as the Company receives final financial information. (in thousands) June 8, 2017 Buildings, fixtures and improvements $ 594 Cash and cash equivalents 859 Prepaid expenses and other assets 1,528 Total assets acquired $ 2,981 Accounts payable and accrued expenses $ 2,981 Total liabilities acquired $ 2,981 Real Estate Sale During the six months ended June 30, 2017 , the Company sold one of its multi-tenant MOB properties located in Peoria, Arizona for an aggregate contract sales price of $0.8 million , exclusive of closing costs. The sale of this property resulted in a gain of $0.4 million for the three and six months ended June 30, 2017 , which is reflected within gain on sale of real estate investment in the consolidated statements of operations and comprehensive loss. No gain on sale of real estate investment was recognized during the three and six months ended June 30, 2016 . Assets Held For Sale When assets are identified by management as held for sale, the Company 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 January 2017, the Company entered into an agreement to sell eight of its skilled nursing facility properties in Missouri (the "Missouri SNF Properties") for an aggregate contract purchase price of $42.0 million if closing occurs in 2017, and $44.1 million if closing occurs in 2018 (including any amendments thereto, the "Missouri SNF PSA"). Subsequently, in February 2017, the due diligence period of the Missouri SNF PSA expired and, concurrently with the expiration of the due diligence period, the Company stopped recognizing depreciation and amortization expense and reclassified the Missouri SNF Properties as held for sale on the consolidated balance sheet. The Missouri SNF PSA provides for an extended closing period to include seven closing adjournment periods, each requiring a non-refundable deposit through the final closing adjournment date, September 28, 2018. The Company does not have a material relationship with the potential buyer, and the disposition will not be an affiliated transaction. Although the Company believes the disposition of the Missouri SNF Properties is probable, there can be no assurance that the disposition will be consummated. The Company expects the disposition to be consummated before December 31, 2017. In connection with the Missouri SNF Properties being classified as held for sale, the Company recognized an impairment charge of approximately $35,000 on one of the eight Missouri SNF Properties. In February 2017, the Company's then-existing operator entered into an agreement to transfer the operations of the Missouri SNF Properties to a new operator (the "Missouri SNF OTA"). The Missouri SNF OTA permanently transferred all aspects of operations to the new operator effective February 15, 2017 and is not dependent on closing on the sale of the Missouri SNF Properties as outlined in the Missouri SNF PSA. On March 1, 2017, in connection with the new operator assuming the leases of the Missouri SNF Properties from the old operator pursuant to the Missouri SNF OTA, the Company paid its third-party broker a leasing commission of $0.4 million . The Company capitalized this cost to deferred costs, net on the consolidated balance sheet as of June 30, 2017 and is amortizing the cost through December 31, 2017, the expected disposition date of the Missouri SNF Properties. Additionally, on March 1, 2017, in connection with the Missouri SNF PSA and Missouri SNF OTA, the Company reached an agreement with the prior tenants of the Missouri SNF Properties to provide a one-time payment of $2.8 million to a creditor of the prior tenants in order to close on the transfer of operations of the Missouri SNF Properties. This payment was made in March 2017 and is included in the Company's acquisition and transaction related expenses in the consolidated statements of operations and comprehensive loss for the six months ended June 30, 2017 . The following table details the major classes of assets associated with the properties that have been classified as held for sale as of June 30, 2017 : (In thousands) June 30, 2017 Real estate held for sale, at cost: Land $ 3,131 Buildings, fixtures and improvements 38,596 Total real estate held for sale, at cost 41,727 Less accumulated depreciation and amortization (3,870 ) Real estate assets held for sale, net 37,857 Impairment charges related to properties reclassified as held for sale (35 ) Assets held for sale $ 37,822 |
Investment Securities
Investment Securities | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Note 4 — Investment Securities As of June 30, 2017 and December 31, 2016 , the Company had no investment securities. Investment securities previously owned were sold during the third quarter 2016. During the three and six months ended June 30, 2016 , the Company had unrealized gain on investment securities, net of approximately $43,000 and $36,000 , respectively, which is reflected in the consolidated statements of operations and comprehensive loss. |
Credit Facilities
Credit Facilities | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Credit Facilities | Note 5 — Credit Facilities The Company has the following credit facilities outstanding as of June 30, 2017 and December 31, 2016 : Outstanding Facility Amount as of Effective Interest Rate Credit Facility Encumbered Properties (1) June 30, December 31, 2016 June 30, December 31, 2016 Maturity (In thousands) (In thousands) Revolving Credit Facility 45 (2) $ 280,500 $ 421,500 2.57 % 2.00 % Mar. 2019 Fannie Mae Master Credit Facilities: Capital One Facility 2 (3) 83,439 30,000 3.39 % 3.24 % Nov. 2026 KeyBank Facility 4 (4) 58,677 30,000 3.41 % 3.24 % Nov. 2026 Total Fannie Mae Master Credit Facilities 142,116 60,000 Total Credit Facilities 51 $ 422,616 $ 481,500 2.85 % (5) 2.15 % (5) _______________ (1) Encumbered as of June 30, 2017 . (2) The equity interests and related rights in the Company's wholly owned subsidiaries that directly own 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. (3) Secured by first-priority mortgages on two of the Company’s seniors housing properties located in Florida as of June 30, 2017 . (4) Secured by first-priority mortgages on four of the Company’s seniors housing properties located in Michigan, Missouri and Kansas as of June 30, 2017 . (5) Calculated on a weighted average basis for all credit facilities outstanding as of June 30, 2017 and December 31, 2016 . Revolving Credit Facility On March 21, 2014, the Company entered into a senior secured revolving credit facility in the amount of $50.0 million (the "Revolving Credit Facility"). The Company amended the Revolving Credit Facility in 2014 and 2015, which, among other things, allowed for borrowings of up to $565.0 million . The Revolving Credit Facility also contains a sub-facility for letters of credit of up to $25.0 million and an "accordion" feature to allow the Company, under certain circumstances, to increase the aggregate borrowings under the Revolving Credit Facility to a maximum of $750.0 million . On February 24, 2017, the Company further amended its Revolving Credit Facility, which, among other things, amended the method and inputs used in the calculation of certain financial covenants contained within the Revolving Credit Facility. The Company has the option, based upon its leverage, to have the Revolving Credit Facility priced at either: (a) LIBOR, plus an applicable margin that ranges from 1.60% to 2.20% ; or (b) the Base Rate, plus an applicable margin that ranges from 0.35% to 0.95% . The Base Rate is defined in the Revolving Credit Facility as the greater of (i) the fluctuating annual rate of interest announced from time to time by the lender as its “prime rate,” (ii) 0.5% above the federal funds effective rate or (iii) the applicable one-month LIBOR plus 1.0% . The Revolving Credit Facility provides for monthly interest payments for each Base Rate loan and periodic interest payments for each LIBOR loan, based upon the applicable LIBOR loan period, with all principal outstanding being due on the maturity date of March 21, 2019. The Revolving Credit Facility may be prepaid at any time, in whole or in part, without premium or penalty (subject to standard breakage costs). In the event of a default, the lender has the right to terminate its obligations under the Revolving Credit Facility and to accelerate the payment on any unpaid principal amount of all outstanding loans. As of June 30, 2017 , the Company's unused borrowing capacity under the Revolving Credit Facility was $14.6 million , based on a pool of eligible unencumbered real estate assets comprising the borrowing base thereunder. The Revolving Credit Facility requires the Company to meet certain financial covenants. As of June 30, 2017 , the Company was in compliance with the financial covenants under the Revolving Credit Facility. 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 (the “KeyBank Credit Agreement”) relating to a secured credit facility (the "Key Bank Facility") with KeyBank National Association (“KeyBank”) and a master credit facility agreement (the “Capital One Credit Agreement” and, together with the KeyBank Credit Agreement, the “Fannie Mae Master Credit Agreements”) for a secured credit facility (the "Capital One Facility"; the Capital One Facility and the Key Bank Facility are referred to herein individually as a "Fannie Mae Master Credit Facility" and together as the "Fannie Mae Master Credit Facilities") with Capital One Multifamily Finance, LLC (“Capital One”). The Fannie Mae Master Credit Agreements and related loan documents were issued through Fannie Mae’s (“Lender”) Multifamily MBS program and assigned by Capital One and KeyBank to the Lender at closing. The Fannie Mae Master Credit Facilities each provided for an initial $30.0 million of advances. The Fannie Mae Master Credit Facilities are secured by six unencumbered properties, in aggregate. The Company may request future advances under the Fannie Mae Master Credit Facilities by borrowing against the value of the initial mortgaged properties, as described below, 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. The initial advances under the Fannie Mae Master Credit Facilities will mature on November 1, 2026. Beginning December 1, 2016, the annual interest rates under the Fannie Mae Master Credit Facilities changed to vary on a monthly basis and are equal to the sum of the current one month LIBOR and 2.62% , with a floor of 2.62% . Prior to December 1, 2016, borrowings under the KeyBank Facility and the Capital One Facility bore interest at rates of 3.15% and 3.16% , respectively, per annum. 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 (the "IR Caps") with an unrelated third party, which caps interest paid on amounts outstanding under the Fannie Mae Master Credit Facilities at a maximum of 3.5% . The IR Caps terminate on November 1, 2019. The Fannie Mae Master Credit Agreements require the Company to enter into replacement interest rate cap or swap agreements upon termination of the IR Caps, to the extent any variable rate loans are outstanding on the date of termination. See Note 8 — Derivatives and Hedging Activities for further disclosure over the Company's derivatives. The KeyBank Facility is secured by first-priority mortgages on four of the Company’s seniors housing properties located in Michigan, Missouri and Kansas. The Capital One Facility is secured by first-priority mortgages on two of the Company’s seniors housing properties located in Florida. Each Fannie Mae Master Credit Facility is cross-defaulted and cross-collateralized with the other notes and security agreements securing such Fannie Mae Master Credit Facility. The Fannie Mae Master Credit Facilities are non-recourse, subject to standard carve-outs and environmental indemnities, which obligations are guaranteed by the OP on an unsecured basis. The initial advances under the Fannie Mae Master Credit Facilities may not be prepaid until November 1, 2017, after which they may be prepaid in full or in part through July 31, 2026 with payment of a 1% prepayment premium, and may be freely prepaid in full or in part thereafter. The Master Credit Agreements provide for optional acceleration by the Lender upon an event of default. The Master Credit Agreements contain customary events of default, including the breach of transfer prohibitions, principal or interest payment defaults and bankruptcy-related defaults. On March 30, 2017, the Company increased its advances under the Capital One Facility by $53.4 million (the "2017 Capital One Advance"). The 2017 Capital One Advance was secured by the value of the initial mortgaged properties subject to the Capital One Facility. In connection with the 2017 Capital One Advance, the OP entered into an additional interest rate cap agreement (the "2017 Capital One IR Cap") with an unrelated third party, which caps interest paid on amounts outstanding on the 2017 Capital One Advance at a maximum of 3.5% . The 2017 Capital One IR Cap terminates on April 1, 2020. See Note 8 — Derivatives and Hedging Activities for further disclosure over the Company's derivatives. On April 26, 2017, the Company increased its advances under the KeyBank Facility by $28.7 million (the "2017 KeyBank Advance"). The 2017 KeyBank Advance was secured by the value of the initial mortgaged properties subject to the KeyBank Facility. In connection with the 2017 KeyBank Advance, the OP entered into an additional interest rate cap agreement (the "2017 KeyBank IR Cap") with an unrelated third party, which caps interest paid on amounts outstanding on the 2017 KeyBank Advance at a maximum of 3.5% . The 2017 KeyBank IR Cap terminates on November 1, 2019. See Note 8 — Derivatives and Hedging Activities for further disclosure over the Company's derivatives. Upon an event of default under the Fannie Mae Master Credit Agreements, payment of any unpaid amounts under the applicable Fannie Mae Master Credit Facility may be accelerated by Lender and Lender may exercise its rights with respect to the applicable pool of seniors housing properties securing the Fannie Mae Master Credit Facilities. |
Mortgage Notes Payable
Mortgage Notes Payable | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable | Note 6 — Mortgage Notes Payable The following table reflects the Company's mortgage notes payable as of June 30, 2017 and December 31, 2016 : Outstanding Loan Amount as of Effective Interest Rate as of Portfolio Encumbered Properties June 30, 2017 December 31, 2016 June 30, 2017 Interest Rate Maturity (In thousands) (In thousands) Medical Center of New Windsor - New Windsor, NY 1 $ 8,539 $ 8,602 6.39 % Fixed Sep. 2017 Plank Medical Center - Clifton Park, NY 1 3,389 3,414 6.39 % Fixed Sep. 2017 Countryside Medical Arts - Safety Harbor, FL 1 5,851 5,904 4.75 % Variable (2) Apr. 2019 St. Andrews Medical Park - Venice, FL 3 6,466 6,526 4.75 % Variable (2) Apr. 2019 Slingerlands Crossing Phase I - Bethlehem, NY 1 6,541 6,589 6.39 % Fixed Sep. 2017 Slingerlands Crossing Phase II - Bethlehem, NY 1 7,615 7,671 6.39 % Fixed Sep. 2017 Benedictine Cancer Center - Kingston, NY 1 6,669 6,719 6.39 % Fixed Sep. 2017 Aurora Healthcare Center Portfolio - WI 6 30,644 30,858 6.55 % Fixed Jan. 2018 Palm Valley Medical Plaza - Goodyear, AZ 1 3,378 3,428 4.15 % Fixed Jun. 2023 Medical Center V - Peoria, AZ 1 3,109 3,151 4.75 % Fixed Sep. 2023 Courtyard Fountains - Gresham, OR 1 24,597 24,820 3.87 % Fixed Jan. 2020 Fox Ridge Bryant - Bryant, AR 1 7,632 7,698 3.98 % Fixed May 2047 Fox Ridge Chenal - Little Rock, AR 1 17,407 17,540 3.98 % Fixed May 2049 Fox Ridge North Little Rock - North Little Rock, AR 1 10,801 10,884 3.98 % Fixed May 2049 MOB Loan 32 250,000 — 4.38 % Fixed (4) June 2022 Gross mortgage notes payable 53 392,638 (1) 143,804 4.66 % (3) Deferred financing costs, net of accumulated amortization (7,000 ) (1,516 ) Mortgage premiums and discounts, net (413 ) 466 Mortgage notes payable, net $ 385,225 $ 142,754 _______________ (1) Does not include eligible unencumbered real estate assets comprising the borrowing base of the Revolving Credit Facility. The equity interests and related rights in the Company's wholly owned subsidiaries that directly own these real estate assets have been pledged for the benefit of the lenders thereunder. See Note 5 — Credit Facilities for further details. (2) Interest rate changed from a fixed to a variable rate beginning in June 2017 and will remain variable throughout the remaining term of the mortgage. (3) Calculated on a weighted average basis for all mortgages outstanding as of June 30, 2017 and December 31, 2016 . (4) Variable rate loan which is fixed as a result of a entering into an interest rate swap agreement. Note 8 — Derivatives and Hedging Activities. On June 30, 2017, Capital One, National Association ("Capital One, NA"), as administrative agent and lender, and certain other lenders (collectively the "Lenders"), made a loan in the aggregate amount of $250.0 million (the “MOB Loan”) to certain subsidiaries of the OP. In connection with the MOB Loan, the OP entered into a Guaranty of Recourse Obligations (the “Guaranty”) and a Hazardous Materials Indemnity Agreement (the “Environmental Indemnity”) in favor of Capital One, NA and the Lenders. Pursuant to the Guaranty, the OP has guaranteed, among other things, specified losses arising from certain actions of any of the OP's subsidiaries, including fraud, willful misrepresentation, certain intentional acts, misapplication of funds, physical waste, and failure to pay taxes. The Guaranty requires the Company to maintain a certain minimum of shareholders’ equity on its balance sheet. Pursuant to the Environmental Indemnity, the OP and the Company's subsidiaries that directly own the mortgaged properties have indemnified the Lenders against losses, costs or liabilities related to certain environmental matters. The MOB Loan bears interest at a variable rate equal to LIBOR plus 2.5% and requires the Company to pay interest on a monthly basis with the principal balance due on the maturity date of June 30, 2022. In connection with the closing of the MOB Loan, the OP executed an interest rate swap on the full amount of the MOB Loan, fixing the interest rate exposure at 4.38% . See Note 8 — Derivatives and Hedging Activities for additional information on the Company's outstanding derivatives. The Company may pre-pay the MOB Loan, in whole or in part, at any time, with payment of a prepayment premium equal to (a) 2.0% of principal outstanding if prepayment is made during the first 12 months of the MOB Loan and (b) 1.0% of principal outstanding if prepayment is made during the second 12 months of the MOB Loan. Thereafter, no prepayment premium is applicable. As of June 30, 2017 , the Company had pledged $744.5 million in total real estate investments as collateral for these mortgage notes payable. This real estate is not available to satisfy other debts and obligations unless first satisfying the mortgage notes payable on the properties. Except as noted above, the Company makes payments of principal and interest on all of its mortgage notes payable on a monthly basis. The following table summarizes the scheduled aggregate principal payments on mortgage notes payable for the five years subsequent to June 30, 2017 and thereafter: (In thousands) Future Principal Payments July 1, 2017 — December 31, 2017 $ 33,760 2018 32,061 2019 13,060 2020 24,279 2021 892 Thereafter 288,586 Total $ 392,638 Some of the Company's mortgage note agreements (including the MOB Loan) require the compliance with certain property-level financial covenants, including debt service coverage ratios. As of June 30, 2017 , the Company was in compliance with these financial covenants. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 7 — Fair Value of Financial Instruments GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments 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. 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 June 30, 2017 , 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 Company had impaired real estate investments held for sale, which were carried at fair value on the consolidated balance sheet as of June 30, 2017 . Impaired real estate investments held for sale were valued using the sale price from the Missouri SNF PSA less costs to sell, which is an observable input. As a result, the Company's impaired real estate investments held for sale are classified in Level 2 of the fair value hierarchy. There were no impaired real estate investments held for sale as of December 31, 2016 . The following table presents information about the Company's assets and liabilities measured at fair value as of June 30, 2017 and December 31, 2016 , aggregated by the level in the fair value hierarchy within which those instruments fall. (In thousands) Basis of Measurement Quoted Prices in Active Markets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Total June 30, 2017 Derivatives, net Recurring $ — $ (254 ) $ — $ (254 ) Impaired assets held for sale Non-recurring — 1,323 — 1,323 Total $ — $ 1,069 $ — $ 1,069 December 31, 2016 Derivatives, net Recurring $ — $ 61 $ — $ 61 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 six months ended June 30, 2017 . 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: Carrying Amount at Fair Value at Carrying Amount at Fair Value at (In thousands) Level June 30, June 30, December 31, December 31, Gross mortgage notes payable and mortgage premium and discounts, net 3 $ 392,225 $ 393,042 $ 144,270 $ 144,261 Revolving Credit Facility 3 $ 280,500 $ 280,500 $ 421,500 $ 421,500 Fannie Mae Master Credit Facilities 3 $ 142,116 $ 142,850 $ 60,000 $ 60,000 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. Advances under the Revolving Credit Facility 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 | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Note 8 — 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. 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 the counterparties will fail to meet their obligations. Derivatives Designated as Cash Flow Hedges of Interest Rate Risk The Company currently has one interest rate swap that is designated as a hedge. The interest rate swap is 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 2017, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. The Company tests the effectiveness of its designated hedges. The effective portion of the changes in fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss. The ineffective portion of the change in fair value of the derivatives is recognized directly in 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 twelve months, the Company estimates that $1.3 million will be reclassified from other comprehensive loss as an increase to interest expense. As of June 30, 2017 , the Company had the following derivatives that were designated as cash flow hedges of interest rate risk. The Company did not have any derivatives designated as cash flow hedges as of December 31, 2016 . June 30, 2017 December 31, 2016 Interest Rate Derivative Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate swap 1 $ 250,000 — $ — The table below details the location in the financial statements the loss recognized on interest rate derivatives designated as cash flow hedges for the three and six months ended June 30, 2017 . The Company did not have any derivatives designated as cash flow hedges as of June 30, 2016 . Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2017 2016 2017 2016 Amount of loss recognized in accumulated other comprehensive loss on designated derivatives (effective portion) $ (296 ) $ — $ (296 ) $ — Derivatives Not Designated as Hedges The Company currently has four interest rate caps that are not designated as hedges in qualified hedging relationships. The interest rate caps are used as part of the Company's interest rate risk management strategy. Changes in the fair value of the Company's interest rate caps are recorded directly in earnings, which resulted in a loss of approximately $43 thousand and $0.1 million for the three and six months ended June 30, 2017 , respectively. The Company did not have any derivatives not designated as hedges outstanding as of June 30, 2016 . The Company had the following outstanding interest rate derivatives that were not designated as hedges in qualified hedging relationships as of June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 Interest Rate Derivative Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate caps 4 $ 142,116 2 $ 60,000 Balance Sheet Classification 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 June 30, 2017 and December 31, 2016 : (In thousands) Balance Sheet Location June 30, 2017 December 31, 2016 Derivatives designated as hedging instruments: Interest rate swap Derivative liabilities, at fair value $ (296 ) $ — Derivatives not designated as hedging instruments: Interest rate caps Derivative assets, at fair value $ 42 $ 61 Credit-risk-related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision wherein 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 June 30, 2017 , 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 $0.3 million . As of June 30, 2017 , 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. |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Common Stock | Note 9 — Common Stock As of June 30, 2017 and December 31, 2016 , the Company had 89.6 million and 89.4 million shares of common stock outstanding, respectively, including unvested restricted shares and shares issued pursuant to the DRIP, net of shares repurchases. As of June 30, 2017 and December 31, 2016 , the Company had received total proceeds from the IPO and DRIP, net of shares repurchases, of $2.2 billion . In April 2013, our 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. 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 reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured. On March 30, 2017, the Board approved an updated estimate of per-share net asset value ("Estimated Per-Share NAV") as of December 31, 2016 . The Company intends to publish Estimated Per-Share NAV periodically at the discretion of the Company's Board, provided that such valuations will be made at least once annually. 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 the shares issued pursuant to the IPO. 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 any aspect of 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 six months ended June 30, 2017 , the Company issued 1.5 million shares of common stock pursuant to the DRIP, generating aggregate proceeds of $32.9 million . Until April 7, 2016 (the "Original NAV Pricing Date"), the first date the Company published an Estimated Per-Share NAV, the Company offered shares pursuant to the DRIP at $23.75 , which was 95.0% of the initial offering price of shares of common stock in the IPO. Effective on the Original NAV Pricing Date, the Company began offering shares pursuant to the DRIP at the then-current Estimated Per-Share NAV approved by the Board. Effective March 30, 2017, the Company began offering shares pursuant to the DRIP at the Estimated Per-Share NAV as of December 31, 2016 . Share Repurchase Program The Board has adopted the share repurchase program (as amended and restated, the "SRP"), which enables stockholders 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 the significant conditions and limitations described below. On June 14, 2017, the Company announced that its Board had adopted an amendment and restatement of the SRP that superseded and replaced the existing SRP effective as of July 14, 2017. Under the amended and restated 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 would be considered for repurchase. Other terms and provisions of the amended and restated SRP remained consistent with the existing SRP. In cases of requests for death and disability, the repurchase price is equal to then-current Estimated Per-Share NAV at the time of repurchase. Prior to the Original NAV Pricing Date, the repurchase price under these circumstances was equal to the price paid to acquire the shares. Prior to the Original NAV Pricing Date, the repurchase price per share other than with respect to requests for death and disability was as follows (in each case, as adjusted for any stock distributions, combinations, splits and recapitalizations): • the lower of $23.13 or 92.5% of the price paid to acquire the shares, for stockholders who had continuously held their shares for a period greater than one year and less than two years; • the lower of $23.75 or 95.0% of the price paid to acquire the shares, for stockholders who had continuously held their shares for greater than two years and less than three years; • the lower of $24.38 or 97.5% of the price paid to acquire the shares, for stockholders who had continuously held their shares for greater than three years and less than four years; and • the lower of $25.00 or 100.0% of the price paid to acquire the shares, for stockholders who had continuously held their shares for greater than four years. Beginning with the Original NAV Pricing Date, the repurchase price per share, other than with respect to requests for death and disability was as follows (in each case, as adjusted for any stock distributions, combinations, splits and recapitalizations): • 92.5% of the then-current (at the time of repurchase) Estimated Per-Share NAV for stockholders who had continuously held their shares for a period greater than one year and less than two years; • 95.0% of the then-current Estimated Per-Share NAV for stockholders who had continuously held their shares for a period greater than two years and less than three years; • 97.5% of the then-current Estimated Per-Share NAV for stockholders who had continuously held their shares for a period greater than three years and less than four years; and • 100.0% of the then-current Estimated Per-Share NAV for stockholders who had continuously held their shares for a period greater than four years. Under the SRP, repurchases of shares of the Company's common stock, when requested, are at the sole discretion of the Board and generally are made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Repurchases for any fiscal semester are limited to a maximum of 2.5% of the weighted average number of shares of common stock outstanding during the previous fiscal year (the "Prior Year Outstanding Shares"), with a maximum for any fiscal year of 5.0% of the Prior Year Outstanding Shares. In addition, the Company is only authorized to repurchase shares in a given fiscal semester up to the amount of proceeds received from its DRIP in that same fiscal semester. On June 28, 2016, the Board amended the Company’s SRP (the "Special 2016 SRP Amendment") to provide for one twelve-month repurchase period for calendar year 2016 (the “2016 Repurchase Period”) instead of two semi-annual periods ending June 30 and December 31. The annual limit on repurchases under the SRP remained unchanged and continued to be limited to a maximum of 5.0% of the Prior Year Outstanding Shares and was subject to the terms and limitations set forth in the SRP. Accordingly, the 2016 Repurchase Period was limited to a maximum of 5.0% of the Prior Year Outstanding Shares and continues to be subject to the terms and conditions set forth in the SRP, as amended. Following calendar year 2016, the repurchase periods return to two semi-annual periods and applicable limitations set forth in the SRP. On January 25, 2017, the Board further amended the Company’s SRP for calendar year 2016, changing the date on which any repurchases were to be made in respect of requests made during the calendar year 2016 to no later than March 15, 2017, rather than on or before the 31st day following December 31, 2016. All other terms of the SRP remained in effect, including that repurchases pursuant to the SRP are at the sole discretion of the Board. When a stockholder requests repurchases and the repurchases are approved, the Company reclassifies such an obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased have the status of authorized but unissued shares. The following table reflects the number of shares repurchased cumulatively through June 30, 2017 : Number of Shares Repurchased Weighted-Average Price per Share Cumulative repurchases as of December 31, 2016 975,030 $ 23.73 Six months ended June 30, 2017 (1) 1,287,045 21.64 Cumulative repurchases as of June 30, 2017 2,262,075 $ 22.54 _____________________________ (1) Includes (i) 1,273,179 shares repurchased during the three months ended March 31, 2017 for approximately $27.5 million at a weighted average price per share of $21.61 , (ii) 13,866 shares repurchased during the three months ended June 30, 2017 for approximately $0.3 million at a weighted average price per share $24.02 . Excludes rejected repurchases received during 2016 with respect to 2.3 million shares for $48.7 million at a weighted average price per share of $21.27 . In July 2017, following the effectiveness of the amendment and restatement of the SRP, the Board approved 100% of the repurchase requests made following the death or qualifying disability of stockholders during the period from January 1, 2017 to June 30, 2017, which was equal to 263,460 shares repurchased for approximately $5.7 million at an average price per share of $21.46 . No repurchases have been or will be made with respect to requests received during 2017 that are not valid requests in accordance with the amended and restated SRP. See Note 18 - Subsequent Events. Note 13 — Accumulated Other Comprehensive Loss The following table illustrates the changes in accumulated other comprehensive loss as of and for the period presented: (In thousands) Unrealized loss on designated derivative Balance, December 31, 2016 $ — Other comprehensive loss, before reclassifications (296 ) Balance, June 30, 2017 $ (296 ) |
Related Party Transactions and
Related Party Transactions and Arrangements | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Arrangements | Note 10 — Related Party Transactions and Arrangements As of June 30, 2017 and December 31, 2016 , 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 June 30, 2017 and December 31, 2016 , the Advisor held 90 units of limited partner interests in the OP ("OP Units"). Realty Capital Securities, LLC (the "Former Dealer Manager") served as the dealer manager of the IPO. American National Stock Transfer, LLC ("ANST"), a subsidiary of the parent company of the Former Dealer Manager, provided other general professional services through January 2016. RCS Capital Corporation ("RCAP"), the parent company of the Former Dealer Manager and certain of its affiliates that provided the Company with services, filed for Chapter 11 bankruptcy protection in January 2016, prior to which it was also under common control with AR Global, the parent of the Sponsor. In May 2016, RCAP and its affiliated debtors emerged from bankruptcy under the new name Aretec Group, Inc. On March 8, 2017, the creditor trust established in connection with the RCAP bankruptcy filed suit against AR Global, the Advisor, advisors of other entities sponsored by AR Global, and AR Global’s principals (including Mr. Weil, a member of the Board). The suit alleges, among other things, certain breaches of duties to RCAP. The Company is not named in the suit, nor are there any allegations related to the services the Advisor provides to the Company. On May 26, 2017, the defendants moved to dismiss. The Advisor has informed the Company that it believes that the suit is without merit and intends to defend against it vigorously. The limited partnership agreement of the OP provides for a special allocation, solely for tax purposes, of excess depreciation deductions of up to $10.0 million to the Company's Advisor, a limited partner of the OP. In connection with this special allocation, the Company's 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. Purchase Agreement On June 16, 2017, the Company entered into a purchase agreement (the “Purchase Agreement”) with American Realty Capital Healthcare Trust III, Inc. (“HT III”). HT III is sponsored and advised by affiliates of the Advisor. Pursuant to the Purchase Agreement, the Company has agreed to purchase membership interests in HT III’s subsidiaries that collectively own all 19 properties owned by HT III and comprise substantially all of HT III’s assets (together with the other transactions contemplated by the Purchase Agreement, the “Asset Purchase”) for a purchase price of $120.0 million (the “Purchase Price”). The Purchase Price will be payable on the date the Asset Purchase is consummated (the “Closing Date”), subject to closing adjustments for customary prorations and reduced for debt assumption or repayment, all as provided in the Purchase Agreement. The only indebtedness being assumed or repaid is the loan secured by HT III's Philip Center property (the “Philip Center Loan”), which had an outstanding principal balance of approximately $4.9 million as of July 17, 2017. The Company will deposit $6.0 million (the “Escrow Amount”) of the Purchase Price payable into an escrow account on the Closing Date for the benefit of HT III, and the Escrow Amount will be released in installments thereafter over a period of 14 months following the Closing Date. Pursuant to the terms of the Purchase Agreement, the Company has agreed to use commercially reasonable efforts (including paying early termination fees not to exceed $200,000 ) to assume the Philip Center Loan, which, as of July 17, 2017 had an outstanding principal balance of approximately $4.9 million , and to cause HT III to be released from the guaranty associated with the Philip Center Loan. If the Company does not assume the Philip Center Loan on the Closing Date or if HT III is not released from the guaranty associated with the Philip Center Loan, the Philip Center Loan will be repaid in full by HT III on the Closing Date and any early termination fee in excess of $200,000 will be subtracted from the Purchase Price. In connection with its approval of the Purchase Agreement, HT III’s board of directors also approved a plan of liquidation, which is subject to stockholder approval. The closing of the Asset Purchase is conditioned upon stockholder approval of both the Asset Purchase and the plan of liquidation. Thus, if HT III’s stockholders do not approve the plan of liquidation, the Asset Purchase will not be completed even if HT III’s stockholders approve the Asset Purchase. On July 19, 2017, HT III filed a preliminary proxy statement related to its 2017 annual meeting of stockholders, at which stockholder approval of the Asset Purchase and the plan of liquidation will be sought, but the date on which this annual meeting will be held has not yet been announced. 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 the Amended and Restated Advisory Agreement, as amended (the "Original A&R 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 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 in control or a transition to self-management (see the section titled "Termination Fees" included within this footnote), (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. Acquisition Fees Under the Original A&R Advisory Agreement and until February 17, 2017, the Advisor was paid an acquisition fee equal to 1.0% of the contract purchase price of each acquired property and 1.0% of the amount advanced for a loan or other investment. The Advisor was also reimbursed for services provided for which it incurred investment-related expenses, or insourced expenses. The amount reimbursed for insourced expenses was not permitted to 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 reimbursed the Advisor for third party acquisition expenses. The aggregate amount of acquisition fees and financing coordination fees (as described below) could not exceed 1.5% of the contract purchase price and the amount advanced for a loan or other investment for all the assets acquired. As of June 30, 2017 , aggregate acquisition fees and financing fees did not exceed the 1.5% threshold. In no event was the total of all acquisition fees, acquisition expenses and any financing coordination fees payable with respect to the Company's portfolio of investments or reinvestments permitted to exceed 4.5% of the contract purchase price of the Company's portfolio to be measured at the close of the acquisition phase or 4.5% of the amount advanced for all loans or other investments. As of June 30, 2017 , the total of all cumulative acquisition fees, acquisition expenses and financing coordination fees did not exceed the 4.5% threshold. The Second A&R Advisory Agreement does not provide for an acquisition fee, however the Advisor may continue to 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. Financing Coordination Fees Under the Original A&R Advisory Agreement and until February 17, 2017, if the Advisor provided services in connection with the origination or refinancing of any debt that the Company obtained and used to acquire properties or to make other permitted investments, or that was assumed, directly or indirectly, in connection with the acquisition of properties, the Company paid the Advisor a financing coordination fee equal to 0.75% of the amount available and/or outstanding under such financing, subject to certain limitations. The Second A&R Advisory Agreement does not provide for a financing coordination fee. Asset Management Fees and Variable Management/Incentive Fees Under an 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 performance-based restricted, forfeitable partnership units of the OP designated as "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) an other 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 June 30, 2017 , the Company cannot determine the probability of achieving the performance condition. The Advisor receives cash distributions on each issued Class B Units equal to the distribution rate received on the Company's common stock. Such 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. As of June 30, 2017 , the Board had approved the issuance of 359,250 Class B Units to the Advisor in connection with this arrangement. On May 12, 2015, the Company, the OP and the Advisor entered into an amendment (the “Amendment”) to the 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 April 1, 2015, the Company began paying an asset management fee to the Advisor or its assignees as compensation for services rendered in connection with the management of the Company’s assets. The asset management fee was payable on the first business day of each month in the amount of 0.0625% multiplied by the lesser of (a) cost of assets or (b) fair value of assets for the preceding monthly period. The asset management fee was payable to the Advisor or its assignees in cash, in shares, or a combination of both, the form of payment to be determined in the sole discretion of the Advisor. For the purposes of the payment of any fees in shares (a) prior to the Original NAV Pricing Date, each share was valued at $22.50 , (b) after the Original NAV Pricing Date and prior to any listing on a national securities exchange, if it occurs, each share will be valued at the then-current Estimated Per-Share NAV and (c) at all other times, each share shall be valued by the Board in good faith at the fair market value. 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 debt) 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. 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 (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. 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. 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, until February 17, 2019. The A&R Property Management Agreement will automatically renew for successive one -year terms unless any party provides written notice of its intention to terminate the A&R Property Management Agreement at least ninety days prior to the end of the term. 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. Professional Fees and Other Reimbursements The Company reimburses the Advisor's costs of providing administrative services. Until June 2015, reimbursement of these expenses was subject to the limitation that the Company did not reimburse the Advisor for any amount by which the Company's operating expenses at the end of the four preceding fiscal quarters exceeded the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income other than any additions to reserves for depreciation, bad debt or other similar non-cash expenses and excluding any gain from the sale of assets for that period (the "2%/25% Limitation"), unless the Company's independent directors determined that such excess was justified based on unusual and nonrecurring factors which they deemed sufficient, in which case the excess amount could be reimbursed to the Advisor in subsequent periods. This limitation ceased to exist after June 2015, when the Original A&R Advisory Agreement became effective. Additionally, the Company reimburses the Advisor for personnel costs; however, the Company may not reimburse the Advisor for personnel costs in connection with services for which the Advisor receives acquisition fees, reimbursement of acquisition expenses or real estate commissions. During the three and six months ended June 30, 2017 , the Company incurred $1.5 million and $2.8 million , respectively, of reimbursement expenses from the Advisor for providing administrative services. During the three and six months ended June 30, 2016 , the Company incurred $0.8 million and $1.6 million , respectively, of reimbursement expenses from the Advisor for providing administrative services. In order to improve operating cash flows and the ability to pay distributions from operating cash flows, the Advisor may elect to forgive and absorb certain fees. Because the Advisor may forgive or absorb certain fees, cash flow from operations that would have been paid to the Advisor may be available to pay distributions to stockholders. The fees that are forgiven are not deferrals and, accordingly, will not be paid to the Advisor in the future. There were no such fees forgiven during the three and six months ended June 30, 2017 or 2016 . In certain instances, to improve the Company's working capital, the Advisor may elect to absorb a portion of the Company's property operating and general and administrative costs, which the Company will not repay. No such fees were absorbed during the three and six months ended June 30, 2017 or 2016 . 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 June 30, Six Months Ended June 30, Payable (Receivable) as of 2017 2016 2017 2016 June 30, December 31, (In thousands) Incurred Forgiven Incurred Forgiven Incurred Forgiven Incurred Forgiven 2017 2016 One-time fees and reimbursements: Acquisition cost reimbursements $ 22 $ — $ — $ — $ 22 $ — $ — $ — $ — $ — Ongoing fees and reimbursements: Asset management fees 4,875 — 4,397 — 9,439 — 8,781 — 14 — Property management fees 762 — 775 — 1,499 — 1,546 — 45 (163 ) Professional fees and other reimbursements 1,592 — 906 — 3,034 — 1,909 — 626 1,025 Distributions on Class B Units 130 — 152 — 280 — 304 — — — Total related party operation fees and reimbursements $ 7,381 $ — $ 6,230 $ — $ 14,274 $ — $ 12,540 $ — $ 685 $ 862 The predecessor to AR Global was a party to a services agreement with RCS Advisory Services, LLC (“RCS Advisory”), a subsidiary of RCAP, pursuant to which RCS Advisory and its affiliates provided the Company and certain other companies sponsored by AR Global with services (including, without limitation, transaction management, compliance, due diligence, event coordination and marketing services, among others) on a time and expenses incurred basis or at a flat rate based on services performed. The predecessor to AR Global instructed RCS Advisory to stop providing such services in November 2015 and no services have since been provided by RCS Advisory. The Company was also party to a transfer agency agreement with ANST, a subsidiary of RCAP, pursuant to which ANST provided the Company with transfer agency services (including broker and stockholder servicing, transaction processing, year-end IRS reporting and other services), and supervisory services overseeing the transfer agency services performed by DST Systems, Inc. ("DST"), a third-party transfer agent. AR Global received written notice from ANST on February 10, 2016 that it would wind down operations by the end of the month and would withdraw as the transfer agent effective February 29, 2016. On February 26, 2016, the Company entered into a definitive agreement with DST to provide the Company directly with transfer agency services (including broker and stockholder servicing, transaction processing, year-end IRS reporting and other services). 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 15.0% 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 three and six months ended June 30, 2017 or 2016 . 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. Annual Subordinated Performance Fees and Brokerage Commissions Under the Original A&R Advisory Agreement and until February 17, 2017, the Advisor was entitled to an annual subordinated performance fee calculated on the basis of the Company's total return to stockholders, payable annually in arrears, such that for any year in which the Company's total return on stockholders' capital exceeded 6.0% per annum, the Advisor was entitled to 15.0% of the excess total return but not to exceed 10.0% of the aggregate total return for such year. This fee would have been payable only upon the sale of assets, distributions or another event which resulted in the return on stockholders' capital exceeding 6.0% per annum. No subordinated performance fees were incurred during the three and six months ended June 30, 2017 or 2016 . Under the Original A&R Advisory Agreement and until February 17, 2017, the Advisor was entitled to a brokerage commission on the sale of property, not to exceed the lesser of (a) 2.0% of the contract sale price of the property and (b) 50.0% of the total brokerage commission paid if a third party broker was also involved; provided, however, that in no event could the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of (a) 6.0% of the contract sales price and (b) a reasonable, customary and competitive real estate commission. The brokerage commission payable to the Advisor was subject to approval by a majority of the independent directors upon a finding that the Advisor provided a substantial amount of services in connection with the sale. No such fees were incurred during the three and six months ended June 30, 2017 or 2016 . The Second A&R Advisory Agreement does not provide for the annual subordinated performance fee and brokerage commissions payable to the Advisor, (all as defined in the Original A&R Advisory Agreement) effective February 17, 2017. 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 three and six months ended June 30, 2017 or 2016 . 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 change in control, the Company would pay a change in control fee equal to the product of (a) four (4) and (b) the "Subject Fees". The Subject Fees are equal to (i) the product of four (4) multiplied by the actual base management fee plus (ii) the product of four (4) 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 in control occurs or the transition is consummated (see below), 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 in control occurs. Upon a transition to self-management, the Company would pay a transition fee equal to (i) $15.0 million plus (ii) the product of (a) four (4) multiplied by (b) subject fees (as defined above), provided that the transition fee shall not exceed an amount equal (i) 4.5 multiplied by (ii) subject fees. Termination of the Second A&R Advisory Agreement due to a change in control or transition to self-management is subject to a lockout period that ends on February 14, 2019. |
Economic Dependency
Economic Dependency | 6 Months Ended |
Jun. 30, 2017 | |
Economic Dependency [Abstract] | |
Economic Dependency | Note 11 — 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 and legal services, human resources and information technology. 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 | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation | Note 12 — Share-Based Compensation Restricted Share Plan The Company has an employee and director incentive restricted share plan (the "RSP"), which, until an amendment approved by the Board in August 2017, provided for the automatic grant of 1,333 restricted shares to each of the independent directors, without any further approval by the Board or the stockholders, after initial election to the Board and after each annual stockholder meeting. Following the amendment to the RSP in August 2017, the number of restricted shares to be issued automatically in those circumstances is equal to 30,000 divided by the then-current Estimated Per-Share NAV. These restricted shares vest annually over a five -year period in increments of 20.0% per annum beginning with the one-year anniversary of initial election to the Board and the date of the next annual meeting, respectively. The RSP provides the Company with the ability to grant awards of 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). For restricted share awards granted prior to July 1, 2015, such awards would typically be forfeited with respect to the unvested shares upon the termination of the recipient's employment or other relationship with the Company. For restricted share awards granted on or after July 1, 2015, such awards provide for accelerated vesting of the portion of the unvested shares scheduled to vest in the year of the recipient's voluntary termination or the failure to be re-elected to the Board. 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 shall be subject to the same restrictions as the underlying restricted shares. The following table reflects restricted share award activity for the period presented: Number of Shares of Common Stock Weighted Average Issue Price Unvested, December 31, 2016 9,921 $ 22.42 Granted — — Vested (800 ) 22.50 Forfeitures — — Unvested, June 30, 2017 9,121 $ 22.42 As of June 30, 2017 , the Company had $0.1 million of unrecognized compensation cost related to unvested restricted share awards granted under the Company's RSP. That cost is expected to be recognized over a weighted-average period of 3.6 years . Compensation expense related to restricted shares was approximately $13,000 and $27,000 during the three and six months ended June 30, 2017 , respectively. Compensation expense related to restricted shares was approximately $15,000 and $30,000 during the three and six months ended June 30, 2016 , 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 the shares issued since these payments in lieu of cash relate to fees earned for services performed. No such shares were issued during the three and six months ended June 30, 2017 or 2016 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Note 9 — Common Stock As of June 30, 2017 and December 31, 2016 , the Company had 89.6 million and 89.4 million shares of common stock outstanding, respectively, including unvested restricted shares and shares issued pursuant to the DRIP, net of shares repurchases. As of June 30, 2017 and December 31, 2016 , the Company had received total proceeds from the IPO and DRIP, net of shares repurchases, of $2.2 billion . In April 2013, our 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. 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 reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured. On March 30, 2017, the Board approved an updated estimate of per-share net asset value ("Estimated Per-Share NAV") as of December 31, 2016 . The Company intends to publish Estimated Per-Share NAV periodically at the discretion of the Company's Board, provided that such valuations will be made at least once annually. 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 the shares issued pursuant to the IPO. 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 any aspect of 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 six months ended June 30, 2017 , the Company issued 1.5 million shares of common stock pursuant to the DRIP, generating aggregate proceeds of $32.9 million . Until April 7, 2016 (the "Original NAV Pricing Date"), the first date the Company published an Estimated Per-Share NAV, the Company offered shares pursuant to the DRIP at $23.75 , which was 95.0% of the initial offering price of shares of common stock in the IPO. Effective on the Original NAV Pricing Date, the Company began offering shares pursuant to the DRIP at the then-current Estimated Per-Share NAV approved by the Board. Effective March 30, 2017, the Company began offering shares pursuant to the DRIP at the Estimated Per-Share NAV as of December 31, 2016 . Share Repurchase Program The Board has adopted the share repurchase program (as amended and restated, the "SRP"), which enables stockholders 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 the significant conditions and limitations described below. On June 14, 2017, the Company announced that its Board had adopted an amendment and restatement of the SRP that superseded and replaced the existing SRP effective as of July 14, 2017. Under the amended and restated 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 would be considered for repurchase. Other terms and provisions of the amended and restated SRP remained consistent with the existing SRP. In cases of requests for death and disability, the repurchase price is equal to then-current Estimated Per-Share NAV at the time of repurchase. Prior to the Original NAV Pricing Date, the repurchase price under these circumstances was equal to the price paid to acquire the shares. Prior to the Original NAV Pricing Date, the repurchase price per share other than with respect to requests for death and disability was as follows (in each case, as adjusted for any stock distributions, combinations, splits and recapitalizations): • the lower of $23.13 or 92.5% of the price paid to acquire the shares, for stockholders who had continuously held their shares for a period greater than one year and less than two years; • the lower of $23.75 or 95.0% of the price paid to acquire the shares, for stockholders who had continuously held their shares for greater than two years and less than three years; • the lower of $24.38 or 97.5% of the price paid to acquire the shares, for stockholders who had continuously held their shares for greater than three years and less than four years; and • the lower of $25.00 or 100.0% of the price paid to acquire the shares, for stockholders who had continuously held their shares for greater than four years. Beginning with the Original NAV Pricing Date, the repurchase price per share, other than with respect to requests for death and disability was as follows (in each case, as adjusted for any stock distributions, combinations, splits and recapitalizations): • 92.5% of the then-current (at the time of repurchase) Estimated Per-Share NAV for stockholders who had continuously held their shares for a period greater than one year and less than two years; • 95.0% of the then-current Estimated Per-Share NAV for stockholders who had continuously held their shares for a period greater than two years and less than three years; • 97.5% of the then-current Estimated Per-Share NAV for stockholders who had continuously held their shares for a period greater than three years and less than four years; and • 100.0% of the then-current Estimated Per-Share NAV for stockholders who had continuously held their shares for a period greater than four years. Under the SRP, repurchases of shares of the Company's common stock, when requested, are at the sole discretion of the Board and generally are made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Repurchases for any fiscal semester are limited to a maximum of 2.5% of the weighted average number of shares of common stock outstanding during the previous fiscal year (the "Prior Year Outstanding Shares"), with a maximum for any fiscal year of 5.0% of the Prior Year Outstanding Shares. In addition, the Company is only authorized to repurchase shares in a given fiscal semester up to the amount of proceeds received from its DRIP in that same fiscal semester. On June 28, 2016, the Board amended the Company’s SRP (the "Special 2016 SRP Amendment") to provide for one twelve-month repurchase period for calendar year 2016 (the “2016 Repurchase Period”) instead of two semi-annual periods ending June 30 and December 31. The annual limit on repurchases under the SRP remained unchanged and continued to be limited to a maximum of 5.0% of the Prior Year Outstanding Shares and was subject to the terms and limitations set forth in the SRP. Accordingly, the 2016 Repurchase Period was limited to a maximum of 5.0% of the Prior Year Outstanding Shares and continues to be subject to the terms and conditions set forth in the SRP, as amended. Following calendar year 2016, the repurchase periods return to two semi-annual periods and applicable limitations set forth in the SRP. On January 25, 2017, the Board further amended the Company’s SRP for calendar year 2016, changing the date on which any repurchases were to be made in respect of requests made during the calendar year 2016 to no later than March 15, 2017, rather than on or before the 31st day following December 31, 2016. All other terms of the SRP remained in effect, including that repurchases pursuant to the SRP are at the sole discretion of the Board. When a stockholder requests repurchases and the repurchases are approved, the Company reclassifies such an obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased have the status of authorized but unissued shares. The following table reflects the number of shares repurchased cumulatively through June 30, 2017 : Number of Shares Repurchased Weighted-Average Price per Share Cumulative repurchases as of December 31, 2016 975,030 $ 23.73 Six months ended June 30, 2017 (1) 1,287,045 21.64 Cumulative repurchases as of June 30, 2017 2,262,075 $ 22.54 _____________________________ (1) Includes (i) 1,273,179 shares repurchased during the three months ended March 31, 2017 for approximately $27.5 million at a weighted average price per share of $21.61 , (ii) 13,866 shares repurchased during the three months ended June 30, 2017 for approximately $0.3 million at a weighted average price per share $24.02 . Excludes rejected repurchases received during 2016 with respect to 2.3 million shares for $48.7 million at a weighted average price per share of $21.27 . In July 2017, following the effectiveness of the amendment and restatement of the SRP, the Board approved 100% of the repurchase requests made following the death or qualifying disability of stockholders during the period from January 1, 2017 to June 30, 2017, which was equal to 263,460 shares repurchased for approximately $5.7 million at an average price per share of $21.46 . No repurchases have been or will be made with respect to requests received during 2017 that are not valid requests in accordance with the amended and restated SRP. See Note 18 - Subsequent Events. Note 13 — Accumulated Other Comprehensive Loss The following table illustrates the changes in accumulated other comprehensive loss as of and for the period presented: (In thousands) Unrealized loss on designated derivative Balance, December 31, 2016 $ — Other comprehensive loss, before reclassifications (296 ) Balance, June 30, 2017 $ (296 ) |
Non-controlling Interests
Non-controlling Interests | 6 Months Ended |
Jun. 30, 2017 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interests | Note 14 — Non-controlling Interests The Company is the sole general partner and holds substantially all of the OP Units. As of June 30, 2017 and December 31, 2016 , the Advisor held 90 OP Units, which represents a nominal percentage of the aggregate OP ownership. 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 or upon liquidation of the OP or sale of substantially all of the assets of the OP, a holder of OP Units has the right, at the option of the OP, to redeem OP Units for 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 three and six months ended June 30, 2017 , OP Unit non-controlling interest holders were paid distributions of $0.2 million and $0.3 million , respectively. During the three and six months ended June 30, 2016 , OP Unit non-controlling interest holders were paid distributions of $0.2 million and $0.3 million , respectively. The Company has investment arrangements with an unaffiliated third party whereby such investor receives an ownership interest in certain of the Company's property-owning subsidiaries and is 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 party for the three and six months ended June 30, 2017 and 2016 : As of June 30, 2017 As of December 31, 2016 Distributions for the Three Months Ended June 30 Distributions for the Six Months Ended June 30, Property Name (In thousands) Investment Date Third Party Net Investment Amount as of June 30, 2017 Non-Controlling Ownership Percentage as of June 30, 2017 Net Real Estate Assets Subject to Investment Arrangement Mortgage Notes Payable Subject to Investment Arrangement Net Real Estate Assets Subject to Investment Arrangement Mortgage Notes Payable Subject to Investment Arrangement 2017 2016 2017 2016 Plaza Del Rio Medical Office Campus Portfolio - Peoria, AZ May 2015 $ 406 4.1 % $ 10,198 $ — $ 10,429 $ — $ 52 $ — $ 52 — |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Note 15 — Net Loss Per Share The following is a summary of the basic and diluted net loss per share computation for the three and six months ended June 30, 2017 and 2016 : Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Net loss attributable to stockholders (in thousands) $ (4,716 ) $ (3,000 ) $ (10,855 ) $ (4,555 ) Basic and diluted weighted-average shares outstanding 89,335,489 87,465,569 89,486,742 87,062,123 Basic and diluted net loss per share $ (0.05 ) $ (0.03 ) $ (0.12 ) $ (0.05 ) Diluted net loss per share assumes the conversion of all common stock equivalents into an equivalent number of common shares, 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 share 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 period presented: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Unvested restricted shares (1) 9,534 10,615 9,659 10,976 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 774,782 775,863 774,907 776,224 _______________ (1) Weighted average number of antidilutive unvested restricted shares outstanding for the periods presented. There were 9,121 and 9,598 unvested restricted shares outstanding as of June 30, 2017 and 2016 , respectively. (2) Weighted average number of antidilutive OP Units outstanding for the periods presented. There were 405,998 OP Units outstanding as of June 30, 2017 and 2016 . (3) Weighted average number of antidilutive Class B Units outstanding for the periods presented. There were 359,250 Class B Units outstanding as of June 30, 2017 and 2016 . |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 16 — Segment Reporting During the six months ended June 30, 2017 and 2016 , the Company operated in three reportable business segments for management and internal financial reporting purposes: MOBs, triple-net leased healthcare facilities, and SHOP. The Company evaluates performance and makes resource allocations based on its three business segments. The MOB 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. On June 8, 2017, the Company's taxable REIT subsidiary, through 12 separately executed membership interest or stock transfer agreements, acquired 12 operating entities that leased 12 healthcare facilities included in the Company's triple-net leased healthcare facilities segment. Concurrently with the acquisition of the 12 operating entities, the Company transitioned the management of the healthcare facilities to a third-party management company that manages other healthcare facilities in the Company's SHOP operating segment. See Note 3 — Real Estate Investments for additional disclosure. The segment reporting results of these 12 operating entities is included in the Company's triple-net leased healthcare facilities segment through June 8, 2017. Subsequent to June 8, 2017, these operating entities are operated under the RIDEA structure and are included in the Company's SHOP segment. There were no intersegment sales or transfers during the three and six months ended June 30, 2016 . The Company evaluates the performance of the combined properties in each segment based on net operating income ("NOI"). NOI is defined as total revenues, excluding contingent purchase price consideration, less property operating and maintenance expense. NOI excludes all other items of expense and income included in the financial statements in calculating net 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 loss. NOI excludes certain components from net 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 loss as presented in the Company's consolidated financial statements. NOI should not be considered as an alternative to net loss as an indication of the Company's performance or to cash flows as a measure of the Company's liquidity or ability to make distributions. The following tables reconcile the segment activity to consolidated net loss for the three and six months ended June 30, 2017 and 2016 : Three Months Ended June 30, 2017 Six Ended June 30, 2017 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties Consolidated Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties Consolidated Revenues: Rental income $ 16,648 $ 7,430 $ 3 $ 24,081 $ 32,996 $ 15,101 $ 6 $ 48,103 Operating expense reimbursements 3,789 97 — 3,886 7,574 416 — 7,990 Resident services and fee income — — 47,799 47,799 — — 94,288 94,288 Total revenues 20,437 7,527 47,802 75,766 40,570 15,517 94,294 150,381 Property operating and maintenance 6,146 4,514 33,700 44,360 11,881 9,280 65,810 86,971 NOI $ 14,291 $ 3,013 $ 14,102 31,406 $ 28,689 $ 6,237 $ 28,484 63,410 Impairment charges — (35 ) Operating fees to related parties (5,637 ) (10,938 ) Acquisition and transaction related (1,743 ) (4,588 ) General and administrative (3,419 ) (7,576 ) Depreciation and amortization (19,339 ) (39,822 ) Interest expense (6,588 ) (12,070 ) Interest and other income 2 3 Gain on sale of real estate investment 438 438 Loss on non-designated derivatives (43 ) (107 ) Income tax benefit 202 397 Net loss attributable to non-controlling interests 5 33 Net loss attributable to stockholders $ (4,716 ) $ (10,855 ) _______________ (1) Three and six months ended June 30, 2017 includes 12 properties that were transitioned from our triple-net leased healthcare facilities segment to our SHOP segment in June 2017. Three Months Ended June 30, 2016 Six Ended June 30, 2016 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities Seniors Housing — Operating Properties Consolidated Medical Office Buildings Triple-Net Leased Healthcare Facilities Seniors Housing — Operating Properties Consolidated Revenues: Rental income $ 16,517 $ 9,894 $ 1 $ 26,412 $ 33,119 $ 19,884 $ 1 $ 53,004 Operating expense reimbursements 3,751 21 — 3,772 7,428 53 — 7,481 Resident services and fee income — — 45,454 45,454 — — 90,656 90,656 Total revenues 20,268 9,915 45,455 75,638 40,547 19,937 90,657 151,141 Property operating and maintenance 5,896 3,121 31,677 40,694 11,667 3,757 64,062 79,486 NOI $ 14,372 $ 6,794 $ 13,778 34,944 $ 28,880 $ 16,180 $ 26,595 71,655 Contingent purchase price consideration 219 225 Impairment charges (389 ) (389 ) Operating fees to related parties (5,172 ) (10,327 ) Acquisition and transaction related (2,059 ) (2,101 ) General and administrative (2,416 ) (6,403 ) Depreciation and amortization (24,283 ) (48,898 ) Interest expense (4,876 ) (9,860 ) Interest and other income 21 43 Income tax benefit 992 1,475 Net loss attributable to non-controlling interests 19 25 Net loss attributable to stockholders $ (3,000 ) $ (4,555 ) The following table reconciles the segment activity to consolidated total assets as of the periods presented: June 30, December 31, (In thousands) 2017 2016 ASSETS Investments in real estate, net: Medical office buildings $ 783,590 $ 788,023 Triple-net leased healthcare facilities 298,176 418,819 Construction in progress (1) 76,021 70,055 Seniors housing — operating properties 900,193 837,338 Total investments in real estate, net 2,057,980 2,114,235 Cash and cash equivalents 158,127 29,225 Restricted cash 4,849 3,962 Assets held for sale 37,822 — Derivative assets, at fair value 42 61 Straight-line rent receivable, net 13,512 12,026 Prepaid expenses and other assets 22,181 22,073 Deferred costs, net 13,087 12,123 Total assets $ 2,307,600 $ 2,193,705 _______________ (1) Includes $10.0 million of land related to a property under construction. The following table reconciles capital expenditures by reportable business segment, excluding corporate non-real estate expenditures, for the periods presented: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2017 2016 2017 2016 Medical office buildings 1,041 777 $ 1,594 $ 1,441 Triple-net leased healthcare facilities — 4 — 103 Seniors housing — operating properties (1) 1,903 834 2,491 1,884 Total capital expenditures 2,944 1,615 $ 4,085 $ 3,428 _______________ (1) Three and six months ended June 30, 2017 includes capital expenditures assumed through asset acquisitions which are reflected in the Company's non-cash investing activity on the consolidated statements of cash flows. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 17 — Commitments and Contingencies The Company has entered into operating and capital lease agreements related to certain acquisitions under leasehold interests arrangements. The following table reflects the minimum base cash rental payments due from the Company over the next five years and thereafter under these arrangements, including the present value of the net minimum payment due under capital leases. These amounts exclude contingent rent payments, as applicable, that may be payable based on provisions related to increases in annual rent based on exceeding certain economic indexes among other items. Future Minimum Base Rent Payments (In thousands) Operating Leases Capital Leases July 1, 2017 — December 31, 2017 $ 406 $ 38 2018 668 78 2019 673 80 2020 671 82 2021 658 84 Thereafter 32,571 7,764 Total minimum lease payments $ 35,647 8,126 Less: amounts representing interest (3,308 ) Total present value of minimum lease payments $ 4,818 Total rental expense from operating leases was $0.2 million and $0.4 million during the three and six months ended June 30, 2017 and 2016 , respectively. During the three and six months ended June 30, 2017 and 2016 , interest expense related to capital leases was approximately $21,000 and approximately $42,000 , respectively. Purchase Agreement The Company entered into the Purchase Agreement with HT III on June 16, 2017. Pursuant to the Purchase Agreement, the Company will be required to fund the Purchase Price on the Closing Date. The consummation of the Asset Purchase pursuant to the Purchase Agreement is subject to certain conditions, including, among others, HT III obtaining the approval of the holders of at least a majority of all the votes entitled to be cast in connection with the Asset Purchase and HT III's plan of liquidation. See Note 10 — Related Party Transactions and Arrangements for further disclosure on the Purchase Agreement. 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 June 30, 2017 , 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 skilled nursing facility in Jupiter, Florida for $82.0 million . As of June 30, 2017 , the Company had funded $10.0 million and $63.6 million for the land and construction in progress, respectively. Concurrent with the acquisition, the Company entered into a loan agreement and lease agreement with an affiliate of the project developer. The loan agreement is intended to provide working capital to the tenant during the initial operating period of the facility and allows for borrowings of up to $2.7 million from the Company on a non-revolving basis. Any outstanding principal balances under the loan will bear interest at 7.0% per year, payable on the first day of each fiscal quarter. As of June 30, 2017 , there were no amounts outstanding due to the Company pursuant to the loan agreement. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 18 — 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: Asset Acquisition On July 13, 2017, the Company closed on a $13.5 million acquisition of an MOB in Canton, GA. The property comprises approximately 38,100 rentable square feet and is 100% leased, under two leases, to a single tenant. The leases expire in December 2028 and include one , five -year renewal option. Approval of Share Repurchases In July 2017, following the effectiveness of the amendment and restatement of the SRP, the Board approved 100% of the repurchase requests made following the death or qualifying disability of stockholders during the period from January 1, 2017 to June 30, 2017, which was equal to 263,460 shares repurchased for approximately $5.7 million at an average price per share of $21.46 . No repurchases have been or will be made with respect to requests received during 2017 that are not valid requests in accordance with the amended and restated SRP. See Note 9 — Common Stock for more information on the SRP. Approval of Amendment to RSP On August 8, 2017, following approval by the Company's Board, the Company amended (the “RSP Amendment”) its RSP. Following the RSP Amendment, the number of restricted shares to be issued automatically to an independent director after initial election to the Board and after each annual stockholder meeting is equal to $30,000 divided by the then-current Estimated Per-Share NAV. These restricted shares vest over a five -year period following the grant date in increments of 20.0% per annum. Appointment of Chief Executive Officer On August 8, 2017, W. Todd Jensen was named chief executive officer of the Company. Previously, Mr. Jensen served as interim chief executive officer of the Company. Mr. Jensen will continue to serve in his capacity as president of the Company and as chief executive officer and president of the Advisor. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
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. |
Recently Issued and Recently Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued revised guidance relating to revenue recognition. Under the revised guidance, an entity is required to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The revised guidance is to become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company will adopt this guidance effective January 1, 2018 and currently expect to utilize the modified retrospective transition method upon adoption. The Company has progressed with its project plan for adopting this standard, including gathering and evaluating the inventory of our revenue streams. The Company expects that this revised guidance will have an impact on the timing of gains on certain sales of real estate. The Company is in the process of evaluating any differences in the timing, measurement or presentation of revenue recognition and the impact on the Company's consolidated financial statements and internal accounting processes. In January 2016, the FASB issued an update that amends the recognition and measurement of financial instruments. The new guidance revises an entity’s accounting related to equity investments and the presentation of certain fair value changes for financial liabilities measured at fair value. Among other things, it also amends the presentation and disclosure requirements associated with the fair value of financial instruments. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is not permitted for most of the amendments in the update. The Company is currently evaluating the impact of this new guidance. In February 2016, the FASB issued an update that sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The revised guidance supersedes previous leasing standards and is effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The Company has ground leases, which it will be required to record a right-of-use asset and lease liability equal to the present value of the remaining lease payments upon adoption of this update. The Company also expects this revised guidance to impact the presentation of these lease and non-lease components of revenue from leases for lessors. The Company has progressed in its project plan for adopting this revised guidance for lessors, including developing an inventory of leases as well as the lease and non-lease components contained therein. The Company is continuing to evaluate the impact of this new guidance and the allowable methods of adoption. In March 2016, the FASB issued guidance which requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. This guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In August 2016, the FASB issued guidance on how certain transactions should be classified and presented in the statement of cash flows as either operating, investing or financing activities. Among other things, the update provides specific guidance on where to classify debt prepayment and extinguishment costs, payments for contingent consideration made after a business combination and distributions received from equity method investments. The revised guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In November 2016, the FASB issued guidance on the classification of restricted cash in the statement of cash flows. The amendment requires restricted cash to be included in the beginning-of-period and end-of-period total cash amounts. Therefore, transfers between cash and restricted cash will no longer be shown on the statement of cash flows. The guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In January 2017, the FASB issued guidance on simplifying subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The amendments in this update modify the concept of impairment from the condition that exists to when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. The revised guidance is effective for reporting periods beginning after December 15, 2019, and the amendments will be applied prospectively. Early application is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of this new guidance. In February 2017, the FASB issued guidance on other income, specifically gains and losses from the derecognition of nonfinancial assets. The guidance clarifies the definition of ‘in substance non-financial assets’, unifies guidance related to partial sales of non-financial assets, eliminates rules specifically addressing the sales of real estate, removes exception to the financial asset derecognition model and clarifies the accounting for contributions of non-financial assets to joint ventures. The revised guidance is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted but only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the impact of this new guidance. In May 2017, the FASB issued guidance that clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The update states that modification accounting should be used unless the fair value of the award, the vesting terms of the award and the classification of the award as either equity or liability, does not change as a result of the modification. The revised guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted for reporting periods for which financial statements have not yet been issued. The Company is currently evaluating the impact of this new guidance. Recently Adopted Accounting Pronouncements In October 2016, the FASB issued guidance where a reporting entity will need to evaluate if it should consolidate a VIE. The amendments change the evaluation of whether a reporting entity is the primary beneficiary of a VIE by changing how a single decision maker of a VIE treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The revised guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company has adopted the provisions of this guidance beginning January 1, 2017 and determined that there is no impact to our consolidated financial position, results of operations and cash flows. In January 2017, the FASB issued guidance that revises the definition of a business. This new guidance is applicable when evaluating whether an acquisition should be treated as either a business acquisition or an asset acquisition. Under the revised guidance, when substantially all of the fair value of gross assets acquired is concentrated in a single asset or group of similar assets, the assets acquired would not be considered a business. The revised guidance is effective for reporting periods beginning after December 15, 2017, and the amendments will be applied prospectively. Early application is permitted only for transactions that have not previously been reported in issued financial statements. The Company has assessed this revised guidance and expects, based on historical acquisitions, that, in most cases, a future property acquisition would be treated as an asset acquisition rather than a business acquisition, which would result in the capitalization of related transaction costs. The Company has adopted the provisions of this guidance beginning January 1, 2017. |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Real Estate Investments, Net [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | At closing of the transfer of operations, the Company assumed the following assets and liabilities which are included in the consolidated balance sheet within the line items as shown below. The Company determined the fair value of assets acquired was equal to the fair value of liabilities assumed and provisionally assigned the amounts to the appropriate financial statement line as shown below. The amounts below are subject to adjustment as the Company receives final financial information. (in thousands) June 8, 2017 Buildings, fixtures and improvements $ 594 Cash and cash equivalents 859 Prepaid expenses and other assets 1,528 Total assets acquired $ 2,981 Accounts payable and accrued expenses $ 2,981 Total liabilities acquired $ 2,981 The following table presents the allocation of real estate assets acquired and liabilities assumed during the six months ended June 30, 2017 as well as capitalized construction in progress during the six months ended June 30, 2017 and 2016 : Six Months Ended June 30, (Dollar amounts in thousands) 2017 2016 Real estate investments, at cost: Land $ 1,459 $ — Buildings, fixtures and improvements 9,300 — Construction in progress 5,966 10,671 Total tangible assets 16,725 10,671 Acquired intangibles: In-place leases (1) 1,780 — Below-market lease liabilities (1) (13 ) — Total assets and liabilities acquired, net 18,492 10,671 Other assets and liabilities, net (60 ) — Cash paid for real estate investments $ 18,432 $ 10,671 Number of properties purchased 1 — _______________ (1) Weighted-average remaining amortization periods for in-place leases and below-market lease assets acquired during the six months ended June 30, 2017 were 8.9 years . |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table presents future minimum base rental cash payments due to the Company over the next five years and thereafter as of June 30, 2017 . These amounts exclude 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. (In thousands) Future Minimum July 1, 2017 — December 31, 2017 $ 42,548 2018 81,857 2019 76,353 2020 71,099 2021 66,086 Thereafter 363,437 Total $ 701,380 |
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 June 30, 2017 and 2016 : June 30, State 2017 2016 Florida 17.4% 18.7% Iowa 9.3% 10.1% Michigan 15.9% * Pennsylvania 10.8% 11.8% _______________ * 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 Acquired Finite-Lived Intangible Assets by Major Class | Acquired intangible assets and liabilities consisted of the following as of the periods presented: June 30, 2017 December 31, 2016 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: In-place leases $ 195,944 $ 123,308 $ 72,636 $ 195,940 $ 115,641 $ 80,299 Intangible market lease assets 28,210 6,920 21,290 28,220 5,798 22,422 Other intangible assets 10,589 706 9,883 10,589 574 10,015 Total acquired intangible assets $ 234,743 $ 130,934 $ 103,809 $ 234,749 $ 122,013 $ 112,736 Intangible market lease liabilities $ 25,080 $ 6,092 $ 18,988 $ 25,614 $ 5,427 $ 20,187 |
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 accretion of above-market ground leases, for the periods presented: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2017 2016 2017 2016 Amortization of in-place leases and other intangible assets (1) $ 4,029 $ 9,203 $ 9,565 $ 18,748 Amortization and (accretion) of above- and below-market leases, net (2) $ (12 ) $ (65 ) $ (165 ) $ (127 ) Amortization and (accretion) of above- and below-market ground leases, net (3) $ 43 $ 43 $ 86 $ 86 _______________ (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) July 1, 2017 — December 31, 2017 2018 2019 2020 2021 In-place lease assets $ 7,547 $ 13,358 $ 10,813 $ 8,882 $ 7,341 Other intangible assets 132 265 265 265 265 Total to be added to amortization expense $ 7,679 $ 13,623 $ 11,078 $ 9,147 $ 7,606 Above-market lease assets $ (850 ) $ (1,357 ) $ (1,068 ) $ (742 ) $ (532 ) Below-market lease liabilities 1,015 1,852 1,572 1,415 1,266 Total to be added to rental income $ 165 $ 495 $ 504 $ 673 $ 734 Below-market ground lease assets $ 106 $ 212 $ 212 $ 212 $ 212 Above-market ground lease liabilities (20 ) (40 ) (40 ) (40 ) (40 ) Total to be added to property operating and maintenance expense $ 86 $ 172 $ 172 $ 172 $ 172 |
Real Estate Sales | The following table details the major classes of assets associated with the properties that have been classified as held for sale as of June 30, 2017 : (In thousands) June 30, 2017 Real estate held for sale, at cost: Land $ 3,131 Buildings, fixtures and improvements 38,596 Total real estate held for sale, at cost 41,727 Less accumulated depreciation and amortization (3,870 ) Real estate assets held for sale, net 37,857 Impairment charges related to properties reclassified as held for sale (35 ) Assets held for sale $ 37,822 |
Credit Facilities (Tables)
Credit Facilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Credit Facilities | The Company has the following credit facilities outstanding as of June 30, 2017 and December 31, 2016 : Outstanding Facility Amount as of Effective Interest Rate Credit Facility Encumbered Properties (1) June 30, December 31, 2016 June 30, December 31, 2016 Maturity (In thousands) (In thousands) Revolving Credit Facility 45 (2) $ 280,500 $ 421,500 2.57 % 2.00 % Mar. 2019 Fannie Mae Master Credit Facilities: Capital One Facility 2 (3) 83,439 30,000 3.39 % 3.24 % Nov. 2026 KeyBank Facility 4 (4) 58,677 30,000 3.41 % 3.24 % Nov. 2026 Total Fannie Mae Master Credit Facilities 142,116 60,000 Total Credit Facilities 51 $ 422,616 $ 481,500 2.85 % (5) 2.15 % (5) _______________ (1) Encumbered as of June 30, 2017 . (2) The equity interests and related rights in the Company's wholly owned subsidiaries that directly own 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. (3) Secured by first-priority mortgages on two of the Company’s seniors housing properties located in Florida as of June 30, 2017 . (4) Secured by first-priority mortgages on four of the Company’s seniors housing properties located in Michigan, Missouri and Kansas as of June 30, 2017 . (5) Calculated on a weighted average basis for all credit facilities outstanding as of June 30, 2017 and December 31, 2016 . |
Mortgage Notes Payable (Tables)
Mortgage Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table reflects the Company's mortgage notes payable as of June 30, 2017 and December 31, 2016 : Outstanding Loan Amount as of Effective Interest Rate as of Portfolio Encumbered Properties June 30, 2017 December 31, 2016 June 30, 2017 Interest Rate Maturity (In thousands) (In thousands) Medical Center of New Windsor - New Windsor, NY 1 $ 8,539 $ 8,602 6.39 % Fixed Sep. 2017 Plank Medical Center - Clifton Park, NY 1 3,389 3,414 6.39 % Fixed Sep. 2017 Countryside Medical Arts - Safety Harbor, FL 1 5,851 5,904 4.75 % Variable (2) Apr. 2019 St. Andrews Medical Park - Venice, FL 3 6,466 6,526 4.75 % Variable (2) Apr. 2019 Slingerlands Crossing Phase I - Bethlehem, NY 1 6,541 6,589 6.39 % Fixed Sep. 2017 Slingerlands Crossing Phase II - Bethlehem, NY 1 7,615 7,671 6.39 % Fixed Sep. 2017 Benedictine Cancer Center - Kingston, NY 1 6,669 6,719 6.39 % Fixed Sep. 2017 Aurora Healthcare Center Portfolio - WI 6 30,644 30,858 6.55 % Fixed Jan. 2018 Palm Valley Medical Plaza - Goodyear, AZ 1 3,378 3,428 4.15 % Fixed Jun. 2023 Medical Center V - Peoria, AZ 1 3,109 3,151 4.75 % Fixed Sep. 2023 Courtyard Fountains - Gresham, OR 1 24,597 24,820 3.87 % Fixed Jan. 2020 Fox Ridge Bryant - Bryant, AR 1 7,632 7,698 3.98 % Fixed May 2047 Fox Ridge Chenal - Little Rock, AR 1 17,407 17,540 3.98 % Fixed May 2049 Fox Ridge North Little Rock - North Little Rock, AR 1 10,801 10,884 3.98 % Fixed May 2049 MOB Loan 32 250,000 — 4.38 % Fixed (4) June 2022 Gross mortgage notes payable 53 392,638 (1) 143,804 4.66 % (3) Deferred financing costs, net of accumulated amortization (7,000 ) (1,516 ) Mortgage premiums and discounts, net (413 ) 466 Mortgage notes payable, net $ 385,225 $ 142,754 _______________ (1) Does not include eligible unencumbered real estate assets comprising the borrowing base of the Revolving Credit Facility. The equity interests and related rights in the Company's wholly owned subsidiaries that directly own these real estate assets have been pledged for the benefit of the lenders thereunder. See Note 5 — Credit Facilities for further details. (2) Interest rate changed from a fixed to a variable rate beginning in June 2017 and will remain variable throughout the remaining term of the mortgage. (3) Calculated on a weighted average basis for all mortgages outstanding as of June 30, 2017 and December 31, 2016 . (4) Variable rate loan which is fixed as a result of a entering into an interest rate swap agreement. Note 8 — Derivatives and Hedging Activities. |
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 June 30, 2017 and thereafter: (In thousands) Future Principal Payments July 1, 2017 — December 31, 2017 $ 33,760 2018 32,061 2019 13,060 2020 24,279 2021 892 Thereafter 288,586 Total $ 392,638 |
Fair Value of Financial Instr29
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following table presents information about the Company's assets and liabilities measured at fair value as of June 30, 2017 and December 31, 2016 , aggregated by the level in the fair value hierarchy within which those instruments fall. (In thousands) Basis of Measurement Quoted Prices in Active Markets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Total June 30, 2017 Derivatives, net Recurring $ — $ (254 ) $ — $ (254 ) Impaired assets held for sale Non-recurring — 1,323 — 1,323 Total $ — $ 1,069 $ — $ 1,069 December 31, 2016 Derivatives, net Recurring $ — $ 61 $ — $ 61 |
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: Carrying Amount at Fair Value at Carrying Amount at Fair Value at (In thousands) Level June 30, June 30, December 31, December 31, Gross mortgage notes payable and mortgage premium and discounts, net 3 $ 392,225 $ 393,042 $ 144,270 $ 144,261 Revolving Credit Facility 3 $ 280,500 $ 280,500 $ 421,500 $ 421,500 Fannie Mae Master Credit Facilities 3 $ 142,116 $ 142,850 $ 60,000 $ 60,000 |
Derivatives and Hedging Activ30
Derivatives and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Derivative Instruments | As of June 30, 2017 , the Company had the following derivatives that were designated as cash flow hedges of interest rate risk. The Company did not have any derivatives designated as cash flow hedges as of December 31, 2016 . June 30, 2017 December 31, 2016 Interest Rate Derivative Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate swap 1 $ 250,000 — $ — he Company had the following outstanding interest rate derivatives that were not designated as hedges in qualified hedging relationships as of June 30, 2017 and December 31, 2016 : June 30, 2017 December 31, 2016 Interest Rate Derivative Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate caps 4 $ 142,116 2 $ 60,000 |
Schedule of Derivatives Included in AOCI | The table below details the location in the financial statements the loss recognized on interest rate derivatives designated as cash flow hedges for the three and six months ended June 30, 2017 . The Company did not have any derivatives designated as cash flow hedges as of June 30, 2016 . Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2017 2016 2017 2016 Amount of loss recognized in accumulated other comprehensive loss on designated derivatives (effective portion) $ (296 ) $ — $ (296 ) $ — |
Balance Sheet Classification | 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 June 30, 2017 and December 31, 2016 : (In thousands) Balance Sheet Location June 30, 2017 December 31, 2016 Derivatives designated as hedging instruments: Interest rate swap Derivative liabilities, at fair value $ (296 ) $ — Derivatives not designated as hedging instruments: Interest rate caps Derivative assets, at fair value $ 42 $ 61 |
Common Stock (Tables)
Common Stock (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Class of Treasury Stock | The following table reflects the number of shares repurchased cumulatively through June 30, 2017 : Number of Shares Repurchased Weighted-Average Price per Share Cumulative repurchases as of December 31, 2016 975,030 $ 23.73 Six months ended June 30, 2017 (1) 1,287,045 21.64 Cumulative repurchases as of June 30, 2017 2,262,075 $ 22.54 _____________________________ (1) Includes (i) 1,273,179 shares repurchased during the three months ended March 31, 2017 for approximately $27.5 million at a weighted average price per share of $21.61 , (ii) 13,866 shares repurchased during the three months ended June 30, 2017 for approximately $0.3 million at a weighted average price per share $24.02 . Excludes rejected repurchases received during 2016 with respect to 2.3 million shares for $48.7 million at a weighted average price per share of $21.27 . In July 2017, following the effectiveness of the amendment and restatement of the SRP, the Board approved 100% of the repurchase requests made following the death or qualifying disability of stockholders during the period from January 1, 2017 to June 30, 2017, which was equal to 263,460 shares repurchased for approximately $5.7 million at an average price per share of $21.46 . No repurchases have been or will be made with respect to requests received during 2017 that are not valid requests in accordance with the amended and restated SRP. See Note 18 - Subsequent Events. |
Related Party Transactions an32
Related Party Transactions and Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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 June 30, Six Months Ended June 30, Payable (Receivable) as of 2017 2016 2017 2016 June 30, December 31, (In thousands) Incurred Forgiven Incurred Forgiven Incurred Forgiven Incurred Forgiven 2017 2016 One-time fees and reimbursements: Acquisition cost reimbursements $ 22 $ — $ — $ — $ 22 $ — $ — $ — $ — $ — Ongoing fees and reimbursements: Asset management fees 4,875 — 4,397 — 9,439 — 8,781 — 14 — Property management fees 762 — 775 — 1,499 — 1,546 — 45 (163 ) Professional fees and other reimbursements 1,592 — 906 — 3,034 — 1,909 — 626 1,025 Distributions on Class B Units 130 — 152 — 280 — 304 — — — Total related party operation fees and reimbursements $ 7,381 $ — $ 6,230 $ — $ 14,274 $ — $ 12,540 $ — $ 685 $ 862 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Restricted Share Award Activity | The following table reflects restricted share award activity for the period presented: Number of Shares of Common Stock Weighted Average Issue Price Unvested, December 31, 2016 9,921 $ 22.42 Granted — — Vested (800 ) 22.50 Forfeitures — — Unvested, June 30, 2017 9,121 $ 22.42 |
Accumulated Other Comprehensi34
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | The following table illustrates the changes in accumulated other comprehensive loss as of and for the period presented: (In thousands) Unrealized loss on designated derivative Balance, December 31, 2016 $ — Other comprehensive loss, before reclassifications (296 ) Balance, June 30, 2017 $ (296 ) |
Non-controlling Interests (Tabl
Non-controlling Interests (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interest | The following table summarizes the activity related to investment arrangements with the unaffiliated third party for the three and six months ended June 30, 2017 and 2016 : As of June 30, 2017 As of December 31, 2016 Distributions for the Three Months Ended June 30 Distributions for the Six Months Ended June 30, Property Name (In thousands) Investment Date Third Party Net Investment Amount as of June 30, 2017 Non-Controlling Ownership Percentage as of June 30, 2017 Net Real Estate Assets Subject to Investment Arrangement Mortgage Notes Payable Subject to Investment Arrangement Net Real Estate Assets Subject to Investment Arrangement Mortgage Notes Payable Subject to Investment Arrangement 2017 2016 2017 2016 Plaza Del Rio Medical Office Campus Portfolio - Peoria, AZ May 2015 $ 406 4.1 % $ 10,198 $ — $ 10,429 $ — $ 52 $ — $ 52 — |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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 three and six months ended June 30, 2017 and 2016 : Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Net loss attributable to stockholders (in thousands) $ (4,716 ) $ (3,000 ) $ (10,855 ) $ (4,555 ) Basic and diluted weighted-average shares outstanding 89,335,489 87,465,569 89,486,742 87,062,123 Basic and diluted net loss per share $ (0.05 ) $ (0.03 ) $ (0.12 ) $ (0.05 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The Company had the following common share 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 period presented: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Unvested restricted shares (1) 9,534 10,615 9,659 10,976 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 774,782 775,863 774,907 776,224 _______________ (1) Weighted average number of antidilutive unvested restricted shares outstanding for the periods presented. There were 9,121 and 9,598 unvested restricted shares outstanding as of June 30, 2017 and 2016 , respectively. (2) Weighted average number of antidilutive OP Units outstanding for the periods presented. There were 405,998 OP Units outstanding as of June 30, 2017 and 2016 . (3) Weighted average number of antidilutive Class B Units outstanding for the periods presented. There were 359,250 Class B Units outstanding as of June 30, 2017 and 2016 . |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables reconcile the segment activity to consolidated net loss for the three and six months ended June 30, 2017 and 2016 : Three Months Ended June 30, 2017 Six Ended June 30, 2017 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties Consolidated Medical Office Buildings Triple-Net Leased Healthcare Facilities (1) Seniors Housing — Operating Properties Consolidated Revenues: Rental income $ 16,648 $ 7,430 $ 3 $ 24,081 $ 32,996 $ 15,101 $ 6 $ 48,103 Operating expense reimbursements 3,789 97 — 3,886 7,574 416 — 7,990 Resident services and fee income — — 47,799 47,799 — — 94,288 94,288 Total revenues 20,437 7,527 47,802 75,766 40,570 15,517 94,294 150,381 Property operating and maintenance 6,146 4,514 33,700 44,360 11,881 9,280 65,810 86,971 NOI $ 14,291 $ 3,013 $ 14,102 31,406 $ 28,689 $ 6,237 $ 28,484 63,410 Impairment charges — (35 ) Operating fees to related parties (5,637 ) (10,938 ) Acquisition and transaction related (1,743 ) (4,588 ) General and administrative (3,419 ) (7,576 ) Depreciation and amortization (19,339 ) (39,822 ) Interest expense (6,588 ) (12,070 ) Interest and other income 2 3 Gain on sale of real estate investment 438 438 Loss on non-designated derivatives (43 ) (107 ) Income tax benefit 202 397 Net loss attributable to non-controlling interests 5 33 Net loss attributable to stockholders $ (4,716 ) $ (10,855 ) _______________ (1) Three and six months ended June 30, 2017 includes 12 properties that were transitioned from our triple-net leased healthcare facilities segment to our SHOP segment in June 2017. Three Months Ended June 30, 2016 Six Ended June 30, 2016 (In thousands) Medical Office Buildings Triple-Net Leased Healthcare Facilities Seniors Housing — Operating Properties Consolidated Medical Office Buildings Triple-Net Leased Healthcare Facilities Seniors Housing — Operating Properties Consolidated Revenues: Rental income $ 16,517 $ 9,894 $ 1 $ 26,412 $ 33,119 $ 19,884 $ 1 $ 53,004 Operating expense reimbursements 3,751 21 — 3,772 7,428 53 — 7,481 Resident services and fee income — — 45,454 45,454 — — 90,656 90,656 Total revenues 20,268 9,915 45,455 75,638 40,547 19,937 90,657 151,141 Property operating and maintenance 5,896 3,121 31,677 40,694 11,667 3,757 64,062 79,486 NOI $ 14,372 $ 6,794 $ 13,778 34,944 $ 28,880 $ 16,180 $ 26,595 71,655 Contingent purchase price consideration 219 225 Impairment charges (389 ) (389 ) Operating fees to related parties (5,172 ) (10,327 ) Acquisition and transaction related (2,059 ) (2,101 ) General and administrative (2,416 ) (6,403 ) Depreciation and amortization (24,283 ) (48,898 ) Interest expense (4,876 ) (9,860 ) Interest and other income 21 43 Income tax benefit 992 1,475 Net loss attributable to non-controlling interests 19 25 Net loss attributable to stockholders $ (3,000 ) $ (4,555 ) The following table reconciles the segment activity to consolidated total assets as of the periods presented: June 30, December 31, (In thousands) 2017 2016 ASSETS Investments in real estate, net: Medical office buildings $ 783,590 $ 788,023 Triple-net leased healthcare facilities 298,176 418,819 Construction in progress (1) 76,021 70,055 Seniors housing — operating properties 900,193 837,338 Total investments in real estate, net 2,057,980 2,114,235 Cash and cash equivalents 158,127 29,225 Restricted cash 4,849 3,962 Assets held for sale 37,822 — Derivative assets, at fair value 42 61 Straight-line rent receivable, net 13,512 12,026 Prepaid expenses and other assets 22,181 22,073 Deferred costs, net 13,087 12,123 Total assets $ 2,307,600 $ 2,193,705 _______________ (1) Includes $10.0 million of land related to a property under construction. The following table reconciles capital expenditures by reportable business segment, excluding corporate non-real estate expenditures, for the periods presented: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2017 2016 2017 2016 Medical office buildings 1,041 777 $ 1,594 $ 1,441 Triple-net leased healthcare facilities — 4 — 103 Seniors housing — operating properties (1) 1,903 834 2,491 1,884 Total capital expenditures 2,944 1,615 $ 4,085 $ 3,428 _______________ (1) Three and six months ended June 30, 2017 includes capital expenditures assumed through asset acquisitions which are reflected in the Company's non-cash investing activity on the consolidated statements of cash flows. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity Schedule | The following table reflects the minimum base cash rental payments due from the Company over the next five years and thereafter under these arrangements, including the present value of the net minimum payment due under capital leases. These amounts exclude contingent rent payments, as applicable, that may be payable based on provisions related to increases in annual rent based on exceeding certain economic indexes among other items. Future Minimum Base Rent Payments (In thousands) Operating Leases Capital Leases July 1, 2017 — December 31, 2017 $ 406 $ 38 2018 668 78 2019 673 80 2020 671 82 2021 658 84 Thereafter 32,571 7,764 Total minimum lease payments $ 35,647 8,126 Less: amounts representing interest (3,308 ) Total present value of minimum lease payments $ 4,818 |
Organization (Narrative) (Detai
Organization (Narrative) (Details) $ / shares in Units, ft² in Thousands | 57 Months Ended | ||||||||
Jun. 30, 2017USD ($)property | Jun. 30, 2017ft² | Jun. 30, 2017$ / shares | Jun. 30, 2017encumbered_property | Jun. 30, 2017shares | Jun. 30, 2017state | Apr. 07, 2017ft² | Dec. 31, 2016$ / sharesshares | Feb. 28, 2013USD ($)$ / shares | |
Class of Stock [Line Items] | |||||||||
Number of Properties | 163 | 51 | |||||||
Number of states properties are located in | state | 29 | ||||||||
Rentable square feet | ft² | 8,500 | 77 | |||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Common stock, shares outstanding (in shares) | shares | 89,577,910 | 89,368,899 | |||||||
Proceeds from issuance of common stock | $ | $ 2,200,000,000 | ||||||||
Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Share Price (in usd per share) | $ / shares | $ 25 | ||||||||
IPO | |||||||||
Class of Stock [Line Items] | |||||||||
Stock available for issuance, IPO (in shares) | $ | $ 1,700,000,000 |
Real Estate Investments (Narrat
Real Estate Investments (Narrative) (Details) ft² in Thousands | Jun. 08, 2017property | Apr. 07, 2017USD ($)ft² | Mar. 01, 2017USD ($) | Jan. 31, 2017USD ($)property | Jun. 30, 2017USD ($)property | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)property | Jun. 30, 2016USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2017ft² | Jun. 30, 2017USD ($) | Jun. 30, 2017encumbered_property | Feb. 28, 2017period |
Real Estate Investments, Net [Abstract] | |||||||||||||
Number of Properties | 163 | 163 | 51 | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Rentable square feet | ft² | 77 | 8,500 | |||||||||||
Number of properties divested | property | 8 | ||||||||||||
Gain on sale of real estate investment | $ 438,000 | $ 0 | $ 438,000 | $ 0 | |||||||||
Impairment charges | 0 | 389,000 | $ 35,000 | 389,000 | |||||||||
Number of properties impaired | property | 1 | ||||||||||||
SNF Properties | Assets Held-for-sale | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Contract purchase price | $ 42,000,000 | ||||||||||||
Number of closing adjournment periods | period | 7 | ||||||||||||
Impairment charges | $ 35,000 | ||||||||||||
Leasing brokerage commission | $ 400,000 | ||||||||||||
One-time payment to creditor trusts | $ 2,800,000 | ||||||||||||
Scenario, Forecast | SNF Properties | Assets Held-for-sale | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Contract purchase price | $ 44,100,000 | ||||||||||||
Lancaster, California | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Purchase price | $ 12,500,000 | ||||||||||||
Peoria, Arizona | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Number of properties divested | property | 1 | ||||||||||||
Contract purchase price | $ 800,000 | ||||||||||||
Gain on sale of real estate investment | $ 400,000 | $ 0 | $ 400,000 | $ 0 | |||||||||
Transfer of Operations | |||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||
Number of properties | property | 12 |
Real Estate Investments (Acquir
Real Estate Investments (Acquired Assets) (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017USD ($)property | Jun. 30, 2016USD ($)property | |
Real estate investments, at cost: | ||
Cash paid for acquired real estate investments | $ 18,432 | $ 10,671 |
Individual business acquisitions | ||
Real estate investments, at cost: | ||
Land | 1,459 | 0 |
Buildings, fixtures and improvements | 9,300 | 0 |
Construction in progress | 5,966 | 10,671 |
Total tangible assets | 16,725 | 10,671 |
Below-market lease liabilities | (13) | 0 |
Total assets and liabilities acquired, net | 18,492 | 10,671 |
Other assets and liabilities, net | (60) | 0 |
Cash paid for acquired real estate investments | $ 18,432 | $ 10,671 |
Number of properties purchased | property | 1 | 0 |
In-place leases | Individual business acquisitions | ||
Real estate investments, at cost: | ||
In-place leases | $ 1,780 | $ 0 |
Acquired finite-lived intangible assets, weighted-average remaining amortization period | 8 years 10 months 24 days |
Real Estate Investments (Future
Real Estate Investments (Future Minimum Payments) (Details) $ in Thousands | Jun. 30, 2017USD ($) |
Real Estate Investments, Net [Abstract] | |
July 1, 2017 — December 31, 2017 | $ 42,548 |
2,018 | 81,857 |
2,019 | 76,353 |
2,020 | 71,099 |
2,021 | 66,086 |
Thereafter | 363,437 |
Total | $ 701,380 |
Real Estate Investments (Geogra
Real Estate Investments (Geographic Concentrations) (Details) - Sales Revenue, Net - Geographic Concentration Risk | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Florida | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 17.40% | 18.70% |
Iowa | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 9.30% | 10.10% |
Michigan | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 15.90% | |
Pennsylvania | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.80% | 11.80% |
Real Estate Investments (Summar
Real Estate Investments (Summary of Intangible Lease Assets and Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Intangible assets: | ||
Gross Carrying Amount | $ 234,743 | $ 234,749 |
Accumulated Amortization | 130,934 | 122,013 |
Net Carrying Amount | 103,809 | 112,736 |
Intangible market lease liabilities | ||
Gross Carrying Amount | 25,080 | 25,614 |
Accumulated Amortization | 6,092 | 5,427 |
Net Carrying Amount | 18,988 | 20,187 |
In-place leases | ||
Intangible assets: | ||
Gross Carrying Amount | 195,944 | 195,940 |
Accumulated Amortization | 123,308 | 115,641 |
Net Carrying Amount | 72,636 | 80,299 |
Intangible market lease assets | ||
Intangible assets: | ||
Gross Carrying Amount | 28,210 | 28,220 |
Accumulated Amortization | 6,920 | 5,798 |
Net Carrying Amount | 21,290 | 22,422 |
Other intangible assets | ||
Intangible assets: | ||
Gross Carrying Amount | 10,589 | 10,589 |
Accumulated Amortization | 706 | 574 |
Net Carrying Amount | $ 9,883 | $ 10,015 |
Real Estate Investments (Summ45
Real Estate Investments (Summary of Amortization and Accretion Recognized) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Accretion of Below-Market Lease Liabilities and Amortization of Above-Market Lease Assets, Net | $ 195 | $ 61 | ||
Depreciation and Amortization Expense | In-place Leases and Other Intangible Assets | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of market least intangibles | $ 4,029 | $ 9,203 | 9,565 | 18,748 |
Rental Income | Above and Below Market Leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Accretion of Below-Market Lease Liabilities and Amortization of Above-Market Lease Assets, Net | (12) | (65) | (165) | (127) |
Property Operating and Maintenance Expense | Above-market ground lease liabilities | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of market least intangibles | $ 43 | $ 43 | $ 86 | $ 86 |
Real Estate Investments (Summ46
Real Estate Investments (Summary of Intangible Assets and Liabilities Future Amortization Expense) (Details) $ in Thousands | Jun. 30, 2017USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, July 1, 2017 - December 31, 2017 | $ 86 |
Finite-lived intangible assets, amortization expense, 2018 | 172 |
Finite-lived intangible assets, amortization expense, 2019 | 172 |
Finite-lived intangible assets, amortization expense, 2020 | 172 |
Finite-lived intangible assets, amortization expense, 2021 | 172 |
Amortization Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, July 1, 2017 - December 31, 2017 | 7,679 |
Finite-lived intangible assets, amortization expense, 2018 | 13,623 |
Finite-lived intangible assets, amortization expense, 2019 | 11,078 |
Finite-lived intangible assets, amortization expense, 2020 | 9,147 |
Finite-lived intangible assets, amortization expense, 2021 | 7,606 |
Rental Income | |
Finite-Lived Intangible Assets [Line Items] | |
Below market leases, amortization income, July 1, 2017 - December 31, 2017 | 165 |
Below market leases, amortization income, 2018 | 495 |
Below market leases, amortization income, 2019 | 504 |
Below market leases, amortization income, 2020 | 673 |
Below market leases, amortization income, 2021 | 734 |
In-place leases | Amortization Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, July 1, 2017 - December 31, 2017 | 7,547 |
Finite-lived intangible assets, amortization expense, 2018 | 13,358 |
Finite-lived intangible assets, amortization expense, 2019 | 10,813 |
Finite-lived intangible assets, amortization expense, 2020 | 8,882 |
Finite-lived intangible assets, amortization expense, 2021 | 7,341 |
Other intangible assets | Amortization Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, July 1, 2017 - December 31, 2017 | 132 |
Finite-lived intangible assets, amortization expense, 2018 | 265 |
Finite-lived intangible assets, amortization expense, 2019 | 265 |
Finite-lived intangible assets, amortization expense, 2020 | 265 |
Finite-lived intangible assets, amortization expense, 2021 | 265 |
Above-market lease assets | Rental Income | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, July 1, 2017 - December 31, 2017 | (850) |
Finite-lived intangible assets, amortization expense, 2018 | (1,357) |
Finite-lived intangible assets, amortization expense, 2019 | (1,068) |
Finite-lived intangible assets, amortization expense, 2020 | (742) |
Finite-lived intangible assets, amortization expense, 2021 | (532) |
Below-market lease liabilities | Rental Income | |
Finite-Lived Intangible Assets [Line Items] | |
Below market leases, amortization income, July 1, 2017 - December 31, 2017 | 1,015 |
Below market leases, amortization income, 2018 | 1,852 |
Below market leases, amortization income, 2019 | 1,572 |
Below market leases, amortization income, 2020 | 1,415 |
Below market leases, amortization income, 2021 | 1,266 |
Below-market ground lease assets | Property Operating and Maintenance Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, July 1, 2017 - December 31, 2017 | 106 |
Finite-lived intangible assets, amortization expense, 2018 | 212 |
Finite-lived intangible assets, amortization expense, 2019 | 212 |
Finite-lived intangible assets, amortization expense, 2020 | 212 |
Finite-lived intangible assets, amortization expense, 2021 | 212 |
Above-market ground lease liabilities | Property Operating and Maintenance Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible liability, amortization income, July 1, 2017 - December 31, 2017 | (20) |
Finite-lived intangible liability, amortization income, 2018 | (40) |
Finite-lived intangible liability, amortization income, 2019 | (40) |
Finite-lived intangible liability, amortization income, 2020 | (40) |
Finite-lived intangible liability, amortization income, 2021 | $ (40) |
Real Estate Investments (Summ47
Real Estate Investments (Summary of Transfer of Operations) (Details) - Transfer of Operations $ in Thousands | Jun. 08, 2017USD ($) |
Business Acquisition [Line Items] | |
Buildings, fixtures and improvements | $ 594 |
Cash and cash equivalents | 859 |
Prepaid expenses and other assets | 1,528 |
Total assets acquired | 2,981 |
Accounts payable and accrued expenses | 2,981 |
Total liabilities acquired | $ 2,981 |
Real Estate Investments (Assets
Real Estate Investments (Assets Held-for-sale) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Real estate held for sale, at cost: | ||
Assets held for sale | $ 37,822 | $ 0 |
Assets Held-for-sale | ||
Real estate held for sale, at cost: | ||
Land | 3,131 | |
Buildings, fixtures and improvements | 38,596 | |
Total real estate held for sale, at cost | 41,727 | |
Less accumulated depreciation and amortization | (3,870) | |
Real estate assets held for sale, net | 37,857 | |
Impairment charges related to properties reclassified as held for sale | (35) | |
Assets held for sale | $ 37,822 |
Investment Securities (Narrativ
Investment Securities (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Unrealized gain on investment securities, net | $ 0 | $ 43 | $ 0 | $ 36 |
Credit Facilities (Summary of C
Credit Facilities (Summary of Credit Facilities) (Details) $ in Thousands | Jun. 30, 2017property | Jun. 30, 2017 | Jun. 30, 2017USD ($) | Jun. 30, 2017encumbered_property | Dec. 31, 2016USD ($) |
Line of Credit Facility [Line Items] | |||||
Number of Properties | 163 | 51 | |||
Outstanding balance | $ 422,616 | $ 481,500 | |||
Effective Interest Rate | 2.85% | 2.15% | |||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Number of Properties | property | 45 | ||||
Outstanding balance | 280,500 | $ 421,500 | |||
Effective Interest Rate | 2.57% | 2.00% | |||
Credit Facility | Fannie Mae Master Credit Facilities | |||||
Line of Credit Facility [Line Items] | |||||
Number of Properties | property | 6 | ||||
Outstanding balance | 142,116 | $ 60,000 | |||
Credit Facility | Fannie Mae Master Credit Facilities | Capital One Facility | |||||
Line of Credit Facility [Line Items] | |||||
Number of Properties | property | 2 | ||||
Outstanding balance | 83,439 | $ 30,000 | |||
Effective Interest Rate | 3.39% | 3.24% | |||
Credit Facility | Fannie Mae Master Credit Facilities | KeyBank Facility | |||||
Line of Credit Facility [Line Items] | |||||
Number of Properties | property | 4 | ||||
Outstanding balance | $ 58,677 | $ 30,000 | |||
Effective Interest Rate | 3.41% | 3.24% |
Credit Facilities (Narrative) (
Credit Facilities (Narrative) (Details) | Oct. 31, 2016USD ($)instrument | Jun. 30, 2017property | Jun. 30, 2017USD ($) | Jun. 30, 2017instrument | Jun. 30, 2017encumbered_property | Apr. 26, 2017USD ($) | Mar. 30, 2017USD ($) | Dec. 31, 2016instrument | Aug. 31, 2015USD ($) | Mar. 21, 2014USD ($) |
Line of Credit Facility [Line Items] | ||||||||||
Number of Properties | 163 | 51 | ||||||||
Letter of Credit | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Maximum borrowing capacity | $ 25,000,000 | |||||||||
Secured Debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Maximum borrowing capacity | 565,000,000 | $ 50,000,000 | ||||||||
Maximum borrowing capacity under accordion feature | 750,000,000 | |||||||||
Unused borrowing capacity | $ 14,600,000 | |||||||||
Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Maximum borrowing capacity | $ 2,700,000 | |||||||||
Stated rate | 7.00% | |||||||||
Federal Funds Effective Rate | Secured Debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 0.50% | |||||||||
One-Month LIBOR | Secured Debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 1.00% | |||||||||
Minimum | London Interbank Offered Rate (LIBOR) | Secured Debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 1.60% | |||||||||
Minimum | Base Rate | Secured Debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 0.35% | |||||||||
Maximum | London Interbank Offered Rate (LIBOR) | Secured Debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 2.20% | |||||||||
Maximum | Base Rate | Secured Debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 0.95% | |||||||||
Fannie Mae Master Credit Facilities | Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Number of Properties | property | 6 | |||||||||
KeyBank Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Increase in advances | $ 28,700,000 | |||||||||
Capital One Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Increase in advances | $ 53,400,000 | |||||||||
Credit Facility | Credit Agreements | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Initial advances | $ 30,000,000 | |||||||||
Credit Facility | Fannie Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Prepayment premium percent | 1.00% | |||||||||
Credit Facility | Fannie Credit Facility | London Interbank Offered Rate (LIBOR) | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 2.62% | |||||||||
Credit Facility | Fannie Credit Facility | Minimum | London Interbank Offered Rate (LIBOR) | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 2.62% | |||||||||
Credit Facility | KeyBank Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 3.15% | |||||||||
Credit Facility | Capital One Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Stated rate | 3.16% | |||||||||
Interest rate caps | Fannie Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate cap | 3.50% | |||||||||
Derivatives not designated as hedging instruments: | Interest rate swap | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Number of Instruments | instrument | 2 | |||||||||
Derivatives not designated as hedging instruments: | Interest rate caps | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Number of Instruments | instrument | 4 | 2 |
Mortgage Notes Payable (Mortgag
Mortgage Notes Payable (Mortgage Notes) (Details) $ in Thousands | Jun. 30, 2017USD ($)property | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | ||
Effective Interest Rate | 2.85% | 2.15% |
Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 53 | |
Outstanding loan amount | $ 392,638 | $ 143,804 |
Effective Interest Rate | 4.66% | |
Deferred financing costs, net of accumulated amortization | $ (7,000) | (1,516) |
Mortgage premiums and discounts, net | (413) | 466 |
Mortgage notes payable, net | $ 385,225 | 142,754 |
MOB Loan | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 32 | |
Outstanding loan amount | $ 250,000 | 0 |
Effective Interest Rate | 4.38% | |
Medical Center of New Windsor - New Windsor, NY | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Outstanding loan amount | $ 8,539 | 8,602 |
Effective Interest Rate | 6.39% | |
Plank Medical Center - Clifton Park, NY | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Outstanding loan amount | $ 3,389 | 3,414 |
Effective Interest Rate | 6.39% | |
Countryside Medical Arts - Safety Harbor, FL | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Outstanding loan amount | $ 5,851 | 5,904 |
Effective Interest Rate | 4.75% | |
St. Andrews Medical Park, Venice, FL | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 3 | |
Outstanding loan amount | $ 6,466 | 6,526 |
Effective Interest Rate | 4.75% | |
Slingerlands Crossing Phase I - Bethlehem, NY | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Outstanding loan amount | $ 6,541 | 6,589 |
Effective Interest Rate | 6.39% | |
Slingerlands Crossing Phase II - Bethlehem, NY | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Outstanding loan amount | $ 7,615 | 7,671 |
Effective Interest Rate | 6.39% | |
Benedictine Cancer Center - Kingston | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Outstanding loan amount | $ 6,669 | 6,719 |
Effective Interest Rate | 6.39% | |
Aurora Healthcare Center Portfolio - WI | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 6 | |
Outstanding loan amount | $ 30,644 | 30,858 |
Effective Interest Rate | 6.55% | |
Palm Valley Medical Plaza - Goodyear, AZ | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Outstanding loan amount | $ 3,378 | 3,428 |
Effective Interest Rate | 4.15% | |
Medical Center V - Peoria, AZ | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Outstanding loan amount | $ 3,109 | 3,151 |
Effective Interest Rate | 4.75% | |
Courtyard Fountains - Gresham, OR | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Outstanding loan amount | $ 24,597 | 24,820 |
Effective Interest Rate | 3.87% | |
Fox Ridge Senior Living at Bryant - Bryant | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Outstanding loan amount | $ 7,632 | 7,698 |
Effective Interest Rate | 3.98% | |
Fox Ridge Senior Living at Chenal - Little Rock | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Outstanding loan amount | $ 17,407 | 17,540 |
Effective Interest Rate | 3.98% | |
Fox Ridge Senior Living at Parkstone - North Little Rock | Mortgages | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Outstanding loan amount | $ 10,801 | $ 10,884 |
Effective Interest Rate | 3.98% |
Mortgage Notes Payable (Mortg53
Mortgage Notes Payable (Mortgage Principal Payments) (Details) - Mortgages - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
July 1, 2017 — December 31, 2017 | $ 33,760 | |
2,018 | 32,061 | |
2,019 | 13,060 | |
2,020 | 24,279 | |
2,021 | 892 | |
Thereafter | 288,586 | |
Total | $ 392,638 | $ 143,804 |
Mortgage Notes Payable (Narrati
Mortgage Notes Payable (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Real estate investment, at cost relating to notes payable | $ 744,500 | |
Mortgages | ||
Debt Instrument [Line Items] | ||
Outstanding loan amount | 392,638 | $ 143,804 |
Mortgages | MOB Loan | ||
Debt Instrument [Line Items] | ||
Outstanding loan amount | $ 250,000 | $ 0 |
Fixed interest rate | 4.38% | |
Prepayment penalty, first 12 months | 2.00% | |
Prepayment penalty, second 12 months | 1.00% | |
Mortgages | London Interbank Offered Rate (LIBOR) | MOB Loan | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.50% |
Fair Value of Financial Instr55
Fair Value of Financial Instruments (Assets Measured at Fair Value) (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives, net | $ (254) | $ 61 |
Total | 1,069 | |
Quoted Prices in Active Markets Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives, net | 0 | 0 |
Total | 0 | |
Significant Other Observable Inputs Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives, net | (254) | 61 |
Total | 1,069 | |
Significant Unobservable Inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives, net | 0 | $ 0 |
Total | 0 | |
Impaired assets held for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired assets held for sale | 1,323 | |
Impaired assets held for sale | Quoted Prices in Active Markets Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired assets held for sale | 0 | |
Impaired assets held for sale | Significant Other Observable Inputs Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired assets held for sale | 1,323 | |
Impaired assets held for sale | Significant Unobservable Inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired assets held for sale | $ 0 |
Fair Value of Financial Instr56
Fair Value of Financial Instruments (Carrying Amounts and Fair Values of Debt) (Details) - Significant Unobservable Inputs Level 3 - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Gross mortgage notes payable and mortgage premium and discounts, net | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 392,225 | $ 144,270 |
Gross mortgage notes payable and mortgage premium and discounts, net | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 144,261 | |
Credit Facility | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 280,500 | 421,500 |
Credit Facility | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 280,500 | 421,500 |
Fannie Mae Master Credit Facilities | Credit Facility | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 142,116 | 60,000 |
Fannie Mae Master Credit Facilities | Credit Facility | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | $ 142,850 | $ 60,000 |
Derivatives and Hedging Activ57
Derivatives and Hedging Activities (Narrative) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017USD ($)instrument | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)instrument | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($)instrument | Oct. 31, 2016instrument | |
Derivative [Line Items] | ||||||
Loss on non-designated derivatives | $ 43 | $ 0 | $ 107 | $ 0 | ||
Derivatives designated as hedging instruments: | Interest rate swap | ||||||
Derivative [Line Items] | ||||||
Number of Instruments | instrument | 1 | 1 | 0 | |||
Derivatives designated as hedging instruments: | Derivative liabilities, at fair value | Interest rate swap | ||||||
Derivative [Line Items] | ||||||
Derivative liability | $ (296) | $ (296) | $ 0 | |||
Derivatives not designated as hedging instruments: | Interest rate swap | ||||||
Derivative [Line Items] | ||||||
Number of Instruments | instrument | 2 | |||||
Derivatives not designated as hedging instruments: | Non-designated derivatives assets, at fair value | Interest rate swap | ||||||
Derivative [Line Items] | ||||||
Loss on non-designated derivatives | 43 | 100 | ||||
Interest Expense | Derivatives designated as hedging instruments: | Interest Rate Contract | ||||||
Derivative [Line Items] | ||||||
Cash flow hedge reclassification in next twelve months | $ 1,300 | $ 1,300 |
Derivatives and Hedging Activ58
Derivatives and Hedging Activities (Summary of Derivative Instruments) (Details) $ in Thousands | Jun. 30, 2017USD ($)instrument | Dec. 31, 2016USD ($)instrument | Oct. 31, 2016instrument |
Derivatives designated as hedging instruments: | Interest rate swap | |||
Derivative [Line Items] | |||
Number of Instruments | 1 | 0 | |
Notional Amount | $ | $ 250,000 | $ 0 | |
Derivatives not designated as hedging instruments: | Interest rate swap | |||
Derivative [Line Items] | |||
Number of Instruments | 2 | ||
Derivatives not designated as hedging instruments: | Interest rate caps | |||
Derivative [Line Items] | |||
Number of Instruments | 4 | 2 | |
Notional Amount | $ | $ 142,116 | $ 60,000 |
Derivatives and Hedging Activ59
Derivatives and Hedging Activities (Derivatives Included in AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivative [Line Items] | ||||
Amount of loss recognized in accumulated other comprehensive loss on designated derivatives (effective portion) | $ (296) | $ 0 | $ (296) | $ 0 |
Derivatives designated as hedging instruments: | Interest rate swap | ||||
Derivative [Line Items] | ||||
Amount of loss recognized in accumulated other comprehensive loss on designated derivatives (effective portion) | $ (296) | $ 0 | $ (296) | $ 0 |
Derivatives and Hedging Activ60
Derivatives and Hedging Activities (Balance Sheet Classification) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Derivative liabilities, at fair value | Derivatives designated as hedging instruments: | Interest rate swap | ||
Derivative [Line Items] | ||
Derivative liability | $ (296) | $ 0 |
Derivative assets, at fair value | Derivatives not designated as hedging instruments: | Interest rate caps | ||
Derivative [Line Items] | ||
Derivative asset | $ 42 | $ 61 |
Common Stock (Schedule of Stock
Common Stock (Schedule of Stock by Class) (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 01, 2017 | Apr. 30, 2013 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Dec. 31, 2016 | Jan. 26, 2016 |
Class of Stock [Line Items] | |||||||||
Common stock, shares outstanding (in shares) | 89,577,910 | 89,577,910 | 89,577,910 | 89,368,899 | |||||
Proceeds from issuance of common stock | $ 2,200,000 | ||||||||
Common stock dividends (in usd per share) | $ 1.45 | $ 1.70 | $ 0.36 | $ 0.43 | $ 0.78 | $ 0.85 | |||
Common stock issued through distribution reinvestment plan (in shares) | 1,500,000 | ||||||||
Common stock issued through distribution reinvestment plan | $ 32,944 | $ 37,839 | |||||||
Percentage of weighted average outstanding stock for fiscal semester | 2.50% | ||||||||
Percentage of weighted average outstanding stock for fiscal year | 5.00% | ||||||||
One Year | |||||||||
Class of Stock [Line Items] | |||||||||
Share repurchase price percent | 92.50% | 92.50% | 92.50% | ||||||
One Year | Maximum | |||||||||
Class of Stock [Line Items] | |||||||||
Share repurchase price (in usd per share) | $ 23.13 | $ 23.13 | $ 23.13 | ||||||
Share repurchase price percent | 92.50% | 92.50% | 92.50% | ||||||
Two Years | |||||||||
Class of Stock [Line Items] | |||||||||
Share repurchase price percent | 95.00% | 95.00% | 95.00% | ||||||
Two Years | Maximum | |||||||||
Class of Stock [Line Items] | |||||||||
Share repurchase price (in usd per share) | $ 23.75 | $ 23.75 | $ 23.75 | ||||||
Share repurchase price percent | 95.00% | 95.00% | 95.00% | ||||||
Three Years | |||||||||
Class of Stock [Line Items] | |||||||||
Share repurchase price percent | 97.50% | 97.50% | 97.50% | ||||||
Three Years | Maximum | |||||||||
Class of Stock [Line Items] | |||||||||
Share repurchase price (in usd per share) | $ 24.38 | $ 24.38 | $ 24.38 | ||||||
Share repurchase price percent | 97.50% | 97.50% | 97.50% | ||||||
Four Years | |||||||||
Class of Stock [Line Items] | |||||||||
Share repurchase price percent | 100.00% | 100.00% | 100.00% | ||||||
Four Years | Maximum | |||||||||
Class of Stock [Line Items] | |||||||||
Share repurchase price (in usd per share) | $ 25 | $ 25 | $ 25 | ||||||
Share repurchase price percent | 100.00% | 100.00% | 100.00% | ||||||
Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
DRIP share price (in usd per share) | $ 23.75 | $ 23.75 | $ 23.75 | ||||||
DRIP share price, percentage of IPO | 95.00% | 95.00% | 95.00% |
Common Stock (Cumulative Share
Common Stock (Cumulative Share Repurchases) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 51 Months Ended | 57 Months Ended | ||
Jul. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Jun. 30, 2017 | |
Class of Stock [Line Items] | |||||||
Number of Shares Repurchased (in shares) | 14,000 | 1,300,000 | 1,287,045 | 975,030 | 2,262,075 | ||
Weighted-Average Price per Share (in usd per share) | $ 24.02 | $ 21.61 | $ 21.64 | $ 23.73 | $ 22.54 | ||
Common stock repurchases | $ 331,800 | $ 27,500,000 | $ 27,851,000 | $ 12,184,000 | |||
Rejected share repurchases (in shares) | 2,300,000 | ||||||
Rejected share repurchases | $ 48,700,000 | ||||||
Rejected share repurchases, average cost per share (in usd per share) | $ 21.27 | ||||||
Repurchase requests approved following death or qualifying disability of stockholder (in shares) | 263,460 | ||||||
Repurchase requests approved following death or qualifying disability of stockholder | $ 5,700,000 | ||||||
Repurchase requests approved following death or qualifying disability of stockholder (in usd per share) | $ 21.46 | ||||||
Subsequent Event | |||||||
Class of Stock [Line Items] | |||||||
Percentage approved | 100.00% |
Related Party Transactions an63
Related Party Transactions and Arrangements (Narrative) (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Common stock, shares outstanding (in shares) | 89,577,910 | 89,368,899 |
Limited partner units (in units) | 90 | 90 |
Tax Depreciation Deduction | Advisor | ||
Related Party Transaction [Line Items] | ||
Excess depreciation deductions maximum | $ 10 | |
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 an64
Related Party Transactions and Arrangements (Purchase Agreement) (Details) - American Realty Capital Healthcare Trust III | Jun. 16, 2017USD ($)property | Jun. 17, 2017USD ($) |
Related Party Transaction [Line Items] | ||
Number of properties purchased | property | 19 | |
Purchase price | $ 120,000,000 | |
Escrow deposit | $ 6,000,000 | |
Installment period | 14 months | |
Early termination fee | $ 200,000 | |
Phillip Center Loan | ||
Related Party Transaction [Line Items] | ||
Debt assumed in purchase agreement | $ 4,900,000 |
Related Party Transactions an65
Related Party Transactions and Arrangements (Fees Paid in Connection With the Operations of the Company) (Details) - USD ($) | Feb. 17, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | May 12, 2015 | Apr. 01, 2015 |
Related Party Transaction [Line Items] | |||||||
Equity instruments, net of selling commissions (in usd per share) | $ 22.50 | $ 22.50 | $ 22.50 | ||||
Advisor | |||||||
Related Party Transaction [Line Items] | |||||||
Shares approved for issuance (in shares) | 359,250 | ||||||
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] | |||||||
Acquisition fees as a percentage of benchmark | 1.00% | 1.00% | |||||
Reimbursed fees to related party, percentage of benchmark | 0.50% | 0.50% | |||||
Related party transaction, total one-time operating fees earned by related party, percentage of benchmark, fee cap | 4.50% | 4.50% | |||||
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] | |||||||
Acquisition fees as a percentage of benchmark | 1.00% | 1.00% | |||||
Reimbursed fees to related party, percentage of benchmark | 0.50% | 0.50% | |||||
Related party transaction, total one-time operating fees earned by related party, percentage of benchmark, fee cap | 4.50% | 4.50% | |||||
American Realty Capital Healthcare Advisors, LLC | Contract Purchase Price, All Assets Acquired | Advisor | |||||||
Related Party Transaction [Line Items] | |||||||
Acquisition fees and financing coordination fees, fee cap earned by related party, percentage of benchmark | 1.50% | 1.50% | |||||
American Realty Capital Healthcare Advisors, LLC | Amount Available or Outstanding Under Financing Arrangement | Advisor | |||||||
Related Party Transaction [Line Items] | |||||||
Financing coordination fees | 0.75% | 0.75% | |||||
American Realty Capital Healthcare Advisors, LLC | Pre-tax Non-compounded Return on Capital Contribution | Advisor | |||||||
Related Party Transaction [Line Items] | |||||||
Cumulative capital investment return to investors as a percentage of benchmark | 6.00% | 6.00% | |||||
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 | Average Invested Assets | Advisor | |||||||
Related Party Transaction [Line Items] | |||||||
Operating expenses as a percentage of benchmark | 2.00% | 2.00% | |||||
Maximum | American Realty Capital Healthcare Advisors, LLC | Net Income, Excluding Additions to Non-cash Reserves and Gains on Sales of Assets | Advisor | |||||||
Related Party Transaction [Line Items] | |||||||
Operating expenses as a percentage of benchmark | 25.00% | 25.00% | |||||
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 | Cost of Assets | Advisor | |||||||
Related Party Transaction [Line Items] | |||||||
Asset management fees earned, percentage of benchmark | 0.0625% | ||||||
Second Amended and Restated Advisory Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Term of agreement | 10 years | ||||||
Period of notice of termination | 365 days | ||||||
Percent of board approval required for early termination | 67.00% | ||||||
Period to terminate early with board approval | 45 days | ||||||
Second Amended and Restated Advisory Agreement | American Realty Capital Healthcare Advisors, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Period to terminate with approval with Advisor | 60 days | ||||||
Monthly Base Management Fee | American Realty Capital Healthcare Advisors, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Transaction amount | $ 1,625,000 | ||||||
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 | $ 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 | $ 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 | $ 1,500,000 | $ 800,000 | $ 2,800,000 | $ 1,600,000 |
Related Party Transactions an66
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 | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Total related party operation fees and reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | $ 7,381 | $ 6,230 | $ 14,274 | $ 12,540 | |
Expenses forgiven | 0 | 0 | 0 | 0 | |
Payable (Receivable) | 685 | 685 | $ 862 | ||
Acquisition cost reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 22 | 0 | 22 | 0 | |
Expenses forgiven | 0 | 0 | 0 | 0 | |
Payable (Receivable) | 0 | 0 | 0 | ||
Asset management fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 4,875 | 4,397 | 9,439 | 8,781 | |
Expenses forgiven | 0 | 0 | 0 | 0 | |
Payable (Receivable) | 14 | 14 | 0 | ||
Property management and leasing fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 762 | 775 | 1,499 | 1,546 | |
Expenses forgiven | 0 | 0 | 0 | 0 | |
Payable (Receivable) | 45 | 45 | (163) | ||
Transfer agent and other professional services | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 1,592 | 906 | 3,034 | 1,909 | |
Expenses forgiven | 0 | 0 | 0 | 0 | |
Payable (Receivable) | 626 | 626 | 1,025 | ||
Distributions on Class B Units | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 130 | 152 | 280 | 304 | |
Expenses forgiven | 0 | $ 0 | 0 | $ 0 | |
Payable (Receivable) | $ 0 | $ 0 | $ 0 |
Related Party Transactions an67
Related Party Transactions and Arrangements (Fees and Participations Paid in Connection with the Liquidation or Listing of the Company's Real Estate Assets) (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
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] | |
Distribution upon nonrenewal of advisory agreement | 15.00% |
American Realty Capital Healthcare Advisors, LLC | Pre-tax Non-compounded Return on Capital Contribution | Advisor | |
Related Party Transaction [Line Items] | |
Subordinated performance fee as a percentage of benchmark | 15.00% |
Cumulative capital investment return to investors as a percentage of benchmark | 6.00% |
Maximum | American Realty Capital Healthcare Advisors, LLC | Aggregate Total Return of Year Fee is Incurred | Advisor | |
Related Party Transaction [Line Items] | |
Subordinated performance fee earned by related party, fee cap | 10.00% |
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% |
Brokerage Commission Fees | Option One | Maximum | American Realty Capital Healthcare Advisors, LLC | Contract Sales Price | Advisor | |
Related Party Transaction [Line Items] | |
Real estate commissions as a percentage of benchmark | 2.00% |
Brokerage Commission Fees | Option Two | Maximum | American Realty Capital Healthcare Advisors, LLC | Contract Sales Price | Advisor | |
Related Party Transaction [Line Items] | |
Real estate commissions as a percentage of benchmark | 50.00% |
Real Estate Commissions | Maximum | American Realty Capital Healthcare Advisors, LLC | Contract Sales Price | Advisor | |
Related Party Transaction [Line Items] | |
Real estate commissions 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 |
Subject Fees (Transition Fee Not in Excess of the Product) | |
Related Party Transaction [Line Items] | |
Fee multiplier | 4 |
Subject Fees | |
Related Party Transaction [Line Items] | |
Fee multiplier | 4.5 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) | Aug. 08, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Aug. 31, 2017 |
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 | ||
Restricted Share Plan | Unvested Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted automatically upon election to board of directors, in shares | 1,333 | 1,333 | ||||
Restricted share vesting period | 5 years | |||||
Periodic vesting percentage | 20.00% | 20.00% | ||||
Maximum authorized amount as a percentage of shares authorized | 5.00% | |||||
Number of shares authorized, in shares | 3,400,000 | 3,400,000 | ||||
Nonvested awards, compensation cost not yet recognized | $ 100,000 | $ 100,000 | ||||
Nonvested awards, compensation cost not yet recognized, period for recognition | 3 years 7 months 15 days | |||||
Share-based compensation expense | $ 13,000 | $ 15,000 | $ 27,000 | $ 30,000 | ||
Subsequent Event | Unvested Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Benchmark for RSP issuance (in shares) | $ 30,000 | |||||
Restricted share vesting period | 5 years | |||||
Subsequent Event | Restricted Share Plan | Unvested Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Benchmark for RSP issuance (in shares) | $ 30,000 |
Share-Based Compensation (Summa
Share-Based Compensation (Summary of Activity) (Details) - Restricted Share Plan - Unvested Restricted Stock | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning Balance, Unvested (in shares) | shares | 9,921 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (800) |
Forfeitures (in shares) | shares | 0 |
Ending Balance, Unvested (in shares) | shares | 9,121 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning Balance, Unvested, Weighted-Average Issue Price (in usd per share) | $ / shares | $ 22.42 |
Granted, Weighted-Average Issue Price (in usd per share) | $ / shares | 0 |
Vested, Weighted-Average Issue Price (in usd per share) | $ / shares | 22.50 |
Forfeitures, Weighted-Average Issued (in usd per share) | $ / shares | 0 |
Ending Balance, Unvested, Weighted-Average Issue Price (in usd per share) | $ / shares | $ 22.42 |
Accumulated Other Comprehensi70
Accumulated Other Comprehensive Loss (Summary of Changes in AOCI) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | $ 1,495,456 |
Ending balance | 1,419,544 |
Unrealized loss on designated derivative | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | 0 |
Other comprehensive loss, before reclassifications | (296) |
Ending balance | $ (296) |
Non-controlling Interests (Narr
Non-controlling Interests (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Nov. 30, 2014 | |
Noncontrolling Interest [Line Items] | ||||||
Limited partner units (in units) | 90 | 90 | 90 | |||
Distributions to non-controlling interest holders | $ 200 | $ 200 | $ 346 | $ 345 | ||
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 ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Noncontrolling Interest [Line Items] | |||||
Third Party Net Investment Amount | $ 8,460,000 | $ 8,460,000 | $ 8,870,000 | ||
Net Real Estate Assets Subject to Investment Arrangement | 2,057,980,000 | 2,057,980,000 | 2,114,235,000 | ||
Mortgage Notes Payable Subject to Investment Arrangement | 385,225,000 | 385,225,000 | 142,754,000 | ||
Distributions | 377,000 | ||||
Non-controlling Interests | |||||
Noncontrolling Interest [Line Items] | |||||
Distributions | 377,000 | ||||
Plaza Del Rio Medical Office Campus Portfolio - Peoria, AZ | |||||
Noncontrolling Interest [Line Items] | |||||
Distributions | 52,000 | $ 0 | |||
Plaza Del Rio Medical Office Campus Portfolio - Peoria, AZ | Non-controlling Interests | |||||
Noncontrolling Interest [Line Items] | |||||
Third Party Net Investment Amount | $ 406,000 | $ 406,000 | |||
Non-controlling ownership percentage | 4.10% | 4.10% | |||
Net Real Estate Assets Subject to Investment Arrangement | $ 10,198,000 | $ 10,198,000 | 10,429,000 | ||
Mortgage Notes Payable Subject to Investment Arrangement | 0 | $ 0 | $ 0 | ||
Distributions | $ 52,000 | $ 0 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||||||
Net loss attributable to stockholders | $ (4,716) | $ (3,000) | $ (10,855) | $ (4,555) | ||
Basic and diluted weighted-average shares outstanding (in shares) | 89,335,489 | 87,465,569 | 89,486,742 | 87,062,123 | ||
Basic and diluted net loss per share (in usd per share) | $ (0.05) | $ (0.03) | $ (0.12) | $ (0.05) | ||
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) | 774,782 | 775,863 | 774,907 | 776,224 | ||
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) | 9,534 | 10,615 | 9,659 | 10,976 | ||
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) | 9,121 | 9,121 | 9,921 | 9,598 | ||
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) | Jun. 08, 2017property |
Transfer of Operations | |
Segment Reporting Information [Line Items] | |
Number of properties purchased | 12 |
Segment Reporting (Reconciliati
Segment Reporting (Reconciliation of Segment Activity) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)segment | Jun. 30, 2016USD ($)segment | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 3 | 3 | ||
Revenues: | ||||
Rental income | $ 24,081 | $ 26,412 | $ 48,103 | $ 53,004 |
Operating expense reimbursements | 3,886 | 3,772 | 7,990 | 7,481 |
Resident services and fee income | 47,799 | 45,454 | 94,288 | 90,656 |
Total revenues | 75,766 | 75,638 | 150,381 | 151,141 |
Property operating and maintenance | 44,360 | 40,694 | 86,971 | 79,486 |
Net operating income | 31,406 | 34,944 | 63,410 | 71,655 |
Contingent purchase price consideration | 0 | 219 | 0 | 225 |
Impairment charges | 0 | (389) | (35) | (389) |
Operating fees to related parties | (5,637) | (5,172) | (10,938) | (10,327) |
Acquisition and transaction related | (1,743) | (2,059) | (4,588) | (2,101) |
General and administrative | (3,419) | (2,416) | (7,576) | (6,403) |
Depreciation and amortization | (19,339) | (24,283) | (39,822) | (48,898) |
Interest expense | (6,588) | (4,876) | (12,070) | (9,860) |
Gain on sale of real estate investment | 438 | 0 | 438 | 0 |
Interest and other income | 2 | 21 | 3 | 43 |
Loss on non-designated derivatives | (43) | 0 | (107) | 0 |
Income tax benefit | 202 | 992 | 397 | 1,475 |
Net loss attributable to non-controlling interests | 5 | 19 | 33 | 25 |
Net loss attributable to stockholders | (4,716) | (3,000) | (10,855) | (4,555) |
Medical Office Buildings | ||||
Revenues: | ||||
Rental income | 16,648 | 16,517 | 32,996 | 33,119 |
Operating expense reimbursements | 3,789 | 3,751 | 7,574 | 7,428 |
Resident services and fee income | 0 | 0 | 0 | 0 |
Total revenues | 20,437 | 20,268 | 40,570 | 40,547 |
Property operating and maintenance | 6,146 | 5,896 | 11,881 | 11,667 |
Net operating income | 14,291 | 14,372 | 28,689 | 28,880 |
Triple-Net Leased Healthcare Facilities | ||||
Revenues: | ||||
Rental income | 7,430 | 9,894 | 15,101 | 19,884 |
Operating expense reimbursements | 97 | 21 | 416 | 53 |
Resident services and fee income | 0 | 0 | 0 | 0 |
Total revenues | 7,527 | 9,915 | 15,517 | 19,937 |
Property operating and maintenance | 4,514 | 3,121 | 9,280 | 3,757 |
Net operating income | 3,013 | 6,794 | 6,237 | 16,180 |
Seniors Housing Communities | ||||
Revenues: | ||||
Rental income | 3 | 1 | 6 | 1 |
Operating expense reimbursements | 0 | 0 | 0 | 0 |
Resident services and fee income | 47,799 | 45,454 | 94,288 | 90,656 |
Total revenues | 47,802 | 45,455 | 94,294 | 90,657 |
Property operating and maintenance | 33,700 | 31,677 | 65,810 | 64,062 |
Net operating income | $ 14,102 | $ 13,778 | $ 28,484 | $ 26,595 |
Segment Reporting (Reconcilia76
Segment Reporting (Reconciliation of Segment Activity to Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Real estate investments, at cost: | ||||
Investments in real estate: | $ 2,057,980 | $ 2,114,235 | ||
Construction in progress | 76,021 | 70,055 | ||
Cash and cash equivalents | 158,127 | 29,225 | $ 40,645 | $ 24,474 |
Restricted cash | 4,849 | 3,962 | ||
Assets held for sale | 37,822 | 0 | ||
Derivative assets, at fair value | 42 | 61 | ||
Straight-line rent receivable, net | 13,512 | 12,026 | ||
Prepaid expenses and other assets | 22,181 | 22,073 | ||
Deferred costs, net | 13,087 | 12,123 | ||
Total assets | 2,307,600 | 2,193,705 | ||
Land related to property under construction | 10,000 | 10,000 | ||
Medical Office Buildings | ||||
Real estate investments, at cost: | ||||
Investments in real estate: | 783,590 | 788,023 | ||
Triple-Net Leased Healthcare Facilities | ||||
Real estate investments, at cost: | ||||
Investments in real estate: | 298,176 | 418,819 | ||
Seniors Housing Communities | ||||
Real estate investments, at cost: | ||||
Investments in real estate: | $ 900,193 | $ 837,338 |
Segment Reporting (Reconcilia77
Segment Reporting (Reconciliation of Capital Expenditures by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | $ 3,313 | $ 3,428 | ||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | $ 2,944 | $ 1,615 | 4,085 | 3,428 |
Operating Segments | Medical Office Buildings | ||||
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | 1,041 | 777 | 1,594 | 1,441 |
Operating Segments | Triple-Net Leased Healthcare Facilities | ||||
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | 0 | 4 | 0 | 103 |
Operating Segments | Seniors Housing Communities | ||||
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | $ 1,903 | $ 834 | $ 2,491 | $ 1,884 |
Commitments and Contingencies78
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense | $ 200 | $ 400 | ||
Interest expense | $ 21 | $ 21 | $ 42 | $ 42 |
Commitments and Contingencies79
Commitments and Contingencies (Schedule of Future Minimum Rental Payments) (Details) $ in Thousands | Jun. 30, 2017USD ($) |
Operating Leases | |
July 1, 2017 — December 31, 2017 | $ 406 |
2018, Operating Leases | 668 |
2019, Operating Leases | 673 |
2020, Operating Leases | 671 |
2021, Operating Leases | 658 |
Thereafter, Operating Leases | 32,571 |
Total, Operating Leases | 35,647 |
Capital Leases | |
July 1, 2017 — December 31, 2017 | 38 |
2018, Capital Leases | 78 |
2019, Capital Leases | 80 |
2020, Capital Leases | 82 |
2021, Capital Leases | 84 |
Thereafter, Capital Leases | 7,764 |
Total, Capital Leases | 8,126 |
Interest, Capital Leases | (3,308) |
Total present value of minimum lease payments | $ 4,818 |
Commitments and Contingencies80
Commitments and Contingencies (Development Project Funding) (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 | Aug. 31, 2015 |
Long-term Purchase Commitment [Line Items] | |||
Asset purchase and development agreement | $ 82,000,000 | ||
Construction in progress | $ 66,021,000 | $ 60,055,000 | |
Land | |||
Long-term Purchase Commitment [Line Items] | |||
Construction in progress | 10,000,000 | ||
Construction in Progress | |||
Long-term Purchase Commitment [Line Items] | |||
Construction in progress | $ 63,600,000 | ||
Credit Facility | |||
Long-term Purchase Commitment [Line Items] | |||
Maximum borrowing capacity | $ 2,700,000 | ||
Stated rate | 7.00% |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) | Aug. 08, 2017USD ($) | Jul. 13, 2017USD ($)ft²leaserenewal_option | Jul. 31, 2017 | Jun. 30, 2017USD ($)ft²$ / sharesshares | Apr. 07, 2017ft² |
Subsequent Event [Line Items] | |||||
Rentable square feet | ft² | 8,500,000 | 77,000 | |||
Repurchase requests approved following death or qualifying disability of stockholder (in shares) | shares | 263,460 | ||||
Repurchase requests approved following death or qualifying disability of stockholder | $ 5,700,000 | ||||
Repurchase requests approved following death or qualifying disability of stockholder (in usd per share) | $ / shares | $ 21.46 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Percentage approved | 100.00% | ||||
Subsequent Event | RSP | |||||
Subsequent Event [Line Items] | |||||
Benchmark for RSP issuance (in shares) | $ 30,000 | ||||
Vesting period | 5 years | ||||
Subsequent Event | RSP | Year One | |||||
Subsequent Event [Line Items] | |||||
Vesting right percentages | 20.00% | ||||
Subsequent Event | RSP | Year Two | |||||
Subsequent Event [Line Items] | |||||
Vesting right percentages | 20.00% | ||||
Subsequent Event | RSP | Year Three | |||||
Subsequent Event [Line Items] | |||||
Vesting right percentages | 20.00% | ||||
Subsequent Event | RSP | Year Four | |||||
Subsequent Event [Line Items] | |||||
Vesting right percentages | 20.00% | ||||
Subsequent Event | RSP | Year Five | |||||
Subsequent Event [Line Items] | |||||
Vesting right percentages | 20.00% | ||||
Subsequent Event | Canton, GA | Medical Office Buildings | |||||
Subsequent Event [Line Items] | |||||
Purchase price | $ 13,500,000 | ||||
Rentable square feet | ft² | 38,100 | ||||
Leased percentage | 100.00% | ||||
Number of leases | lease | 2 | ||||
Renewal options | renewal_option | 1 | ||||
Renewal option term | 5 years |