Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018 | |
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 | |
Entity Emerging Growth Company | true | |
Entity Small Business | false | |
Entity Ex Transition Period | true | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 91,374,181 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Real estate investments, at cost: | ||
Land | $ 202,720 | $ 201,427 |
Buildings, fixtures and improvements | 1,957,560 | 1,955,940 |
Construction in progress | 78,692 | 72,007 |
Acquired intangible assets | 255,993 | 256,678 |
Total real estate investments, at cost | 2,494,965 | 2,486,052 |
Less: accumulated depreciation and amortization | (361,906) | (309,711) |
Total real estate investments, net | 2,133,059 | 2,176,341 |
Cash and cash equivalents | 52,109 | 94,177 |
Restricted cash | 17,097 | 8,411 |
Assets held for sale | 79,995 | 37,822 |
Derivative assets, at fair value | 9,271 | 2,550 |
Straight-line rent receivable, net | 16,178 | 15,327 |
Prepaid expenses and other assets (including $68 due from related parties as of September 30, 2018) | 30,302 | 22,099 |
Deferred costs, net | 12,904 | 15,134 |
Total assets | 2,350,915 | 2,371,861 |
LIABILITIES AND EQUITY | ||
Mortgage notes payable, net | 462,745 | 406,630 |
Credit facilities | 549,022 | 534,869 |
Market lease intangible liabilities, net | 17,579 | 18,829 |
Accounts payable and accrued expenses (including $732 and $1,637 due to related parties as of September 30, 2018 and December 31, 2017, respectively) | 40,981 | 38,112 |
Deferred rent | 6,242 | 6,201 |
Distributions payable | 6,381 | 11,161 |
Total liabilities | 1,082,950 | 1,015,802 |
Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding as of September 30, 2018 and December 31, 2017 | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized, 91,608,625 and 91,002,766 shares of common stock issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 917 | 910 |
Additional paid-in capital | 2,024,460 | 2,009,197 |
Accumulated other comprehensive income | 9,017 | 2,473 |
Accumulated deficit | (774,441) | (665,026) |
Total stockholders' equity | 1,259,953 | 1,347,554 |
Non-controlling interests | 8,012 | 8,505 |
Total equity | 1,267,965 | 1,356,059 |
Total liabilities and equity | $ 2,350,915 | $ 2,371,861 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Due from related parties | $ 68 | |
Due to affiliates | $ 732 | $ 1,637 |
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) | 91,605,625 | 91,002,766 |
Common stock, shares outstanding (in shares) | 91,608,625 | 91,002,766 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Rental income | $ 25,686 | $ 23,118 | $ 76,513 | $ 71,221 |
Total revenues | 90,191 | 79,072 | 270,586 | 229,453 |
Operating expenses: | ||||
Property operating and maintenance | 59,298 | 48,443 | 166,161 | 135,414 |
Impairment charges | 17,837 | 18,958 | 18,570 | 18,993 |
Operating fees to related parties | 5,743 | 5,635 | 17,233 | 16,573 |
Acquisition and transaction related | 40 | (261) | 333 | 4,327 |
General and administrative | 4,441 | 3,540 | 12,705 | 11,116 |
Depreciation and amortization | 20,466 | 19,089 | 62,099 | 58,911 |
Total expenses | 107,825 | 95,404 | 277,101 | 245,334 |
Operating loss | (17,634) | (16,332) | (6,515) | (15,881) |
Other income (expense): | ||||
Interest expense | (12,597) | (8,838) | (35,962) | (20,908) |
Interest and other income | 16 | 302 | 21 | 305 |
Gain on sale of real estate investment | 0 | 0 | 0 | 438 |
Gain (loss) on non-designated derivatives | 18 | (22) | 46 | (129) |
Total other expenses | (12,563) | (8,558) | (35,895) | (20,294) |
Loss before income taxes | (30,197) | (24,890) | (42,410) | (36,175) |
Income tax benefit (expense) | 550 | 652 | (225) | 1,049 |
Net loss | (29,647) | (24,238) | (42,635) | (35,126) |
Net loss attributable to non-controlling interests | 40 | 102 | 87 | 135 |
Net loss attributable to stockholders | (29,607) | (24,136) | (42,548) | (34,991) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on designated derivative | 998 | 172 | 6,544 | (124) |
Comprehensive loss attributable to stockholders | $ (28,609) | $ (23,964) | $ (36,004) | $ (35,115) |
Basic and diluted weighted-average shares outstanding (in shares) | 90,203,311 | 89,821,799 | 90,983,620 | 89,599,655 |
Basic and diluted net loss per share (in usd per share) | $ (0.33) | $ (0.27) | $ (0.47) | $ (0.39) |
Distributions declared per share (in usd per share) | $ 0.2164671871 | $ 0.37 | $ 0.73 | $ 1.15 |
Operating expense reimbursements | ||||
Revenues: | ||||
Revenue | $ 4,579 | $ 3,906 | $ 15,377 | $ 11,896 |
Resident services and fee income | ||||
Revenues: | ||||
Revenue | $ 59,926 | $ 52,048 | $ 178,696 | $ 146,336 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands | Total | Total Stockholders' Equity | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Non-controlling Interests |
Beginning Balance (in shares) at Dec. 31, 2017 | 91,002,766 | ||||||
Beginning balance at Dec. 31, 2017 | $ 1,356,059 | $ 1,347,554 | $ 910 | $ 2,009,197 | $ 2,473 | $ (665,026) | $ 8,505 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Common stock issued through distribution reinvestment plan (in shares) | 1,400,000 | 1,365,726 | |||||
Common stock issued through distribution reinvestment plan | $ 28,551 | 28,551 | $ 14 | 28,537 | |||
Common stock repurchases (in shares) | (759,867) | ||||||
Common stock repurchases | (14,202) | (14,202) | $ (7) | (14,195) | 0 | ||
Share-based compensation | 921 | 921 | 921 | ||||
Distributions declared | (66,867) | (66,867) | (66,867) | ||||
Distributions to non-controlling interest holders | (406) | (406) | |||||
Other comprehensive income | 6,544 | 6,544 | 6,544 | ||||
Net loss | (42,635) | (42,548) | (42,548) | (87) | |||
Ending Balance (in shares) at Sep. 30, 2018 | 91,608,625 | ||||||
Ending balance at Sep. 30, 2018 | $ 1,267,965 | $ 1,259,953 | $ 917 | $ 2,024,460 | $ 9,017 | $ (774,441) | $ 8,012 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jan. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||||||
Net loss | $ (29,647) | $ (24,238) | $ (42,635) | $ (35,126) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||
Depreciation and amortization | 62,099 | 58,911 | ||||
Amortization of deferred financing costs | 6,448 | 4,271 | ||||
Amortization of mortgage premiums and discounts, net | (200) | (1,279) | ||||
Amortization of market lease and other intangibles, net | 205 | 222 | ||||
Bad debt expense | 9,227 | 9,945 | ||||
Share-based compensation | 921 | 144 | ||||
Gain on sale of real estate investments, net | 0 | (438) | ||||
(Gain) loss on non-designated derivatives | (46) | 129 | ||||
Impairment charges | 18,570 | 18,993 | ||||
Changes in assets and liabilities: | ||||||
Straight-line rent receivable | (6,302) | (4,537) | ||||
Prepaid expenses and other assets | (12,934) | (9,969) | ||||
Due from related party | 14 | 0 | ||||
Accounts payable, accrued expenses and other liabilities | 2,875 | 7,216 | ||||
Deferred rent | 41 | (488) | ||||
Net cash provided by operating activities | 38,283 | 47,994 | ||||
Cash flows from investing activities: | ||||||
Investments in real estate | (73,536) | (61,788) | ||||
Deposits paid for unconsummated acquisitions | 0 | (540) | ||||
Deposits for real estate dispositions | 0 | 1,125 | ||||
Capital expenditures | (6,968) | (5,569) | ||||
Cash received in asset acquisition | 0 | 865 | ||||
Proceeds from sale of real estate | 0 | 757 | ||||
Net cash used in investing activities | (80,504) | (65,150) | ||||
Cash flows from financing activities: | ||||||
Proceeds from credit facilities | 94,153 | 128,116 | ||||
Payments on credit facilities | (80,000) | (187,000) | ||||
Proceeds from mortgage notes payable | 118,700 | 250,000 | ||||
Payments on mortgage notes payable | (62,872) | (34,417) | ||||
Payments for derivative instruments | (131) | (88) | ||||
Payments of deferred financing costs | (3,307) | (8,840) | ||||
Common stock repurchases | $ (8,000) | (14,202) | (33,599) | $ (33,600) | ||
Distributions paid | (43,096) | (57,491) | ||||
Distributions to non-controlling interest holders | (406) | (495) | ||||
Net cash provided by financing activities | 8,839 | 56,186 | ||||
Net change in cash, cash equivalents and restricted cash | (33,382) | 39,030 | ||||
Cash, cash equivalents and restricted cash, beginning of period | $ 102,588 | 102,588 | 33,187 | 33,187 | ||
Cash, cash equivalents and restricted cash, end of period | $ 69,206 | $ 72,217 | 69,206 | 72,217 | $ 102,588 | |
Supplemental disclosures of cash flow information: | ||||||
Cash paid for interest | 31,192 | 18,187 | ||||
Cash paid for income taxes | 328 | 64 | ||||
Non-cash investing and financing activities: | ||||||
Common stock issued through distribution reinvestment plan | 28,551 | 47,342 | ||||
Proceeds from sale of real estate investments payable to non-controlling interest holder | 0 | 605 | ||||
Capital expenditures assumed in asset acquisition | $ 0 | $ 60 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 , the Company owned 196 properties located in 30 states and comprised of 9.3 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. 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 assets. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
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 nine months ended September 30, 2018 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, 2017 , which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 20, 2018 . There have been no significant changes to the Company's significant accounting policies during the nine months ended September 30, 2018 other than the updates described below. Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity ("VIE") for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company's assets and liabilities are held by the OP. Reclassifications Certain prior year amounts have been reclassified to conform with the current year presentation. Revenue Recognition The Company's rental income is primarily related to rent received from tenants in MOBs and triple-net leased healthcare facilities. Rent from tenants in the Company's MOB and triple-net leased healthcare facilities operating segments (as discussed below) is recorded in accordance with the terms of each lease on a straight-line basis over the initial term of the lease. Because many of the leases provide for rental increases at specified intervals, GAAP requires the Company to record a receivable, and include in revenues on a straight-line basis, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation. Cost recoveries from tenants are included in operating expense reimbursement in the period the related costs are incurred, as applicable. Resident services and fee income primarily relates to rent from residents in the Company's Seniors Housing — Operating Properties ("SHOP") held using a structure permitted by the REIT Investment Diversification and Empowerment Act of 2007 ("RIDEA") and to fees for ancillary services performed for SHOP residents. Rental income from residents in the Company's SHOP operating segment is recognized as earned. Residents pay monthly rent that covers occupancy of their unit and basic services, including utilities, meals and some housekeeping services. The terms of the rent are short term in nature, primarily month-to-month. Fees for ancillary services are recorded in the period in which the services are performed. The Company defers the revenue related to lease payments received from tenants and residents in advance of their due dates. The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant's payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is in doubt, the Company records an increase in the allowance for uncollectible accounts on the consolidated balance sheets or records a direct write-off of the receivable in the consolidated statements of operations. Recently Issued Accounting Pronouncements Adopted as of January 1, 2018 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606 ), and has since issued several additional amendments thereto (collectively referred to herein as "ASC 606"). ASC 606 establishes a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Under ASC 606, 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. ASC 606 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. A reporting entity may apply the amendments in ASC 606 using either a modified retrospective approach, by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or a full retrospective approach. The Company adopted this guidance effective January 1, 2018 under the modified retrospective approach and it did not have an impact on the Company's consolidated financial statements. See above for further information on the Company's Revenue Recognition Accounting Policies under ASC 606. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The revised guidance amends the recognition and measurement of financial instruments. The new guidance significantly 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 Company adopted this guidance effective January 1, 2018, using the modified retrospective transition method, and there was no impact to the Company's consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides 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 Company adopted the new guidance on January 1, 2018 and it did not have an impact on its statement of cash flows. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Assets Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which provides guidance related to partial sales of non-financial assets, eliminates rules specifically addressing the sales of real estate, clarifies the definition of in substance non-financial assets, removes the exception to the financial asset derecognition model and clarifies the accounting for contributions of non-financial assets to joint ventures. The Company adopted this guidance effective January 1, 2018 using the modified transition method and it did not have an impact on its financial statements. The Company expects that any future sales of real estate in which the Company retains a non-controlling interest in the property would result in the full gain amount being recognized at the time of the partial sale. Historically, the Company has not retained any interest in properties it has sold. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, which provides 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, all do not change as a result of the modification. The Company adopted this guidance effective January 1, 2018 using the modified retrospective transition method and it did not have an impact on its consolidated financial statements. The Company expects that any future modifications to the Company's issued share-based awards will be accounted for using modification accounting, unless the modification meets all of the exception criteria noted above. As a result, the modification would be treated as an exchange of the original award for a new award, with any incremental fair value being treated as additional compensation cost. Pending Adoption as of September 30, 2018 In February 2016, the FASB issued ASC 842, which originally stated that companies would be required to bifurcate certain lease revenues between lease and non-lease components, however, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, in July 2018 ("ASU 2018-11"), which allows lessors a practical expedient by class of underlying assets to account for lease and non-lease components as a single lease component if certain criteria are met. Additionally, only incremental direct leasing costs may be capitalized under this new guidance, which is consistent with the Company’s existing policies. ASC 842 originally required a modified retrospective method of adoption, however, ASU 2018-11 indicates that companies may be permitted to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The pronouncement allows some optional practical expedients. From a lessor perspective the Company expects that the new standard will impact the presentation of lease and non-lease components of revenue such as rent, and operating expense reimbursements including common area maintenance, taxes, and insurance from leases for which the Company is a lessor. The Company does not expect this guidance to impact its existing lessor revenue recognition pattern. We expect to elect the practical expedient to account for costs paid by lessees directly to a third-party on a net basis. This reporting will have no impact on our net income. Resident leases within our Seniors Housing — Operating Properties business segment are accounted for as leases but also contain service elements. We expect to elect the practical expedient to account for our resident leases as a single lease component. The Company is a lessee for 19 of its properties for which it has ground leases as of September 30, 2018 . For these leases, the Company 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 new standard requires lessees to apply a dual lease classification 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 intends to take the practical expedients allowed under ASU No. 2018-11 and adopt the new provisions of ASC 842 prospectively on January 1, 2019, therefore, financial information and disclosures under ASC 842 will not be provided for periods prior to January 1, 2019. The Company continuing to evaluate any differences in the timing, measurement, or presentation of lessor revenues as well as the impact of the new lessee accounting model on the Company’s consolidated financial position, results of operations and disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the update requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. The amendments become effective for reporting periods beginning after December 15, 2019. On July 25, 2018, the FASB proposed an amendment to ASU 2016-13 to clarify that operating lease receivables recorded by lessors (including unbilled straight-line rent) are explicitly excluded from the scope of ASU 2016-13. Early adoption is permitted for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) : (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception guidance that changes the method to determine the classification of certain financial instruments with a down round feature as liabilities or equity instruments and clarify existing disclosure requirements for equity-classified instruments. A down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. As a result, a freestanding equity-linked financial instrument no longer would be accounted for as a derivative liability, rather, an entity that presents earnings per share is required to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common stockholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features. The revised guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. Adoption should be applied retrospectively to outstanding financial instruments with a down round feature with a cumulative-effect adjustment to the statement of financial position. The Company is currently evaluating the impact of this new guidance. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The transition guidance provides companies with the option of early adopting the new standard using a modified retrospective transition method in any interim period after issuance of the update, or alternatively requires adoption for fiscal years beginning after December 15, 2018. This adoption method will require the Company to recognize the cumulative effect of initially applying the ASU as an adjustment to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that the Company adopts the update. The Company is currently assessing the potential impacts of this new standard. In July 2018, the FASB issued ASU 2018-07, Compensation- Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting as an amendment and update expanding the scope of Topic 718. The amendment specifies that Topic 718 now applies to all share-based payment transactions, even non-employee awards, in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. Under the new guidance, awards to nonemployees are measured on the grant date, rather than on the earlier of the performance commitment date or the date at which the nonemployee’s performance is complete. Also, the awards would be measured by estimating the fair value of the equity instruments to be issued, rather than the fair value of the goods or services received or the fair value of the equity instruments issued, whichever can be measured more reliably. In addition, entities may use the expected term to measure nonemployee awards or elect to use the contractual term as the expected term, on an award-by-award basis. The new guidance is effective for the Company in annual periods beginning after December 15, 2018, and interim periods within those annual periods. The Company is currently evaluating the impact of this new guidance. |
Real Estate Investments
Real Estate Investments | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate Investments, Net [Abstract] | |
Real Estate Investments | Note 3 — Real Estate Investments The Company owned 196 properties as of September 30, 2018 . The Company invests in MOBs, seniors housing communities and other healthcare-related facilities primarily to expand and diversify its portfolio and revenue base. During the nine months ended September 30, 2018 , the Company, through wholly-owned subsidiaries of the OP, completed its acquisitions of six single tenant MOBs, five multi-tenant MOB, and acquired a parcel of land attached to an existing investment property for an aggregate contract purchase price of $66.7 million . Additionally, the Company incurred construction in progress costs during the period of $6.7 million . The following table presents the allocation of real estate assets acquired and liabilities assumed during the nine months ended September 30, 2018 and 2017 as well as capitalized construction in progress during the nine months ended September 30, 2018 and 2017 : Nine Months Ended September 30, (In thousands) 2018 2017 Real estate investments, at cost: Land $ 7,807 $ 6,960 Buildings, fixtures and improvements 53,614 40,344 Construction in progress 6,685 7,871 Total tangible assets 68,106 55,175 Acquired intangibles: In-place leases (1) 5,440 6,566 Market lease and other intangible assets (1) 276 — Market lease liabilities (1) (286 ) (13 ) Total intangible assets and liabilities 5,430 6,553 Other assets acquired and liabilities assumed in the Asset Acquisition, net (1) — (60 ) Cash paid for acquired real estate investments $ 73,536 $ 61,788 Number of properties purchased 11 4 _______________ (1) Weighted-average remaining amortization periods for in-place leases, an above-market lease and a below-market lease liability acquired were 6.7 years and 8.9 years as of September 30, 2018 and 2017 , respectively. The following table presents future minimum base rental cash payments due to the Company over the next five years and thereafter as of September 30, 2018 . These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to performance thresholds and increases in annual rent based on exceeding certain economic indexes, among other items. (In thousands) Future Minimum October 1, 2018 - December 31, 2018 $ 24,112 2019 93,970 2020 89,151 2021 83,076 2022 75,755 Thereafter 335,900 Total $ 701,964 As of September 30, 2018 and 2017 , the Company did not have any tenants (including for this purpose, all affiliates of such tenants) whose annualized rental income on a straight-line basis represented 10% or greater of total annualized rental income for the portfolio on a straight-line basis. The following table lists the states where the Company had concentrations of properties where annualized rental income on a straight-line basis represented 10% or more of consolidated annualized rental income on a straight-line basis for all properties as of September 30, 2018 and 2017 : September 30, State 2018 2017 Florida 16.6% 17.2% Michigan 13.1% 15.2% Georgia 10.1% 10.3% Pennsylvania 10.1% 10.8% Intangible Assets and Liabilities Acquired intangible assets and liabilities consisted of the following as of the periods presented: September 30, 2018 December 31, 2017 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: In-place leases $ 214,495 $ 141,188 $ 73,307 $ 215,453 $ 130,749 $ 84,704 Market lease assets 30,911 9,467 21,444 30,636 7,853 22,783 Other intangible assets 10,587 1,037 9,550 10,589 838 9,751 Total acquired intangible assets $ 255,993 $ 151,692 $ 104,301 $ 256,678 $ 139,440 $ 117,238 Intangible liabilities: Market lease liabilities $ 26,237 $ 8,658 $ 17,579 $ 25,956 $ 7,127 $ 18,829 The following table discloses amounts recognized within the consolidated statements of operations and comprehensive loss related to amortization of in-place leases and other intangible assets, amortization and accretion of above- and below-market lease assets and liabilities, net and the amortization and accretion of above- and below-market ground leases, for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Amortization of in-place leases and other intangible assets (1) $ 4,632 $ 3,925 $ 14,382 $ 13,491 Amortization and (accretion) of above- and below-market leases, net (2) $ (30 ) $ (64 ) $ (30 ) $ (230 ) Amortization and (accretion) of above- and below-market ground leases, net (3) $ 37 $ 43 $ 110 $ 129 _______________ (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) October 1, 2018 - December 31, 2018 2019 2020 2021 2022 In-place lease assets $ 18,071 $ 14,182 $ 12,180 $ 9,942 $ 8,117 Other intangible assets 153 568 414 414 414 Total to be added to amortization expense $ 18,224 $ 14,750 $ 12,594 $ 10,356 $ 8,531 Above-market lease assets $ (442 ) $ (1,625 ) $ (1,287 ) $ (934 ) $ (583 ) Below-market lease liabilities 461 1,694 1,537 1,387 1,347 Total to be added to rental income $ 19 $ 69 $ 250 $ 453 $ 764 Below-market ground lease assets $ 60 $ 222 $ 222 $ 214 $ 212 Above-market ground lease liabilities (16 ) (65 ) (65 ) (65 ) (63 ) Total to be added to property operating and maintenance expense $ 44 $ 157 $ 157 $ 149 $ 149 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. On November 6, 2018, the Company entered into an amendment to the January 2017 agreement to sell eight of its skilled nursing facility properties in Missouri (the "Missouri SNF Properties") for an aggregate contract purchase price of $27.5 million (the "Amended Missouri SNF PSA"). Under the Amended Missouri SNF PSA, the purchaser is required to close no later than November 30, 2018. The Amended Missouri SNF PSA also provides that the purchasers pay a $4 million non-refundable extension and waiver fee. Although the Company believes the disposition of the Missouri SNF Properties is probable, there can be no assurance that the disposition will be consummated by November 30, 2018, or at all. In connection with the Amended Missouri SNF PSA, the Company recognized an impairment charge of approximately $10.4 million on the Missouri SNF Properties for the three and nine months ended September 30, 2018 which is included on the consolidated statement of operations and comprehensive loss. During the three months ended September 30, 2018 , the Company reconsidered the intended holding period for six MOB properties within the state of New York (the "New York Six MOBs") due to various market conditions and the potential to reinvest in properties generating a higher yield. On July 26, 2018, the Company entered into a purchase and sale agreement for the sale of the New York Six MOBs, for an aggregate contract sale price of approximately $68.0 million . On September 25, 2018, the Company amended the purchase and sale agreement to decrease the aggregate contract sale price to $58.8 million . In connection with this amendment, the Company recognized an impairment charge of approximately $6.2 million on the New York Six MOBs for the three and nine months ended September 30, 2018 , which is included on the consolidated statement of operations and comprehensive loss. Although the Company believes the disposition of the New York Six MOBs is probable, there can be no assurance that the disposition will be consummated, or that we will be able to reinvest the net proceeds in an accretive manner. The following table details the major classes of assets associated with the properties that have been classified as held for sale as of September 30, 2018 and December 31, 2017: (In thousands) September 30, 2018 December 31, 2017 Land $ 7,580 $ 3,131 Buildings, fixtures and improvements 72,415 34,691 Assets held for sale $ 79,995 $ 37,822 Impairment of Held for Use Real Estate Investments As of September 30, 2018 , the Company owned held for use properties for which the Company had reconsidered the projected cash flows due to various performance indicators. As a result, the Company evaluated the impact on its ability to recover the carrying value of such properties based on the expected cash flows over its intended holding period. The Company primarily used an undiscounted cash flow approach to estimate the future cash flows expected to be generated. The Company made certain assumptions in this approach including, among others, the market and economic conditions, expected cash flow projections, intended holding periods and assessments of terminal values. As these factors are difficult to predict and are subject to future events that may alter management's assumptions, the future cash flows estimated by management in its impairment analysis may not be achieved, and actual losses for impairment may be realized in the future. For one of these held for use properties, the Company used a purchase and sale agreement to estimate future cash flows expected to be generated. The Company made certain assumptions in this approach as well, mainly that the sale of these properties would close at this value and within a specified time in the future. There can be no guarantee that the sales of these properties would close under these terms, or at all. As a result of its consideration of impairment, the Company determined that the carrying value of this one held for use property exceeded its estimated undiscounted cash flows and recognized aggregate impairment charges of $1.3 million and $2.0 million which are included on the consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2018 , respectively. The LaSalle Tenant The Company is currently exploring options to replace tenants at four properties in Texas (collectively, the "LaSalle Tenant"). In January 2018, the Company entered into an agreement with the LaSalle Tenant in which the Company agreed to forbear from exercising legal remedies, including staying a lawsuit against the tenant, as long as the tenant pays the amounts due for rent and property taxes on an updated payment schedule pursuant to a forbearance agreement. The LaSalle Tenant is currently in default of the forbearance agreement and owes the Company $2.9 million of rent, property taxes, late fees, and interest receivable thereunder. The Company has the entire receivable balance and related income from the LaSalle Tenant fully reserved as of September 30, 2018 . The Company incurred $3.3 million and $3.6 million of bad debt expense, including straight-line rent write-offs, related to the LaSalle Tenant during the three and nine months ended September 30, 2018 , which is included in property operating and maintenance expense on the consolidated statement of operations. The NuVista Tenants The Company had tenants and former tenants at two of its properties in Florida (collectively, the "NuVista Tenants") that have been in default under their leases since July 2017 and collectively owe the Company $8.0 million of rent, property taxes, late fees, and interest receivable under their leases as of September 30, 2018 . There can be no guarantee on the collectibility of these receivables, and as such, the Company has the entire receivable balance and related income from the NuVista Tenants fully reserved as of September 30, 2018 . The Company also incurred $1.6 million and $5.4 million of bad debt expense related to the NuVista Tenants during the three and nine months ended September 30, 2018 and incurred $2.3 million and $3.3 million of bad debt expense related to the NuVista Tenants during the three and nine months ended September 30, 2017 , respectively which are included in property operating and maintenance expense on the consolidated statement of operations. The NuVista Tenants are related to Palm Health Partners, LLC ("Palm"), the developer of the Company's development property in Jupiter, Florida which is also currently in default to the Company (see Note 16 — Commitments and Contingencies for more information on the status of the relationship with Palm). At one of the properties which is occupied by the NuVista Tenants, located in Wellington, Florida, the Company and the tenant entered into an agreement (the “OTA”) pursuant to which the Company and the tenant agreed to cooperate in transitioning operations at the property to a third party operator selected by the Company. To date, the transition set forth in the OTA has not occurred, and the Company has commenced litigation to enforce the terms of the OTA and, in the alternative, pursue eviction proceedings against the NuVista Tenant and appoint a court ordered receiver in order to replace the NuVista Tenant with a new tenant and operator at the property. The other property, located in Lutz, Florida, transitioned to the SHOP operating segment as of January 1, 2018. In connection with this transition, the Company replaced the NuVista Tenant as a tenant with a taxable REIT subsidiary ("TRS"), and has engaged a third party to operate the property. This structure is permitted by the REIT Investment Diversification and Empowerment Act of 2007, under which a REIT may lease qualified healthcare properties on an arm's length basis to a TRS if the property is operated on behalf of such subsidiary by an entity who qualifies as an eligible independent contractor. During the three months ended September 30, 2018 , the new operator obtained a Medicare license. Prior to the operator obtaining this Medicare license, the Company was unable to bill Medicare for services performed, and therefore, accumulated $6.1 million of Medicare receivables as of September 30, 2018 . The Company expects that $0.5 million of these receivables are not collectible and therefore has reserved them, resulting in bad debt expense during the three and nine months ended September 30, 2018 , which are included in property operating and maintenance expense on the consolidated statement of operations. There can be no assurance as to the collectibility of these Medicare receivables. |
Mortgage Notes Payable
Mortgage Notes Payable | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable | Note 4 — Mortgage Notes Payable, Net The following table reflects the Company's mortgage notes payable as of September 30, 2018 and December 31, 2017 : Outstanding Loan Amount as of Effective Interest Rate as of Portfolio Encumbered Properties (1) September 30, December 31, 2017 September 30, December 31, 2017 Interest Rate Maturity (In thousands) (In thousands) Countryside Medical Arts - Safety Harbor, FL 1 $ 5,712 $ 5,773 5.92 % 4.98 % Variable Apr. 2019 St. Andrews Medical Park - Venice, FL 3 6,313 6,381 5.92 % 4.98 % Variable Apr. 2019 Palm Valley Medical Plaza - Goodyear, AZ 1 3,249 3,327 4.15 % 4.15 % Fixed Jun. 2023 Medical Center V - Peoria, AZ 1 3,000 3,066 4.75 % 4.75 % Fixed Sep. 2023 Courtyard Fountains - Gresham, OR 1 24,024 24,372 3.87 % 3.87 % Fixed Jan. 2020 Fox Ridge Bryant - Bryant, AR 1 7,462 7,565 3.98 % 3.98 % Fixed May 2047 Fox Ridge Chenal - Little Rock, AR 1 17,059 17,270 3.98 % 3.98 % Fixed May 2049 Fox Ridge North Little Rock - North Little Rock, AR 1 10,585 10,716 3.98 % 3.98 % Fixed May 2049 Philip Professional Center - Lawrenceville, GA 2 4,819 4,895 4.00 % 4.00 % Fixed Oct. 2019 Capital One MOB Loan 32 250,000 250,000 4.44 % 4.44 % Fixed (3) Jun. 2022 Bridge Loan 16 20,271 82,000 4.54 % 4.13 % Variable Dec. 2019 Multi-Property CMBS Loan 21 118,700 — 4.60 % — % Fixed May 2028 Gross mortgage notes payable 81 471,194 415,365 4.46 % 4.31 % (2) Deferred financing costs, net of accumulated amortization (7,139 ) (7,625 ) Mortgage premiums and (discounts), net (1,310 ) (1,110 ) Mortgage notes payable, net $ 462,745 $ 406,630 _______________ (1) Does not include real estate assets mortgaged to secure advances under the Fannie Mae Master Credit Facilities (as defined below) or eligible unencumbered real estate assets comprising the borrowing base of the Revolving Credit Facility (as defined in Note 5 — Credit Facilities ). The equity interests and related rights in the Company's wholly owned subsidiaries that directly own or lease the real estate assets comprising the borrowing base have been pledged for the benefit of the lenders thereunder ( see Note 5 — Credit Facilities for additional details). (2) Calculated on a weighted average basis for all mortgages outstanding as of September 30, 2018 . (3) Variable rate loan which is fixed as a result of entering into interest rate swap agreements ( see Note 7 — Derivatives and Hedging Activities for additional details). As of September 30, 2018 , the Company had pledged $1,003.0 million in total real estate investments, at cost, as collateral for its $471.2 million of mortgage notes payable. This real estate is not available to satisfy other debts and obligations unless first satisfying the mortgage notes payable secured by these properties. The Company makes payments of principal and interest, or interest only, depending upon the specific requirements of each mortgage note, on a monthly basis. Some of the Company's mortgage note agreements require compliance with certain property-level financial covenants, including debt service coverage ratios. As of September 30, 2018 , the Company was in compliance with these financial covenants. Multi-Property CMBS Loan On April 10, 2018, the Company, entered into a $118.7 million loan agreement (the “Multi-Property CMBS Loan”) with KeyBank National Association ("Key Bank"). The Multi-Property CMBS Loan requires monthly interest-only payments, with the principal balance due on the maturity date. The Multi-Property CMBS Loan permits KeyBank to securitize the entire Multi-Property CMBS Loan or any portion thereof. At the closing of the Multi-Property CMBS Loan, the net proceeds after accrued interest and closing costs were used to (i) repay approximately $80.0 million of indebtedness under the Revolving Credit Facility, under which 14 of the properties were included as part of the borrowing base prior to the Multi-Property CMBS Loan, (ii) fund approximately $3.8 million in deposits required to be made at closing into reserve accounts required under the loan agreement. The remaining $33.0 million net proceeds available to the Company may be used for general corporate purposes, including future acquisitions. Bridge Loan On December 28, 2017, 23 wholly owned subsidiaries of the OP entered into a loan agreement providing for an $82 million loan (the “Bridge Loan”) with Capital One, as administrative agent and lender. On March 2, 2018, the Company used $64.2 million of advances under a Fannie Mae Master Credit Facility with Capital One, National Association ("Capital One") to prepay a portion of the Bridge Loan ( see Note 5 — Credit Facilities for more information). Concurrent with this prepayment, the seven mortgaged properties that were identified for refinancing at the time the Bridge Loan was entered into, were added to the collateral pool securing the Fannie Mae Master Credit Facility with Capital One. Future Principal Payments The following table summarizes the scheduled aggregate principal payments on mortgage notes payable for the five years subsequent to September 30, 2018 and thereafter: (In thousands) Future Principal Payments October 1, 2018 - December 31, 2018 $ 391 2019 38,348 2020 24,279 2021 892 2022 250,929 Thereafter 156,355 Total $ 471,194 The Company plans on refinancing or exercising extension options for the mortgages due in 2019 prior to their maturity. |
Credit Facilities
Credit Facilities | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Credit Facilities | Note 5 — Credit Facilities The Company had the following credit facilities outstanding as of September 30, 2018 and December 31, 2017 : Outstanding Facility Amount as of Effective Interest Rate Credit Facility Encumbered Properties (1) September 30, December 31, 2017 September 30, December 31, 2017 Interest Rate Maturity (In thousands) (In thousands) Revolving Credit Facility 55 (2) $ 189,700 $ 239,700 4.20 % 3.33 % Variable Mar. 2019 Fannie Mae Master Credit Facilities: Capital One Facility 12 (3) 216,614 152,461 4.56 % 3.88 % Variable (6) Nov. 2026 KeyBank Facility 10 (4) 142,708 142,708 4.61 % 3.89 % Variable (6) Nov. 2026 Total Fannie Mae Master Credit Facilities 359,322 295,169 Total Credit Facilities 77 $ 549,022 $ 534,869 4.44 % (5) 3.63 % (5) _______________ (1) Encumbered as of September 30, 2018 . (2) The equity interests and related rights in the Company's wholly owned subsidiaries that directly own or lease the eligible unencumbered real estate assets comprising the borrowing base of the Revolving Credit Facility have been pledged for the benefit of the lenders thereunder. (3) Secured by first-priority mortgages on 12 of the Company’s seniors housing properties located in Florida, Georgia, Iowa and Michigan as of September 30, 2018 . (4) Secured by first-priority mortgages on 10 of the Company’s seniors housing properties located in Michigan, Missouri, Kansas, California, Florida, Georgia and Iowa as of September 30, 2018 . (5) Calculated on a weighted average basis for all credit facilities outstanding as of September 30, 2018 and December 31, 2017 . (6) Variable rate loan which is capped as a result of entering into interest rate cap agreements ( see Note 7 — Derivatives and Hedging Activities for additional details). Revolving Credit Facility On March 21, 2014, the Company entered into a senior secured revolving credit facility (as amended from time to time, the "Revolving Credit Facility"). The Revolving Credit Facility is secured by a pledged pool of the equity interests and related rights in the Company's wholly owned subsidiaries that directly own or lease the eligible unencumbered real estate assets comprising the borrowing base thereunder. The Revolving Credit Facility allows for committed 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 and at the discretion of the participating lenders, to increase the aggregate borrowings under the Revolving Credit Facility to a maximum of $750.0 million . The Company has the option, to have the Revolving Credit Facility priced at either: (a) LIBOR, plus an applicable margin that ranges, depending on the Company's leverage, from 1.60% to 2.20% ; or (b) the Base Rate (as defined in the Revolving Credit Facility), plus an applicable margin that ranges, depending on the Company's leverage, from 0.35% to 0.95% . The Base Rate is defined in the 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% . At the closing of the Multi-Property CMBS Loan ( see Note 4 — Mortgage Notes Payable, Net ), the net proceeds after accrued interest and closing costs were used primarily to repay approximately $80.0 million of indebtedness under the Revolving Credit Facility, under which 14 of the properties were included as part of the borrowing base prior to the Multi-Property CMBS Loan. During May and September of 2018, the Company added ten and five properties to the borrowing base of the Revolving Credit Facility, respectively. As of September 30, 2018 , $189.7 million was outstanding under the Revolving Credit Facility and the unused borrowing capacity under the Revolving Credit Facility was $32.4 million . Availability of borrowings is based on a pool of eligible otherwise unencumbered real estate assets comprising the borrowing base thereunder. The equity interests and related rights in the Company's wholly owned subsidiaries that directly own or lease the eligible unencumbered real estate assets comprising the borrowing base of the Revolving Credit Facility have been pledged for the benefit of the lenders thereunder. The Revolving Credit Facility requires the Company to meet certain financial covenants. As of September 30, 2018 , the Company was in compliance with the financial covenants under the Revolving Credit Facility. The Company plans on refinancing the Revolving Credit Facility prior to its maturity. 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 "KeyBank Facility") with KeyBank and a master credit facility agreement with Capital One (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 KeyBank 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 (an affiliate of Capital One). Advances made under the Fannie Mae Master Credit Agreements are assigned by Capital One and KeyBank to Fannie Mae at closing for inclusion in Fannie Mae’s Multifamily MBS program. Effective October 31, 2016, in conjunction with the execution of the Fannie Mae Master Credit Facilities, the OP entered into two interest rate cap agreements with an unrelated third party, which caps interest paid on amounts outstanding under the Fannie Mae Master Credit Facilities at a maximum of 3.5% ( see Note 7 — Derivatives and Hedging Activities for additional disclosure regarding the Company's derivatives). 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. During the year ended December 31, 2017, the Company increased its advances under the Capital One Facility and the KeyBank Facility to $152.5 million and $142.7 million , respectively. On March 2, 2018, the Company, increased its advances under the Capital One Facility by $64.2 million . The advance was secured by the addition of seven mortgaged properties subject to the Capital One Facility. All of the $61.7 million of the net proceeds, after closing costs, of the advance was used by the Company to prepay a portion of the Bridge Loan ( see Note 4 — Mortgage Notes Payable, Net ). |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 6 — Fair Value of Financial Instruments GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring 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. Derivative Instruments Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of September 30, 2018 , 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. Real Estate Investments - Held for Use The Company also had impaired real estate investments held for use, which were carried at fair value on a non-recurring basis on the consolidated balance sheet as of September 30, 2018 . As of September 30, 2018 , the Company owned held for use properties for which the Company had reconsidered the projected cash flows due to various performance indicators. As a result, the Company evaluated the impact on its ability to recover the carrying value of such properties based on the expected cash flows over its intended holding period. As a result of this evaluation and its consideration of impairment, the Company determined that the carrying value of one held for use property exceeded its estimated undiscounted cash flows. The Company primarily used a purchase and sale agreement to estimate the undiscounted cash flows expected to be generated for this one held for use property, which is an observable input. As a result, the impaired property that the Company evaluated using this approach is classified in Level 2 of the fair value hierarchy. Real Estate Investments - Held for Sale The Company has impaired real estate investments held for sale, which are carried at fair value on a non-recurring basis on the consolidated balance sheets as of September 30, 2018 and December 31, 2017. Impaired real estate investments held for sale were valued using the sale price from the applicable 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. The following table presents information about the Company's assets and liabilities measured at fair value as of September 30, 2018 and December 31, 2017 , 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 September 30, 2018 Derivative assets, at fair value Recurring $ — $ 9,271 $ — $ 9,271 Impaired real estate investments held for use Non-recurring — 3,814 — 3,814 Impaired real estate investments held for sale Non-recurring — 32,139 — 32,139 Total $ — $ 45,224 $ — $ 45,224 December 31, 2017 Derivative assets, at fair value Recurring $ — $ 2,550 $ — $ 2,550 Impaired real estate investments held for sale Non-recurring — 1,323 — 1,323 Total $ — $ 3,873 $ — $ 3,873 A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the nine months ended September 30, 2018 . The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate that value. The fair values of short-term financial instruments such as cash and cash equivalents, restricted cash, straight-line rent receivable, net, prepaid expenses and other assets, deferred costs, net, accounts payable and accrued expenses, deferred rent and distributions payable approximate their carrying value on the consolidated balance sheets due to their short-term nature. The fair values of the Company's remaining financial instruments that are not reported at fair value on the consolidated balance sheets are reported below: September 30, 2018 December 31, 2017 (In thousands) Level Carrying Amount (1) Fair Value Carrying Amount (1) Fair Value Gross mortgage notes payable and mortgage premium and discounts, net 3 $ 469,884 $ 468,851 $ 414,255 $ 411,749 Revolving Credit Facility 3 $ 189,700 $ 189,700 $ 239,700 $ 239,700 Fannie Mae Master Credit Facilities 3 $ 359,322 $ 359,718 $ 295,169 $ 296,151 (1) Carrying value includes mortgage notes payable of $471.2 million and $415.4 million and mortgage premiums and (discounts), net of $(1.3) million and $(1.1) million as of September 30, 2018 and December 31, 2017, respectively. The fair value of the mortgage notes payable is estimated using a discounted cash flow analysis, based on the Advisor's experience with similar types of borrowing arrangements. Advances under the Revolving Credit Facility and Fannie Mae Master Credit Facilities are considered to be reported at fair value, because their interest rates vary with changes in LIBOR and there has not been a significant change in credit risk of the Company or credit markets since origination. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Note 7 — Derivatives and Hedging Activities Risk Management Objective of Using Derivatives The Company may use derivative financial instruments, including interest rate swaps, caps, collars, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company's operating and financial structure as well as to hedge specific anticipated transactions. Additionally, in using interest rate derivatives, the Company aims to add stability to interest expense and to manage its exposure to interest rate movements. The Company does not intend to utilize derivatives for speculative purposes or purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company, and its affiliates, may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of September 30, 2018 and December 31, 2017 : (In thousands) Balance Sheet Location September 30, December 31, 2017 Derivatives designated as hedging instruments: Interest rate swaps Derivative assets, at fair value $ 9,017 $ 2,473 Derivatives not designated as hedging instruments: Interest rate caps Derivative assets, at fair value $ 254 $ 77 Cash Flow Hedges of Interest Rate Risk The Company currently has two interest rate swaps that are designated as cash flow hedges. The interest rate swaps are used as part of the Company's interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During 2018 and 2017, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2018 and 2017, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. The ineffective portion of the change in fair value of the derivatives, if any, would be 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 12 months, from October 1, 2018 through September 30, 2019, the Company estimates that $1.8 million will be reclassified from other comprehensive income as a decrease to interest expense. As of September 30, 2018 and December 31, 2017 , the Company had the following derivatives that were designated as cash flow hedges of interest rate risk: September 30, 2018 December 31, 2017 Interest Rate Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate swap 2 $ 250,000 2 $ 250,000 The table below details the location in the financial statements of the loss recognized on interest rate derivatives designated as cash flow hedges for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Amount of gain (loss) recognized in accumulated other comprehensive income on interest rate derivatives (effective portion) $ 1,133 $ (243 ) $ 6,533 $ (539 ) Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense $ 135 $ (415 ) $ (11 ) $ (415 ) Non-Designated Derivatives These derivatives are used to manage the Company's exposure to interest rate movements, but do not meet the strict hedge accounting requirements to be classified as hedging instruments. Changes in the fair value of derivatives not designated as hedges under a qualifying hedging relationship are recorded directly to net income (loss) and were gains of $18,000 and $46,000 for the three and nine months ended September 30, 2018 , respectively, and a loss of $22,000 and $0.1 million for the three and nine months ended September 30, 2017 , respectively. The Company had the following outstanding interest rate derivatives that were not designated as hedges in qualified hedging relationships as of September 30, 2018 and December 31, 2017 : September 30, 2018 December 31, 2017 Interest Rate Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate caps 7 $ 359,322 6 $ 295,169 Offsetting Derivatives The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of September 30, 2018 and December 31, 2017 . The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheet. Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Received Net Amount September 30, 2018 $ 9,271 $ — $ — $ 9,271 $ — $ — $ 9,271 December 31, 2017 $ 2,550 $ — $ — $ 2,550 $ — $ — $ 2,550 Credit-risk-related Contingent Features The Company has agreements in place with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of September 30, 2018 , there were no derivatives in a net liability position. As a result, there is no termination value associated with the settlement of the Company’s obligations under the agreement, and the Company has not posted any collateral related to the agreement. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Common Stock | Note 8 — Common Stock As of September 30, 2018 and December 31, 2017 , the Company had 91.6 million and 91.0 million shares of common stock outstanding, respectively, including unvested restricted shares and shares issued pursuant to the Company's distribution reinvestment plan ("DRIP"), net of share repurchases. As of September 30, 2018 and December 31, 2017 , the Company had received total net proceeds from its initial public offering (the "IPO") and DRIP, net of share repurchases, of $2.3 billion . In April 2013, the Company's board of directors (the "Board") authorized, and the Company began paying distributions on a monthly basis at a rate equivalent to $1.70 per annum, per share of common stock, which began in May 2013. In March 2017, the Board authorized a decrease in the rate at which the Company pays monthly distributions to stockholders, effective as of April 1, 2017, to a rate equivalent to $1.45 per annum per share of common stock. On February 20, 2018, the Board authorized a further decrease in the rate at which the Company pays monthly distributions to stockholders, effective as of March 1, 2018, to a rate equivalent to $0.85 per annum per share of common stock. Distributions are payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month. Distribution payments are dependent on the availability of funds. The Board may further reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured. On March 29, 2018, the independent directors of the Board approved an updated estimate of per-share net asset value ("Estimated Per-Share NAV") as of December 31, 2017, which was published on April 4, 2018. The Company intends to publish Estimated Per-Share NAV periodically at the discretion of the Board, provided that such estimates will be made at least once annually. Share Repurchase Program Under the Company's share repurchase program (the "SRP"), as amended from time to time stockholders are able to sell their shares to the Company in limited circumstances. The SRP permits investors to sell their shares back to the Company after they have held them for at least one year, subject to the significant conditions and limitations described below. Beginning on April 7, 2016 (the "Original NAV Pricing Date"), the price per share that the Company will pay to repurchase its shares would have been prior to amendment and restatement of the SRP effective in July 2017 as described below, equal to its Estimated Per-Share NAV multiplied by a percentage equal to: • 92.5% , if the person seeking repurchase has held his or her shares for a period greater than one year and less than two years; • 95.0% , if the person seeking repurchase has held his or her shares for a period greater than two years and less than three years; • 97.5% , if the person seeking repurchase has held his or her shares for a period greater than three years and less than four years; or • 100.0% if the person seeking repurchase has held his or her shares for a period greater than four years. In cases of requests for death and disability, the repurchase price is equal to Estimated Per-Share NAV at the time of repurchase. Repurchases of shares of the Company's common stock, when requested, are at the sole discretion of the Board. Until the First SRP Amendment (as defined below), the Company limited the number of shares repurchased during any calendar year to 5% of the weighted average number of shares of common stock outstanding on December 31st of the previous calendar year. In addition, the Company was only authorized to repurchase shares in a given quarter up to the amount of proceeds received from its DRIP in that same quarter. On January 26, 2016, the Board approved and amended the SRP (the "First SRP Amendment") to supersede and replace the existing SRP. Under the First SRP Amendment, repurchases of shares of the Company's common stock, when requested, are at the sole discretion of the Board and generally will be made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Repurchases for any fiscal semester will be 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. If an updated Estimated Per-Share NAV is published during any fiscal semester, any repurchase requests received during such fiscal semester will be paid at the applicable Estimated Per-Share NAV then in effect. On June 14, 2017, the Board approved and adopted an amended and restated 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 our common stock or received their shares from us (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. On March 13, 2018, the Company announced a tender offer (the "Tender Offer") to purchase up to 2.0 million shares of the Company’s common stock for cash at a purchase price equal to $13.15 per share with the proration period and withdrawal rights expiring on April 12, 2018. The Company suspended the SRP during the pendency of the Tender Offer. On June 29, 2018, the Company announced the Board unanimously determined to reactivate the SRP, effective June 30, 2018. In connection with reactivating the SRP, the Board approved all repurchase requests received during the period from January 1, 2018 through the suspension of the SRP on March 13, 2018 (see table below for additional details). When a stockholder requests redemption and redemption is approved by the Board, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP have the status of authorized but unissued shares. The following table reflects the number of shares repurchased cumulatively through September 30, 2018 : Number of Shares Repurchased Average Price per Share Cumulative repurchases as of December 31, 2017 (1) 2,529,798 $ 22.43 Nine months ended September 30, 2018 (2) 529,871 $ 21.10 Cumulative repurchases as of September 30, 2018 3,059,669 $ 22.20 _______________ (1) Includes 1,554,768 shares repurchased during the year ended December 31, 2017 for approximately $33.6 million at a weighted average price per share of $21.61 . 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 September 30, 2017, which was equal to 267,723 shares repurchased for approximately $5.7 million at an average price per share of $21.47 . 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. (2) Includes (i) 373,967 shares repurchased during January 2018 with respect to requests received following the death or qualifying disability of stockholders during the six months ended December 31, 2017 for approximately $8.0 million at a weighted average price per share of $21.45 , and (ii) 155,904 shares that were repurchased for $3.2 million at an average price per share of $20.25 on July 31, 2018, representing 100% of the repurchase requests made following the death or qualifying disability of stockholders during the period from January 1, 2018 through the suspension of the SRP on March 13, 2018. No repurchase requests received during the SRP suspension were accepted. Tender Offer On March 13, 2018, the Company announced the Tender Offer to purchase up to 2.0 million shares of the Company’s common stock for cash at a purchase price equal to $13.15 per share with the proration period and withdrawal rights expiring on April 12, 2018. The Company made the Tender Offer in response to an unsolicited offer to stockholders commenced on February 27, 2018. On April 4, 2018 and April 16, 2018, the Tender Offer was amended to reduce the number of shares the Company was offering to purchase to 230,000 shares and extend the expiration date to May 1, 2018. The Tender Offer expired in accordance with its terms on May 1, 2018. During May 2018, in accordance with the terms of the Tender Offer, the Company accepted for purchase 229,999 shares for a total cost of approximately $3.0 million . Distribution Reinvestment Plan Pursuant to the DRIP, stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased under the DRIP. The shares purchased pursuant to the DRIP have the same rights and are treated in the same manner as all of the other shares of outstanding common stock. The Board may designate that certain cash or other distributions be excluded from reinvestment pursuant to the DRIP. The Company has the right to amend the DRIP or terminate the DRIP with ten days' notice to participants. Shares issued under the DRIP are recorded as equity in the accompanying consolidated balance sheet in the period distributions are declared. During the nine months ended September 30, 2018 , the Company issued 1.4 million shares of common stock pursuant to the DRIP, generating aggregate proceeds of $28.6 million . The Company offers shares pursuant to the DRIP at the then-current Estimated Per-Share NAV approved by the Board. Note 12 — Accumulated Other Comprehensive Income The following table illustrates the changes in accumulated other comprehensive income as of and for the period presented: (In thousands) Unrealized Gain on Designated Derivative Balance, December 31, 2017 $ 2,473 Other comprehensive income, before reclassifications 6,533 Amount of loss reclassified from accumulated other comprehensive income 11 Balance, September 30, 2018 $ 9,017 |
Related Party Transactions and
Related Party Transactions and Arrangements | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Arrangements | Note 9 — Related Party Transactions and Arrangements As of September 30, 2018 and December 31, 2017 , the Special Limited Partner owned 8,888 shares of the Company's outstanding common stock. The Advisor and its affiliates may incur and pay costs and fees on behalf of the Company. As of September 30, 2018 and December 31, 2017 , the Advisor held 90 partnership units in the OP designated as "OP Units" ("OP Units"). Realty Capital Securities, LLC (the "Former Dealer Manager") served as the dealer manager of the Company's initial public offering, which was ongoing from October 2012 to June 2014 and, together with its affiliates, continued to provide the Company with various services through December 31, 2015. RCS Capital Corporation ("RCAP"), which became the parent company of the Former Dealer Manager in December 2012, and certain of its affiliates that provided services to the Company, filed for Chapter 11 bankruptcy protection in January 2016. In May 2016, RCAP and its affiliated debtors emerged from bankruptcy under the new name of Aretec Group, Inc. On March 8, 2017, the creditor trust established in connection with the RCAP bankruptcy filed suit against AR Capital, AR Global, the Advisor, advisors of other entities sponsored by AR Global, and AR Global's principals, and RCAP Holdings, LLC. The suit alleges, among other things, certain breaches of duties to RCAP. The Company is not a defendant in the suit, nor are there any allegations that the Advisor engaged in any wrongful conduct. On May 26, 2017, the defendants moved to dismiss. On November 30, 2017, the Court issued an opinion partially granting the defendants’ motion to dismiss. On December 7, 2017, the creditor trust moved for limited reargument of the court's partial dismissal of its breach of fiduciary duty claim, and on January 10, 2018, the defendants filed a supplemental motion to dismiss certain claims. On April 5, 2018, the court issued an opinion denying the creditor trust's motion for reconsideration while partially granting the defendants' supplemental motion 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 Advisor, a limited partner of the OP. In connection with this special allocation, the Advisor has agreed to restore a deficit balance in its capital account in the event of a liquidation of the OP and has agreed to provide a guaranty or indemnity of indebtedness of the OP. Fees Incurred in Connection with the Operations of the Company On February 17, 2017, the members of a special committee of the Board unanimously approved certain amendments to the then-effective 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 of 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 September 30, 2018 , 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 September 30, 2018 , 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 and the limited partnership agreement of the OP, for its asset management services, the Company issued the Advisor an asset management subordinated participation by causing the OP to issue (subject to periodic approval by the Board) to the Advisor partnership units of the OP designated as "Class B Units" ("Class B Units"). The Class B Units were intended to be profit interests and vest, and no longer are subject to forfeiture, at such time as: (x) the value of the OP's assets plus all distributions made equals or exceeds the total amount of capital contributed by investors plus a 6.0% cumulative, pre-tax, non-compounded annual return thereon (the "economic hurdle"); (y) any one of the following occurs: (1) a listing; (2) another liquidity event or (3) the termination of the advisory agreement by an affirmative vote of a majority of the Company's independent directors without cause; and (z) the Advisor is still providing advisory services to the Company (the "performance condition"). Unvested Class B Units will be forfeited immediately if: (a) the advisory agreement is terminated for any reason other than a termination without cause; or (b) the advisory agreement is terminated by an affirmative vote of a majority of the Company's independent directors without cause before the economic hurdle has been met. Subject to approval by the Board, the Class B Units were issued to the Advisor quarterly in arrears pursuant to the terms of the limited partnership agreement of the OP. The number of Class B Units issued in any quarter was equal to: (i) the excess of (A) the product of (y) the cost of assets multiplied by (z) 0.1875% over (B) any amounts payable as an oversight fee (as described below) for such calendar quarter; divided by (ii) the value of one share of common stock as of the last day of such calendar quarter, which was initially equal to $22.50 (the IPO price minus the selling commissions and dealer manager fees). The value of issued Class B Units will be determined and expensed when the Company deems the achievement of the performance condition to be probable. As of September 30, 2018 , 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 September 30, 2018 , 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 equity and certain convertible debt but excluding proceeds from the DRIP) raised subsequent to February 17, 2017 per month. The base management fee is payable to the Advisor or its assignees in cash, OP Units or shares, or a combination thereof, the form of payment to be determined at the discretion of the Advisor and the value of any OP Unit or share to be determined by the Advisor acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate. In addition, the Second A&R Advisory Agreement requires the Company to pay the Advisor a variable management/incentive fee quarterly in arrears equal to (1) the product of fully diluted shares of common stock outstanding multiplied by (2) (x) 15.0% of the applicable prior quarter's Core Earnings (as defined below) per share in excess of $0.375 per share plus (y) 10.0% of the applicable prior quarter's Core Earnings per share in excess of $0.47 per share. Core Earnings is defined as, for the applicable period, net income or loss, computed in accordance with GAAP, excluding non-cash equity compensation expense, the variable management/incentive fee, acquisition and transaction related fees and expenses, financing related fees and expenses, depreciation and amortization, realized gains and losses on the sale of assets, any unrealized gains or losses or other non-cash items recorded in net income or loss for the applicable period, regardless of whether such items are included in other comprehensive income or loss, or in net income, one-time events pursuant to changes in GAAP and certain non-cash charges, impairment losses on real estate related investments and other than temporary impairments of securities, amortization of deferred financing costs, amortization of tenant inducements, amortization of straight-line rent and any associated bad debt reserves, amortization of market lease intangibles, provision for loss loans, and other non-recurring revenue and expenses (in each case after discussions between the Advisor and the independent directors and approved by a majority of the independent directors). The variable management/incentive fee is payable to the Advisor or its assignees in cash or shares, or a combination of both, the form of payment to be determined in the sole discretion of the Advisor and the value of any share to be determined by the Advisor acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate. Property Management Fees Unless the Company contracts with a third party, the Company pays the Property Manager a property management fee of 1.5% of gross revenues from the Company's stand-alone single-tenant net leased properties and 2.5% of gross revenues from all other types of properties, respectively. The Company also reimburses the Property Manager for property level expenses incurred by the Property Manager. If the Company contracts directly with third parties for such services, the Company will pay them customary market fees and will pay the Property Manager an oversight fee of up to 1.0% of the gross revenues of the property managed. In no event will the Company pay the Property Manager or any affiliate of the Property Manager both a property management fee and an oversight fee with respect to any particular property. On February 17, 2017, the Company entered into the Amended and Restated Property Management and Leasing Agreement (the “A&R Property Management Agreement”) with the OP and the Property Manager. The A&R Property Management Agreement was entered into to reflect amendments to the original agreement between the parties and further amends the original agreement by extending the term of the agreement from one to two years, 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. On April 10, 2018, in connection with the Multi-Property CMBS Loan, the Company and the OP entered into an amendment to the A&R Property Management Agreement confirming, consistent with the intent of the parties, that the borrowers under the Multi-Property CMBS Loan and other subsidiaries of the OP that actually own or lease the Company’s properties are the direct obligors under the arrangements pursuant to which the Company’s properties are actually managed by either the Property Manager or a third party overseen by the Property Manager pursuant to the A&R Property Management Agreement. Professional Fees and Other Reimbursements The Company reimburses the Advisor's costs of providing administrative services. 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. The Company reimburses the Advisor for personnel costs, excluding any compensation paid to individuals who also serve as the Company’s executive officers, or the executive officers of the Advisor, the Property Manager or their respective affiliates. This reimbursement includes reasonable overhead expenses for employees of the Advisor or its affiliates directly involved in the performance of services on behalf of the Company, including the reimbursement of rent expense at certain properties that are both occupied by employees of the Advisor or its affiliates and owned by affiliates of the Advisor. During the three and nine months ended September 30, 2018 , the Company incurred $2.0 million and $5.9 million , respectively, of reimbursement expenses from the Advisor for providing administrative services. During the three and nine months ended September 30, 2017 , the Company incurred $1.9 million and $4.9 million , respectively, of reimbursement expenses from the Advisor for providing administrative services. 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 nine months ended September 30, 2018 or 2017 . 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 nine months ended September 30, 2018 or 2017 . The Advisor elected to, without interest accrual, defer cash payment of $1.7 million in certain fees and reimbursements due to the Advisor as of December 31, 2017. As of December 31, 2017, a portion of these fees and reimbursements were already paid and the Company had recorded a $0.7 million receivable due from the Advisor. As of September 30, 2018 , there was no remaining receivable or payable due from the Advisor. The $1.7 million in deferred fees and reimbursements were repaid during April 2018. The following table details amounts incurred, forgiven and payable in connection with the Company's operations-related services described above as of and for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, Payable (Receivable) as of 2018 2017 2018 2017 September 30, December 31, (In thousands) Incurred (1) Incurred (1) Incurred (1) Incurred (1) 2018 2017 One-time fees and reimbursements: Acquisition cost reimbursements $ 34 $ 77 $ 144 $ 99 $ 34 $ 36 Due to (from) HT III related to Asset Purchase (2) — — — — (68 ) 196 Ongoing fees and reimbursements: Asset management fees 4,875 4,875 14,625 14,314 — — Property management fees 868 758 2,608 2,257 3 66 Professional fees and other reimbursements 2,121 1,889 6,330 4,922 695 (4) 1,339 (4) Distributions on Class B Units (3) 77 131 263 412 — — Total related party operation fees and reimbursements $ 7,975 $ 7,730 $ 23,970 $ 22,004 $ 664 $ 1,637 _______________ (1) There were no fees or reimbursements forgiven during the three and nine months ended September 30, 2018 or 2017. (2) On December 22, 2017, the Company purchased substantially all the assets of American Realty Capital Healthcare Trust III, Inc. ("HT III"). Certain proration estimates were included within the closing. The purchase agreement calls for a final purchase price adjustment. The Company had a $68,000 net receivable and $196,000 net payable related to the Asset Purchase (as defined below) included on its consolidated balance sheet as of September 30, 2018 and December 31, 2017, respectively. Please see below for additional information related to the asset purchase. (3) Prior to April 1, 2015, the Company caused the OP to issue (subject to periodic approval by the Board) to the Advisor restricted performance based Class B Units for asset management services. As of December 31, 2017, the Board had approved the issuance of 359,250 Class B Units to the Advisor in connection with this arrangement. Effective April 1, 2015, the Company began paying an asset management fee to the Advisor or its assignees in cash, in shares, or a combination of both and no longer issues any Class B Units. (4) Balance includes costs which were incurred and accrued due to ANST and a subsidiary of RCAP which were related parties of the Company. See above for further details on the status of the ANST and RCAP relationship. 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 nine months ended September 30, 2018 or 2017 . 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 nine months ended September 30, 2018 or 2017 . 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 nine months ended September 30, 2018 or 2017 . 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 and no such fees or commissions were incurred prior thereto. 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 nine months ended September 30, 2018 or 2017 . Neither the Special Limited Partner nor any of its affiliates can earn both the subordinated participation in net sales proceeds and the subordinated incentive listing distribution described above. Termination Fees Under the operating partnership agreement of the OP, upon termination or non-renewal of the advisory agreement with the Advisor, with or without cause, the Special Limited Partner is entitled to receive distributions from the OP equal to 15.0% of the amount by which the sum of the Company's market value plus distributions exceeds the sum of the aggregate capital contributed by investors plus an amount equal to an annual 6.0% cumulative, pre-tax, non-compounded annual return to investors. The Special Limited Partner is able to elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or other liquidity event occurs. Under the Second A&R Advisory Agreement, upon the termination or non-renewal of the agreement, the Advisor will be entitled to receive from the Company all amounts due to the Advisor, including any change in control fee and transition fee (both described below), as well as the then-present fair market value of the Advisor's interest in the Company. All fees will be due within 30 days after the effective date of the termination of the Second A&R Advisory Agreement. Upon a termination by either party in connection with a change of control (as defined in the Second A&R Advisory Agreement), the Company would pay the Advisor a change of control fee equal to the product of four (4) and the "Subject Fees." Upon a termination by the Company in connection with transition to self-management, the Company would pay the Advisor a transition fee equal to (i) $15.0 million plus (ii) the product of four multiplied by the Subject Fees, provided that the transition fee shall not exceed an amount equal (i) 4.5 multiplied by (ii) the Subject Fees. The Subject Fees are equal to (i) the product of four (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 of control or the transition to self-management is consummated, as applicable, plus (iii) without duplication, the annual increase in the base management fee resulting from the cumulative net proceeds of any equity raised in respect to the fiscal quarter immediately prior to the fiscal quarter in which the change of control or the transition to self-management is consummated, as applicable. The right to termination of the Second A&R Advisory Agreement in connection with a change of control or transition to self-management is subject to a lockout period that requires the notice of any termination in connection with a change of control or transition to self-management to be delivered after February 14, 2019. American Realty Capital Healthcare Trust III, Inc. Asset Purchase On December 22, 2017, the Company, the OP and its subsidiary, ARHC TRS Holdco II, LLC, purchased all of the membership interests in indirect subsidiaries of HT III that own the 19 properties comprising substantially all of HT III’s assets (the “Asset Purchase”), pursuant to a purchase agreement (the “Purchase Agreement”), dated as of June 16, 2017. HT III is sponsored and advised by an affiliate of the Company’s advisor. As of September 30, 2018 and December 31, 2017 the Company had a $68,000 net receivable and $0.2 million net payable, respectively, to HT III included on its consolidated balance sheet. At the closing of the Asset Purchase, the Company paid HT III $108.4 million , representing the purchase price under the Purchase Agreement of $120.0 million , less (i) $0.7 million reflecting prorations and closing adjustments in accordance with the Purchase Agreement, (ii) $4.9 million reflecting the outstanding principal amount of the loan secured by HT III’s Philip Center property assumed by the Company at the closing in accordance with the Purchase Agreement, and (iii) $6.0 million deposited by the Company into an escrow account in accordance with the Purchase Agreement. This escrow amount, less any amounts paid or reserved for pending or unsatisfied indemnification claims that the Company may make pursuant to the Purchase Agreement, will be released to HT III in installments over a period of 14 months following the closing. In June 2018, one third of this escrow amount, representing $2.0 million , was released in accordance with the Purchase Agreement. To date, no indemnification claims have been made under the Purchase Agreement. |
Economic Dependency
Economic Dependency | 9 Months Ended |
Sep. 30, 2018 | |
Economic Dependency [Abstract] | |
Economic Dependency | Note 10 — Economic Dependency Under various agreements, the Company has engaged or will engage the Advisor, its affiliates and entities under common control with the Advisor to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company and asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that the Advisor and its affiliates are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Note 11 — Share-Based Compensation Restricted Share Plan The Company has adopted an employee and director incentive restricted share plan (as amended from time to time, the "RSP"), which provides the Company with the ability to grant awards of restricted shares of common stock ("restricted shares") to the Company's directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The total number of shares of common stock that may be subject to awards granted under the RSP may not exceed 5.0% of the Company's outstanding shares of common stock on a fully diluted basis at any time and in any event will not exceed 3.4 million shares (as such number may be adjusted for stock splits, stock dividends, combinations and similar events). Prior to August 2017, the RSP provided for an automatic grant of 1,333 restricted shares to each of the independent directors, without any further approval by the Board or the stockholders, on the date of his or her initial election to the Board and thereafter on the date of each annual stockholder meeting. The restricted shares granted as annual automatic awards prior to August 2017 were subject to vesting over a five -year period following the date of grant. In August 2017, the Board amended the RSP to provide that the number of restricted shares comprising the automatic annual award to each of the independent directors would be equal to the quotient of $30,000 divided by the then-current Estimated Per-Share NAV and subsequently amended and restated the RSP to eliminate the automatic annual awards and to make other revisions related to the implementation of a new independent director equity compensation program. As part of this new independent director equity compensation program, the Board approved a one-time grant of restricted share awards to the independent directors as follows: (i) 300,000 restricted shares to the chairman, with one-seventh of the shares vesting annually in equal increments over a seven -year period with initial vesting on August 4, 2018; and (ii) 25,000 restricted shares to each of the three other independent directors, with one-fifth of the shares vesting annually in equal increments over a five -year period with initial vesting on August 4, 2018. In connection with these one-time grants, the restricted shares granted as automatic annual awards in connection with the Company’s 2017 annual meeting of stockholders on July 21, 2017 were forfeited. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of common stock 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, 2017 382,510 $ 21.47 Granted — — Vested (59,465 ) 21.48 Forfeitures — — Unvested, September 30, 2018 323,045 21.47 As of September 30, 2018 , the Company had $6,769.8 million of unrecognized compensation cost related to unvested restricted share awards granted under the RSP. That cost is expected to be recognized over a weighted-average period of 5.4 years. Compensation expense related to restricted shares was approximately $282,000 and $921,000 during the three and nine months ended September 30, 2018 , respectively. Compensation expense related to restricted shares was approximately $117,000 and $144,000 during the three and nine months ended September 30, 2017 , respectively. Compensation expense related to restricted shares is recorded as general and administrative expense in the accompanying consolidated statements of operations and comprehensive loss. Other Share-Based Compensation The Company may issue common stock in lieu of cash to pay fees earned by the Company's directors at the respective director's election. There are no restrictions on shares issued in lieu of cash compensation since these payments in lieu of cash relate to fees earned for services performed. No such shares were issued during the three and nine months ended September 30, 2018 or 2017 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Note 8 — Common Stock As of September 30, 2018 and December 31, 2017 , the Company had 91.6 million and 91.0 million shares of common stock outstanding, respectively, including unvested restricted shares and shares issued pursuant to the Company's distribution reinvestment plan ("DRIP"), net of share repurchases. As of September 30, 2018 and December 31, 2017 , the Company had received total net proceeds from its initial public offering (the "IPO") and DRIP, net of share repurchases, of $2.3 billion . In April 2013, the Company's board of directors (the "Board") authorized, and the Company began paying distributions on a monthly basis at a rate equivalent to $1.70 per annum, per share of common stock, which began in May 2013. In March 2017, the Board authorized a decrease in the rate at which the Company pays monthly distributions to stockholders, effective as of April 1, 2017, to a rate equivalent to $1.45 per annum per share of common stock. On February 20, 2018, the Board authorized a further decrease in the rate at which the Company pays monthly distributions to stockholders, effective as of March 1, 2018, to a rate equivalent to $0.85 per annum per share of common stock. Distributions are payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month. Distribution payments are dependent on the availability of funds. The Board may further reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured. On March 29, 2018, the independent directors of the Board approved an updated estimate of per-share net asset value ("Estimated Per-Share NAV") as of December 31, 2017, which was published on April 4, 2018. The Company intends to publish Estimated Per-Share NAV periodically at the discretion of the Board, provided that such estimates will be made at least once annually. Share Repurchase Program Under the Company's share repurchase program (the "SRP"), as amended from time to time stockholders are able to sell their shares to the Company in limited circumstances. The SRP permits investors to sell their shares back to the Company after they have held them for at least one year, subject to the significant conditions and limitations described below. Beginning on April 7, 2016 (the "Original NAV Pricing Date"), the price per share that the Company will pay to repurchase its shares would have been prior to amendment and restatement of the SRP effective in July 2017 as described below, equal to its Estimated Per-Share NAV multiplied by a percentage equal to: • 92.5% , if the person seeking repurchase has held his or her shares for a period greater than one year and less than two years; • 95.0% , if the person seeking repurchase has held his or her shares for a period greater than two years and less than three years; • 97.5% , if the person seeking repurchase has held his or her shares for a period greater than three years and less than four years; or • 100.0% if the person seeking repurchase has held his or her shares for a period greater than four years. In cases of requests for death and disability, the repurchase price is equal to Estimated Per-Share NAV at the time of repurchase. Repurchases of shares of the Company's common stock, when requested, are at the sole discretion of the Board. Until the First SRP Amendment (as defined below), the Company limited the number of shares repurchased during any calendar year to 5% of the weighted average number of shares of common stock outstanding on December 31st of the previous calendar year. In addition, the Company was only authorized to repurchase shares in a given quarter up to the amount of proceeds received from its DRIP in that same quarter. On January 26, 2016, the Board approved and amended the SRP (the "First SRP Amendment") to supersede and replace the existing SRP. Under the First SRP Amendment, repurchases of shares of the Company's common stock, when requested, are at the sole discretion of the Board and generally will be made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Repurchases for any fiscal semester will be 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. If an updated Estimated Per-Share NAV is published during any fiscal semester, any repurchase requests received during such fiscal semester will be paid at the applicable Estimated Per-Share NAV then in effect. On June 14, 2017, the Board approved and adopted an amended and restated 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 our common stock or received their shares from us (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. On March 13, 2018, the Company announced a tender offer (the "Tender Offer") to purchase up to 2.0 million shares of the Company’s common stock for cash at a purchase price equal to $13.15 per share with the proration period and withdrawal rights expiring on April 12, 2018. The Company suspended the SRP during the pendency of the Tender Offer. On June 29, 2018, the Company announced the Board unanimously determined to reactivate the SRP, effective June 30, 2018. In connection with reactivating the SRP, the Board approved all repurchase requests received during the period from January 1, 2018 through the suspension of the SRP on March 13, 2018 (see table below for additional details). When a stockholder requests redemption and redemption is approved by the Board, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares repurchased under the SRP have the status of authorized but unissued shares. The following table reflects the number of shares repurchased cumulatively through September 30, 2018 : Number of Shares Repurchased Average Price per Share Cumulative repurchases as of December 31, 2017 (1) 2,529,798 $ 22.43 Nine months ended September 30, 2018 (2) 529,871 $ 21.10 Cumulative repurchases as of September 30, 2018 3,059,669 $ 22.20 _______________ (1) Includes 1,554,768 shares repurchased during the year ended December 31, 2017 for approximately $33.6 million at a weighted average price per share of $21.61 . 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 September 30, 2017, which was equal to 267,723 shares repurchased for approximately $5.7 million at an average price per share of $21.47 . 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. (2) Includes (i) 373,967 shares repurchased during January 2018 with respect to requests received following the death or qualifying disability of stockholders during the six months ended December 31, 2017 for approximately $8.0 million at a weighted average price per share of $21.45 , and (ii) 155,904 shares that were repurchased for $3.2 million at an average price per share of $20.25 on July 31, 2018, representing 100% of the repurchase requests made following the death or qualifying disability of stockholders during the period from January 1, 2018 through the suspension of the SRP on March 13, 2018. No repurchase requests received during the SRP suspension were accepted. Tender Offer On March 13, 2018, the Company announced the Tender Offer to purchase up to 2.0 million shares of the Company’s common stock for cash at a purchase price equal to $13.15 per share with the proration period and withdrawal rights expiring on April 12, 2018. The Company made the Tender Offer in response to an unsolicited offer to stockholders commenced on February 27, 2018. On April 4, 2018 and April 16, 2018, the Tender Offer was amended to reduce the number of shares the Company was offering to purchase to 230,000 shares and extend the expiration date to May 1, 2018. The Tender Offer expired in accordance with its terms on May 1, 2018. During May 2018, in accordance with the terms of the Tender Offer, the Company accepted for purchase 229,999 shares for a total cost of approximately $3.0 million . Distribution Reinvestment Plan Pursuant to the DRIP, stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased under the DRIP. The shares purchased pursuant to the DRIP have the same rights and are treated in the same manner as all of the other shares of outstanding common stock. The Board may designate that certain cash or other distributions be excluded from reinvestment pursuant to the DRIP. The Company has the right to amend the DRIP or terminate the DRIP with ten days' notice to participants. Shares issued under the DRIP are recorded as equity in the accompanying consolidated balance sheet in the period distributions are declared. During the nine months ended September 30, 2018 , the Company issued 1.4 million shares of common stock pursuant to the DRIP, generating aggregate proceeds of $28.6 million . The Company offers shares pursuant to the DRIP at the then-current Estimated Per-Share NAV approved by the Board. Note 12 — Accumulated Other Comprehensive Income The following table illustrates the changes in accumulated other comprehensive income as of and for the period presented: (In thousands) Unrealized Gain on Designated Derivative Balance, December 31, 2017 $ 2,473 Other comprehensive income, before reclassifications 6,533 Amount of loss reclassified from accumulated other comprehensive income 11 Balance, September 30, 2018 $ 9,017 |
Non-controlling Interests
Non-controlling Interests | 9 Months Ended |
Sep. 30, 2018 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interests | Note 13 — Non-controlling Interests Non-Controlling Interests in the Operating Partnership The Company is the sole general partner and holds substantially all of the OP Units. As of September 30, 2018 and December 31, 2017 , the Advisor held 90 OP Units, which represents a nominal percentage of the aggregate ownership in the OP. In November 2014, the Company partially funded the purchase of a MOB from an unaffiliated third party by causing the OP to issue 405,908 OP Units, with a value of $10.1 million , or $25.00 per unit, to the unaffiliated third party. A holder of OP Units has the right to distributions. After holding the OP Units for a period of one year, a holder of OP Units has the right to redeem OP Units for, at the option of the OP, the cash value of a corresponding number of shares of the Company's common stock or a corresponding number of shares of the Company's common stock. The remaining rights of the limited partners in the OP are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP's assets. During the three and nine months ended September 30, 2018 , OP Unit non-controlling interest holders were paid distributions of $0.1 million and $0.3 million , respectively. During the three and nine months ended September 30, 2017 , OP Unit non-controlling interest holders were paid distributions of $0.1 million and $0.5 million , respectively. Non-Controlling Interests in Property Owning Subsidiaries The Company also has investment arrangements with other unaffiliated third parties whereby such investors receive an ownership interest in certain of the Company's property-owning subsidiaries and are entitled to receive a proportionate share of the net operating cash flow derived from the subsidiaries' property. Upon disposition of a property subject to non-controlling interest, the investor will receive a proportionate share of the net proceeds from the sale of the property. The investor has no recourse to any other assets of the Company. Due to the nature of the Company's involvement with these arrangements and the significance of its investment in relation to the investment of the third party, the Company has determined that it controls each entity in these arrangements and therefore the entities related to these arrangements are consolidated within the Company's financial statements. A non-controlling interest is recorded for the investor's ownership interest in the properties. During the three months ended September 30, 2018 and 2017 there were no distributions were paid to non-controlling interest holders in property owning subsidiaries. During the nine months ended September 30, 2018 , approximately $87 thousand , representing a share of proceeds from the Multi-Property CMBS Loan was paid to non-controlling interest holders in property owning subsidiaries and during the nine months ended September 30, 2017 , approximately $52,000 distributions were paid to non-controlling interest holders in property owning subsidiaries. The following table summarizes the activity related to investment arrangements with the unaffiliated third parties: Distributions (2) Third Party Net Investment Amount Non-Controlling Ownership Percentage Net Real Estate Assets Subject to Investment Arrangement (1) Three Months Ended September 30, Nine Months Ended September 30, Property Name (Dollar amounts in thousands) Investment Date As of September 30, 2018 As of September 30, 2018 As of September 30, 2018 As of December 31, 2017 2018 2017 2018 2017 Plaza Del Rio Medical Office Campus Portfolio May 2015 $ 328 2.2 % $ 12,850 $ 10,784 $ — $ — $ 87 $ 52 UnityPoint Clinic Portfolio (2) December 2017 $ 485 5.0 % $ 9,340 $ 9,639 $ — $ — $ — $ — ______________ (1) One property within the Plaza Del Rio Medical Office Campus Portfolio was mortgaged as part of the Multi-Property CMBS Loan. See Note 4 - Mortgage Notes Payable for additional information. (2) Assumed as part of the HT III Asset Purchase. See Note 9 - Related Party Transactions and Arrangements for further information on the Asset Purchase. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Note 14 — Net Loss Per Share The following is a summary of the basic and diluted net loss per share computation for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net loss attributable to stockholders (in thousands) $ (29,607 ) $ (24,136 ) $ (42,548 ) $ (34,991 ) Basic and diluted weighted-average shares outstanding 90,203,311 89,821,799 90,983,620 89,599,655 Basic and diluted net loss per share $ (0.33 ) $ (0.27 ) $ (0.47 ) $ (0.39 ) Diluted net loss per share assumes the conversion of all common stock equivalents into an equivalent number of shares of common stock, unless the effect is antidilutive. The Company considers unvested restricted shares, OP Units and Class B Units to be common share equivalents. The Company had the following common stock equivalents on a weighted-average basis that were excluded from the calculation of diluted net loss per share attributable to stockholders as their effect would have been antidilutive for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Unvested restricted shares (1) 341,976 114,920 369,946 45,131 OP Units (2) 405,998 405,998 405,998 405,998 Class B Units (3) 359,250 359,250 359,250 359,250 Total weighted average antidilutive common stock equivalents 1,107,224 880,168 1,135,194 810,379 _______________ (1) Weighted average number of antidilutive unvested restricted shares outstanding for the periods presented. There were 323,045 and 9,121 unvested restricted shares outstanding as of September 30, 2018 and 2017 , respectively. (2) Weighted average number of antidilutive OP Units outstanding for the periods presented. There were 405,998 OP Units outstanding as of September 30, 2018 and 2017 , respectively. (3) Weighted average number of antidilutive Class B Units outstanding for the periods presented. There were 359,250 Class B Units outstanding as of September 30, 2018 and 2017 , respectively. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 15 — Segment Reporting During the nine months ended September 30, 2018 and 2017 , the Company operated in three reportable business segments for management and internal financial reporting purposes: MOBs, triple-net leased healthcare facilities, and SHOPs. The Company evaluates performance and makes resource allocations based on its three business segments. The medical office building segment primarily consists of MOBs leased to healthcare-related tenants under long-term leases, which may require such tenants to pay a pro rata share of property-related expenses. The triple-net leased healthcare facilities segment primarily consists of investments in seniors housing communities, hospitals, inpatient rehabilitation facilities and skilled nursing facilities under long-term leases, under which tenants are generally responsible to directly pay property-related expenses. The SHOP segment consists of direct investments in seniors housing communities, primarily providing assisted living, independent living and memory care services, which are operated through engaging independent third-party managers. There were no intersegment sales or transfers during the periods presented. 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. 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. On January 1, 2018, the Company transitioned six properties in its triple-net leased healthcare facilities segment to operating properties under a structure permitted by the RIDEA structure. The properties consist of two assisted living facilities located in Burlington and Cudahy, Wisconsin, two assisted living facilities located in Dixon and Rockford, Illinois, an assisted living facility located in Richmond, Kentucky and a skilled nursing facility located in Lutz, Florida. The prior tenants of the six properties transferred the operations of the properties to newly-formed subsidiaries of the Company and third-party managers engaged by those Company subsidiaries pursuant to market operations transfer agreements. The Company’s subsidiaries simultaneously entered into new management agreements with the third-party managers, who will operate and manage the facilities on behalf of the Company's subsidiaries. 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 income (loss). The Company uses NOI to assess and compare property level performance and to make decisions concerning the operation of the properties. The Company believes that NOI is useful as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from net income (loss). NOI excludes certain components from net income (loss) in order to provide results that are more closely related to a property's results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by the Company may not be comparable to NOI reported by other REITs that define NOI differently. The Company believes that in order to facilitate a clear understanding of the Company's operating results, NOI should be examined in conjunction with net income (loss) as presented in the Company's consolidated financial statements. NOI should not be considered as an alternative to net income (loss) as an indication of the Company's performance or to cash flows as a measure of the Company's liquidity or ability to make distributions. The following tables reconcile the segment activity to consolidated net loss for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2018 2018 (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 $ 19,758 $ 5,924 $ 4 $ 25,686 $ 58,729 $ 17,773 $ 11 $ 76,513 Operating expense reimbursements 4,428 151 — 4,579 14,653 724 — 15,377 Resident services and fee income — — 59,926 59,926 — — 178,696 178,696 Total revenues 24,186 6,075 59,930 90,191 73,382 18,497 178,707 270,586 Property operating and maintenance 6,985 7,126 45,187 59,298 22,328 11,569 132,264 166,161 NOI $ 17,201 $ (1,051 ) $ 14,743 30,893 $ 51,054 $ 6,928 $ 46,443 104,425 Impairment charges (17,837 ) (18,570 ) Operating fees to related parties (5,743 ) (17,233 ) Acquisition and transaction related (40 ) (333 ) General and administrative (4,441 ) (12,705 ) Depreciation and amortization (20,466 ) (62,099 ) Interest expense (12,597 ) (35,962 ) Interest and other income 16 21 Gain (loss) on non-designated derivatives 18 46 Income tax benefit 550 (225 ) Net loss attributable to non-controlling interests 40 87 Net loss attributable to stockholders $ (29,607 ) $ (42,548 ) Three Months Ended September 30, Nine Months Ended September 30, 2017 2017 (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 $ 16,879 $ 6,236 $ 3 $ 23,118 $ 49,876 $ 21,337 $ 8 $ 71,221 Operating expense reimbursements 4,009 (103 ) — 3,906 11,583 313 — 11,896 Resident services and fee income — — 52,048 52,048 — — 146,336 146,336 Total revenues 20,888 6,133 52,051 79,072 61,459 21,650 146,344 229,453 Property operating and maintenance 6,338 3,742 38,363 48,443 18,219 13,255 103,940 135,414 NOI $ 14,550 $ 2,391 $ 13,688 30,629 $ 43,240 $ 8,395 $ 42,404 94,039 Impairment charges (18,958 ) (18,993 ) Operating fees to related parties (5,635 ) (16,573 ) Acquisition and transaction related 261 (4,327 ) General and administrative (3,540 ) (11,116 ) Depreciation and amortization (19,089 ) (58,911 ) Interest expense (8,838 ) (20,908 ) Interest and other income 302 305 Gain on sale of real estate investment — 438 Loss on non-designated derivative instruments (22 ) (129 ) Income tax (expense) benefit 652 1,049 Net loss attributable to non-controlling interests 102 135 Net loss attributable to stockholders $ (24,136 ) $ (34,991 ) The following table reconciles the segment activity to consolidated total assets as of the periods presented: (In thousands) September 30, 2018 December 31, 2017 ASSETS Investments in real estate, net: Medical office buildings $ 879,127 $ 897,264 Triple-net leased healthcare facilities 245,936 294,727 Construction in progress 88,904 82,007 Seniors housing — operating properties 919,092 902,343 Total investments in real estate, net 2,133,059 2,176,341 Cash and cash equivalents 52,109 94,177 Restricted cash 17,097 8,411 Assets held for sale 79,995 37,822 Derivative assets, at fair value 9,271 2,550 Straight-line rent receivable, net 16,178 15,327 Prepaid expenses and other assets 30,302 22,099 Deferred costs, net 12,904 15,134 Total assets $ 2,350,915 $ 2,371,861 The following table reconciles capital expenditures by reportable business segment, excluding corporate non-real estate expenditures, for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Medical office buildings $ 1,834 $ 1,120 $ 4,060 $ 2,712 Triple-net leased healthcare facilities 425 64 493 64 Seniors housing — operating properties 489 905 2,415 3,398 Total capital expenditures $ 2,748 $ 2,089 $ 6,968 $ 6,174 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 16 — 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 October 1, 2018 - December 31, 2018 $ 221 $ 20 2019 780 80 2020 781 82 2021 774 84 2022 790 86 Thereafter 35,104 7,678 Total minimum lease payments $ 38,450 8,030 Less: amounts representing interest (3,202 ) Total present value of minimum lease payments $ 4,828 Total rental expense from operating leases was $0.2 million during the three months ended September 30, 2018 and 2017 , respectively, and $0.6 million for the nine months ended September 30, 2018 and 2017 , respectively. Interest expense related to capital leases was approximately $21,000 during the three months ended September 30, 2018 and 2017 , respectively, and $64,000 and $63,000 during the nine months ended September 30, 2018 and 2017 , respectively. Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company or its properties. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of September 30, 2018 , the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations. Development Project Funding In August 2015, the Company entered into an asset purchase agreement and development agreement to acquire land and construction in progress, and subsequently fund the remaining construction, of a development property in Jupiter, Florida for $82.0 million . As of September 30, 2018 , the Company had funded $88.7 million , including $10.0 million for the land and $78.7 million for construction in progress. As a result, the Company believes that it has satisfied its funding commitments for the construction. As of September 30, 2018 , the Company had funded $6.7 million in excess of its $72.0 million funding commitment for the construction. The Company has and may continue to, at its election, provide additional funding to ensure completion of the construction. To the extent the Company funds additional monies for the completion of the development, Palm, the developer of the facility, is responsible for reimbursing the Company for any amounts funded. Entities related to Palm, referred to herein as the NuVista Tenants, are, however, in default to the Company under leases at other properties in the Company's portfolio (see Note 3 — Real Estate Investments for more information). The Company currently does not expect that Palm will reimburse the Company for construction overruns funded and there can be no assurance that they will do so, in whole or in part. Palm is responsible for completing the development and obtaining a final certificate of occupancy for the facility (the "CO"). However, Palm is in default of the development agreement and has provided notice that it will cease providing services under the development agreement, which may result in additional delays in obtaining the CO. Until the CO is obtained, the Company will not receive income from the property. There is no assurance as to when and if Palm will comply with its obligations. The Company is currently working to obtain the CO. Under the development agreement, the targeted completion date was December 31, 2016. Additionally, the estimated rent commencement date was expected to be no later than April 1, 2017 with entities related to Palm operating the property as the tenants (the "Jupiter Tenant"). The Company does not expect the Jupiter Tenant (or other entities related to Palm) to become the tenant and currently expects that it will need to identify a replacement tenant once it obtains the CO. Pursuant to an agreement between the Company and the Jupiter Tenant, the Jupiter Tenant has agreed to transfer all contracts, licenses and permits (including all operational permissions and certificates of need) to a replacement tenant designated by the Company. Until such replacement tenant is identified, there can be no assurance that this transfer will take place or that the Jupiter Tenant will comply with its obligations when required to do so. Concurrent with the acquisition, the Company entered into a loan agreement and lease agreement with an affiliate of Palm. 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 September 30, 2018 and December 31, 2017 , there were no amounts outstanding under the loan agreement as operations at the facility have not yet started. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 17 — 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: Amended Missouri SNF PSA On November 6, 2018, the Company entered into the Amended Missouri SNF PSA to sell the Missouri SNF Properties for an aggregate contract purchase price of $27.5 million . In connection with the Amended Missouri SNF PSA, the Company recognized an impairment charge of approximately $10.4 million on the eight Missouri SNF Properties for the three and nine months ended September 30, 2018 which are included on the consolidated statement of operations and comprehensive loss. See Note 3 — Real Estate Investments for additional information. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity ("VIE") for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company's assets and liabilities are held by the OP. |
Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity ("VIE") for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company's assets and liabilities are held by the OP. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform with the current year presentation. |
Revenue Recognition | Revenue Recognition The Company's rental income is primarily related to rent received from tenants in MOBs and triple-net leased healthcare facilities. Rent from tenants in the Company's MOB and triple-net leased healthcare facilities operating segments (as discussed below) is recorded in accordance with the terms of each lease on a straight-line basis over the initial term of the lease. Because many of the leases provide for rental increases at specified intervals, GAAP requires the Company to record a receivable, and include in revenues on a straight-line basis, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation. Cost recoveries from tenants are included in operating expense reimbursement in the period the related costs are incurred, as applicable. Resident services and fee income primarily relates to rent from residents in the Company's Seniors Housing — Operating Properties ("SHOP") held using a structure permitted by the REIT Investment Diversification and Empowerment Act of 2007 ("RIDEA") and to fees for ancillary services performed for SHOP residents. Rental income from residents in the Company's SHOP operating segment is recognized as earned. Residents pay monthly rent that covers occupancy of their unit and basic services, including utilities, meals and some housekeeping services. The terms of the rent are short term in nature, primarily month-to-month. Fees for ancillary services are recorded in the period in which the services are performed. The Company defers the revenue related to lease payments received from tenants and residents in advance of their due dates. The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant's payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is in doubt, the Company records an increase in the allowance for uncollectible accounts on the consolidated balance sheets or records a direct write-off of the receivable in the consolidated statements of operations. |
Recently Issued and Recently Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted as of January 1, 2018 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606 ), and has since issued several additional amendments thereto (collectively referred to herein as "ASC 606"). ASC 606 establishes a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Under ASC 606, 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. ASC 606 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. A reporting entity may apply the amendments in ASC 606 using either a modified retrospective approach, by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or a full retrospective approach. The Company adopted this guidance effective January 1, 2018 under the modified retrospective approach and it did not have an impact on the Company's consolidated financial statements. See above for further information on the Company's Revenue Recognition Accounting Policies under ASC 606. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The revised guidance amends the recognition and measurement of financial instruments. The new guidance significantly 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 Company adopted this guidance effective January 1, 2018, using the modified retrospective transition method, and there was no impact to the Company's consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which provides 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 Company adopted the new guidance on January 1, 2018 and it did not have an impact on its statement of cash flows. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Assets Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which provides guidance related to partial sales of non-financial assets, eliminates rules specifically addressing the sales of real estate, clarifies the definition of in substance non-financial assets, removes the exception to the financial asset derecognition model and clarifies the accounting for contributions of non-financial assets to joint ventures. The Company adopted this guidance effective January 1, 2018 using the modified transition method and it did not have an impact on its financial statements. The Company expects that any future sales of real estate in which the Company retains a non-controlling interest in the property would result in the full gain amount being recognized at the time of the partial sale. Historically, the Company has not retained any interest in properties it has sold. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, which provides 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, all do not change as a result of the modification. The Company adopted this guidance effective January 1, 2018 using the modified retrospective transition method and it did not have an impact on its consolidated financial statements. The Company expects that any future modifications to the Company's issued share-based awards will be accounted for using modification accounting, unless the modification meets all of the exception criteria noted above. As a result, the modification would be treated as an exchange of the original award for a new award, with any incremental fair value being treated as additional compensation cost. Pending Adoption as of September 30, 2018 In February 2016, the FASB issued ASC 842, which originally stated that companies would be required to bifurcate certain lease revenues between lease and non-lease components, however, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, in July 2018 ("ASU 2018-11"), which allows lessors a practical expedient by class of underlying assets to account for lease and non-lease components as a single lease component if certain criteria are met. Additionally, only incremental direct leasing costs may be capitalized under this new guidance, which is consistent with the Company’s existing policies. ASC 842 originally required a modified retrospective method of adoption, however, ASU 2018-11 indicates that companies may be permitted to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The pronouncement allows some optional practical expedients. From a lessor perspective the Company expects that the new standard will impact the presentation of lease and non-lease components of revenue such as rent, and operating expense reimbursements including common area maintenance, taxes, and insurance from leases for which the Company is a lessor. The Company does not expect this guidance to impact its existing lessor revenue recognition pattern. We expect to elect the practical expedient to account for costs paid by lessees directly to a third-party on a net basis. This reporting will have no impact on our net income. Resident leases within our Seniors Housing — Operating Properties business segment are accounted for as leases but also contain service elements. We expect to elect the practical expedient to account for our resident leases as a single lease component. The Company is a lessee for 19 of its properties for which it has ground leases as of September 30, 2018 . For these leases, the Company 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 new standard requires lessees to apply a dual lease classification 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 intends to take the practical expedients allowed under ASU No. 2018-11 and adopt the new provisions of ASC 842 prospectively on January 1, 2019, therefore, financial information and disclosures under ASC 842 will not be provided for periods prior to January 1, 2019. The Company continuing to evaluate any differences in the timing, measurement, or presentation of lessor revenues as well as the impact of the new lessee accounting model on the Company’s consolidated financial position, results of operations and disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the update requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. The amendments become effective for reporting periods beginning after December 15, 2019. On July 25, 2018, the FASB proposed an amendment to ASU 2016-13 to clarify that operating lease receivables recorded by lessors (including unbilled straight-line rent) are explicitly excluded from the scope of ASU 2016-13. Early adoption is permitted for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of this new guidance. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815) : (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception guidance that changes the method to determine the classification of certain financial instruments with a down round feature as liabilities or equity instruments and clarify existing disclosure requirements for equity-classified instruments. A down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. As a result, a freestanding equity-linked financial instrument no longer would be accounted for as a derivative liability, rather, an entity that presents earnings per share is required to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common stockholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features. The revised guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. Adoption should be applied retrospectively to outstanding financial instruments with a down round feature with a cumulative-effect adjustment to the statement of financial position. The Company is currently evaluating the impact of this new guidance. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The transition guidance provides companies with the option of early adopting the new standard using a modified retrospective transition method in any interim period after issuance of the update, or alternatively requires adoption for fiscal years beginning after December 15, 2018. This adoption method will require the Company to recognize the cumulative effect of initially applying the ASU as an adjustment to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that the Company adopts the update. The Company is currently assessing the potential impacts of this new standard. In July 2018, the FASB issued ASU 2018-07, Compensation- Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting as an amendment and update expanding the scope of Topic 718. The amendment specifies that Topic 718 now applies to all share-based payment transactions, even non-employee awards, in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. Under the new guidance, awards to nonemployees are measured on the grant date, rather than on the earlier of the performance commitment date or the date at which the nonemployee’s performance is complete. Also, the awards would be measured by estimating the fair value of the equity instruments to be issued, rather than the fair value of the goods or services received or the fair value of the equity instruments issued, whichever can be measured more reliably. In addition, entities may use the expected term to measure nonemployee awards or elect to use the contractual term as the expected term, on an award-by-award basis. The new guidance is effective for the Company in annual periods beginning after December 15, 2018, and interim periods within those annual periods. The Company is currently evaluating the impact of this new guidance. |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate Investments, Net [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table presents the allocation of real estate assets acquired and liabilities assumed during the nine months ended September 30, 2018 and 2017 as well as capitalized construction in progress during the nine months ended September 30, 2018 and 2017 : Nine Months Ended September 30, (In thousands) 2018 2017 Real estate investments, at cost: Land $ 7,807 $ 6,960 Buildings, fixtures and improvements 53,614 40,344 Construction in progress 6,685 7,871 Total tangible assets 68,106 55,175 Acquired intangibles: In-place leases (1) 5,440 6,566 Market lease and other intangible assets (1) 276 — Market lease liabilities (1) (286 ) (13 ) Total intangible assets and liabilities 5,430 6,553 Other assets acquired and liabilities assumed in the Asset Acquisition, net (1) — (60 ) Cash paid for acquired real estate investments $ 73,536 $ 61,788 Number of properties purchased 11 4 _______________ (1) Weighted-average remaining amortization periods for in-place leases, an above-market lease and a below-market lease liability acquired were 6.7 years and 8.9 years as of September 30, 2018 and 2017 , respectively. |
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 September 30, 2018 . These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to performance thresholds and increases in annual rent based on exceeding certain economic indexes, among other items. (In thousands) Future Minimum October 1, 2018 - December 31, 2018 $ 24,112 2019 93,970 2020 89,151 2021 83,076 2022 75,755 Thereafter 335,900 Total $ 701,964 |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following table lists the states where the Company had concentrations of properties where annualized rental income on a straight-line basis represented 10% or more of consolidated annualized rental income on a straight-line basis for all properties as of September 30, 2018 and 2017 : September 30, State 2018 2017 Florida 16.6% 17.2% Michigan 13.1% 15.2% Georgia 10.1% 10.3% Pennsylvania 10.1% 10.8% |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | Acquired intangible assets and liabilities consisted of the following as of the periods presented: September 30, 2018 December 31, 2017 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: In-place leases $ 214,495 $ 141,188 $ 73,307 $ 215,453 $ 130,749 $ 84,704 Market lease assets 30,911 9,467 21,444 30,636 7,853 22,783 Other intangible assets 10,587 1,037 9,550 10,589 838 9,751 Total acquired intangible assets $ 255,993 $ 151,692 $ 104,301 $ 256,678 $ 139,440 $ 117,238 Intangible liabilities: Market lease liabilities $ 26,237 $ 8,658 $ 17,579 $ 25,956 $ 7,127 $ 18,829 |
Schedule of Finite-Lived Intangible Assets | The following table discloses amounts recognized within the consolidated statements of operations and comprehensive loss related to amortization of in-place leases and other intangible assets, amortization and accretion of above- and below-market lease assets and liabilities, net and the amortization and accretion of above- and below-market ground leases, for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Amortization of in-place leases and other intangible assets (1) $ 4,632 $ 3,925 $ 14,382 $ 13,491 Amortization and (accretion) of above- and below-market leases, net (2) $ (30 ) $ (64 ) $ (30 ) $ (230 ) Amortization and (accretion) of above- and below-market ground leases, net (3) $ 37 $ 43 $ 110 $ 129 _______________ (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) October 1, 2018 - December 31, 2018 2019 2020 2021 2022 In-place lease assets $ 18,071 $ 14,182 $ 12,180 $ 9,942 $ 8,117 Other intangible assets 153 568 414 414 414 Total to be added to amortization expense $ 18,224 $ 14,750 $ 12,594 $ 10,356 $ 8,531 Above-market lease assets $ (442 ) $ (1,625 ) $ (1,287 ) $ (934 ) $ (583 ) Below-market lease liabilities 461 1,694 1,537 1,387 1,347 Total to be added to rental income $ 19 $ 69 $ 250 $ 453 $ 764 Below-market ground lease assets $ 60 $ 222 $ 222 $ 214 $ 212 Above-market ground lease liabilities (16 ) (65 ) (65 ) (65 ) (63 ) Total to be added to property operating and maintenance expense $ 44 $ 157 $ 157 $ 149 $ 149 |
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 September 30, 2018 and December 31, 2017: (In thousands) September 30, 2018 December 31, 2017 Land $ 7,580 $ 3,131 Buildings, fixtures and improvements 72,415 34,691 Assets held for sale $ 79,995 $ 37,822 |
Mortgage Notes Payable (Tables)
Mortgage Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table reflects the Company's mortgage notes payable as of September 30, 2018 and December 31, 2017 : Outstanding Loan Amount as of Effective Interest Rate as of Portfolio Encumbered Properties (1) September 30, December 31, 2017 September 30, December 31, 2017 Interest Rate Maturity (In thousands) (In thousands) Countryside Medical Arts - Safety Harbor, FL 1 $ 5,712 $ 5,773 5.92 % 4.98 % Variable Apr. 2019 St. Andrews Medical Park - Venice, FL 3 6,313 6,381 5.92 % 4.98 % Variable Apr. 2019 Palm Valley Medical Plaza - Goodyear, AZ 1 3,249 3,327 4.15 % 4.15 % Fixed Jun. 2023 Medical Center V - Peoria, AZ 1 3,000 3,066 4.75 % 4.75 % Fixed Sep. 2023 Courtyard Fountains - Gresham, OR 1 24,024 24,372 3.87 % 3.87 % Fixed Jan. 2020 Fox Ridge Bryant - Bryant, AR 1 7,462 7,565 3.98 % 3.98 % Fixed May 2047 Fox Ridge Chenal - Little Rock, AR 1 17,059 17,270 3.98 % 3.98 % Fixed May 2049 Fox Ridge North Little Rock - North Little Rock, AR 1 10,585 10,716 3.98 % 3.98 % Fixed May 2049 Philip Professional Center - Lawrenceville, GA 2 4,819 4,895 4.00 % 4.00 % Fixed Oct. 2019 Capital One MOB Loan 32 250,000 250,000 4.44 % 4.44 % Fixed (3) Jun. 2022 Bridge Loan 16 20,271 82,000 4.54 % 4.13 % Variable Dec. 2019 Multi-Property CMBS Loan 21 118,700 — 4.60 % — % Fixed May 2028 Gross mortgage notes payable 81 471,194 415,365 4.46 % 4.31 % (2) Deferred financing costs, net of accumulated amortization (7,139 ) (7,625 ) Mortgage premiums and (discounts), net (1,310 ) (1,110 ) Mortgage notes payable, net $ 462,745 $ 406,630 _______________ (1) Does not include real estate assets mortgaged to secure advances under the Fannie Mae Master Credit Facilities (as defined below) or eligible unencumbered real estate assets comprising the borrowing base of the Revolving Credit Facility (as defined in Note 5 — Credit Facilities ). The equity interests and related rights in the Company's wholly owned subsidiaries that directly own or lease the real estate assets comprising the borrowing base have been pledged for the benefit of the lenders thereunder ( see Note 5 — Credit Facilities for additional details). (2) Calculated on a weighted average basis for all mortgages outstanding as of September 30, 2018 . (3) Variable rate loan which is fixed as a result of entering into interest rate swap agreements ( see Note 7 — Derivatives and Hedging Activities for additional details). |
Schedule of Maturities of Long-term Debt | The following table summarizes the scheduled aggregate principal payments on mortgage notes payable for the five years subsequent to September 30, 2018 and thereafter: (In thousands) Future Principal Payments October 1, 2018 - December 31, 2018 $ 391 2019 38,348 2020 24,279 2021 892 2022 250,929 Thereafter 156,355 Total $ 471,194 The Company plans on refinancing or exercising extension options for the mortgages due in 2019 prior to their maturity. |
Credit Facilities (Tables)
Credit Facilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Credit Facilities | The Company had the following credit facilities outstanding as of September 30, 2018 and December 31, 2017 : Outstanding Facility Amount as of Effective Interest Rate Credit Facility Encumbered Properties (1) September 30, December 31, 2017 September 30, December 31, 2017 Interest Rate Maturity (In thousands) (In thousands) Revolving Credit Facility 55 (2) $ 189,700 $ 239,700 4.20 % 3.33 % Variable Mar. 2019 Fannie Mae Master Credit Facilities: Capital One Facility 12 (3) 216,614 152,461 4.56 % 3.88 % Variable (6) Nov. 2026 KeyBank Facility 10 (4) 142,708 142,708 4.61 % 3.89 % Variable (6) Nov. 2026 Total Fannie Mae Master Credit Facilities 359,322 295,169 Total Credit Facilities 77 $ 549,022 $ 534,869 4.44 % (5) 3.63 % (5) _______________ (1) Encumbered as of September 30, 2018 . (2) The equity interests and related rights in the Company's wholly owned subsidiaries that directly own or lease the eligible unencumbered real estate assets comprising the borrowing base of the Revolving Credit Facility have been pledged for the benefit of the lenders thereunder. (3) Secured by first-priority mortgages on 12 of the Company’s seniors housing properties located in Florida, Georgia, Iowa and Michigan as of September 30, 2018 . (4) Secured by first-priority mortgages on 10 of the Company’s seniors housing properties located in Michigan, Missouri, Kansas, California, Florida, Georgia and Iowa as of September 30, 2018 . (5) Calculated on a weighted average basis for all credit facilities outstanding as of September 30, 2018 and December 31, 2017 . (6) Variable rate loan which is capped as a result of entering into interest rate cap agreements ( see Note 7 — Derivatives and Hedging Activities for additional details). |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 and December 31, 2017 , 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 September 30, 2018 Derivative assets, at fair value Recurring $ — $ 9,271 $ — $ 9,271 Impaired real estate investments held for use Non-recurring — 3,814 — 3,814 Impaired real estate investments held for sale Non-recurring — 32,139 — 32,139 Total $ — $ 45,224 $ — $ 45,224 December 31, 2017 Derivative assets, at fair value Recurring $ — $ 2,550 $ — $ 2,550 Impaired real estate investments held for sale Non-recurring — 1,323 — 1,323 Total $ — $ 3,873 $ — $ 3,873 |
Fair Value, by Balance Sheet Grouping | The fair values of the Company's remaining financial instruments that are not reported at fair value on the consolidated balance sheets are reported below: September 30, 2018 December 31, 2017 (In thousands) Level Carrying Amount (1) Fair Value Carrying Amount (1) Fair Value Gross mortgage notes payable and mortgage premium and discounts, net 3 $ 469,884 $ 468,851 $ 414,255 $ 411,749 Revolving Credit Facility 3 $ 189,700 $ 189,700 $ 239,700 $ 239,700 Fannie Mae Master Credit Facilities 3 $ 359,322 $ 359,718 $ 295,169 $ 296,151 (1) Carrying value includes mortgage notes payable of $471.2 million and $415.4 million and mortgage premiums and (discounts), net of $(1.3) million and $(1.1) million as of September 30, 2018 and December 31, 2017, respectively. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Balance Sheet Location | The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of September 30, 2018 and December 31, 2017 : (In thousands) Balance Sheet Location September 30, December 31, 2017 Derivatives designated as hedging instruments: Interest rate swaps Derivative assets, at fair value $ 9,017 $ 2,473 Derivatives not designated as hedging instruments: Interest rate caps Derivative assets, at fair value $ 254 $ 77 |
Summary of Derivative Instruments | The Company had the following outstanding interest rate derivatives that were not designated as hedges in qualified hedging relationships as of September 30, 2018 and December 31, 2017 : September 30, 2018 December 31, 2017 Interest Rate Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate caps 7 $ 359,322 6 $ 295,169 As of September 30, 2018 and December 31, 2017 , the Company had the following derivatives that were designated as cash flow hedges of interest rate risk: September 30, 2018 December 31, 2017 Interest Rate Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate swap 2 $ 250,000 2 $ 250,000 |
Schedule of Derivatives Included in AOCI | The table below details the location in the financial statements of the loss recognized on interest rate derivatives designated as cash flow hedges for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Amount of gain (loss) recognized in accumulated other comprehensive income on interest rate derivatives (effective portion) $ 1,133 $ (243 ) $ 6,533 $ (539 ) Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense $ 135 $ (415 ) $ (11 ) $ (415 ) |
Offsetting Assets | The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of September 30, 2018 and December 31, 2017 . The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheet. Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets presented in the Consolidated Balance Sheet Financial Instruments Cash Collateral Received Net Amount September 30, 2018 $ 9,271 $ — $ — $ 9,271 $ — $ — $ 9,271 December 31, 2017 $ 2,550 $ — $ — $ 2,550 $ — $ — $ 2,550 |
Common Stock (Tables)
Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Class of Treasury Stock | The following table reflects the number of shares repurchased cumulatively through September 30, 2018 : Number of Shares Repurchased Average Price per Share Cumulative repurchases as of December 31, 2017 (1) 2,529,798 $ 22.43 Nine months ended September 30, 2018 (2) 529,871 $ 21.10 Cumulative repurchases as of September 30, 2018 3,059,669 $ 22.20 _______________ (1) Includes 1,554,768 shares repurchased during the year ended December 31, 2017 for approximately $33.6 million at a weighted average price per share of $21.61 . 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 September 30, 2017, which was equal to 267,723 shares repurchased for approximately $5.7 million at an average price per share of $21.47 . 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. (2) Includes (i) 373,967 shares repurchased during January 2018 with respect to requests received following the death or qualifying disability of stockholders during the six months ended December 31, 2017 for approximately $8.0 million at a weighted average price per share of $21.45 , and (ii) 155,904 shares that were repurchased for $3.2 million at an average price per share of $20.25 on July 31, 2018, representing 100% of the repurchase requests made following the death or qualifying disability of stockholders during the period from January 1, 2018 through the suspension of the SRP on March 13, 2018. No repurchase requests received during the SRP suspension were accepted. |
Related Party Transactions an_2
Related Party Transactions and Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services | The following table details amounts incurred, forgiven and payable in connection with the Company's operations-related services described above as of and for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, Payable (Receivable) as of 2018 2017 2018 2017 September 30, December 31, (In thousands) Incurred (1) Incurred (1) Incurred (1) Incurred (1) 2018 2017 One-time fees and reimbursements: Acquisition cost reimbursements $ 34 $ 77 $ 144 $ 99 $ 34 $ 36 Due to (from) HT III related to Asset Purchase (2) — — — — (68 ) 196 Ongoing fees and reimbursements: Asset management fees 4,875 4,875 14,625 14,314 — — Property management fees 868 758 2,608 2,257 3 66 Professional fees and other reimbursements 2,121 1,889 6,330 4,922 695 (4) 1,339 (4) Distributions on Class B Units (3) 77 131 263 412 — — Total related party operation fees and reimbursements $ 7,975 $ 7,730 $ 23,970 $ 22,004 $ 664 $ 1,637 _______________ (1) There were no fees or reimbursements forgiven during the three and nine months ended September 30, 2018 or 2017. (2) On December 22, 2017, the Company purchased substantially all the assets of American Realty Capital Healthcare Trust III, Inc. ("HT III"). Certain proration estimates were included within the closing. The purchase agreement calls for a final purchase price adjustment. The Company had a $68,000 net receivable and $196,000 net payable related to the Asset Purchase (as defined below) included on its consolidated balance sheet as of September 30, 2018 and December 31, 2017, respectively. Please see below for additional information related to the asset purchase. (3) Prior to April 1, 2015, the Company caused the OP to issue (subject to periodic approval by the Board) to the Advisor restricted performance based Class B Units for asset management services. As of December 31, 2017, the Board had approved the issuance of 359,250 Class B Units to the Advisor in connection with this arrangement. Effective April 1, 2015, the Company began paying an asset management fee to the Advisor or its assignees in cash, in shares, or a combination of both and no longer issues any Class B Units. (4) Balance includes costs which were incurred and accrued due to ANST and a subsidiary of RCAP which were related parties of the Company. See above for further details on the status of the ANST and RCAP relationship. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2017 382,510 $ 21.47 Granted — — Vested (59,465 ) 21.48 Forfeitures — — Unvested, September 30, 2018 323,045 21.47 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | The following table illustrates the changes in accumulated other comprehensive income as of and for the period presented: (In thousands) Unrealized Gain on Designated Derivative Balance, December 31, 2017 $ 2,473 Other comprehensive income, before reclassifications 6,533 Amount of loss reclassified from accumulated other comprehensive income 11 Balance, September 30, 2018 $ 9,017 |
Non-controlling Interests (Tabl
Non-controlling Interests (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interest | The following table summarizes the activity related to investment arrangements with the unaffiliated third parties: Distributions (2) Third Party Net Investment Amount Non-Controlling Ownership Percentage Net Real Estate Assets Subject to Investment Arrangement (1) Three Months Ended September 30, Nine Months Ended September 30, Property Name (Dollar amounts in thousands) Investment Date As of September 30, 2018 As of September 30, 2018 As of September 30, 2018 As of December 31, 2017 2018 2017 2018 2017 Plaza Del Rio Medical Office Campus Portfolio May 2015 $ 328 2.2 % $ 12,850 $ 10,784 $ — $ — $ 87 $ 52 UnityPoint Clinic Portfolio (2) December 2017 $ 485 5.0 % $ 9,340 $ 9,639 $ — $ — $ — $ — ______________ (1) One property within the Plaza Del Rio Medical Office Campus Portfolio was mortgaged as part of the Multi-Property CMBS Loan. See Note 4 - Mortgage Notes Payable for additional information. (2) Assumed as part of the HT III Asset Purchase. See Note 9 - Related Party Transactions and Arrangements for further information on the Asset Purchase. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a summary of the basic and diluted net loss per share computation for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net loss attributable to stockholders (in thousands) $ (29,607 ) $ (24,136 ) $ (42,548 ) $ (34,991 ) Basic and diluted weighted-average shares outstanding 90,203,311 89,821,799 90,983,620 89,599,655 Basic and diluted net loss per share $ (0.33 ) $ (0.27 ) $ (0.47 ) $ (0.39 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Net loss attributable to stockholders (in thousands) $ (29,607 ) $ (24,136 ) $ (42,548 ) $ (34,991 ) Basic and diluted weighted-average shares outstanding 90,203,311 89,821,799 90,983,620 89,599,655 Basic and diluted net loss per share $ (0.33 ) $ (0.27 ) $ (0.47 ) $ (0.39 ) Diluted net loss per share assumes the conversion of all common stock equivalents into an equivalent number of shares of common stock, unless the effect is antidilutive. The Company considers unvested restricted shares, OP Units and Class B Units to be common share equivalents. The Company had the following common stock equivalents on a weighted-average basis that were excluded from the calculation of diluted net loss per share attributable to stockholders as their effect would have been antidilutive for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Unvested restricted shares (1) 341,976 114,920 369,946 45,131 OP Units (2) 405,998 405,998 405,998 405,998 Class B Units (3) 359,250 359,250 359,250 359,250 Total weighted average antidilutive common stock equivalents 1,107,224 880,168 1,135,194 810,379 _______________ (1) Weighted average number of antidilutive unvested restricted shares outstanding for the periods presented. There were 323,045 and 9,121 unvested restricted shares outstanding as of September 30, 2018 and 2017 , respectively. (2) Weighted average number of antidilutive OP Units outstanding for the periods presented. There were 405,998 OP Units outstanding as of September 30, 2018 and 2017 , respectively. (3) Weighted average number of antidilutive Class B Units outstanding for the periods presented. There were 359,250 Class B Units outstanding as of September 30, 2018 and 2017 , respectively. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables reconcile the segment activity to consolidated net loss for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2018 2018 (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 $ 19,758 $ 5,924 $ 4 $ 25,686 $ 58,729 $ 17,773 $ 11 $ 76,513 Operating expense reimbursements 4,428 151 — 4,579 14,653 724 — 15,377 Resident services and fee income — — 59,926 59,926 — — 178,696 178,696 Total revenues 24,186 6,075 59,930 90,191 73,382 18,497 178,707 270,586 Property operating and maintenance 6,985 7,126 45,187 59,298 22,328 11,569 132,264 166,161 NOI $ 17,201 $ (1,051 ) $ 14,743 30,893 $ 51,054 $ 6,928 $ 46,443 104,425 Impairment charges (17,837 ) (18,570 ) Operating fees to related parties (5,743 ) (17,233 ) Acquisition and transaction related (40 ) (333 ) General and administrative (4,441 ) (12,705 ) Depreciation and amortization (20,466 ) (62,099 ) Interest expense (12,597 ) (35,962 ) Interest and other income 16 21 Gain (loss) on non-designated derivatives 18 46 Income tax benefit 550 (225 ) Net loss attributable to non-controlling interests 40 87 Net loss attributable to stockholders $ (29,607 ) $ (42,548 ) Three Months Ended September 30, Nine Months Ended September 30, 2017 2017 (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 $ 16,879 $ 6,236 $ 3 $ 23,118 $ 49,876 $ 21,337 $ 8 $ 71,221 Operating expense reimbursements 4,009 (103 ) — 3,906 11,583 313 — 11,896 Resident services and fee income — — 52,048 52,048 — — 146,336 146,336 Total revenues 20,888 6,133 52,051 79,072 61,459 21,650 146,344 229,453 Property operating and maintenance 6,338 3,742 38,363 48,443 18,219 13,255 103,940 135,414 NOI $ 14,550 $ 2,391 $ 13,688 30,629 $ 43,240 $ 8,395 $ 42,404 94,039 Impairment charges (18,958 ) (18,993 ) Operating fees to related parties (5,635 ) (16,573 ) Acquisition and transaction related 261 (4,327 ) General and administrative (3,540 ) (11,116 ) Depreciation and amortization (19,089 ) (58,911 ) Interest expense (8,838 ) (20,908 ) Interest and other income 302 305 Gain on sale of real estate investment — 438 Loss on non-designated derivative instruments (22 ) (129 ) Income tax (expense) benefit 652 1,049 Net loss attributable to non-controlling interests 102 135 Net loss attributable to stockholders $ (24,136 ) $ (34,991 ) The following table reconciles the segment activity to consolidated total assets as of the periods presented: (In thousands) September 30, 2018 December 31, 2017 ASSETS Investments in real estate, net: Medical office buildings $ 879,127 $ 897,264 Triple-net leased healthcare facilities 245,936 294,727 Construction in progress 88,904 82,007 Seniors housing — operating properties 919,092 902,343 Total investments in real estate, net 2,133,059 2,176,341 Cash and cash equivalents 52,109 94,177 Restricted cash 17,097 8,411 Assets held for sale 79,995 37,822 Derivative assets, at fair value 9,271 2,550 Straight-line rent receivable, net 16,178 15,327 Prepaid expenses and other assets 30,302 22,099 Deferred costs, net 12,904 15,134 Total assets $ 2,350,915 $ 2,371,861 The following table reconciles capital expenditures by reportable business segment, excluding corporate non-real estate expenditures, for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Medical office buildings $ 1,834 $ 1,120 $ 4,060 $ 2,712 Triple-net leased healthcare facilities 425 64 493 64 Seniors housing — operating properties 489 905 2,415 3,398 Total capital expenditures $ 2,748 $ 2,089 $ 6,968 $ 6,174 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 October 1, 2018 - December 31, 2018 $ 221 $ 20 2019 780 80 2020 781 82 2021 774 84 2022 790 86 Thereafter 35,104 7,678 Total minimum lease payments $ 38,450 8,030 Less: amounts representing interest (3,202 ) Total present value of minimum lease payments $ 4,828 |
Organization (Narrative) (Detai
Organization (Narrative) (Details) - Sep. 30, 2018 ft² in Millions | property | ft² | encumbered_property | state |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Number of Properties | 196 | 77 | ||
Number of states properties are located in | state | 30 | |||
Rentable square feet | ft² | 9.3 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Narrative) (Details) - Sep. 30, 2018 | property | encumbered_property |
Lessee, Lease, Description [Line Items] | ||
Number of Properties | 196 | 77 |
Ground lease | ||
Lessee, Lease, Description [Line Items] | ||
Number of Properties | 19 |
Real Estate Investments (Narrat
Real Estate Investments (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2018USD ($)property | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)property | Sep. 30, 2017USD ($) | Nov. 06, 2018USD ($)property | Sep. 30, 2018USD ($) | Sep. 30, 2018impaired_property | Sep. 30, 2018encumbered_property | Sep. 25, 2018USD ($) | Jul. 26, 2018USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Number of Properties | 196 | 196 | 77 | |||||||
Impairment charges | $ 17,837 | $ 18,958 | $ 18,570 | $ 18,993 | ||||||
Bad debt expense | $ 9,227 | 9,945 | ||||||||
Single Tenant MOB | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Number of properties | property | 6 | |||||||||
Purchase price | $ 66,700 | |||||||||
Multi-tenant MOB | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Number of properties | property | 5 | |||||||||
Skilled Nursing Facilities | Assets Held-for-sale | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Impairment charges | $ 10,400 | $ 10,400 | ||||||||
Medical Office Buildings | Assets Held-for-sale | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Number of Properties | property | 6 | 6 | ||||||||
Aggregate contract sale price | $ 58,800 | $ 68,000 | ||||||||
Impairment charges | $ 6,200 | $ 6,200 | ||||||||
Held-for-use | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Number of Properties | impaired_property | 1 | |||||||||
Impairment charges | $ 1,300 | $ 2,000 | ||||||||
Subsequent Event | Skilled Nursing Facilities | Assets Held-for-sale | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Number of Properties | property | 8 | |||||||||
Aggregate contract sale price | $ 27,500 | |||||||||
Nonrefundable extension and waiver fees | $ 4,000 | |||||||||
LaSalle Tenant | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Number of Properties | property | 4 | 4 | ||||||||
Receivable | $ 2,900 | |||||||||
Bad debt expense | $ 3,300 | $ 3,600 | ||||||||
NuVista Tenants | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Number of Properties | property | 2 | 2 | ||||||||
Receivable | 8,000 | |||||||||
Bad debt expense | $ 1,600 | $ 2,300 | $ 5,400 | $ 3,300 | ||||||
NuVista Tenants | Medicare Receivable | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Receivable | $ 6,100 |
Real Estate Investments (Acquir
Real Estate Investments (Acquired Assets) (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018USD ($)property | Sep. 30, 2017USD ($)property | |
Real estate investments, at cost: | ||
Cash paid for acquired real estate investments | $ 73,536 | $ 61,788 |
Acquired finite-lived intangible assets, weighted-average remaining amortization period | 6 years 8 months 12 days | 8 years 10 months 25 days |
Individual business acquisitions | ||
Real estate investments, at cost: | ||
Land | $ 7,807 | $ 6,960 |
Buildings, fixtures and improvements | 53,614 | 40,344 |
Construction in progress | 6,685 | 7,871 |
Total tangible assets | 68,106 | 55,175 |
Below-market lease liabilities | (286) | (13) |
Total intangible assets and liabilities | 5,430 | 6,553 |
Other assets acquired and liabilities assumed in the Asset Acquisition, net (1) | 0 | (60) |
Cash paid for acquired real estate investments | $ 73,536 | $ 61,788 |
Number of properties purchased | property | 11 | 4 |
In-place leases | Individual business acquisitions | ||
Real estate investments, at cost: | ||
In-place leases | $ 5,440 | $ 6,566 |
Market lease and other intangible assets | Individual business acquisitions | ||
Real estate investments, at cost: | ||
In-place leases | $ 276 | $ 0 |
Real Estate Investments (Future
Real Estate Investments (Future Minimum Payments) (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Real Estate Investments, Net [Abstract] | |
October 1, 2018 - December 31, 2018 | $ 24,112 |
2,019 | 93,970 |
2,020 | 89,151 |
2,021 | 83,076 |
2,022 | 75,755 |
Thereafter | 335,900 |
Total | $ 701,964 |
Real Estate Investments (Geogra
Real Estate Investments (Geographic Concentrations) (Details) - Annualized Rental Income - Geographic Concentration Risk | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Florida | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 16.60% | 17.20% |
Georgia | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.10% | 10.30% |
Michigan | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13.10% | 15.20% |
Pennsylvania | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.10% | 10.80% |
Real Estate Investments (Summar
Real Estate Investments (Summary of Intangible Lease Assets and Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Intangible assets: | ||
Gross Carrying Amount | $ 255,993 | $ 256,678 |
Accumulated Amortization | 151,692 | 139,440 |
Net Carrying Amount | 104,301 | 117,238 |
Market lease liabilities | ||
Gross Carrying Amount | 26,237 | 25,956 |
Accumulated Amortization | 8,658 | 7,127 |
Net Carrying Amount | 17,579 | 18,829 |
In-place leases | ||
Intangible assets: | ||
Gross Carrying Amount | 214,495 | 215,453 |
Accumulated Amortization | 141,188 | 130,749 |
Net Carrying Amount | 73,307 | 84,704 |
Market lease assets | ||
Intangible assets: | ||
Gross Carrying Amount | 30,911 | 30,636 |
Accumulated Amortization | 9,467 | 7,853 |
Net Carrying Amount | 21,444 | 22,783 |
Other intangible assets | ||
Intangible assets: | ||
Gross Carrying Amount | 10,587 | 10,589 |
Accumulated Amortization | 1,037 | 838 |
Net Carrying Amount | $ 9,550 | $ 9,751 |
Real Estate Investments (Summ_2
Real Estate Investments (Summary of Amortization and Accretion Recognized) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Accretion of Below-Market Lease Liabilities and Amortization of Above-Market Lease Assets, Net | $ 205 | $ 222 | ||
Depreciation and Amortization Expense | In-place Leases and Other Intangible Assets | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of market least intangibles | $ 4,632 | $ 3,925 | 14,382 | 13,491 |
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 | (30) | (64) | (30) | (230) |
Property Operating and Maintenance Expense | Above-market ground lease liabilities | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of market least intangibles | $ 37 | $ 43 | $ 110 | $ 129 |
Real Estate Investments (Summ_3
Real Estate Investments (Summary of Intangible Assets and Liabilities Future Amortization Expense) (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, October 1, 2018 - December 31, 2018 | $ 44 |
Finite-lived intangible assets, amortization expense, 2019 | 157 |
Finite-lived intangible assets, amortization expense, 2020 | 157 |
Finite-lived intangible assets, amortization expense, 2021 | 149 |
Finite-lived intangible assets, amortization expense, 2022 | 149 |
Amortization Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, October 1, 2018 - December 31, 2018 | 18,224 |
Finite-lived intangible assets, amortization expense, 2019 | 14,750 |
Finite-lived intangible assets, amortization expense, 2020 | 12,594 |
Finite-lived intangible assets, amortization expense, 2021 | 10,356 |
Finite-lived intangible assets, amortization expense, 2022 | 8,531 |
Rental Income | |
Finite-Lived Intangible Assets [Line Items] | |
Below market leases, amortization income, October 1, 2018 - December 31, 2018 | 19 |
Below market leases, amortization income, 2019 | 69 |
Below market leases, amortization income, 2020 | 250 |
Below market leases, amortization income, 2021 | 453 |
Below market leases, amortization income, 2022 | 764 |
In-place leases | Amortization Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, October 1, 2018 - December 31, 2018 | 18,071 |
Finite-lived intangible assets, amortization expense, 2019 | 14,182 |
Finite-lived intangible assets, amortization expense, 2020 | 12,180 |
Finite-lived intangible assets, amortization expense, 2021 | 9,942 |
Finite-lived intangible assets, amortization expense, 2022 | 8,117 |
Other intangible assets | Amortization Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, October 1, 2018 - December 31, 2018 | 153 |
Finite-lived intangible assets, amortization expense, 2019 | 568 |
Finite-lived intangible assets, amortization expense, 2020 | 414 |
Finite-lived intangible assets, amortization expense, 2021 | 414 |
Finite-lived intangible assets, amortization expense, 2022 | 414 |
Market lease and other intangible assets | Rental Income | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, October 1, 2018 - December 31, 2018 | (442) |
Finite-lived intangible assets, amortization expense, 2019 | (1,625) |
Finite-lived intangible assets, amortization expense, 2020 | (1,287) |
Finite-lived intangible assets, amortization expense, 2021 | (934) |
Finite-lived intangible assets, amortization expense, 2022 | (583) |
Below-market lease liabilities | Rental Income | |
Finite-Lived Intangible Assets [Line Items] | |
Below market leases, amortization income, October 1, 2018 - December 31, 2018 | 461 |
Below market leases, amortization income, 2019 | 1,694 |
Below market leases, amortization income, 2020 | 1,537 |
Below market leases, amortization income, 2021 | 1,387 |
Below market leases, amortization income, 2022 | 1,347 |
Below-market ground lease assets | Property Operating and Maintenance Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, amortization expense, October 1, 2018 - December 31, 2018 | 60 |
Finite-lived intangible assets, amortization expense, 2019 | 222 |
Finite-lived intangible assets, amortization expense, 2020 | 222 |
Finite-lived intangible assets, amortization expense, 2021 | 214 |
Finite-lived intangible assets, amortization expense, 2022 | 212 |
Above-market ground lease liabilities | Property Operating and Maintenance Expense | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible liability, amortization income, October 1, 2018 - December 31, 2018 | (16) |
Finite-lived intangible liability, amortization income, 2019 | (65) |
Finite-lived intangible liability, amortization income, 2020 | (65) |
Finite-lived intangible liability, amortization income, 2021 | (65) |
Finite-lived intangible liability, amortization income, 2022 | $ (63) |
Real Estate Investments (Proper
Real Estate Investments (Properties Sold and Assets Held-for-sale) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets held for sale | $ 79,995 | $ 37,822 |
Assets Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Land | 7,580 | 3,131 |
Buildings, fixtures and improvements | 72,415 | 34,691 |
Assets held for sale | $ 79,995 | $ 37,822 |
Mortgage Notes Payable (Mortgag
Mortgage Notes Payable (Mortgage Notes) (Details) $ in Thousands | Sep. 30, 2018USD ($)property | Dec. 31, 2017USD ($) | Dec. 28, 2017USD ($) |
Debt Instrument [Line Items] | |||
Effective Interest Rate | 4.44% | 3.63% | |
Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 81 | ||
Outstanding loan amount | $ 471,194 | $ 415,365 | |
Effective Interest Rate | 4.46% | 4.31% | |
Deferred financing costs, net of accumulated amortization | $ (7,139) | $ (7,625) | |
Mortgage premiums and (discounts), net | (1,310) | (1,110) | |
Mortgage notes payable, net | $ 462,745 | 406,630 | |
Capital One MOB Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 32 | ||
Outstanding loan amount | $ 250,000 | $ 250,000 | |
Effective Interest Rate | 4.44% | 4.44% | |
Bridge Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 16 | ||
Outstanding loan amount | $ 20,271 | $ 82,000 | $ 82,000 |
Effective Interest Rate | 4.54% | 4.13% | |
Multi-Property CMBS Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 21 | ||
Outstanding loan amount | $ 118,700 | $ 0 | |
Effective Interest Rate | 4.60% | 0.00% | |
Countryside Medical Arts - Safety Harbor, FL | Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Outstanding loan amount | $ 5,712 | $ 5,773 | |
Effective Interest Rate | 5.92% | 4.98% | |
St. Andrews Medical Park, Venice, FL | Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 3 | ||
Outstanding loan amount | $ 6,313 | $ 6,381 | |
Effective Interest Rate | 5.92% | 4.98% | |
Palm Valley Medical Plaza - Goodyear, AZ | Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Outstanding loan amount | $ 3,249 | $ 3,327 | |
Effective Interest Rate | 4.15% | 4.15% | |
Medical Center V - Peoria, AZ | Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Outstanding loan amount | $ 3,000 | $ 3,066 | |
Effective Interest Rate | 4.75% | 4.75% | |
Courtyard Fountains - Gresham, OR | Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Outstanding loan amount | $ 24,024 | $ 24,372 | |
Effective Interest Rate | 3.87% | 3.87% | |
Fox Ridge Senior Living at Bryant - Bryant | Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Outstanding loan amount | $ 7,462 | $ 7,565 | |
Effective Interest Rate | 3.98% | 3.98% | |
Fox Ridge Senior Living at Chenal - Little Rock | Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Outstanding loan amount | $ 17,059 | $ 17,270 | |
Effective Interest Rate | 3.98% | 3.98% | |
Fox Ridge Senior Living at Parkstone - North Little Rock | Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Outstanding loan amount | $ 10,585 | $ 10,716 | |
Effective Interest Rate | 3.98% | 3.98% | |
Philip Professional Center - Lawrenceville, GA | Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 2 | ||
Outstanding loan amount | $ 4,819 | $ 4,895 | |
Effective Interest Rate | 4.00% | 4.00% |
Mortgage Notes Payable (Mortg_2
Mortgage Notes Payable (Mortgage Principal Payments) (Details) - Mortgages - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
October 1, 2018 - December 31, 2018 | $ 391 | |
2,018 | 38,348 | |
2,019 | 24,279 | |
2,020 | 892 | |
2,021 | 250,929 | |
Thereafter | 156,355 | |
Total | $ 471,194 | $ 415,365 |
Mortgage Notes Payable (Narrati
Mortgage Notes Payable (Narrative) (Details) | Apr. 10, 2018USD ($)property | Mar. 02, 2018USD ($) | Sep. 30, 2018USD ($)property | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018encumbered_property | Sep. 30, 2018state | Dec. 31, 2017USD ($) | Dec. 28, 2017USD ($)encumbered_property |
Debt Instrument [Line Items] | |||||||||
Real estate investment, at cost relating to notes payable | $ 1,003,000,000 | ||||||||
Proceeds from credit facilities | $ 94,153,000 | $ 128,116,000 | |||||||
Number of Properties | 196 | 77 | |||||||
Number of states properties are located in | state | 30 | ||||||||
Payments of credit facilities | $ 80,000,000 | $ 187,000,000 | |||||||
Mortgages | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding loan amount | 471,194,000 | $ 415,365,000 | |||||||
Encumbered Properties | property | 81 | ||||||||
Mortgages | Multi-Property CMBS Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding loan amount | 118,700,000 | 0 | |||||||
Encumbered Properties | property | 21 | ||||||||
Face amount | $ 118,700,000 | ||||||||
Mortgages | Bridge Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding loan amount | 20,271,000 | 82,000,000 | $ 82,000,000 | ||||||
Encumbered Properties | property | 16 | ||||||||
Proceeds from credit facilities | $ 64,200,000 | ||||||||
Number of Properties | encumbered_property | 23 | ||||||||
Mortgages | MOB Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Outstanding loan amount | $ 250,000,000 | $ 250,000,000 | |||||||
Encumbered Properties | property | 32 | ||||||||
Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of Properties | property | 55 | ||||||||
Revolving Credit Facility | Mortgages | Multi-Property CMBS Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of Properties | property | 14 | ||||||||
Payments of credit facilities | $ 80,000,000 | ||||||||
Payments for deposits on acquisitions | 3,800,000 | ||||||||
Proceeds from loan agreement | $ 33,000,000 |
Credit Facilities (Summary of C
Credit Facilities (Summary of Credit Facilities) (Details) $ in Thousands | Sep. 30, 2018property | Sep. 30, 2018 | Sep. 30, 2018USD ($) | Sep. 30, 2018encumbered_property | Dec. 31, 2017USD ($) |
Line of Credit Facility [Line Items] | |||||
Number of Properties | 196 | 77 | |||
Outstanding balance | $ 549,022 | $ 534,869 | |||
Effective Interest Rate | 4.44% | 3.63% | |||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Number of Properties | property | 55 | ||||
Outstanding balance | $ 239,700 | ||||
Effective Interest Rate | 4.20% | 3.33% | |||
Credit Facility | Fannie Mae Master Credit Facilities | |||||
Line of Credit Facility [Line Items] | |||||
Outstanding balance | 359,322 | $ 295,169 | |||
Credit Facility | Fannie Mae Master Credit Facilities | Capital One Facility | |||||
Line of Credit Facility [Line Items] | |||||
Number of Properties | property | 12 | ||||
Outstanding balance | 216,614 | $ 152,461 | |||
Effective Interest Rate | 4.56% | 3.88% | |||
Credit Facility | Fannie Mae Master Credit Facilities | KeyBank Facility | |||||
Line of Credit Facility [Line Items] | |||||
Number of Properties | property | 10 | ||||
Outstanding balance | $ 142,708 | $ 142,708 | |||
Effective Interest Rate | 4.61% | 3.89% |
Credit Facilities (Narrative) (
Credit Facilities (Narrative) (Details) | Apr. 10, 2018USD ($)property | Mar. 02, 2018USD ($) | Sep. 30, 2018propertyencumbered_property | May 31, 2018encumbered_property | Sep. 30, 2018USD ($)property | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018encumbered_property | Dec. 31, 2017USD ($) | Dec. 28, 2017encumbered_property | Oct. 31, 2016instrument | Aug. 31, 2015USD ($) |
Line of Credit Facility [Line Items] | ||||||||||||
Payments of credit facilities | $ 80,000,000 | $ 187,000,000 | ||||||||||
Outstanding balance | $ 549,022,000 | $ 534,869,000 | ||||||||||
Proceeds from credit facilities | $ 94,153,000 | $ 128,116,000 | ||||||||||
Number of Properties | 196 | 196 | 77 | |||||||||
Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Maximum borrowing capacity | 565,000,000 | |||||||||||
Maximum borrowing capacity under accordion feature | 750,000,000 | |||||||||||
Unused borrowing capacity | 32,400,000 | |||||||||||
Revolving Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Outstanding balance | 239,700,000 | |||||||||||
Number of Properties | property | 55 | 55 | ||||||||||
Letter of Credit | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Maximum borrowing capacity | 25,000,000 | |||||||||||
Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 2,700,000 | |||||||||||
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 | Base Rate | Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Interest rate | 0.35% | |||||||||||
Minimum | London Interbank Offered Rate (LIBOR) | Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Interest rate | 1.60% | |||||||||||
Maximum | Base Rate | Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Interest rate | 0.95% | |||||||||||
Maximum | London Interbank Offered Rate (LIBOR) | Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Interest rate | 2.20% | |||||||||||
Fannie Mae Master Credit Facilities | Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Outstanding balance | 359,322,000 | 295,169,000 | ||||||||||
Fannie Mae Master Credit Facility | Bridge Loan | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Payments of credit facilities | $ 61,700,000 | |||||||||||
Mortgages | Multi-Property CMBS Loan | Revolving Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Payments of credit facilities | $ 80,000,000 | |||||||||||
Number of Properties | property | 14 | |||||||||||
Real Estate Properties Encumbered By Debt During Period | encumbered_property | 5 | 10 | ||||||||||
Mortgages | Bridge Loan | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Proceeds from credit facilities | $ 64,200,000 | |||||||||||
Number of Properties | encumbered_property | 23 | |||||||||||
Interest rate caps | Fannie Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Number of Instruments | instrument | 2 | |||||||||||
Interest rate cap | 3.50% | |||||||||||
KeyBank Facility | Fannie Mae Master Credit Facilities | Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Outstanding balance | 142,708,000 | 142,708,000 | ||||||||||
Number of Properties | property | 10 | 10 | ||||||||||
Capital One Facility | Fannie Mae Master Credit Facilities | Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Outstanding balance | $ 216,614,000 | $ 152,461,000 | ||||||||||
Number of Properties | property | 12 | 12 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Assets Measured at Fair Value) (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets, at fair value | $ 9,271 | $ 2,550 |
Total | 45,224 | 3,873 |
Quoted Prices in Active Markets Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets, at fair value | 0 | 0 |
Total | 0 | 0 |
Significant Other Observable Inputs Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets, at fair value | 9,271 | 2,550 |
Total | 45,224 | 3,873 |
Significant Unobservable Inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets, at fair value | 0 | 0 |
Total | 0 | 0 |
Impaired real estate investments held for use | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired real estate investments held for sale | 3,814 | |
Impaired real estate investments held for use | Quoted Prices in Active Markets Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired real estate investments held for sale | 0 | |
Impaired real estate investments held for use | Significant Other Observable Inputs Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired real estate investments held for sale | 3,814 | |
Impaired real estate investments held for use | Significant Unobservable Inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired real estate investments held for sale | 0 | |
Impaired real estate investments held for sale | Impaired real estate investments held for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired real estate investments held for sale | 32,139 | 1,323 |
Impaired real estate investments held for sale | Impaired real estate investments held for sale | Quoted Prices in Active Markets Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired real estate investments held for sale | 0 | 0 |
Impaired real estate investments held for sale | Impaired real estate investments held for sale | Significant Other Observable Inputs Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired real estate investments held for sale | 32,139 | 1,323 |
Impaired real estate investments held for sale | Impaired real estate investments held for sale | Significant Unobservable Inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired real estate investments held for sale | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments (Carrying Amounts and Fair Values of Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Outstanding balance | $ 549,022 | $ 534,869 |
Mortgage notes payable, net | 462,745 | 406,630 |
Gross mortgage notes payable and mortgage premium and discounts, net | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable, net | 471,200 | 415,400 |
Unamortized discount (premium) | 1,310 | 1,110 |
Significant Unobservable Inputs Level 3 | 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 | 469,884 | 414,255 |
Significant Unobservable Inputs Level 3 | 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 | 468,851 | 411,749 |
Significant Unobservable Inputs Level 3 | Credit Facility | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 239,700 | |
Significant Unobservable Inputs Level 3 | Credit Facility | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 189,700 | 239,700 |
Fannie Credit Facility | Significant Unobservable Inputs Level 3 | Credit Facility | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 359,322 | 295,169 |
Fannie Credit Facility | Significant Unobservable Inputs Level 3 | Credit Facility | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value | 359,718 | 296,151 |
Revolving Credit Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Outstanding balance | $ 239,700 | |
Revolving Credit Facility | Significant Unobservable Inputs Level 3 | Credit Facility | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Outstanding balance | $ 189,700 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | ||||
Impairment charges | $ 17,837 | $ 18,958 | $ 18,570 | $ 18,993 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($)instrument | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)instrument | Sep. 30, 2017USD ($) | Dec. 31, 2017instrument | |
Derivative [Line Items] | |||||
Gain (loss) on non-designated derivatives | $ 18 | $ (22) | $ 46 | $ (129) | |
Derivatives designated as hedging instruments: | Interest rate swap | |||||
Derivative [Line Items] | |||||
Number of Instruments | instrument | 2 | 2 | 2 | ||
Derivatives designated as hedging instruments: | Interest Expense | Interest Rate Contract | |||||
Derivative [Line Items] | |||||
Cash flow hedge reclassification in next twelve months | $ 1,800 | $ 1,800 |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities (Summary of Derivative Instruments) (Details) $ in Thousands | Sep. 30, 2018USD ($)instrument | Dec. 31, 2017USD ($)instrument |
Derivatives designated as hedging instruments: | Interest rate swap | ||
Derivative [Line Items] | ||
Number of Instruments | instrument | 2 | 2 |
Notional Amount | $ | $ 250,000 | $ 250,000 |
Derivatives not designated as hedging instruments: | Interest rate caps | ||
Derivative [Line Items] | ||
Number of Instruments | instrument | 7 | 6 |
Notional Amount | $ | $ 359,322 | $ 295,169 |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities (Derivatives Included in AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Derivative [Line Items] | ||||
Amount of gain (loss) recognized in accumulated other comprehensive income on interest rate derivatives (effective portion) | $ 998 | $ 172 | $ 6,544 | $ (124) |
Derivatives designated as hedging instruments: | Interest rate swap | ||||
Derivative [Line Items] | ||||
Amount of gain (loss) recognized in accumulated other comprehensive income on interest rate derivatives (effective portion) | 1,133 | (243) | 6,533 | (539) |
Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense | $ 135 | $ (415) | $ (11) | $ (415) |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activities (Balance Sheet Classification) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative [Line Items] | ||
Gross Amounts of Recognized (Liabilities) | $ 0 | $ 0 |
Gross Amounts of Recognized Assets | 9,271 | 2,550 |
Derivative assets, at fair value | Derivatives not designated as hedging instruments: | Interest rate swap | ||
Derivative [Line Items] | ||
Gross Amounts of Recognized Assets | 9,017 | 2,473 |
Derivative assets, at fair value | Derivatives not designated as hedging instruments: | Interest rate caps | ||
Derivative [Line Items] | ||
Gross Amounts of Recognized Assets | $ 254 | $ 77 |
Derivatives and Hedging Activ_7
Derivatives and Hedging Activities (Offsetting Derivatives) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 9,271 | $ 2,550 |
Gross Amounts of Recognized (Liabilities) | 0 | 0 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Assets presented in the Consolidated Balance Sheet | 9,271 | 2,550 |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received | 0 | 0 |
Net Amount | $ 9,271 | $ 2,550 |
Common Stock (Schedule of Stock
Common Stock (Schedule of Stock by Class) (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 16, 2018 | Mar. 13, 2018 | Mar. 01, 2018 | Apr. 01, 2017 | Jul. 31, 2018 | Jan. 31, 2018 | Jul. 31, 2017 | Apr. 30, 2013 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Sep. 30, 2018 | Jan. 26, 2016 |
Class of Stock [Line Items] | ||||||||||||||||
Number of Shares Repurchased (in shares) | 155,904 | 373,967 | 267,723 | 529,871 | 1,554,768 | 2,529,798 | 3,059,669 | |||||||||
Weighted-Average Price per Share (in usd per share) | $ 20.25 | $ 21.45 | $ 21.47 | $ 21.10 | $ 21.61 | $ 22.43 | $ 22.20 | |||||||||
Common stock repurchases | $ 3,200 | $ 8,000 | $ 5,700 | $ 14,202 | $ 33,599 | $ 33,600 | ||||||||||
Common stock, shares outstanding (in shares) | 91,608,625 | 91,608,625 | 91,002,766 | 91,002,766 | 91,608,625 | |||||||||||
Proceeds from issuance of common stock | $ 2,300,000 | |||||||||||||||
Common stock dividends (in usd per share) | $ 0.85 | $ 1.45 | $ 1.70 | $ 0.2164671871 | $ 0.37 | $ 0.73 | $ 1.15 | |||||||||
Common stock issued through distribution reinvestment plan (in shares) | 1,400,000 | |||||||||||||||
Authorized amount | 5.00% | 5.00% | 5.00% | |||||||||||||
Percentage of weighted average outstanding stock for fiscal semester | 2.50% | |||||||||||||||
Percentage of weighted average outstanding stock for fiscal year | 5.00% | |||||||||||||||
Proceeds from DRIP | $ 28,600 | |||||||||||||||
One Year | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
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% | |||||||||||||
Three Years | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
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% | |||||||||||||
Tender Offer | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of Shares Repurchased (in shares) | 229,999 | |||||||||||||||
Reduction in shares authorized for repurchase (in shares) | 230,000 | |||||||||||||||
Shares authorized for repurchase | 2,000,000 | |||||||||||||||
Weighted-Average Price per Share (in usd per share) | $ 13.15 |
Common Stock (Cumulative Share
Common Stock (Cumulative Share Repurchases) (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 13, 2018 | Jul. 31, 2018 | Jan. 31, 2018 | Jul. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Sep. 30, 2018 |
Class of Stock [Line Items] | |||||||||
Number of Shares Repurchased (in shares) | 155,904 | 373,967 | 267,723 | 529,871 | 1,554,768 | 2,529,798 | 3,059,669 | ||
Stock repurchase, value | $ 3,000 | ||||||||
Weighted-Average Price per Share (in usd per share) | $ 20.25 | $ 21.45 | $ 21.47 | $ 21.10 | $ 21.61 | $ 22.43 | $ 22.20 | ||
Common stock repurchases | $ 3,200 | $ 8,000 | $ 5,700 | $ 14,202 | $ 33,599 | $ 33,600 | |||
Tender Offer | |||||||||
Class of Stock [Line Items] | |||||||||
Number of Shares Repurchased (in shares) | 229,999 | ||||||||
Weighted-Average Price per Share (in usd per share) | $ 13.15 |
Related Party Transactions an_3
Related Party Transactions and Arrangements (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||
Common stock, shares outstanding (in shares) | 91,608,625 | 91,002,766 |
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 |
Related Party Transactions an_4
Related Party Transactions and Arrangements (Purchase Agreement) (Details) | Jun. 16, 2017property |
American Realty Capital Healthcare Trust III | |
Related Party Transaction [Line Items] | |
Number of properties purchased | 19 |
Related Party Transactions an_5
Related Party Transactions and Arrangements (Fees Paid in Connection With the Operations of the Company) (Details) - USD ($) | Feb. 17, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | 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 | 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 | Gross Revenue, Managed Properties | Advisor | ||||||||
Related Party Transaction [Line Items] | ||||||||
Oversight fees earned by related party | 1.00% | 1.00% | ||||||
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% | ||||||
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] | ||||||||
Period of notice of termination | 90 days | |||||||
Renewal period | 1 year | |||||||
Amended and Restated Property Management and Leasing Agreement | Maximum | ||||||||
Related Party Transaction [Line Items] | ||||||||
Term of agreement | 2 years | |||||||
Amended and Restated Property Management and Leasing Agreement | Minimum | ||||||||
Related Party Transaction [Line Items] | ||||||||
Term of agreement | 1 year | |||||||
Reimbursements of Administrative Services | American Realty Capital Healthcare Advisors, LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Transaction amount | $ 2,000,000 | $ 1,900,000 | $ 5,900,000 | $ 4,900,000 | ||||
Professional Fees and Reimbursements [Member] | Advisor | ||||||||
Related Party Transaction [Line Items] | ||||||||
Deferred cash payment | 1,700,000 | 1,700,000 | $ 1,700,000 | |||||
Due from Affiliates | $ 0 | $ 0 | $ 700,000 |
Related Party Transactions an_6
Related Party Transactions and Arrangements (Fees Paid in Connection With the Operations of the Company, Incurred, Forgiven and Payable) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Total related party operation fees and reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | $ 7,975 | $ 7,730 | $ 23,970 | $ 22,004 | |
Payable (Receivable) | 664 | 664 | $ 1,637 | ||
Acquisition cost reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 34 | 77 | 144 | 99 | |
Payable (Receivable) | (34) | (34) | (36) | ||
Due to (from) HT III related to Asset Purchase | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 0 | 0 | 0 | 0 | |
Payable (Receivable) | 68 | 68 | (196) | ||
Asset management fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 4,875 | 4,875 | 14,625 | 14,314 | |
Payable (Receivable) | 0 | 0 | 0 | ||
Property management and leasing fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 868 | 758 | 2,608 | 2,257 | |
Payable (Receivable) | (3) | (3) | (66) | ||
Transfer agent and other professional services | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 2,121 | 1,889 | 6,330 | 4,922 | |
Payable (Receivable) | (695) | (695) | (1,339) | ||
Distributions on Class B Units | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 77 | $ 131 | 263 | $ 412 | |
Payable (Receivable) | $ 0 | $ 0 | $ 0 | ||
Advisor | |||||
Related Party Transaction [Line Items] | |||||
Shares approved for issuance (in shares) | 359,250 | 359,250 |
Related Party Transactions an_7
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 | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018USD ($) | Dec. 31, 2017 | |
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% | |
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% | |
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 | 4.5 | 4 |
Related Party Transactions an_8
Related Party Transactions and Arrangements (American Realty Capital Healthcare Trust III, Inc. Asset Purchase) (Details) $ in Thousands | Dec. 22, 2017USD ($) | Jun. 16, 2017property | Jun. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Due to (from) HT III related to Asset Purchase | |||||
Related Party Transaction [Line Items] | |||||
Payable (Receivable) | $ 68 | $ (196) | |||
American Realty Capital Healthcare Trust III | |||||
Related Party Transaction [Line Items] | |||||
Number of properties purchased | property | 19 | ||||
Due to (from) HT III related to Asset Purchase | |||||
Related Party Transaction [Line Items] | |||||
Consideration payment | $ 108,400 | ||||
Purchase price | 120,000 | ||||
Closing adjustments | 700 | ||||
Debt assumed | 4,900 | ||||
Escrow deposit | $ 6,000 | $ 2,000 | |||
Installment period | 14 months |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Aug. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation | $ 921,000 | |||||
Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock issued during period, issued for services (in shares) | 0 | 0 | 0 | 0 | ||
Amended and Restated RSP | Unvested Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Benchmark for RSP issuance (in shares) | $ 30,000 | |||||
Amended and Restated RSP | Unvested Restricted Stock | Chairman | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted share vesting period | 7 years | |||||
Granted (in shares) | 300,000 | |||||
Amended and Restated RSP | Unvested Restricted Stock | Independent Directors | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted share vesting period | 5 years | |||||
Granted (in shares) | 25,000 | |||||
Restricted Share Plan | Unvested Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted automatically upon election to board of directors, in shares | 1,333 | 1,333 | ||||
Restricted share vesting period | 5 years | |||||
Maximum authorized amount as a percentage of shares authorized | 5.00% | |||||
Number of shares authorized, in shares | 3,400,000 | 3,400,000 | ||||
Granted (in shares) | 0 | |||||
Nonvested awards, compensation cost not yet recognized | $ 6,769,800,000 | $ 6,769,800,000 | ||||
Nonvested awards, compensation cost not yet recognized, period for recognition | 5 years 4 months 24 days | |||||
Additional Paid-in Capital | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation | $ 282,000 | $ 117,000 | $ 921,000 | $ 144,000 |
Share-Based Compensation (Summa
Share-Based Compensation (Summary of Activity) (Details) - Restricted Share Plan - Unvested Restricted Stock - $ / shares | 1 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2018 | |
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) | 382,510 | |
Granted (in shares) | 0 | |
Vested (in shares) | (59,465) | |
Forfeitures (in shares) | 0 | |
Ending Balance, Unvested (in shares) | 9,121 | 323,045 |
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) | $ 21.47 | |
Granted, Weighted-Average Issue Price (in usd per share) | 0 | |
Vested, Weighted-Average Issue Price (in usd per share) | 21.48 | |
Forfeitures, Weighted-Average Issued (in usd per share) | 0 | |
Ending Balance, Unvested, Weighted-Average Issue Price (in usd per share) | $ 21.47 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Summary of Changes in AOCI) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | $ 1,347,554 |
Ending balance | 1,259,953 |
Unrealized Gain on Designated Derivative | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | 2,473 |
Other comprehensive income, before reclassifications | 6,533 |
Amount of loss reclassified from accumulated other comprehensive income | 11 |
Ending balance | $ 9,017 |
Non-controlling Interests (Narr
Non-controlling Interests (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Nov. 30, 2014 | |
Noncontrolling Interest [Line Items] | ||||||
Limited partner units (in units) | 90 | 90 | 90 | |||
Distributions to non-controlling interest holders | $ 406 | $ 495 | ||||
Distributions | 406 | |||||
Non-controlling Interests | ||||||
Noncontrolling Interest [Line Items] | ||||||
Limited partner units (in units) | 405,908 | |||||
Units issued | $ 10,100 | |||||
Units issued (in usd per share) | $ 25 | |||||
Distributions to non-controlling interest holders | $ 100 | $ 100 | 300 | 500 | ||
Distributions | 406 | |||||
Plaza Del Rio Medical Office Campus Portfolio - Peoria, AZ | Non-controlling Interests | ||||||
Noncontrolling Interest [Line Items] | ||||||
Distributions | $ 0 | $ 0 | $ 87 | $ 52 |
Non-controlling Interests (Summ
Non-controlling Interests (Summary of Non-controlling Interests) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Noncontrolling Interest [Line Items] | |||||
Third Party Net Investment Amount | $ 8,012 | $ 8,012 | $ 8,505 | ||
Net Real Estate Assets Subject to Investment Arrangement | 2,133,059 | 2,133,059 | 2,176,341 | ||
Distributions | 406 | ||||
Non-controlling Interests | |||||
Noncontrolling Interest [Line Items] | |||||
Distributions | 406 | ||||
Plaza Del Rio Medical Office Campus Portfolio - Peoria, AZ | Non-controlling Interests | |||||
Noncontrolling Interest [Line Items] | |||||
Third Party Net Investment Amount | $ 328 | $ 328 | |||
Non-Controlling Ownership Percentage | 2.20% | 2.20% | |||
Net Real Estate Assets Subject to Investment Arrangement | $ 12,850 | $ 12,850 | 10,784 | ||
Distributions | 0 | $ 0 | 87 | $ 52 | |
UnityPoint Clinic Portfolio | Non-controlling Interests | |||||
Noncontrolling Interest [Line Items] | |||||
Third Party Net Investment Amount | $ 485 | $ 485 | |||
Non-Controlling Ownership Percentage | 5.00% | 5.00% | |||
Net Real Estate Assets Subject to Investment Arrangement | $ 9,340 | $ 9,340 | $ 9,639 | ||
Distributions | $ 0 | $ 0 | $ 0 | $ 0 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||
Net loss attributable to stockholders | $ (29,607) | $ (24,136) | $ (42,548) | $ (34,991) | |
Basic and diluted weighted-average shares outstanding (in shares) | 90,203,311 | 89,821,799 | 90,983,620 | 89,599,655 | |
Basic and diluted net loss per share (in usd per share) | $ (0.33) | $ (0.27) | $ (0.47) | $ (0.39) | |
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,107,224 | 880,168 | 1,135,194 | 810,379 | |
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) | 341,976 | 114,920 | 369,946 | 45,131 | |
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) | 323,045 | 9,121 | 323,045 | 9,121 | 382,510 |
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 | Sep. 30, 2018segment | Sep. 30, 2017segment |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 3 | 3 | |
Transfer of Operations | |||
Segment Reporting Information [Line Items] | |||
Number of properties purchased | property | 12 |
Segment Reporting (Reconciliati
Segment Reporting (Reconciliation of Segment Activity) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Rental income | $ 25,686 | $ 23,118 | $ 76,513 | $ 71,221 |
Total revenues | 90,191 | 79,072 | 270,586 | 229,453 |
Property operating and maintenance | 59,298 | 48,443 | 166,161 | 135,414 |
Net operating income | 30,893 | 30,629 | 104,425 | 94,039 |
Impairment charges | (17,837) | (18,958) | (18,570) | (18,993) |
Operating fees to related parties | (5,743) | (5,635) | (17,233) | (16,573) |
Acquisition and transaction related | (40) | 261 | (333) | (4,327) |
General and administrative | (4,441) | (3,540) | (12,705) | (11,116) |
Depreciation and amortization | (20,466) | (19,089) | (62,099) | (58,911) |
Interest expense | (12,597) | (8,838) | (35,962) | (20,908) |
Gain on sale of real estate investment | 0 | 0 | 0 | 438 |
Interest and other income | 16 | 302 | 21 | 305 |
Gain (loss) on non-designated derivatives | 18 | (22) | 46 | (129) |
Income tax benefit | 550 | 652 | (225) | 1,049 |
Net loss attributable to non-controlling interests | 40 | 102 | 87 | 135 |
Net loss attributable to stockholders | (29,607) | (24,136) | (42,548) | (34,991) |
Medical Office Buildings | ||||
Revenues: | ||||
Rental income | 19,758 | 16,879 | 58,729 | 49,876 |
Total revenues | 24,186 | 20,888 | 73,382 | 61,459 |
Property operating and maintenance | 6,985 | 6,338 | 22,328 | 18,219 |
Net operating income | 17,201 | 14,550 | 51,054 | 43,240 |
Triple-Net Leased Healthcare Facilities | ||||
Revenues: | ||||
Rental income | 5,924 | 6,236 | 17,773 | 21,337 |
Total revenues | 6,075 | 6,133 | 18,497 | 21,650 |
Property operating and maintenance | 7,126 | 3,742 | 11,569 | 13,255 |
Net operating income | (1,051) | 2,391 | 6,928 | 8,395 |
Seniors Housing Communities | ||||
Revenues: | ||||
Rental income | 4 | 3 | 11 | 8 |
Total revenues | 59,930 | 52,051 | 178,707 | 146,344 |
Property operating and maintenance | 45,187 | 38,363 | 132,264 | 103,940 |
Net operating income | 14,743 | 13,688 | 46,443 | 42,404 |
Operating expense reimbursements | ||||
Revenues: | ||||
Revenue | 4,579 | 3,906 | 15,377 | 11,896 |
Operating expense reimbursements | Medical Office Buildings | ||||
Revenues: | ||||
Revenue | 4,428 | 4,009 | 14,653 | 11,583 |
Operating expense reimbursements | Triple-Net Leased Healthcare Facilities | ||||
Revenues: | ||||
Revenue | 151 | (103) | 724 | 313 |
Operating expense reimbursements | Seniors Housing Communities | ||||
Revenues: | ||||
Revenue | 0 | 0 | 0 | 0 |
Resident services and fee income | ||||
Revenues: | ||||
Revenue | 59,926 | 52,048 | 178,696 | 146,336 |
Resident services and fee income | Medical Office Buildings | ||||
Revenues: | ||||
Revenue | 0 | 0 | 0 | 0 |
Resident services and fee income | Triple-Net Leased Healthcare Facilities | ||||
Revenues: | ||||
Revenue | 0 | 0 | 0 | 0 |
Resident services and fee income | Seniors Housing Communities | ||||
Revenues: | ||||
Revenue | $ 59,926 | $ 52,048 | $ 178,696 | $ 146,336 |
Segment Reporting (Reconcilia_2
Segment Reporting (Reconciliation of Segment Activity to Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Real estate investments, at cost: | ||
Investments in real estate: | $ 2,133,059 | $ 2,176,341 |
Construction in progress | 88,904 | 82,007 |
Cash and cash equivalents | 52,109 | 94,177 |
Restricted cash | 17,097 | 8,411 |
Assets held for sale | 79,995 | 37,822 |
Derivative assets, at fair value | 9,271 | 2,550 |
Straight-line rent receivable, net | 16,178 | 15,327 |
Prepaid expenses and other assets | 30,302 | 22,099 |
Deferred costs, net | 12,904 | 15,134 |
Total assets | 2,350,915 | 2,371,861 |
Medical Office Buildings | ||
Real estate investments, at cost: | ||
Investments in real estate: | 879,127 | 897,264 |
Triple-Net Leased Healthcare Facilities | ||
Real estate investments, at cost: | ||
Investments in real estate: | 245,936 | 294,727 |
Seniors Housing Communities | ||
Real estate investments, at cost: | ||
Investments in real estate: | $ 919,092 | $ 902,343 |
Segment Reporting (Reconcilia_3
Segment Reporting (Reconciliation of Capital Expenditures by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | $ 6,968 | $ 5,569 | ||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | $ 2,748 | $ 2,089 | 6,968 | 6,174 |
Operating Segments | Medical Office Buildings | ||||
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | 1,834 | 1,120 | 4,060 | 2,712 |
Operating Segments | Triple-Net Leased Healthcare Facilities | ||||
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | 425 | 64 | 493 | 64 |
Operating Segments | Seniors Housing Communities | ||||
Segment Reporting Information [Line Items] | ||||
Total capital expenditures | $ 489 | $ 905 | $ 2,415 | $ 3,398 |
Commitments and Contingencies_2
Commitments and Contingencies (Schedule of Future Minimum Rental Payments) (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Operating Leases | |
October 1, 2018 - December 31, 2018 | $ 221 |
2019, Operating Leases | 780 |
2020, Operating Leases | 781 |
2021, Operating Leases | 774 |
2022, Operating Leases | 790 |
Thereafter, Operating Leases | 35,104 |
Total, Operating Leases | 38,450 |
Capital Leases | |
October 1, 2018 - December 31, 2018 | 20 |
2019, Capital Leases | 80 |
2020, Capital Leases | 82 |
2021, Capital Leases | 84 |
2022, Capital Leases | 86 |
Thereafter, Capital Leases | 7,678 |
Total, Capital Leases | 8,030 |
Interest, Capital Leases | (3,202) |
Total present value of minimum lease payments | $ 4,828 |
Commitments and Contingencies_3
Commitments and Contingencies (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Aug. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||||||
Rent expense | $ 200,000 | $ 200,000 | $ 600,000 | $ 400,000 | ||
Interest expense | 21,000 | $ 21,000 | 64,000 | $ 63,000 | ||
Long-term Purchase Commitment [Line Items] | ||||||
Asset purchase and development agreement | $ 82,000,000 | |||||
Amount funded | 88,700,000 | 88,700,000 | ||||
Construction in progress | 78,692,000 | 78,692,000 | $ 72,007,000 | |||
Funding in excess of original obligation | 6,700,000 | 6,700,000 | ||||
Funding commitment | 72,000,000 | 72,000,000 | ||||
Land | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Construction in progress | 10,000,000 | 10,000,000 | ||||
Construction in Progress | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Construction in progress | $ 78,700,000 | $ 78,700,000 | ||||
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) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018USD ($)property | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)property | Sep. 30, 2017USD ($) | Nov. 06, 2018USD ($)property | Sep. 30, 2018encumbered_property | |
Subsequent Event [Line Items] | ||||||
Impairment charges | $ 17,837 | $ 18,958 | $ 18,570 | $ 18,993 | ||
Number of Properties | 196 | 196 | 77 | |||
Assets Held-for-sale | Skilled Nursing Facilities | ||||||
Subsequent Event [Line Items] | ||||||
Impairment charges | $ 10,400 | $ 10,400 | ||||
Assets Held-for-sale | Skilled Nursing Facilities | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Aggregate contract sale price | $ 27,500 | |||||
Number of Properties | property | 8 |