Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 19, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'New Senior Investment Group Inc. | ' |
Entity Central Index Key | '0001610114 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 66,399,857 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Real estate investments: | ' | ' |
Land | $137,719 | $102,064 |
Buildings, improvements and other | 1,489,213 | 1,271,364 |
Accumulated depreciation | -44,444 | -10,526 |
Net real estate property | 1,582,488 | 1,362,902 |
Acquired lease and other intangible assets | 177,460 | 123,063 |
Accumulated amortization | -62,938 | -22,174 |
Net real estate intangibles | 114,522 | 100,889 |
Net real estate investments | 1,697,010 | 1,463,791 |
Cash and cash equivalents | 42,549 | 30,393 |
Receivables and other assets, net | 41,740 | 13,432 |
Deferred financing costs, net | 36,804 | 41,979 |
Total Assets | 1,818,103 | 1,549,595 |
Liabilities | ' | ' |
Mortgage notes payable | 1,148,008 | 1,077,172 |
Due to affiliates | 12,228 | 5,894 |
Accrued expenses and other liabilities | 79,997 | 58,694 |
Total Liabilities | 1,240,233 | 1,141,760 |
Commitments and contingencies (Note 12) | ' | ' |
Equity | 577,870 | 407,835 |
Total Liabilities and Equity | $1,818,103 | $1,549,595 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Revenues | ' | ' | ' | ' | ||||
Resident fees and services | $40,473 | $24,257 | $113,287 | $50,745 | ||||
Rental revenue | 26,672 | 0 | 71,316 | 0 | ||||
Total revenues | 67,145 | 24,257 | 184,603 | 50,745 | ||||
Expenses | ' | ' | ' | ' | ||||
Property operating expense | 28,870 | 17,926 | 80,775 | 36,385 | ||||
Depreciation and amortization | 28,670 | 7,477 | 74,682 | 15,544 | ||||
Interest expense | 14,130 | 3,060 | 41,532 | 5,405 | ||||
Acquisition and transaction expense | 3,993 | 3,604 | 12,079 | 5,584 | ||||
Management fee to affiliate | 2,385 | 497 | 5,764 | 1,090 | ||||
General and administrative expense | 1,398 | 305 | 3,053 | 945 | ||||
Other (income) expense | -1,500 | 0 | -1,500 | 0 | ||||
Total expenses | 77,946 | 32,869 | 216,385 | 64,953 | ||||
Loss before income taxes | -10,801 | -8,612 | -31,782 | -14,208 | ||||
Income tax expense | 350 | 67 | 1,337 | 714 | ||||
Net loss | ($11,151) | ($8,679) | ($33,119) | ($14,922) | ||||
Basic and diluted loss per share (in dollars per share) | ($0.17) | ($0.13) | ($0.50) | ($0.22) | ||||
Basic and diluted shares outstanding (in shares) | 66,399,857 | [1] | 66,399,857 | [1] | 66,399,857 | [1] | 66,399,857 | [1] |
[1] | For the purposes of computing income per share of Common Stock for periods prior to the spin-off on November 6, 2014, the Company treated the common shares issued in connection with the spin-off as if they had been outstanding for all periods presented, similar to a stock split. The 5.5 million options that were issued on the spin-off date (see Note 13) were excluded from the diluted share calculation as their effect would have been anti-dilutive. |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2014 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) [Abstract] | ' |
Anti-dilutive options (in shares) | 5.5 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Increase (Decrease) in Equity [Roll Forward] | ' |
Equity at December 31, 2013 | $407,835 |
Contributions | 247,475 |
Distributions | -44,321 |
Net loss | -33,119 |
Equity at September 30, 2014 | $577,870 |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash Flows From Operating Activities | ' | ' |
Net loss | ($33,119) | ($14,922) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 74,682 | 15,544 |
Amortization of deferred financing fees | 6,142 | 408 |
Amortization of deferred community fees | -984 | -283 |
Amortization of premium on mortgage notes payable | 635 | 137 |
Non cash straight line rent | -19,034 | 0 |
Change in fair value of contingent consideration | -1,500 | 0 |
Changes in: | ' | ' |
Receivables and other assets, net | -9,014 | -7,537 |
Due to affiliates | 6,334 | 2,528 |
Accrued expenses and other liabilities | 20,850 | 6,122 |
Net cash provided by operating activities | 44,992 | 1,997 |
Cash Flows From Investing Activities | ' | ' |
Acquisition of real estate investments | -299,244 | -221,697 |
Capital expenditures | -5,826 | -1,783 |
Deposits paid for investments | -155 | -135 |
Net cash used in investing activities | -305,225 | -223,615 |
Cash Flows From Financing Activities | ' | ' |
Proceeds from mortgage notes payable | 80,144 | 165,696 |
Principal payments of mortgage notes payable | -9,942 | -143 |
Payment of deferred financing costs | -967 | -4,193 |
Contributions | 247,475 | 104,242 |
Distributions | -44,321 | -23,801 |
Net cash provided by financing activities | 272,389 | 241,801 |
Net Increase in Cash and Cash Equivalents | 12,156 | 20,183 |
Cash and Cash Equivalents, Beginning of Period | 30,393 | 9,720 |
Cash and Cash Equivalents, End of Period | 42,549 | 29,903 |
Supplemental Disclosure of Cash Flow Information | ' | ' |
Cash paid during the period for interest expense | 32,120 | 4,013 |
Cash paid during the period for income taxes | 1,350 | 829 |
Supplemental Schedule of Non-Cash Investing and Financing Activities | ' | ' |
Assumption of mortgage notes payable at fair value | 0 | 43,128 |
Issuance of seller financing for acquisition at fair value | 0 | 9,412 |
Issuance of contingent consideration at fair value | $50 | $1,500 |
ORGANIZATION
ORGANIZATION | 9 Months Ended | ||
Sep. 30, 2014 | |||
ORGANIZATION [Abstract] | ' | ||
ORGANIZATION | ' | ||
1 | ORGANIZATION | ||
New Senior Investment Group Inc. (“New Senior” or “the Company”) invests in a diversified portfolio of senior housing properties across 27 states in the continental United States. The Company was formed as Newcastle Senior Living Holdings LLC, a Delaware limited liability company, in 2012, and as of September 30, 2014, was a wholly owned subsidiary of Newcastle Investment Corp. (“Newcastle”). The Company converted to a Delaware corporation on May 30, 2014 and changed its name to New Senior Investment Group Inc. on June 16, 2014. | |||
On November 6, 2014, subsequent to the date of these financial statements, the spin-off of New Senior was completed with the distribution of all of the outstanding shares of New Senior to the holders of Newcastle common stock. Newcastle was the sole stockholder of the Company until the spin-off. Following the spin-off, New Senior is a separate publicly traded real estate investment trust (“REIT”) primarily focused on investing in senior housing properties and listed on the New York Stock Exchange under the symbol “SNR.” The Company is headquartered in New York, New York. | |||
New Senior intends to elect and qualify to be taxed as a REIT for U.S. federal income tax purposes for the tax year ending December 31, 2014. As such, New Senior will generally not be subject to U.S. federal corporate income tax on that portion of its net income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements. | |||
The Company operates in two reportable segments: (1) Managed Properties and (2) Triple Net Lease Properties. | |||
The Company has invested in 99 senior housing properties as of September 30, 2014. The Company has engaged property managers to manage 42 of its properties on a day-to-day basis under the Managed Properties segment. These properties consist of four dedicated independent living (“IL-only”) properties and 38 properties with a combination of independent living, assisted living or memory care (“AL/MC”) properties. All of the Company’s Managed Properties are operated by either Holiday Acquisition Holdings LLC (“Holiday”), a portfolio company that is majority owned by private equity funds managed by an affiliate of FIG LLC (the “Manager”), a subsidiary of Fortress Investment Group LLC (“Fortress”), or FHC Property Management LLC (together with its subsidiaries, “Blue Harbor”), an affiliate of the Manager, collectively the “Property Managers,” under property management agreements (the “Property Management Agreements”). Under the Property Management Agreements, the Property Managers are responsible for the day-to-day operations of the Company’s senior housing properties and are entitled to a management fee, in accordance with the terms of the Property Management Agreements. See Note 10. | |||
As of September 30, 2014, the Company has also invested in 57 properties (the "Holiday Portfolios" and the "LCS Portfolio") subject to triple net lease arrangements under the Triple Net Lease Properties segment. In a triple net lease transaction, the Company purchases property and leases it back to the seller or to a third party, and the lessee agrees to operate and maintain the property at its own expense, including repairs, maintenance, capital expenditures, utilities, taxes, insurance and the payroll expense of property-level employees. The Company’s triple net lease agreements have terms of approximately 15 or 17 years and include renewal options and periodic rent increases ranging from 2.5% to 4.5% in future years. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | ||
Sep. 30, 2014 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||
2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of Presentation – During the nine months ended September 30, 2014 and September 30, 2013, the Company was not operated as a standalone business from Newcastle. The Condensed Consolidated Financial Statements have been prepared on a spin-off basis from the Consolidated Financial Statements and accounting records of Newcastle and reflect Newcastle’s basis in the acquired properties. Management believes that the assumptions and methods of allocation used in the accompanying Condensed Consolidated Financial Statements are reasonable. | |||
These Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The results and cash flows reported in these Condensed Consolidated Financial Statements should not be regarded as necessarily indicative of results that may be expected for the entire fiscal year. | |||
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These Condensed Consolidated Financial Statements should be read in conjunction with the results of operations, financial position and cash flows in the Company’s Financial Statements as of and for the year ended December 31, 2013 in New Senior’s Registration Statement on Form 10 as filed with the Securities and Exchange Commission. | |||
The accompanying Condensed Consolidated Financial Statements reflect all revenues, expenses and cash flows directly attributable to the Company. Certain expenses of Newcastle, comprised primarily of a portion of its management fee, acquisition and transaction costs and general and administrative costs, have been allocated to New Senior to the extent they were directly associated with the Company for periods prior to the spin-off. The portion of the management fee allocated to New Senior prior to the spin-off represents the product of the management fee rate payable by Newcastle, 1.50%, and New Senior’s gross equity, which management believes is a reasonable method for quantifying the cost of the services provided by the employees of the Manager to the Company. New Senior and Newcastle do not intend to share any costs following the spin-off. See Note 10. | |||
Use of Estimates – Management is required to make estimates and assumptions when preparing financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from management’s estimates. | |||
Revenue Recognition | |||
Resident fees and services– Resident fees and services include monthly rental income, care income and ancillary income recognized from the Managed Properties segment. Resident fees and services are recognized monthly as services are provided. Lease agreements with residents are cancelable by the resident with 30 days’ notice. Ancillary income primarily relates to non-refundable community fees. Non-refundable community fees are recognized on a straight-line basis over the average length of stay of residents, which management estimates to be approximately 24 months for assisted living or memory care properties, and approximately 33 months for independent living properties. | |||
Triple Net Lease Properties – Rental revenue from the Triple Net Lease Properties segment is recognized on a straight-line basis over the applicable term of the lease when collectability is reasonably assured. | |||
Recognizing rental revenue on straight-line basis typically results in recognizing revenue in excess of cash amounts contractually due from the Company’s tenants during the first half of the lease term, creating straight line receivables that are included in other assets. As of September 30, 2014 and December 31, 2013, straight-line rent receivables were $19,556 and $522, respectively. | |||
Acquisition Accounting | |||
Acquisitions are accounted for as business combinations. The accounting for acquisitions requires the identification and measurement of all acquired tangible and intangibles assets and assumed liabilities at their respective fair values as of the respective transaction dates. In determining the allocation of acquisition consideration between net tangible and identified intangible assets acquired and liabilities assumed, management makes estimates as to the fair value of assets and liabilities using information obtained as a result of pre-acquisition due diligence, marketing, leasing activities and independent appraisals. In the case of real property, the fair value of the tangible assets acquired is determined by valuing the property as if it were vacant. Also, changes in management's estimates could impact the fair value measurement of contingent consideration and therefore, the overall value of the acquisition as well as the liability that management estimates will have to be paid upon the ultimate resolution of the contingency. The fair value of the contingent consideration is remeasured at each reporting date with the change recorded in other (income) expense in the Condensed Consolidated Statements of Operations. Acquisition-related costs are expensed as incurred within acquisition and transaction expense in the Condensed Consolidated Statements of Operations. | |||
Real estate investments are recorded at cost less accumulated depreciation. | |||
The Company estimates the fair value of in-place leases as (i) the present value of the estimated rental revenue that would have been forgone, offset by variable costs that would have otherwise been incurred during a reasonable lease-up period, as if the acquired units were vacant and (ii) the estimated absorption costs, such as additional marketing costs that would have been incurred during the leaseup period. The acquisition fair value of the in-place lease intangibles is amortized over the average length of stay of the residents at the senior housing properties on a straight-line basis, which management estimates to be 24 months for AL/MC properties and 33 months for IL-only properties. | |||
Above or below market lease intangibles primarily reflect the fair value of the ground lease agreements in place at acquisition. The Company estimates the fair value of ground lease intangibles as the difference between (a) the leased fee value and (b) the fee simple value. The acquisition fair values of the ground lease intangibles are amortized over the contractual lives of the respective leases. | |||
Other intangibles include non-compete intangibles. Non-compete intangibles reflect the fair value of non-compete agreements at acquisition. The Company estimates the fair value of non-compete intangibles as the sum of (i) the present value of the consulting services during the non-compete period and (ii) the difference between (a) the present value of the net operating income with the non-compete agreements in place and (b) the present value of the net operating income, as if the non-compete agreements were not in place. The acquisition fair value of the non-compete intangibles is amortized over the non-compete period on a straight-line basis, which is five years. | |||
Depreciation is calculated on a straight-line basis using estimated remaining useful lives not to exceed 40 years for buildings, 3 to 10 years for building improvements and 3 to 5 years for other fixed assets. | |||
Amortization is calculated on a straight-line basis using estimated useful lives of 17 to 82 years, 5 to 13 years and 24 to 33 months for above/below market intangibles, other intangibles and in-place lease intangibles, respectively. | |||
Recent Accounting Pronouncements | |||
In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 raises the threshold for disposals to qualify as discontinued operations. A discontinued operation is defined as: (1) a component of an entity or group of components that has been disposed of or classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results; or (2) an acquired business that is classified as held for sale on the acquisition date. ASU 2014-08 also requires additional disclosures regarding discontinued operations, as well as material disposals that do not meet the definition of discontinued operations. This update is effective for New Senior in the first quarter of 2015. New Senior is currently evaluating the new guidance to determine the impact it may have to its Condensed Consolidated Financial Statements. | |||
In May 2014, the FASB and the International Accounting Standards Board ("IASB") issued ASU 2014-09 Revenues from Contracts with Customers (Topic 606). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The ASU is effective for the Company in the first quarter of 2017. Early application is not permitted. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance in the ASU. The Company is currently evaluating the new guidance to determine the impact it may have on its Condensed Consolidated Financial Statements. | |||
The FASB has recently issued or discussed a number of proposed standards on such topics as consolidation, financial statement presentation, leases, financial instruments and hedging. Some of the proposed changes are significant and could have a material impact on our reporting. The Company has not yet fully evaluated the potential impact of all these proposals, but will make such an evaluation as the standards are finalized. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
ACQUISITIONS [Abstract] | ' | ||||||||||||||||
ACQUISITIONS | ' | ||||||||||||||||
3 | ACQUISITIONS | ||||||||||||||||
During the nine months ended September 30, 2014, the Company completed the acquisitions of seven portfolios representing 15 senior housing properties for an aggregate purchase price of $299,244. Nine of these properties (eight AL/MC, and one IL-only) were integrated into the Company’s Managed Properties segment while the remaining six properties (four Continuing Care Retirement Communities (“CCRC”), one AL/MC, and one IL-only (together, the “LCS Portfolio”)) are subject to triple net leases with a third party and were integrated into the Company’s Triple Net Lease segment. | |||||||||||||||||
The Company has retained Holiday to manage two of the properties acquired in the Managed Properties segment, while the other seven properties acquired are managed by Blue Harbor. | |||||||||||||||||
During the nine months ended September 30, 2013, the Company’s completed the acquisitions of 19 senior housing facilities in five different portfolios, all of which were integrated into the Company’s Managed Properties segment. The Company retained Holiday to manage 17 of the properties acquired while the other two properties acquired are managed by Blue Harbor. | |||||||||||||||||
The following table summarizes the fair value of identifiable assets acquired and liabilities assumed in connection with the acquisitions completed in the nine months ended September 30, 2014, in accordance with the acquisition method of accounting: | |||||||||||||||||
Managed Properties | Triple Net Lease | Total | |||||||||||||||
Properties | |||||||||||||||||
Real estate investments | $ | 103,530 | $ | 144,148 | $ | 247,678 | |||||||||||
Lease intangibles | 13,963 | 39,475 | 53,438 | ||||||||||||||
Other intangibles | — | 960 | 960 | ||||||||||||||
Other liabilities, net of other assets | (1,280 | ) | (1,552 | ) | (2,832 | ) | |||||||||||
Total Consideration | $ | 116,213 | $ | 183,031 | $ | 299,244 | |||||||||||
Mortgage notes payable | 80,144 | — | 80,144 | ||||||||||||||
Net assets | $ | 36,069 | $ | 183,031 | $ | 219,100 | |||||||||||
Total acquisition related expenses | $ | 2,150 | $ | 980 | $ | 3,130 | |||||||||||
The allocation of the purchase price of net assets acquired as a result of acquisitions completed during the nine months ended September 30, 2014 is still preliminary, pending the completion of various analyses and the finalization of estimates used in the determination of fair values. During the measurement period (which is not to exceed one year from the acquisition date), additional assets or liabilities may be recognized if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets or liabilities as of that date. The preliminary allocation may be adjusted after obtaining additional information regarding, among other things, asset valuations, liabilities assumed and revisions of previous estimates. These adjustments may be significant and will be accounted for retrospectively. | |||||||||||||||||
During the three months ended September 30, 2014, measurement period adjustments were made based on the valuation of assets acquired and liabilities assumed. The adjustments included a decrease of $18,657 for real estate investments and an increase of $18,583 and $74 for lease intangibles and other liabilities, respectively. None of the measurement period adjustments had a material impact on the Company's previously reported results of operations. | |||||||||||||||||
The following table illustrates the effect of the acquisitions completed in the nine month period ended September 30, 2014 on revenues and pre-tax net income as if they had been consummated as of January 1, 2013: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Revenues | $ | 69,809 | $ | 67,162 | $ | 206,660 | $ | 197,544 | |||||||||
Pre-tax net Income(loss) | (11,402 | ) | (8,845 | ) | (32,264 | ) | (18,295 | ) | |||||||||
The pro forma results are not necessarily indicative of the operating results that would have been obtained had the acquisitions occurred as of January 1, 2013, nor are they necessarily indicative of future operating results. |
SEGMENT_REPORTING
SEGMENT REPORTING | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
SEGMENT REPORTING [Abstract] | ' | ||||||||||||||||
SEGMENT REPORTING | ' | ||||||||||||||||
4 | SEGMENT REPORTING | ||||||||||||||||
As of September 30, 2014, the Company operated in two reportable business segments: Triple Net Lease Properties and Managed Properties. Under its Triple Net Lease Properties segment, the Company invests in senior housing and healthcare properties throughout the United States and leases those properties to healthcare operating companies under triple net leases that obligate the tenants to pay all property-related expenses, including repairs, maintenance, capital expenditures, utilities, taxes, insurance and the payroll expense of property-level employees. Under its Managed Properties segment, the Company invests in senior housing properties throughout the United States and engages property managers to manage those senior housing properties. | |||||||||||||||||
The Company evaluates performance of the combined properties in each reportable business segment based on segment net operating income (“NOI”). The Company defines NOI as total revenues less property-level operating expenses, which include property management fees and travel cost reimbursements to affiliates. The Company believes that net income, as defined by GAAP, is the most appropriate earnings measurement. However, the Company believes that segment NOI serves as a useful supplement to net income because it allows investors, analysts and management to measure unlevered property-level operating results and to compare the Company’s operating results to the operating results of other real estate companies and between periods on a consistent basis. Segment NOI should not be considered as an alternative to net income as determined in accordance with GAAP. | |||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||
30-Sep-14 | 30-Sep-13 | ||||||||||||||||
Triple Net Lease Properties | Managed | Consolidated | Managed | ||||||||||||||
Properties | Properties | ||||||||||||||||
Revenues | |||||||||||||||||
Resident fees and services | $ | — | $ | 40,473 | $ | 40,473 | $ | 24,257 | |||||||||
Rental revenue | 26,672 | — | 26,672 | — | |||||||||||||
Less: Property level expenses | — | 28,870 | 28,870 | 17,926 | |||||||||||||
Segment NOI | $ | 26,672 | $ | 11,603 | $ | 38,275 | $ | 6,331 | |||||||||
Depreciation and amortization | $ | 28,670 | $ | 7,477 | |||||||||||||
Interest expense | 14,130 | 3,060 | |||||||||||||||
Acquisition and transaction expense | 3,993 | 3,604 | |||||||||||||||
Management fee to affiliate | 2,385 | 497 | |||||||||||||||
General and administrative expense | 1,398 | 305 | |||||||||||||||
Other (income) expense | (1,500 | ) | — | ||||||||||||||
Income tax expense | 350 | 67 | |||||||||||||||
Net loss | $ | (11,151 | ) | $ | (8,679 | ) | |||||||||||
Nine months ended and as of | Nine Months Ended | ||||||||||||||||
30-Sep-14 | 30-Sep-13 | ||||||||||||||||
Triple Net Lease Properties | Managed | Consolidated | Managed | ||||||||||||||
Properties | Properties | ||||||||||||||||
Revenues | |||||||||||||||||
Resident fees and services | $ | — | $ | 113,287 | $ | 113,287 | $ | 50,745 | |||||||||
Rental revenue | 71,316 | — | 71,316 | — | |||||||||||||
Less: Property level expenses | — | 80,775 | 80,775 | 36,385 | |||||||||||||
Segment NOI | $ | 71,316 | $ | 32,512 | $ | 103,828 | $ | 14,360 | |||||||||
Depreciation and amortization | $ | 74,682 | $ | 15,544 | |||||||||||||
Interest expense | 41,532 | 5,405 | |||||||||||||||
Acquisition and transaction expense | 12,079 | 5,584 | |||||||||||||||
Management fee to affiliate | 5,764 | 1,090 | |||||||||||||||
General and administrative expense | 3,053 | 945 | |||||||||||||||
Other (income) expense | (1,500 | ) | — | ||||||||||||||
Income tax expense | 1,337 | 714 | |||||||||||||||
Net loss | $ | (33,119 | ) | $ | (14,922 | ) | |||||||||||
Total assets | $ | 1,211,383 | $ | 606,720 | $ | 1,818,103 | $ | 491,823 | |||||||||
Property operating expense includes property management fees and travel reimbursement costs. The Company also reimbursed the Property Managers for property-level payroll expenses. See Note 10 for additional information on these expenses. | |||||||||||||||||
The tenant for the Holiday Portfolios accounted for 33.2% and 36.2% of the total revenues for the three and nine months ending September 30, 2014, respectively. The Company’s properties in Florida and California accounted for approximately 38.5% and 11.0% of Managed Properties’ revenues for the nine months ended September 30, 2014, respectively. The Company’s properties in Florida and California accounted for approximately 15.9% and 23.2% of Managed Properties’ revenues for the nine months ended September 30, 2013, respectively. No other properties in the Company’s portfolio accounted for more than 10% of the Managed Properties’ revenues. |
REAL_ESTATE_INVESTMENTS
REAL ESTATE INVESTMENTS | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
REAL ESTATE INVESTMENTS [Abstract] | ' | ||||||||||||||||||||||||
REAL ESTATE INVESTMENTS | ' | ||||||||||||||||||||||||
5 | REAL ESTATE INVESTMENTS | ||||||||||||||||||||||||
Gross Carrying Amount | |||||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 1,373,428 | |||||||||||||||||||||||
Acquisition of real estate investments | 247,678 | ||||||||||||||||||||||||
Additions to real estate investments | 5,826 | ||||||||||||||||||||||||
Balance as of September 30, 2014 | $ | 1,626,932 | |||||||||||||||||||||||
Accumulated Depreciation | |||||||||||||||||||||||||
Balance as of December 31, 2013 | $ | (10,526 | ) | ||||||||||||||||||||||
Depreciation expense | (33,918 | ) | |||||||||||||||||||||||
Balance as of September 30, 2014 | $ | (44,444 | ) | ||||||||||||||||||||||
Depreciation expense for the three months ended September 30, 2014 and September 30, 2013 was $12,358 and $2,472 respectively. Depreciation expense for the nine months ended September 30, 2014 and September 30, 2013 was $33,918 and $4,801 respectively. | |||||||||||||||||||||||||
Depreciation expense for furniture, fixtures and equipment included in real estate investments for the three months ended September 30, 2014 and September 30, 2013 was $3,152 and $633, respectively. Depreciation expense for furniture, fixtures and equipment included in real estate investments for the nine months ended September 30, 2014 and September 30, 2013 was $8,489 and $928, respectively. | |||||||||||||||||||||||||
The following tables summarize the Company’s real estate intangibles as of September 30, 2014 and December 31, 2013: | |||||||||||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||||
Above/below market lease intangibles, net | $ | 6,009 | $ | (122 | ) | $ | 5,887 | $ | 5,049 | $ | (3 | ) | $ | 5,046 | |||||||||||
In-place lease intangibles | 165,651 | (62,003 | ) | 103,648 | 112,214 | (21,824 | ) | 90,390 | |||||||||||||||||
Other intangibles | 5,800 | (813 | ) | 4,987 | 5,800 | (347 | ) | 5,453 | |||||||||||||||||
Total Intangibles | $ | 177,460 | $ | (62,938 | ) | $ | 114,522 | $ | 123,063 | $ | (22,174 | ) | $ | 100,889 | |||||||||||
Amortization expense for the three months ended September 30, 2014 and September 30, 2013 was $16,312 and $5,005, respectively. | |||||||||||||||||||||||||
Amortization expense for the nine months ended September 30, 2014 and September 30, 2013 was $40,764 and $10,743, respectively. |
RECEIVABLES_AND_OTHER_ASSETS_N
RECEIVABLES AND OTHER ASSETS, NET | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
RECEIVABLES AND OTHER ASSETS, NET [Abstract] | ' | ||||||||
RECEIVABLES AND OTHER ASSETS, NET | ' | ||||||||
6 | RECEIVABLES AND OTHER ASSETS, NET | ||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Straight line rent receivables | $ | 19,556 | $ | 522 | |||||
Escrows held by lenders | 11,047 | 2,834 | |||||||
Tenant receivables, net | 3,144 | 2,993 | |||||||
Deferred tax asset | 1,920 | 1,179 | |||||||
Prepaid expenses | 2,533 | 2,444 | |||||||
Security deposits | 1,320 | 1,289 | |||||||
Other assets | 998 | 1,052 | |||||||
Other receivables | 1,222 | 1,119 | |||||||
$ | 41,740 | $ | 13,432 | ||||||
Tenant receivables are recorded net of allowance of $40 and $58 as of September 30, 2014 and December 31, 2013, respectively. | |||||||||
The provision for uncollectible tenant receivables included in property operating expense in the Condensed Consolidated Statements of Operations for the three months ended September 30, 2014 and September 30, 2013 was $212 and $100, respectively. The provision for uncollectible tenant receivables included in property operating expense in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2014 and September 30, 2013 was $649 and $116, respectively. |
DEFERRED_FINANCING_COSTS
DEFERRED FINANCING COSTS | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
DEFERRED FINANCING COSTS [Abstract] | ' | ||||||||
DEFERRED FINANCING COSTS | ' | ||||||||
7 | DEFERRED FINANCING COSTS | ||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Gross carrying amount | $ | 43,978 | $ | 43,011 | |||||
Accumulated amortization | (7,174 | ) | (1,032 | ) | |||||
$ | 36,804 | $ | 41,979 | ||||||
MORTGAGE_NOTES_PAYABLE
MORTGAGE NOTES PAYABLE | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MORTGAGE NOTES PAYABLE [Abstract] | ' | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MORTGAGE NOTES PAYABLE | ' | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | MORTGAGE NOTES PAYABLE | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding | Carrying | Final | Stated | Weighted | Outstanding | Carrying | |||||||||||||||||||||||||||||||||||||||||||||||||||
Face | Value | Stated | Interest | Average | Face | Value | |||||||||||||||||||||||||||||||||||||||||||||||||||
Amount | Maturity | Rate | Maturity | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(Years) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Managed Properties | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Rate (a)(b) | $ | 157,393 | $ | 158,037 | Aug 2018- | 1.66% to 4.93% | 4.6 | $ | 159,228 | $ | 159,238 | ||||||||||||||||||||||||||||||||||||||||||||||
Mar-20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Floating Rate (c) | 278,549 | 278,549 | Aug 2016- | LIBOR +2.75% to LIBOR +3.75% | 3.6 | 198,584 | 198,584 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Sep-19 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Triple Net Lease Properties | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Rate (d) | 711,422 | 711,422 | Jan 2021- | 3.83% to 8.00% | 7.3 | 719,350 | 719,350 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Jan-24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 1,147,364 | $ | 1,148,008 | 6 | $ | 1,077,162 | $ | 1,077,172 | ||||||||||||||||||||||||||||||||||||||||||||||||
(a) | As of September 30, 2014, for a loan with an outstanding face amount of $11,432, the interest rate for the first two years is based on the applicable US Treasury Security rates. The interest rate for years three through five is 4.5%, 4.75% and 5.0%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(b) | As of September 30, 2014, for loans with total outstanding face amounts of $40,750, issued in August 2013, the Company bought down the interest rate to 4.0% for the first two years. Thereafter, the interest rate will range from 5.99% to 6.76%. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) | As of September 30, 2014, floating rate mortgage loans with a total carrying value of $165,021 have a London Interbank Offered Rate (“LIBOR”) floor of 1.0%. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(d) | As of September 30, 2014, for loans with total outstanding face amounts of $358,392 and $313,459, the Company bought down the interest rates to 4.00% and 3.83%, respectively, until January 2019. Thereafter, the interest rates will increase to 4.99% and 4.56%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The carrying value of the collateral relating to the fixed rate and floating rate mortgages was $1,143,144 and $366,598 as of September 30, 2014 and $1,193,616 and $270,175 as of December 31, 2013, respectively. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company’s mortgage notes payable contain various customary financial and other covenants, in some cases including Debt Service Coverage Ratio and Project Yield, as defined in the agreements. The Company was in compliance with the covenants in its mortgage notes payable agreements as of September 30, 2014. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The fair values of mortgage notes payable as of September 30, 2014 and December 31, 2013 was $1,157,815 and $1,075,390, respectively. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage notes payable are not measured at fair value in the statement of financial position. The disclosed fair value of mortgage notes payable, classified as level 3 within the fair value hierarchy, is based on a discounted cash flow valuation model. Significant inputs in the model include amount and timing of expected future cash flows and interest rates. |
ACCRUED_EXPENSES_AND_OTHER_LIA
ACCRUED EXPENSES AND OTHER LIABILITIES | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | ' | ||||||||
ACCRUED EXPENSES AND OTHER LIABILITIES | ' | ||||||||
9 | ACCRUED EXPENSES AND OTHER LIABILITIES | ||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Security deposits payable | $ | 50,947 | $ | 43,679 | |||||
Accounts payable | 5,493 | 2,578 | |||||||
Property tax payable | 5,522 | 774 | |||||||
Rent collected in advance | 2,138 | 2,252 | |||||||
Mortgage interest payable | 3,496 | 1,237 | |||||||
Contingent consideration | 50 | 1,500 | |||||||
Deferred community fees, net | 2,959 | 1,094 | |||||||
Deferred tax liability | 1,718 | 853 | |||||||
Income tax payable | 59 | 243 | |||||||
Other liabilities | 7,615 | 4,484 | |||||||
$ | 79,997 | $ | 58,694 | ||||||
TRANSACTIONS_WITH_AFFILIATES_A
TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES | 9 Months Ended | ||
Sep. 30, 2014 | |||
TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES [Abstract] | ' | ||
TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES | ' | ||
10 | TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES | ||
Management Agreements | |||
For the three months and nine months ended September 30, 2014 and September 30, 2013, the Company was not party to a standalone management agreement with the Manager. Newcastle, however, has a management agreement with the Manager and as a result, the Company was allocated a portion of the fee paid by Newcastle for management services of $2,385 and $497 for the three months ended September 30, 2014 and September 30, 2013, respectively. The Company was allocated a portion of the fee paid by Newcastle for management services of $5,764 and $1,090 for the nine months ended September 30, 2014 and September 30, 2013, respectively. | |||
Newcastle’s management agreement provides that Newcastle will reimburse the Manager for various expenses incurred by the Manager or its officers, employees and agents on its behalf, including costs of legal, accounting, tax, auditing, administrative and other similar services rendered for Newcastle by providers retained by the Manager or, if provided by the Manager's employees, based on amounts which are no greater than those which would be payable to outside professionals or consultants engaged to perform such services pursuant to agreements negotiated on an arm's-length basis. | |||
Newcastle’s Manager is also entitled to receive an incentive return on a cumulative, but not compounding basis, and subject to certain performance targets and contingent events. Because none of the conditions requiring an incentive payment by Newcastle to the Manager were met, no incentive expense was allocated to the Company. | |||
In conjunction with the spin-off, New Senior entered into a management agreement (the “Management Agreement”) with the Manager dated November 6, 2014, under which the Manager advises the Company on various aspects of its business and manages its day-to-day operations, subject to the supervision of the Company’s board of directors. For its management services, the Manager is entitled to a fee of 1.5% per annum of the Company’s gross equity (generally defined as the equity invested by Newcastle as of the distribution date) calculated and payable monthly in arrears in cash, plus the aggregate offering price from stock offerings, plus certain capital contributions to subsidiaries, less capital distributions (calculated without regard to depreciation and amortization) and repurchases of common stock. | |||
The Manager will be entitled to receive on a quarterly basis annual incentive compensation on a cumulative, but not compounding basis, in an amount equal to the product of (A) 25% of the dollar amount by which (1)(a) funds from operations (as defined in the Management Agreement) before the incentive compensation per share of common stock, plus (b) gains (or losses) from sales of property per share of common stock, plus (c) internal and third party acquisition-related expenses, plus (d) unconsummated transaction expenses, and plus (e) Other Non-Routine Items, exceed (2) an amount equal to (a) the weighted average value per share of the equity invested by Newcastle in the assets of the Company (including total cash contributed to the Company) as of the distribution date and the price per share of the Company’s common stock in any offerings by the Company (adjusted for prior capital dividends or capital distributions, which shall be calculated without regard to depreciation and amortization) multiplied by (b) a simple interest rate of 10% per annum, multiplied by (B) the weighted average number of shares of common stock outstanding. | |||
Because the Manager’s employees perform certain legal, accounting, due diligence tasks and other services that outside professionals or outside consultants otherwise would perform, the Manager is paid or reimbursed for the cost of performing such tasks, provided that such costs and reimbursements are no greater than those which would be paid to outside professionals or consultants on an arm’s-length basis. The Company is also required to pay all operating expenses, except those specifically required to be borne by the Manager under the Management Agreement. The Company is required to pay expenses that include, but are not limited to, issuance and transaction costs incidental to the sourcing, evaluation, acquisition, management, disposition, and financing of the Company’s investments, legal, underwriting, sourcing, asset management and auditing fees and expenses, the compensation and expenses of independent directors, the costs associated with the establishment and maintenance of any credit facilities and other indebtedness of the Company (including commitment fees, legal fees, closing costs, etc.), expenses associated with other securities offerings of the Company, the costs of printing and mailing proxies and reports to the Company’s stockholders, costs incurred by employees or agents of the Manager for travel on the Company’s behalf, costs associated with any computer software or hardware that is solely used by the Company, costs to obtain liability insurance to indemnify directors and officers and the compensation and expenses of the Company’s transfer agent. | |||
Property Management Agreements | |||
Within the Company’s Managed Properties segment, the Company is party to Property Management Agreements with affiliates of Fortress to manage its senior housing properties. Pursuant to the Property Management Agreements for each property, the Company pays property management fees equal to either 5% of the property’s effective gross income (as defined in the Property Management Agreements) or 6% of the property’s gross income (as defined in the agreements) for the first two years and 7% thereafter. As the owner of the managed properties, the Company is responsible for the properties’ operating costs, including repairs, maintenance, capital expenditures, utilities, taxes, insurance and the payroll expense of property-level employees. Property management fees are included in property level operating expenses. Property operating expense include property management fees of $2,505 and $1,450 and travel reimbursement costs of $82 and $52 for the three months ended September 30, 2014 and September 30, 2013, respectively. Property operating expense include property management fees of $6,828 and $3,027 and travel reimbursement costs of $230 and $112 for the nine months ended September 30, 2014 and September 30, 2013, respectively. The payroll expense is structured as a reimbursement to the Property Manager, who is the employer of record. The Company reimbursed the Property Managers for approximately $14,940 and $9,598 of property-level payroll expenses relating to the Company’s operations during the three months ended September 30, 2014 and September 30, 2013, respectively. The Company reimbursed the Property Managers for approximately $42,245 and $19,762 of property-level payroll expenses relating to the Company’s operations during the nine months ended September 30, 2014 and September 30, 2013, respectively. The Property Management Agreements have an initial term of 10 years and provide for automatic one-year extensions after the initial term, subject to termination rights. | |||
INCOME_TAXES
INCOME TAXES | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
INCOME TAXES [Abstract] | ' | ||||||||||||||||
INCOME TAXES | ' | ||||||||||||||||
11 | INCOME TAXES | ||||||||||||||||
The Company is operating so as to qualify as a REIT under the requirements of the Internal Revenue Code (“Code”). However, certain of the Company’s activities are conducted through Taxable REIT Subsidiaries (“TRS”) and therefore are subject to federal and state income taxes at regular corporate tax rates. | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Current | |||||||||||||||||
Federal | $ | (33 | ) | $ | (154 | ) | $ | 972 | $ | 504 | |||||||
State and local | 238 | (33 | ) | 242 | 108 | ||||||||||||
Total current provision | $ | 205 | $ | (187 | ) | $ | 1,214 | $ | 612 | ||||||||
Deferred | |||||||||||||||||
Federal | $ | 130 | $ | 225 | $ | 110 | $ | 94 | |||||||||
State and local | 15 | 29 | 13 | 8 | |||||||||||||
Total deferred provision | 145 | 254 | 123 | 102 | |||||||||||||
Total Provision for Income Taxes | $ | 350 | $ | 67 | $ | 1,337 | $ | 714 | |||||||||
The income tax provisions for the nine months and three months ended September 30, 2014 and September 30, 2013 have been calculated based on the Company’s best estimate of its estimated effective tax rate and estimate of the TRS ordinary income for the corresponding tax year. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | ||
Sep. 30, 2014 | |||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | ||
COMMITMENTS AND CONTINGENCIES | ' | ||
12 | COMMITMENTS AND CONTINGENCIES | ||
As of September 30, 2014, management believes there are no material contingencies that would affect the Company’s results of operations, cash flows or financial position. | |||
Certain Obligations, Liabilities and Litigation | |||
The Company may be subject to various obligations, liabilities and litigation assumed in connection with or arising out of its acquisitions or otherwise arising in connection with its on-going business. Some of these liabilities may be indemnified by third parties. However, if these liabilities are greater than expected or were not known to the Company at the time of acquisition, if the Company is not entitled to indemnification, or if the responsible third party fails to indemnify the Company for these liabilities, such obligations, liabilities and litigation could have a material adverse effect on the Company. In addition, in connection with the sale or leasing of properties, the Company may incur various obligations and liabilities, including indemnification obligations, relating to the operations of those properties, which could have a material adverse effect on the Company’s financial position, cash flows and results. | |||
Certain Tax-Related Covenants | |||
If New Senior is treated as a successor to Newcastle under applicable U.S. federal income tax rules, and if Newcastle fails to qualify as a REIT, New Senior could be prohibited from electing to be a REIT. Accordingly, Newcastle has (i) represented that it has no knowledge of any fact or circumstance that would cause New Senior to fail to qualify as a REIT, (ii) covenanted to use commercially reasonable efforts to cooperate with New Senior as necessary to enable New Senior to qualify for taxation as a REIT and receive customary legal opinions concerning REIT status, including providing information and representations to New Senior and its tax counsel with respect to the composition of Newcastle’s income and assets, the composition of its stockholders, and its operation as a REIT; and (iii) covenanted to use its reasonable best efforts to maintain its REIT status for each of Newcastle’s taxable years ending on or before December 31, 2015 (unless Newcastle obtains an opinion from a nationally recognized tax counsel or a private letter ruling from the Internal Revenue Service (“IRS”) to the effect that Newcastle’s failure to maintain its REIT status will not cause New Senior to fail to qualify as a REIT under the successor REIT rule referred to above). | |||
Proceedings Indemnified and Defended by Third Parties | |||
From time to time, the Company is party to certain legal actions, regulatory investigations and claims for which third parties are contractually obligated to indemnify, defend and hold the Company harmless. While the Company is presently not being defended by any tenant and other obligated third parties in these types of matters, there is no assurance that its tenants, their affiliates or other obligated third parties will continue to defend the Company in these matters, or that such parties will have sufficient assets, income and access to financing to enable them to satisfy their defense and indemnification obligations to the Company. | |||
Environmental Costs | |||
As a commercial real estate owner, the Company is subject to potential environmental costs. As of September 30, 2014, management of the Company is not aware of any environmental concerns that would have a material adverse effect on the Company’s financial position or results of operations. | |||
Capital Improvement and Repair Commitments | |||
The Company is committed to making $6,500 available for capital improvements to the properties under certain lease agreements and also agreed to make available an additional $9,000 at certain intervals over the 15 year lease period to be used for further capital improvements. Upon funding the capital improvements, the Company will be entitled to a rent increase. No funding has been provided as of September 30, 2014. |
RECENT_ACTIVITIES
RECENT ACTIVITIES | 9 Months Ended | ||
Sep. 30, 2014 | |||
RECENT ACTIVITIES [Abstract] | ' | ||
RECENT ACTIVITIES | ' | ||
13 | RECENT ACTIVITIES | ||
These Condensed Consolidated Financial Statements include a discussion of material events, if any, which have occurred subsequent to September 30, 2014 (referred to as subsequent events) through the issuance of the Condensed Consolidated Financial Statements. | |||
On October 7, 2014, the Company entered into a new loan agreement in the total amount of $115,000 which carries an interest rate of LIBOR plus 3.25% and has an initial maturity date of October 6, 2017. The loan is secured by the senior housing triple net lease properties acquired by the Company on June 30, 2014 and consist of six properties. | |||
On October 24, 2014, the SEC declared effective the Company's registration statement on Form 10. The spin-off of New Senior was effected as a taxable pro rata distribution of all of the outstanding shares of common stock of New Senior to the holders of Newcastle common stock. Newcastle distributed one share of New Senior common stock for each share of Newcastle common stock held by Newcastle stockholders of record as of the record date, October 27, 2014. The distribution occurred on November 6, 2014. The distribution ratio was based on the number of Newcastle shares outstanding of 66,399,857. In connection with the spin-off, Newcastle contributed to New Senior all of its investments in senior housing properties, any liabilities relating to these properties and a cash and cash equivalents balance of approximately $243 million. | |||
On October 23 2014, the Company’s certificate of incorporation was amended so that its authorized capital stock now consists of 2 billion shares of common stock, par value $0.01 per share, and 100 million shares of preferred stock, par value $0.01 per share. After completion of the spin-off, there are 66,399,857 issued and outstanding shares of common stock which is based on the number of Newcastle’s shares of common stock outstanding on October 27, 2014 and a distribution ratio of one share of New Senior common stock for each share of Newcastle common stock. | |||
Effective upon the spin-off, the Company has a Nonqualified Stock Option and Incentive Award Plan (the “Plan”) which provides for the grant of equity-based awards, including restricted stock, stock options, stock appreciation rights, performance awards, tandem awards and other equity-based and non-equity based awards, in each case to the Manager, and to the directors, officers, employees, service providers, consultants and advisor of the Manager who perform services for New Senior, and to New Senior’s directors, officers, service providers, consultants and advisors. New Senior has initially reserved 30 million shares of its common stock for issuance under the Plan; on the first day of each fiscal year beginning during the ten-year term of the Plan in and after calendar year 2014, that number will be increased by a number of shares of New Senior’s common stock equal to 10% of the number of shares of common stock newly issued by New Senior during the immediately preceding fiscal year. New Senior’s board of directors may also determine to issue options to the Manager that are not subject to the Plan, provided that the number of shares underlying any options granted to the Manager in connection with capital raising efforts would not exceed 10% of the shares sold in such offering and would be subject to NYSE rules. | |||
Prior to the spin-off, Newcastle had issued rights relating to shares of Newcastle's common stock (the "Newcastle options") to the Manager in connection with capital raising activities. In connection with the spin-off, 5.5 million options that were held by the Manager, or by the directors, officers or employees of the Manager, were converted into an adjusted Newcastle option and a right relating to a number of shares of New Senior common stock (the "New Senior option"). The exercise price of each adjusted Newcastle option and New Senior option was set to collectively maintain the intrinsic value of the Newcastle option immediately prior to the spin-off and to maintain the ratio of the exercise price of the adjusted Newcastle option and the New Senior option, respectively, to the fair market value of the underlying shares as of the spin-off date, in each case based on the five day average closing price subsequent to the spin-off date. The options expire between November 22, 2014 and August 18, 2024. | |||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation – During the nine months ended September 30, 2014 and September 30, 2013, the Company was not operated as a standalone business from Newcastle. The Condensed Consolidated Financial Statements have been prepared on a spin-off basis from the Consolidated Financial Statements and accounting records of Newcastle and reflect Newcastle’s basis in the acquired properties. Management believes that the assumptions and methods of allocation used in the accompanying Condensed Consolidated Financial Statements are reasonable. | |
These Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The results and cash flows reported in these Condensed Consolidated Financial Statements should not be regarded as necessarily indicative of results that may be expected for the entire fiscal year. | |
In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These Condensed Consolidated Financial Statements should be read in conjunction with the results of operations, financial position and cash flows in the Company’s Financial Statements as of and for the year ended December 31, 2013 in New Senior’s Registration Statement on Form 10 as filed with the Securities and Exchange Commission. | |
The accompanying Condensed Consolidated Financial Statements reflect all revenues, expenses and cash flows directly attributable to the Company. Certain expenses of Newcastle, comprised primarily of a portion of its management fee, acquisition and transaction costs and general and administrative costs, have been allocated to New Senior to the extent they were directly associated with the Company for periods prior to the spin-off. The portion of the management fee allocated to New Senior prior to the spin-off represents the product of the management fee rate payable by Newcastle, 1.50%, and New Senior’s gross equity, which management believes is a reasonable method for quantifying the cost of the services provided by the employees of the Manager to the Company. New Senior and Newcastle do not intend to share any costs following the spin-off. See Note 10. | |
Use of Estimates | ' |
Use of Estimates – Management is required to make estimates and assumptions when preparing financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from management’s estimates. | |
Revenue Recognition | ' |
Revenue Recognition | |
Resident fees and services– Resident fees and services include monthly rental income, care income and ancillary income recognized from the Managed Properties segment. Resident fees and services are recognized monthly as services are provided. Lease agreements with residents are cancelable by the resident with 30 days’ notice. Ancillary income primarily relates to non-refundable community fees. Non-refundable community fees are recognized on a straight-line basis over the average length of stay of residents, which management estimates to be approximately 24 months for assisted living or memory care properties, and approximately 33 months for independent living properties. | |
Triple Net Lease Properties – Rental revenue from the Triple Net Lease Properties segment is recognized on a straight-line basis over the applicable term of the lease when collectability is reasonably assured. | |
Recognizing rental revenue on straight-line basis typically results in recognizing revenue in excess of cash amounts contractually due from the Company’s tenants during the first half of the lease term, creating straight line receivables that are included in other assets. As of September 30, 2014 and December 31, 2013, straight-line rent receivables were $19,556 and $522, respectively. | |
Acquisition Accounting | ' |
Acquisition Accounting | |
Acquisitions are accounted for as business combinations. The accounting for acquisitions requires the identification and measurement of all acquired tangible and intangibles assets and assumed liabilities at their respective fair values as of the respective transaction dates. In determining the allocation of acquisition consideration between net tangible and identified intangible assets acquired and liabilities assumed, management makes estimates as to the fair value of assets and liabilities using information obtained as a result of pre-acquisition due diligence, marketing, leasing activities and independent appraisals. In the case of real property, the fair value of the tangible assets acquired is determined by valuing the property as if it were vacant. Also, changes in management's estimates could impact the fair value measurement of contingent consideration and therefore, the overall value of the acquisition as well as the liability that management estimates will have to be paid upon the ultimate resolution of the contingency. The fair value of the contingent consideration is remeasured at each reporting date with the change recorded in other (income) expense in the Condensed Consolidated Statements of Operations. Acquisition-related costs are expensed as incurred within acquisition and transaction expense in the Condensed Consolidated Statements of Operations. | |
Real estate investments are recorded at cost less accumulated depreciation. | |
The Company estimates the fair value of in-place leases as (i) the present value of the estimated rental revenue that would have been forgone, offset by variable costs that would have otherwise been incurred during a reasonable lease-up period, as if the acquired units were vacant and (ii) the estimated absorption costs, such as additional marketing costs that would have been incurred during the leaseup period. The acquisition fair value of the in-place lease intangibles is amortized over the average length of stay of the residents at the senior housing properties on a straight-line basis, which management estimates to be 24 months for AL/MC properties and 33 months for IL-only properties. | |
Above or below market lease intangibles primarily reflect the fair value of the ground lease agreements in place at acquisition. The Company estimates the fair value of ground lease intangibles as the difference between (a) the leased fee value and (b) the fee simple value. The acquisition fair values of the ground lease intangibles are amortized over the contractual lives of the respective leases. | |
Other intangibles include non-compete intangibles. Non-compete intangibles reflect the fair value of non-compete agreements at acquisition. The Company estimates the fair value of non-compete intangibles as the sum of (i) the present value of the consulting services during the non-compete period and (ii) the difference between (a) the present value of the net operating income with the non-compete agreements in place and (b) the present value of the net operating income, as if the non-compete agreements were not in place. The acquisition fair value of the non-compete intangibles is amortized over the non-compete period on a straight-line basis, which is five years. | |
Depreciation is calculated on a straight-line basis using estimated remaining useful lives not to exceed 40 years for buildings, 3 to 10 years for building improvements and 3 to 5 years for other fixed assets. | |
Amortization is calculated on a straight-line basis using estimated useful lives of 17 to 82 years, 5 to 13 years and 24 to 33 months for above/below market intangibles, other intangibles and in-place lease intangibles, respectively. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 raises the threshold for disposals to qualify as discontinued operations. A discontinued operation is defined as: (1) a component of an entity or group of components that has been disposed of or classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results; or (2) an acquired business that is classified as held for sale on the acquisition date. ASU 2014-08 also requires additional disclosures regarding discontinued operations, as well as material disposals that do not meet the definition of discontinued operations. This update is effective for New Senior in the first quarter of 2015. New Senior is currently evaluating the new guidance to determine the impact it may have to its Condensed Consolidated Financial Statements. | |
In May 2014, the FASB and the International Accounting Standards Board ("IASB") issued ASU 2014-09 Revenues from Contracts with Customers (Topic 606). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The ASU is effective for the Company in the first quarter of 2017. Early application is not permitted. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance in the ASU. The Company is currently evaluating the new guidance to determine the impact it may have on its Condensed Consolidated Financial Statements. | |
The FASB has recently issued or discussed a number of proposed standards on such topics as consolidation, financial statement presentation, leases, financial instruments and hedging. Some of the proposed changes are significant and could have a material impact on our reporting. The Company has not yet fully evaluated the potential impact of all these proposals, but will make such an evaluation as the standards are finalized. |
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
ACQUISITIONS [Abstract] | ' | ||||||||||||||||
Fair Value of Identifiable Assets Acquired and Liabilities Assumed | ' | ||||||||||||||||
The following table summarizes the fair value of identifiable assets acquired and liabilities assumed in connection with the acquisitions completed in the nine months ended September 30, 2014, in accordance with the acquisition method of accounting: | |||||||||||||||||
Managed Properties | Triple Net Lease | Total | |||||||||||||||
Properties | |||||||||||||||||
Real estate investments | $ | 103,530 | $ | 144,148 | $ | 247,678 | |||||||||||
Lease intangibles | 13,963 | 39,475 | 53,438 | ||||||||||||||
Other intangibles | — | 960 | 960 | ||||||||||||||
Other liabilities, net of other assets | (1,280 | ) | (1,552 | ) | (2,832 | ) | |||||||||||
Total Consideration | $ | 116,213 | $ | 183,031 | $ | 299,244 | |||||||||||
Mortgage notes payable | 80,144 | — | 80,144 | ||||||||||||||
Net assets | $ | 36,069 | $ | 183,031 | $ | 219,100 | |||||||||||
Total acquisition related expenses | $ | 2,150 | $ | 980 | $ | 3,130 | |||||||||||
Effect of Acquisitions on Revenues and Pre-tax Net Income | ' | ||||||||||||||||
The following table illustrates the effect of the acquisitions completed in the nine month period ended September 30, 2014 on revenues and pre-tax net income as if they had been consummated as of January 1, 2013: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Revenues | $ | 69,809 | $ | 67,162 | $ | 206,660 | $ | 197,544 | |||||||||
Pre-tax net Income(loss) | (11,402 | ) | (8,845 | ) | (32,264 | ) | (18,295 | ) |
SEGMENT_REPORTING_Tables
SEGMENT REPORTING (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
SEGMENT REPORTING [Abstract] | ' | ||||||||||||||||
Segment Reporting | ' | ||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||
30-Sep-14 | 30-Sep-13 | ||||||||||||||||
Triple Net Lease Properties | Managed | Consolidated | Managed | ||||||||||||||
Properties | Properties | ||||||||||||||||
Revenues | |||||||||||||||||
Resident fees and services | $ | — | $ | 40,473 | $ | 40,473 | $ | 24,257 | |||||||||
Rental revenue | 26,672 | — | 26,672 | — | |||||||||||||
Less: Property level expenses | — | 28,870 | 28,870 | 17,926 | |||||||||||||
Segment NOI | $ | 26,672 | $ | 11,603 | $ | 38,275 | $ | 6,331 | |||||||||
Depreciation and amortization | $ | 28,670 | $ | 7,477 | |||||||||||||
Interest expense | 14,130 | 3,060 | |||||||||||||||
Acquisition and transaction expense | 3,993 | 3,604 | |||||||||||||||
Management fee to affiliate | 2,385 | 497 | |||||||||||||||
General and administrative expense | 1,398 | 305 | |||||||||||||||
Other (income) expense | (1,500 | ) | — | ||||||||||||||
Income tax expense | 350 | 67 | |||||||||||||||
Net loss | $ | (11,151 | ) | $ | (8,679 | ) | |||||||||||
Nine months ended and as of | Nine Months Ended | ||||||||||||||||
30-Sep-14 | 30-Sep-13 | ||||||||||||||||
Triple Net Lease Properties | Managed | Consolidated | Managed | ||||||||||||||
Properties | Properties | ||||||||||||||||
Revenues | |||||||||||||||||
Resident fees and services | $ | — | $ | 113,287 | $ | 113,287 | $ | 50,745 | |||||||||
Rental revenue | 71,316 | — | 71,316 | — | |||||||||||||
Less: Property level expenses | — | 80,775 | 80,775 | 36,385 | |||||||||||||
Segment NOI | $ | 71,316 | $ | 32,512 | $ | 103,828 | $ | 14,360 | |||||||||
Depreciation and amortization | $ | 74,682 | $ | 15,544 | |||||||||||||
Interest expense | 41,532 | 5,405 | |||||||||||||||
Acquisition and transaction expense | 12,079 | 5,584 | |||||||||||||||
Management fee to affiliate | 5,764 | 1,090 | |||||||||||||||
General and administrative expense | 3,053 | 945 | |||||||||||||||
Other (income) expense | (1,500 | ) | — | ||||||||||||||
Income tax expense | 1,337 | 714 | |||||||||||||||
Net loss | $ | (33,119 | ) | $ | (14,922 | ) | |||||||||||
Total assets | $ | 1,211,383 | $ | 606,720 | $ | 1,818,103 | $ | 491,823 | |||||||||
REAL_ESTATE_INVESTMENTS_Tables
REAL ESTATE INVESTMENTS (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
REAL ESTATE INVESTMENTS [Abstract] | ' | ||||||||||||||||||||||||
Real Estate Investments | ' | ||||||||||||||||||||||||
Gross Carrying Amount | |||||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 1,373,428 | |||||||||||||||||||||||
Acquisition of real estate investments | 247,678 | ||||||||||||||||||||||||
Additions to real estate investments | 5,826 | ||||||||||||||||||||||||
Balance as of September 30, 2014 | $ | 1,626,932 | |||||||||||||||||||||||
Accumulated Depreciation | |||||||||||||||||||||||||
Balance as of December 31, 2013 | $ | (10,526 | ) | ||||||||||||||||||||||
Depreciation expense | (33,918 | ) | |||||||||||||||||||||||
Balance as of September 30, 2014 | $ | (44,444 | ) | ||||||||||||||||||||||
Real Estate Intangibles | ' | ||||||||||||||||||||||||
The following tables summarize the Company’s real estate intangibles as of September 30, 2014 and December 31, 2013: | |||||||||||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||||
Above/below market lease intangibles, net | $ | 6,009 | $ | (122 | ) | $ | 5,887 | $ | 5,049 | $ | (3 | ) | $ | 5,046 | |||||||||||
In-place lease intangibles | 165,651 | (62,003 | ) | 103,648 | 112,214 | (21,824 | ) | 90,390 | |||||||||||||||||
Other intangibles | 5,800 | (813 | ) | 4,987 | 5,800 | (347 | ) | 5,453 | |||||||||||||||||
Total Intangibles | $ | 177,460 | $ | (62,938 | ) | $ | 114,522 | $ | 123,063 | $ | (22,174 | ) | $ | 100,889 |
RECEIVABLES_AND_OTHER_ASSETS_N1
RECEIVABLES AND OTHER ASSETS, NET (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
RECEIVABLES AND OTHER ASSETS, NET [Abstract] | ' | ||||||||
Receivables and Other Assets, Net | ' | ||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Straight line rent receivables | $ | 19,556 | $ | 522 | |||||
Escrows held by lenders | 11,047 | 2,834 | |||||||
Tenant receivables, net | 3,144 | 2,993 | |||||||
Deferred tax asset | 1,920 | 1,179 | |||||||
Prepaid expenses | 2,533 | 2,444 | |||||||
Security deposits | 1,320 | 1,289 | |||||||
Other assets | 998 | 1,052 | |||||||
Other receivables | 1,222 | 1,119 | |||||||
$ | 41,740 | $ | 13,432 |
DEFERRED_FINANCING_COSTS_Table
DEFERRED FINANCING COSTS (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
DEFERRED FINANCING COSTS [Abstract] | ' | ||||||||
Deferred Financing Costs | ' | ||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Gross carrying amount | $ | 43,978 | $ | 43,011 | |||||
Accumulated amortization | (7,174 | ) | (1,032 | ) | |||||
$ | 36,804 | $ | 41,979 |
MORTGAGE_NOTES_PAYABLE_Tables
MORTGAGE NOTES PAYABLE (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MORTGAGE NOTES PAYABLE [Abstract] | ' | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Notes Payable | ' | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding | Carrying | Final | Stated | Weighted | Outstanding | Carrying | |||||||||||||||||||||||||||||||||||||||||||||||||||
Face | Value | Stated | Interest | Average | Face | Value | |||||||||||||||||||||||||||||||||||||||||||||||||||
Amount | Maturity | Rate | Maturity | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(Years) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Managed Properties | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Rate (a)(b) | $ | 157,393 | $ | 158,037 | Aug 2018- | 1.66% to 4.93% | 4.6 | $ | 159,228 | $ | 159,238 | ||||||||||||||||||||||||||||||||||||||||||||||
Mar-20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Floating Rate (c) | 278,549 | 278,549 | Aug 2016- | LIBOR +2.75% to LIBOR +3.75% | 3.6 | 198,584 | 198,584 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Sep-19 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Triple Net Lease Properties | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Rate (d) | 711,422 | 711,422 | Jan 2021- | 3.83% to 8.00% | 7.3 | 719,350 | 719,350 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Jan-24 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 1,147,364 | $ | 1,148,008 | 6 | $ | 1,077,162 | $ | 1,077,172 | ||||||||||||||||||||||||||||||||||||||||||||||||
(a) | As of September 30, 2014, for a loan with an outstanding face amount of $11,432, the interest rate for the first two years is based on the applicable US Treasury Security rates. The interest rate for years three through five is 4.5%, 4.75% and 5.0%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(b) | As of September 30, 2014, for loans with total outstanding face amounts of $40,750, issued in August 2013, the Company bought down the interest rate to 4.0% for the first two years. Thereafter, the interest rate will range from 5.99% to 6.76%. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(c) | As of September 30, 2014, floating rate mortgage loans with a total carrying value of $165,021 have a London Interbank Offered Rate (“LIBOR”) floor of 1.0%. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(d) | As of September 30, 2014, for loans with total outstanding face amounts of $358,392 and $313,459, the Company bought down the interest rates to 4.00% and 3.83%, respectively, until January 2019. Thereafter, the interest rates will increase to 4.99% and 4.56%, respectively. |
ACCRUED_EXPENSES_AND_OTHER_LIA1
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | ' | ||||||||
Accrued Expenses and Other Liabilities | ' | ||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Security deposits payable | $ | 50,947 | $ | 43,679 | |||||
Accounts payable | 5,493 | 2,578 | |||||||
Property tax payable | 5,522 | 774 | |||||||
Rent collected in advance | 2,138 | 2,252 | |||||||
Mortgage interest payable | 3,496 | 1,237 | |||||||
Contingent consideration | 50 | 1,500 | |||||||
Deferred community fees, net | 2,959 | 1,094 | |||||||
Deferred tax liability | 1,718 | 853 | |||||||
Income tax payable | 59 | 243 | |||||||
Other liabilities | 7,615 | 4,484 | |||||||
$ | 79,997 | $ | 58,694 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
INCOME TAXES [Abstract] | ' | ||||||||||||||||
Provision for Income Taxes | ' | ||||||||||||||||
The Company is operating so as to qualify as a REIT under the requirements of the Internal Revenue Code (“Code”). However, certain of the Company’s activities are conducted through Taxable REIT Subsidiaries (“TRS”) and therefore are subject to federal and state income taxes at regular corporate tax rates. | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Current | |||||||||||||||||
Federal | $ | (33 | ) | $ | (154 | ) | $ | 972 | $ | 504 | |||||||
State and local | 238 | (33 | ) | 242 | 108 | ||||||||||||
Total current provision | $ | 205 | $ | (187 | ) | $ | 1,214 | $ | 612 | ||||||||
Deferred | |||||||||||||||||
Federal | $ | 130 | $ | 225 | $ | 110 | $ | 94 | |||||||||
State and local | 15 | 29 | 13 | 8 | |||||||||||||
Total deferred provision | 145 | 254 | 123 | 102 | |||||||||||||
Total Provision for Income Taxes | $ | 350 | $ | 67 | $ | 1,337 | $ | 714 | |||||||||
ORGANIZATION_Details
ORGANIZATION (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Segment | |
Property | |
State | |
Real Estate Properties [Line Items] | ' |
Number of states in which investments are located | 27 |
Number of reportable segments | 2 |
Number of senior housing properties | 99 |
Managed Properties [Member] | ' |
Real Estate Properties [Line Items] | ' |
Number of senior housing properties | 42 |
Managed Properties [Member] | Independent Living Properties [Member] | ' |
Real Estate Properties [Line Items] | ' |
Number of senior housing properties | 4 |
Managed Properties [Member] | Assisted Living/Memory Care Properties [Member] | ' |
Real Estate Properties [Line Items] | ' |
Number of senior housing properties | 38 |
Triple Net Lease Properties [Member] | ' |
Real Estate Properties [Line Items] | ' |
Number of senior housing properties | 57 |
Triple Net Lease Properties [Member] | Minimum [Member] | ' |
Real Estate Properties [Line Items] | ' |
Term of lease agreements | '15 years |
Rent increase percentage in lease agreements (in hundredths) | 2.50% |
Triple Net Lease Properties [Member] | Maximum [Member] | ' |
Real Estate Properties [Line Items] | ' |
Term of lease agreements | '17 years |
Rent increase percentage in lease agreements (in hundredths) | 4.50% |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Basis of Presentation [Abstract] | ' | ' |
Management fee rate payable by Newcastle (in hundredths) | 1.50% | ' |
Revenue Recognition [Abstract] | ' | ' |
Notice period to cancel lease agreements | '30 days | ' |
Rent receivables | $19,556 | $522 |
Buildings [Member] | Maximum [Member] | ' | ' |
Acquisition Accounting [Abstract] | ' | ' |
Estimated remaining useful life | '40 years | ' |
Building Improvements [Member] | Minimum [Member] | ' | ' |
Acquisition Accounting [Abstract] | ' | ' |
Estimated remaining useful life | '3 years | ' |
Building Improvements [Member] | Maximum [Member] | ' | ' |
Acquisition Accounting [Abstract] | ' | ' |
Estimated remaining useful life | '10 years | ' |
Other Fixed Assets [Member] | Minimum [Member] | ' | ' |
Acquisition Accounting [Abstract] | ' | ' |
Estimated remaining useful life | '3 years | ' |
Other Fixed Assets [Member] | Maximum [Member] | ' | ' |
Acquisition Accounting [Abstract] | ' | ' |
Estimated remaining useful life | '5 years | ' |
Non-compete Agreements [Member] | ' | ' |
Acquisition Accounting [Abstract] | ' | ' |
Amortization period | '5 years | ' |
Above/Below Market Intangibles [Member] | Minimum [Member] | ' | ' |
Acquisition Accounting [Abstract] | ' | ' |
Estimated useful life | '17 years | ' |
Above/Below Market Intangibles [Member] | Maximum [Member] | ' | ' |
Acquisition Accounting [Abstract] | ' | ' |
Estimated useful life | '82 years | ' |
Other Intangibles [Member] | Minimum [Member] | ' | ' |
Acquisition Accounting [Abstract] | ' | ' |
Estimated useful life | '5 years | ' |
Other Intangibles [Member] | Maximum [Member] | ' | ' |
Acquisition Accounting [Abstract] | ' | ' |
Estimated useful life | '13 years | ' |
In-Place Lease Intangibles [Member] | Minimum [Member] | ' | ' |
Acquisition Accounting [Abstract] | ' | ' |
Estimated useful life | '24 months | ' |
In-Place Lease Intangibles [Member] | Maximum [Member] | ' | ' |
Acquisition Accounting [Abstract] | ' | ' |
Estimated useful life | '33 months | ' |
Assisted Living/Memory Care Properties [Member] | ' | ' |
Revenue Recognition [Abstract] | ' | ' |
Average length of stay of residents | '24 months | ' |
Independent Living Properties [Member] | ' | ' |
Revenue Recognition [Abstract] | ' | ' |
Average length of stay of residents | '33 months | ' |
ACQUISITIONS_Details
ACQUISITIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Fair value of identifiable assets acquired and liabilities assumed [Abstract] | ' | ' | ' | ' |
Real estate investments | $247,678 | ' | $247,678 | ' |
Lease intangibles | 53,438 | ' | 53,438 | ' |
Other intangibles | 960 | ' | 960 | ' |
Other liabilities, net of other assets | -2,832 | ' | -2,832 | ' |
Total Consideration | 299,244 | ' | 299,244 | ' |
Mortgage notes payable | 80,144 | ' | 80,144 | ' |
Net assets | 219,100 | ' | 219,100 | ' |
Total acquisition related expenses | 3,130 | ' | 3,130 | ' |
Adjustments to provisional amounts [Abstract] | ' | ' | ' | ' |
Maximum measurement period from acquisition date | ' | ' | '1 year | ' |
Real estate investments | -18,657 | ' | ' | ' |
Lease intangibles | 18,583 | ' | ' | ' |
Other liabilities | 74 | ' | ' | ' |
Effect of acquisitions on revenues and pre-tax net income [Abstract] | ' | ' | ' | ' |
Revenues | 69,809 | 67,162 | 206,660 | 197,544 |
Pre-tax net income (loss) | -11,402 | -8,845 | -32,264 | -18,295 |
Managed Properties Segment [Member] | ' | ' | ' | ' |
Fair value of identifiable assets acquired and liabilities assumed [Abstract] | ' | ' | ' | ' |
Real estate investments | 103,530 | ' | 103,530 | ' |
Lease intangibles | 13,963 | ' | 13,963 | ' |
Other intangibles | 0 | ' | 0 | ' |
Other liabilities, net of other assets | -1,280 | ' | -1,280 | ' |
Total Consideration | 116,213 | ' | 116,213 | ' |
Mortgage notes payable | 80,144 | ' | 80,144 | ' |
Net assets | 36,069 | ' | 36,069 | ' |
Total acquisition related expenses | 2,150 | ' | 2,150 | ' |
Triple Net Lease Properties Segment [Member] | ' | ' | ' | ' |
Fair value of identifiable assets acquired and liabilities assumed [Abstract] | ' | ' | ' | ' |
Real estate investments | 144,148 | ' | 144,148 | ' |
Lease intangibles | 39,475 | ' | 39,475 | ' |
Other intangibles | 960 | ' | 960 | ' |
Other liabilities, net of other assets | -1,552 | ' | -1,552 | ' |
Total Consideration | 183,031 | ' | 183,031 | ' |
Mortgage notes payable | 0 | ' | 0 | ' |
Net assets | 183,031 | ' | 183,031 | ' |
Total acquisition related expenses | $980 | ' | $980 | ' |
Acquisitions [Member] | ' | ' | ' | ' |
Properties acquired [Abstract] | ' | ' | ' | ' |
Number of portfolios acquired | ' | ' | 7 | 5 |
Number of properties acquired | ' | ' | 15 | 19 |
Acquisitions [Member] | Managed Properties Segment [Member] | ' | ' | ' | ' |
Properties acquired [Abstract] | ' | ' | ' | ' |
Number of properties acquired | ' | ' | 9 | 19 |
Acquisitions [Member] | Managed Properties Segment [Member] | Holiday [Member] | ' | ' | ' | ' |
Properties acquired [Abstract] | ' | ' | ' | ' |
Number of acquired properties managed | ' | ' | 2 | 17 |
Acquisitions [Member] | Managed Properties Segment [Member] | Blue Harbor [Member] | ' | ' | ' | ' |
Properties acquired [Abstract] | ' | ' | ' | ' |
Number of acquired properties managed | ' | ' | 7 | 2 |
Acquisitions [Member] | Managed Properties Segment [Member] | Assisted Living/Memory Care Properties [Member] | ' | ' | ' | ' |
Properties acquired [Abstract] | ' | ' | ' | ' |
Number of properties acquired | ' | ' | 8 | ' |
Acquisitions [Member] | Managed Properties Segment [Member] | Independent Living Properties [Member] | ' | ' | ' | ' |
Properties acquired [Abstract] | ' | ' | ' | ' |
Number of properties acquired | ' | ' | 1 | ' |
Acquisitions [Member] | Triple Net Lease Properties Segment [Member] | ' | ' | ' | ' |
Properties acquired [Abstract] | ' | ' | ' | ' |
Number of properties acquired | ' | ' | 6 | ' |
Acquisitions [Member] | Triple Net Lease Properties Segment [Member] | Assisted Living/Memory Care Properties [Member] | ' | ' | ' | ' |
Properties acquired [Abstract] | ' | ' | ' | ' |
Number of properties acquired | ' | ' | 1 | ' |
Acquisitions [Member] | Triple Net Lease Properties Segment [Member] | Independent Living Properties [Member] | ' | ' | ' | ' |
Properties acquired [Abstract] | ' | ' | ' | ' |
Number of properties acquired | ' | ' | 1 | ' |
Acquisitions [Member] | Triple Net Lease Properties Segment [Member] | Continuing Care Retirement Communities [Member] | ' | ' | ' | ' |
Properties acquired [Abstract] | ' | ' | ' | ' |
Number of properties acquired | ' | ' | 4 | ' |
SEGMENT_REPORTING_Details
SEGMENT REPORTING (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Segment | |||||
SEGMENT REPORTING [Abstract] | ' | ' | ' | ' | ' |
Number of reportable business segments | ' | ' | 2 | ' | ' |
Revenues [Abstract] | ' | ' | ' | ' | ' |
Resident fees and services | $40,473 | $24,257 | $113,287 | $50,745 | ' |
Rental revenue | 26,672 | 0 | 71,316 | 0 | ' |
Less: Property level expenses | 28,870 | 17,926 | 80,775 | 36,385 | ' |
Segment NOI | 38,275 | ' | 103,828 | ' | ' |
Depreciation and amortization | 28,670 | 7,477 | 74,682 | 15,544 | ' |
Interest expense | 14,130 | 3,060 | 41,532 | 5,405 | ' |
Acquisition and transaction expense | 3,993 | 3,604 | 12,079 | 5,584 | ' |
Management fee to affiliate | 2,385 | 497 | 5,764 | 1,090 | ' |
General and administrative expense | 1,398 | 305 | 3,053 | 945 | ' |
Other (income) expense | -1,500 | 0 | -1,500 | 0 | ' |
Income tax expense | 350 | 67 | 1,337 | 714 | ' |
Net loss | -11,151 | -8,679 | -33,119 | -14,922 | ' |
Assets | 1,818,103 | ' | 1,818,103 | ' | 1,549,595 |
Revenues [Member] | Tenant for Holiday Portfolios [Member] | ' | ' | ' | ' | ' |
Major Customers [Abstract] | ' | ' | ' | ' | ' |
Percentage of total revenues (in hundredths) | 33.20% | ' | 36.20% | ' | ' |
Managed Properties [Member] | Revenues [Member] | Florida [Member] | ' | ' | ' | ' | ' |
Major Customers [Abstract] | ' | ' | ' | ' | ' |
Percentage of total revenues (in hundredths) | ' | ' | 38.50% | 15.90% | ' |
Managed Properties [Member] | Revenues [Member] | California [Member] | ' | ' | ' | ' | ' |
Major Customers [Abstract] | ' | ' | ' | ' | ' |
Percentage of total revenues (in hundredths) | ' | ' | 11.00% | 23.20% | ' |
Reportable Business Segment [Member] | Triple Net Lease Properties [Member] | ' | ' | ' | ' | ' |
Revenues [Abstract] | ' | ' | ' | ' | ' |
Resident fees and services | 0 | ' | 0 | ' | ' |
Rental revenue | 26,672 | ' | 71,316 | ' | ' |
Less: Property level expenses | 0 | ' | 0 | ' | ' |
Segment NOI | 26,672 | ' | 71,316 | ' | ' |
Assets | 1,211,383 | ' | 1,211,383 | ' | ' |
Reportable Business Segment [Member] | Managed Properties [Member] | ' | ' | ' | ' | ' |
Revenues [Abstract] | ' | ' | ' | ' | ' |
Resident fees and services | 40,473 | 24,257 | 113,287 | 50,745 | ' |
Rental revenue | 0 | 0 | 0 | 0 | ' |
Less: Property level expenses | 28,870 | 17,926 | 80,775 | 36,385 | ' |
Segment NOI | 11,603 | 6,331 | 32,512 | 14,360 | ' |
Assets | 606,720 | 491,823 | 606,720 | 491,823 | ' |
Reconciling Items [Member] | ' | ' | ' | ' | ' |
Revenues [Abstract] | ' | ' | ' | ' | ' |
Depreciation and amortization | 28,670 | 7,477 | 74,682 | 15,544 | ' |
Interest expense | 14,130 | 3,060 | 41,532 | 5,405 | ' |
Acquisition and transaction expense | 3,993 | 3,604 | 12,079 | 5,584 | ' |
Management fee to affiliate | 2,385 | 497 | 5,764 | 1,090 | ' |
General and administrative expense | 1,398 | 305 | 3,053 | 945 | ' |
Other (income) expense | -1,500 | 0 | -1,500 | 0 | ' |
Income tax expense | $350 | $67 | $1,337 | $714 | ' |
REAL_ESTATE_INVESTMENTS_Detail
REAL ESTATE INVESTMENTS (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Gross Carrying Amount [Abstract] | ' | ' | ' | ' | ' |
Balance at beginning of period | ' | ' | $1,373,428 | ' | ' |
Acquisition of real estate investments | ' | ' | 247,678 | ' | ' |
Additions to real estate investments | ' | ' | 5,826 | ' | ' |
Balance at end of period | 1,626,932 | ' | 1,626,932 | ' | ' |
Accumulated Depreciation [Abstract] | ' | ' | ' | ' | ' |
Balance at beginning of period | ' | ' | -10,526 | ' | ' |
Depreciation expense | -12,358 | -2,472 | -33,918 | -4,801 | ' |
Balance at end of period | -44,444 | ' | -44,444 | ' | ' |
Real Estate Intangibles [Abstract] | ' | ' | ' | ' | ' |
Gross carrying amount | 177,460 | ' | 177,460 | ' | 123,063 |
Accumulated amortization | -62,938 | ' | -62,938 | ' | -22,174 |
Net real estate intangibles | 114,522 | ' | 114,522 | ' | 100,889 |
Amortization expense | 16,312 | 5,005 | 40,764 | 10,743 | ' |
Above/Below Market Lease Intangibles, Net [Member] | ' | ' | ' | ' | ' |
Real Estate Intangibles [Abstract] | ' | ' | ' | ' | ' |
Gross carrying amount | 6,009 | ' | 6,009 | ' | 5,049 |
Accumulated amortization | -122 | ' | -122 | ' | -3 |
Net real estate intangibles | 5,887 | ' | 5,887 | ' | 5,046 |
In-Place Lease Intangibles [Member] | ' | ' | ' | ' | ' |
Real Estate Intangibles [Abstract] | ' | ' | ' | ' | ' |
Gross carrying amount | 165,651 | ' | 165,651 | ' | 112,214 |
Accumulated amortization | -62,003 | ' | -62,003 | ' | -21,824 |
Net real estate intangibles | 103,648 | ' | 103,648 | ' | 90,390 |
Other Intangibles [Member] | ' | ' | ' | ' | ' |
Real Estate Intangibles [Abstract] | ' | ' | ' | ' | ' |
Gross carrying amount | 5,800 | ' | 5,800 | ' | 5,800 |
Accumulated amortization | -813 | ' | -813 | ' | -347 |
Net real estate intangibles | 4,987 | ' | 4,987 | ' | 5,453 |
Furniture, Fixtures and Equipment [Member] | ' | ' | ' | ' | ' |
Accumulated Depreciation [Abstract] | ' | ' | ' | ' | ' |
Depreciation expense | ($3,152) | ($633) | ($8,489) | ($928) | ' |
RECEIVABLES_AND_OTHER_ASSETS_N2
RECEIVABLES AND OTHER ASSETS, NET (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Receivables and Other Assets [Abstract] | ' | ' | ' | ' | ' |
Straight line rent receivables | $19,556 | ' | $19,556 | ' | $522 |
Escrows held by lenders | 11,047 | ' | 11,047 | ' | 2,834 |
Tenant receivables, net | 3,144 | ' | 3,144 | ' | 2,993 |
Deferred tax asset | 1,920 | ' | 1,920 | ' | 1,179 |
Prepaid expenses | 2,533 | ' | 2,533 | ' | 2,444 |
Security deposits | 1,320 | ' | 1,320 | ' | 1,289 |
Other assets | 998 | ' | 998 | ' | 1,052 |
Other receivables | 1,222 | ' | 1,222 | ' | 1,119 |
Total receivables and other assets | 41,740 | ' | 41,740 | ' | 13,432 |
Allowance for tenant receivables | 40 | ' | 40 | ' | 58 |
Provision for uncollectible tenant receivables | $212 | $100 | $649 | $116 | ' |
DEFERRED_FINANCING_COSTS_Detai
DEFERRED FINANCING COSTS (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
DEFERRED FINANCING COSTS [Abstract] | ' | ' |
Gross carrying amount | $43,978 | $43,011 |
Accumulated amortization | -7,174 | -1,032 |
Net carrying amount | $36,804 | $41,979 |
MORTGAGE_NOTES_PAYABLE_Details
MORTGAGE NOTES PAYABLE (Details) (Mortgage Notes Payable [Member], USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Outstanding face amount | $1,147,364 | $1,077,162 | |
Carrying value | 1,148,008 | 1,077,172 | |
Weighted average maturity | '6 years | ' | |
Level 3 [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Fair value of mortgage notes payable | 1,157,815 | 1,075,390 | |
Fixed Rate [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Carrying value of collateral | 1,143,144 | 1,193,616 | |
Floating Rate [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Carrying value of collateral | 366,598 | 270,175 | |
Managed Properties [Member] | Fixed Rate [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Outstanding face amount | 157,393 | [1],[2] | 159,228 |
Carrying value | 158,037 | 159,238 | |
Final stated maturity, earliest date | 31-Aug-18 | ' | |
Final stated maturity, latest date | 31-Mar-20 | ' | |
Stated interest rate, minimum (in hundredths) | 1.66% | [1],[2] | ' |
Stated interest rate, maximum (in hundredths) | 4.93% | [1],[2] | ' |
Weighted average maturity | '4 years 7 months 6 days | ' | |
Managed Properties [Member] | Fixed Rate [Member] | Mortgage Loan with Face Amount of $11,432 [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Outstanding face amount | 11,432 | ' | |
Managed Properties [Member] | Fixed Rate [Member] | Mortgage Loan with Face Amount of $11,432 [Member] | Year Three [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Stated interest rate (in hundredths) | 4.50% | ' | |
Managed Properties [Member] | Fixed Rate [Member] | Mortgage Loan with Face Amount of $11,432 [Member] | Year Four [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Stated interest rate (in hundredths) | 4.75% | ' | |
Managed Properties [Member] | Fixed Rate [Member] | Mortgage Loan with Face Amount of $11,432 [Member] | Year Five [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Stated interest rate (in hundredths) | 5.00% | ' | |
Managed Properties [Member] | Fixed Rate [Member] | Mortgage Loans with Face Amounts of $40,750 [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Outstanding face amount | 40,750 | ' | |
Managed Properties [Member] | Fixed Rate [Member] | Mortgage Loans with Face Amounts of $40,750 [Member] | Year One [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Stated interest rate (in hundredths) | 4.00% | ' | |
Managed Properties [Member] | Fixed Rate [Member] | Mortgage Loans with Face Amounts of $40,750 [Member] | Year Two [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Stated interest rate (in hundredths) | 4.00% | ' | |
Managed Properties [Member] | Fixed Rate [Member] | Mortgage Loans with Face Amounts of $40,750 [Member] | After Year Two [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Stated interest rate, minimum (in hundredths) | 5.99% | ' | |
Stated interest rate, maximum (in hundredths) | 6.76% | ' | |
Managed Properties [Member] | Floating Rate [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Outstanding face amount | 278,549 | 198,584 | |
Carrying value | 278,549 | [3] | 198,584 |
Final stated maturity, earliest date | 31-Aug-16 | ' | |
Final stated maturity, latest date | 30-Sep-19 | ' | |
Stated interest rate | 'LIBOR +2.75% to LIBOR +3.75% | [3] | ' |
Weighted average maturity | '3 years 7 months 6 days | ' | |
Managed Properties [Member] | Floating Rate [Member] | LIBOR [Member] | Minimum [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Basis spread on variable rate (in hundredths) | 2.75% | [3] | ' |
Managed Properties [Member] | Floating Rate [Member] | LIBOR [Member] | Maximum [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Basis spread on variable rate (in hundredths) | 3.75% | [3] | ' |
Managed Properties [Member] | Floating Rate [Member] | Mortgage Loans with Carrying Value of $165,021 [Member] | LIBOR [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Carrying value | 165,021 | ' | |
Managed Properties [Member] | Floating Rate [Member] | Mortgage Loans with Carrying Value of $165,021 [Member] | LIBOR [Member] | Minimum [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Basis spread on variable rate (in hundredths) | 1.00% | ' | |
Triple Net Lease Properties [Member] | Fixed Rate [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Outstanding face amount | 711,422 | [4] | 719,350 |
Carrying value | 711,422 | 719,350 | |
Final stated maturity, earliest date | 31-Jan-21 | ' | |
Final stated maturity, latest date | 31-Jan-24 | ' | |
Stated interest rate, minimum (in hundredths) | 3.83% | [4] | ' |
Stated interest rate, maximum (in hundredths) | 8.00% | [4] | ' |
Weighted average maturity | '7 years 3 months 18 days | ' | |
Triple Net Lease Properties [Member] | Fixed Rate [Member] | Mortgage Loans with Face Amounts of $358,392 [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Outstanding face amount | 358,392 | ' | |
Stated interest rate, minimum (in hundredths) | 4.00% | ' | |
Stated interest rate, maximum (in hundredths) | 4.99% | ' | |
Triple Net Lease Properties [Member] | Fixed Rate [Member] | Mortgage Loans with Face Amounts of $313,459 [Member] | ' | ' | |
Mortgage Notes Payable [Abstract] | ' | ' | |
Outstanding face amount | $313,459 | ' | |
Stated interest rate, minimum (in hundredths) | 3.83% | ' | |
Stated interest rate, maximum (in hundredths) | 4.56% | ' | |
[1] | As of September 30, 2014. for loans with total outstanding face amounts of $40,750, issued in August 2013, the Company bought down the interest rate to 4.0% for the first two years. Thereafter, the interest rate will range from 5.99% to 6.76%. | ||
[2] | As of September 30, 2014, for a loan with an outstanding face amount of $11,432, the interest rate for the first two years is based on the applicable US Treasury Security rates. The interest rate for years three through five is 4.5%, 4.75% and 5.0%, respectively. | ||
[3] | As of September 30, 2014, floating rate mortgage loans with a total carrying value of $165,021 have a London Interbank Offered Rate ('LIBOR") floor of 1.0%. | ||
[4] | As of September 30, 2014, for loans with total outstanding face amounts of $358,392 and $313,459, the Company bought down the interest rates to 4.00% and 3.83%, respectively, until January 2019. Thereafter, the interest rates will increase to 4.99% and 4.56%, respectively. |
ACCRUED_EXPENSES_AND_OTHER_LIA2
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts Payable and Accrued Liabilities [Abstract] | ' | ' |
Security deposits payable | $50,947 | $43,679 |
Accounts payable | 5,493 | 2,578 |
Property tax payable | 5,522 | 774 |
Rent collected in advance | 2,138 | 2,252 |
Mortgage interest payable | 3,496 | 1,237 |
Contingent consideration | 50 | 1,500 |
Deferred community fees, net | 2,959 | 1,094 |
Deferred tax liability | 1,718 | 853 |
Income tax payable | 59 | 243 |
Other liabilities | 7,615 | 4,484 |
Accrued expenses and other liabilities | $79,997 | $58,694 |
TRANSACTIONS_WITH_AFFILIATES_A1
TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES [Abstract] | ' | ' | ' | ' |
Management fee to affiliate | $2,385 | $497 | $5,764 | $1,090 |
Management fee rate payable by Newcastle (in hundredths) | ' | ' | 1.50% | ' |
Percentage used in calculation of annual incentive compensation paid to Manager (in hundredths) | ' | ' | 25.00% | ' |
Interest rate used in calculation of annual incentive compensation paid to Manager (in hundredths) | ' | ' | 10.00% | ' |
Percentage of property's effective gross income paid as property management fees (in hundredths) | ' | ' | 5.00% | ' |
Percentage of property's gross income paid as property management fees for first two years (in hundredths) | ' | ' | 6.00% | ' |
Percentage of property's gross income paid as property management fees thereafter (in hundredths) | ' | ' | 7.00% | ' |
Property management fees | 2,505 | 1,450 | 6,828 | 3,027 |
Travel reimbursement costs | -82 | -52 | -230 | -112 |
Property-level payroll expenses | $14,940 | $9,598 | $42,245 | $19,762 |
Initial term of Property Management Agreements | '10 years | ' | ' | ' |
Extension period after initial term of Property Management Agreements | '1 year | ' | ' | ' |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Current [Abstract] | ' | ' | ' | ' |
Federal | ($33) | ($154) | $972 | $504 |
State and local | 238 | -33 | 242 | 108 |
Total current provision | 205 | -187 | 1,214 | 612 |
Deferred [Abstract] | ' | ' | ' | ' |
Federal | 130 | 225 | 110 | 94 |
State and local | 15 | 29 | 13 | 8 |
Total deferred provision | 145 | 254 | 123 | 102 |
Total Provision for Income Taxes | $350 | $67 | $1,337 | $714 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2014 |
Capital Improvement Commitments [Member] | ' |
Capital Improvement and Repair Commitments [Abstract] | ' |
Lease period | '15 years |
Funding for capital improvements | $0 |
Capital Improvements to Properties Under Certain Lease Agreements [Member] | ' |
Capital Improvement and Repair Commitments [Abstract] | ' |
Capital improvements | 6,500 |
Additional Capital Improvements to Properties Under Certain Lease Agreements [Member] | ' |
Capital Improvement and Repair Commitments [Abstract] | ' |
Capital improvements | $9,000 |
RECENT_ACTIVITIES_Details
RECENT ACTIVITIES (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Nov. 06, 2014 | Oct. 23, 2014 | Oct. 07, 2014 | Nov. 06, 2014 | Sep. 30, 2014 | Nov. 06, 2014 | Nov. 06, 2014 | Oct. 07, 2014 | Jun. 30, 2014 |
In Thousands, except Share data, unless otherwise specified | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||
Nonqualified Stock Option and Incentive Award Plan [Member] | Nonqualified Stock Option and Incentive Award Plan [Member] | Nonqualified Stock Option and Incentive Award Plan [Member] | Newcastle Investment Corp. [Member] | LIBOR [Member] | Triple Net Lease Properties [Member] | |||||||||
Property | ||||||||||||||
New Loan Agreement [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Face amount | ' | ' | ' | ' | ' | ' | ' | $115,000 | ' | ' | ' | ' | ' | ' |
Basis spread on variable rate (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.25% | ' |
Stated maturity date | ' | ' | ' | ' | 6-Oct-17 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of properties acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6 |
Spin-Off [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Spin-off distribution ratio | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares outstanding (in shares) | ' | ' | ' | ' | ' | 66,399,857 | ' | ' | ' | ' | ' | 66,399,857 | ' | ' |
Cash and cash equivalents | $42,549 | $30,393 | $29,903 | $9,720 | ' | ' | ' | ' | ' | ' | ' | $243,000 | ' | ' |
Amended Certificate of Incorporation [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized (in shares) | ' | ' | ' | ' | ' | ' | 2,000,000,000 | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value (in dollars per share) | ' | ' | ' | ' | ' | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, shares authorized (in shares) | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' |
Preferred stock, par value (in dollars per share) | ' | ' | ' | ' | ' | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued (in shares) | ' | ' | ' | ' | ' | 66,399,857 | ' | ' | ' | ' | ' | ' | ' | ' |
Nonqualified Stock Option and Incentive Award Plan [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares reserved for issuance (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30,000,000 | ' | ' | ' |
Term of plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' |
Percentage increase in number of common stock shares reserved for issuance (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' |
Maximum percentage of shares that can be issued to Manager in connection with capital raising efforts (in hundredths) | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' |
Number of options converted in connection with spin-off (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 5,500,000 | ' | ' | ' | ' | ' |
Period used to calculate average closing price to set exercise price of options | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 days | ' | ' | ' | ' |