MedEquities Realty Trust 10-Q 7 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 02, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
Trading Symbol	MRT
Entity Registrant Name	MEDEQUITIES REALTY TRUST, INC.
Entity Central Index Key	1,616,314
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		31,755,888

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Real estate properties
Land	$ 42,250	$ 39,584
Building and improvements	489,334	440,927
Intangible lease assets	11,387	11,387
Furniture, fixtures, and equipment	2,981	2,976
Less accumulated depreciation and amortization	(37,547)	(26,052)
Total real estate properties, net	508,405	468,822
Mortgage notes receivable, net	29,120	9,915
Cash and cash equivalents	7,264	9,509
Other assets, net	26,044	31,507
Total Assets	570,833	519,753
Liabilities
Debt, net	206,782	144,000
Accounts payable and accrued liabilities	6,376	15,244
Deferred revenue	2,040	2,251
Total liabilities	215,198	161,495
Commitments and contingencies
Equity
Common stock, $0.01 par value. Authorized 400,000 shares; 31,756 and 31,757 issued and outstanding at September 30, 2017 and December 31, 2016, respectively	314	314
Additional paid in capital	374,994	372,615
Dividends declared	(60,935)	(40,951)
Retained earnings	38,426	23,774
Accumulated other comprehensive loss	(8)
Total MedEquities Realty Trust, Inc. stockholders' equity	352,791	355,752
Noncontrolling interest	2,844	2,506
Total equity	355,635	358,258
Total Liabilities and Equity	$ 570,833	$ 519,753

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	31,756,000	31,757,000
Common stock, shares outstanding	31,756,000	31,757,000

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues
Rental income	$ 15,114	$ 13,603	$ 43,240	$ 34,561
Total revenues	15,766	13,845	44,873	35,286
Expenses
Depreciation and amortization	3,931	3,617	11,176	10,705
Property related	326	341	1,155	1,006
Acquisition related	33	29	362	488
Franchise, excise and other taxes	50	87	76	222
Bad debt expense				216
General and administrative	3,046	2,436	9,196	7,760
Total operating expenses	7,386	6,510	21,965	20,397
Operating income	8,380	7,335	22,908	14,889
Other income (expense)
Interest and other income	3	191	5	194
Interest expense	(2,117)	(2,792)	(5,440)	(9,143)
Other income (expense)	(2,114)	(2,601)	(5,435)	(8,949)
Net income	6,266	4,734	17,473	5,940
Less: Preferred stock dividends		(2,464)		(7,394)
Less: Net (income) loss attributable to noncontrolling interest	(941)	(821)	(2,821)	665
Net income (loss) attributable to common stockholders	$ 5,325	$ 1,449	$ 14,652	$ (789)
Net income (loss) attributable to common stockholders per share
Basic and diluted	$ 0.17	$ 0.12	$ 0.46	$ (0.09)
Weighted average shares outstanding
Basic	31,467	10,964	31,429	10,961
Diluted	31,506	10,964	31,460	10,961
Dividends declared per common share	$ 0.21	$ 0.42	$ 0.63	$ 0.63
Mortgage Notes Receivable
Revenues
Interest income	$ 644	$ 231	$ 1,606	$ 689
Notes Receivable
Revenues
Interest income	$ 8	$ 11	$ 27	$ 36

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 6,266	$ 4,734	$ 17,473	$ 5,940
Other comprehensive income:
Increase (decrease) in fair value of cash flow hedge	115		(8)
Total other comprehensive income (loss)	115		(8)
Comprehensive income	6,381	4,734	17,465	5,940
Less: comprehensive (income) loss attributable to noncontrolling interest	(941)	(821)	(2,821)	665
Comprehensive income attributable to common stockholders	$ 5,440	$ 3,913	$ 14,644	$ 6,605

Consolidated Statement of Equit

Consolidated Statement of Equity (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Dividends Declared	Accumulated other comprehensive loss	Non-controlling Interest
Balance at Dec. 31, 2016	$ 358,258	$ 314	$ 372,615	$ 23,774	$ (40,951)		$ 2,506
Balance (in shares) at Dec. 31, 2016		31,757
Grants of restricted stock (in shares)		34
Issuance of common stock, net of costs	(20)		(20)
Repurchase and cancellation of restricted stock	(50)		(50)
Repurchase and cancellation of restricted stock (in shares)		(5)
Retirement of common stock (in shares)		(11)
Shares surrendered for taxes upon vesting	(224)		(224)
Shares surrendered for taxes upon vesting (in shares)		(19)
Other comprehensive loss	(8)					$ (8)
Distributions to noncontrolling interest	(2,483)						(2,483)
Stock-based compensation	2,673		2,673
Net income	17,473			14,652			2,821
Dividends to common stockholders	(19,984)				(19,984)
Balance at Sep. 30, 2017	$ 355,635	$ 314	$ 374,994	$ 38,426	$ (60,935)	$ (8)	$ 2,844
Balance (in shares) at Sep. 30, 2017		31,756

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Operating activities
Net income	$ 17,473	$ 5,940
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	12,776	13,598
Stock-based compensation	2,673	1,927
Straight-line rent receivable	(4,319)	4,703
Straight-line rent liability	118	124
Provision for bad debt		216
Write-off of pre-acquisition costs	137	252
Write-off of pre-offering costs		89
Changes in operating assets and liabilities
Other assets	10,948	(11,400)
Accounts payable and accrued liabilities	(9,429)	9,721
Deferred revenues	(187)	(2,326)
Net cash provided by operating activities	30,190	22,844
Investing activities
Acquisitions of real estate	(50,138)	(72)
Capital expenditures for real estate	(774)
Funding of mortgage notes and note receivable	(19,200)	(1,662)
Repayments of notes receivable	125	1,712
Capitalized pre-acquisition costs, net	(274)	(268)
Capital expenditures for corporate property	(13)	(2)
Net cash used in investing activities	(70,274)	(292)
Financing activities
Proceeds from borrowings on term loan	125,000
Net repayments on secured revolving credit facility	(61,500)	(3,400)
Dividends paid to common stockholders	(19,988)	(8,096)
Deferred loan costs	(2,771)	(1,400)
Distributions to noncontrolling interest	(2,483)	(1,573)
Taxes remitted upon vesting of restricted stock	(224)
Capitalized pre-offering costs	(102)	(948)
Cancellation of restricted stock	(50)
Offering costs	(43)
Dividends paid to preferred stockholders		(7,398)
Net cash provided by (used in) financing activities	37,839	(22,815)
Decrease in cash and cash equivalents	(2,245)	(263)
Cash and cash equivalents, beginning of period	9,509	12,474
Cash and cash equivalents, end of period	7,264	12,211
Supplemental Cash Flow Information
Interest paid	4,348	7,105
Accrued pre-offering costs	122	2,296
Texas gross margins taxes paid, net of reimbursement	55	69
Accrued deferred loan costs	52	2
Accrued pre-acquisition costs	15	$ 3
Accrued capitalized acquisition costs	$ 6

Organization and Nature of Busi

Organization and Nature of Business	9 Months Ended
	Sep. 30, 2017
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Organization and Nature of Business	Note 1 - Organization and Nature of Business MedEquities Realty Trust, Inc. (the “Company”), which was incorporated in the state of Maryland on April 23, 2014, is a self-managed and self-administered company that invests in a diversified mix of healthcare properties and healthcare-related real estate debt investments. As of September 30, 2017, the Company had investments of $537.5 million, net in 31 real estate properties and three mortgage notes receivable. The Company owns 100% of all of its properties and investments, other than Baylor Scott & White Medical Center - Lakeway (“Lakeway Hospital”), in which the Company owns a 51% interest through a consolidated partnership (the “Lakeway Partnership”). All of the Company’s assets are held by, and its operations conducted through, its operating partnership, MedEquities Realty Operating Partnership, LP, which is a 100% owned subsidiary of the Company. The Company has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.

Accounting Policies and Related

Accounting Policies and Related Matters	9 Months Ended
	Sep. 30, 2017
Accounting Policies [Abstract]
Accounting Policies and Related Matters	Note 2 - Accounting Policies and Related Matters The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of its financial position and results of operations. Interim results of operations are not necessarily indicative of the results that may be achieved for a full year. The financial statements and related notes do not include all information and footnotes required by GAAP for annual reports. These interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2016, included in the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2017. The interim consolidated financial statements include the accounts of the Company’s wholly owned subsidiaries and subsidiaries in which the Company has a controlling interest. All material intercompany transactions and balances have been eliminated in consolidation. For information about significant accounting policies, refer to the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2016 included in the Company’s 2016 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2017. During the three and nine months ended September 30, 2017, there were no material changes to these policies except as noted below. Derivatives: In the normal course of business, the Company is subject to risk from adverse fluctuations in interest rates. The Company has chosen to manage this risk through the use of derivative financial instruments, primarily interest rate swaps. Counterparties to these contracts are major financial institutions. The Company is exposed to credit loss in the event of nonperformance by these counterparties. The Company does not use derivative instruments for trading or speculative purposes. The Company’s objective in managing exposure to interest risk is to limit the impact on cash flows. To qualify for hedge accounting, the Company’s interest rate swaps must effectively reduce the risk exposure that they are designed to hedge. In addition, at inception of a qualifying cash flow hedging relationship, the underlying transactions must be, and be expected to remain, probable of occurring in accordance with the Company’s related assertions. All of the Company’s hedges are cash flow hedges. The Company recognizes all derivative instruments as assets or liabilities at their fair value in the Consolidated Balance Sheets. Changes in the fair value of derivative instruments that are not designated as hedges or that do not meet the criteria of hedge accounting are recognized in earnings. For derivatives designed in qualified cash flow hedging relationships, the change in fair value of the effective portion of the derivatives is recognized in accumulated other comprehensive income (loss), whereas the change in fair value of the ineffective portion is recognized in earnings. Gains and losses are reclassified from accumulated other comprehensive income (loss) into earnings once the underlying hedged transaction is recognized in earnings. Recent Accounting Developments: On January 1, 2017, the Company adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which amends the accounting for share-based payment transactions, including income tax effects, equity versus liability classification and classification on the statement of cash flows. The adoption of this guidance had no impact on the Company’s consolidated results of operations, financial condition, statement of cash flows or liquidity. In January 2017, the FASB issued ASU No. 2017-01, “Clarifying the Definition of a Business,” that clarifies the framework for determining whether an integrated set of assets and activities meets the definition of a business. The revised framework establishes a screen for determining whether an integrated set of assets and activities is a business and narrows the definition of a business, which is expected to result in fewer transactions being accounted for as business combinations. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. ASU 2017-01 will be effective for fiscal years, and for interim periods within those fiscal years, beginning January 1, 2018. Early application of this standard is generally allowed for acquisitions after the standard was issued but before the acquisition has been reflected in a company’s financial statements. The Company has applied the provisions of ASU 2017-01 beginning with its real estate acquisitions in 2017. The adoption of ASU 2017-01 did not have a material effect on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities.” The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The transition guidance provides companies with the option of early adopting the new standard using a modified retrospective transition method in any interim period after issuance of the update, or alternatively requires adoption for fiscal years beginning January 1, 2019. This adoption method will require recognition of the cumulative effect of initially applying the standard as an adjustment to accumulated other comprehensive income (loss) with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year of adoption. The Company continues to assess all potential impacts of the standard but does not currently expect adoption to have a material impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” a comprehensive new revenue recognition standard that supersedes most of the existing revenue recognition guidance. This standard’s core principle is that a company will recognize revenue when it transfers goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date,” which deferred the effective date of this standard by one year. This standard becomes effective for the Company on January 1, 2018 and for interim periods therein. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The Company continues to evaluate this standard and preliminary analyses indicate that the standard is not expected to have a significant impact on the Company’s consolidated financial position, results of operations and cash flows since the Company’s revenues consist primarily of rental income from leasing arrangements, which are specifically excluded from the guidance in ASU 2014-09. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheet and making targeted improvements to lessor accounting. The guidance requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The guidance will be effective beginning January 1, 2019. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new accounting standard on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326),” which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The standard also requires additional disclosures related to significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. The amended guidance is effective for fiscal years, and interim periods within those years, beginning January 1, 2020 with early adoption permitted for the fiscal years, and interim periods within those fiscal years, beginning January 1, 2019. The Company is evaluating the impact of adopting this new accounting standard on the Company’s consolidated financial statements and currently expects that it will not have a material impact. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows - Restricted Cash,” which required that a statement of cash flows explains the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for fiscal years, and interim periods within those years, beginning January 1, 2018. The adoption of this guidance will change the presentation of restricted cash on the Company’s consolidated statement of cash flows. However, it will have no impact on the Company’s consolidated results of operations, financial condition, or liquidity.

Investment Activity

Investment Activity	9 Months Ended
	Sep. 30, 2017
Investment Activity [Abstract]
Investment Activity	Note 3 – Investment Activity During the nine months ended September 30, 2017, the Company made the following real estate investments, which are described in more detail below (dollars in thousands): Investment Date Number of Properties/Loans Investment Type (1) Gross Investment Advanced Diagnostics Hospital East Mortgage Loan January 2017 1 MTG $ 12,500 Woodlake at Tolland Nursing and Rehabilitation Center June 2017 1 SNF 10,120 Magnolia Portfolio July 2017 2 SNF 15,003 Medistar Gemini Mortgage Loan August 2017 1 MTG 6,700 AAC Portfolio August 2017 4 BH 25,020 Total 9 $ 69,343 (1) MTG- Mortgage Note Receivable; SNF- Skilled Nursing Facility; BH- Behavioral Health Facility 2017 Real Estate Acquisitions On June 30, 2017, the Company acquired Woodlake at Tolland Nursing & Rehabilitation Center, a 130-bed skilled nursing facility located in Woodlake, Connecticut, from a wholly owned subsidiary of Prospect Medical Holdings, Inc. for an aggregate purchase price of $10.0 million in cash. The property is 100% leased pursuant to a 12-year initial term triple-net lease with two ten-year renewal options at an initial lease rate of 9.0% with annual escalators. This transaction was accounted for as an asset acquisition and approximately $0.1 million of transaction costs were capitalized. On July 31, 2017, the Company acquired two skilled nursing facilities, totaling 160 licensed beds, located in Indiana from Magnolia Health Systems, Inc. (the “Magnolia Portfolio”) for an aggregate purchase price of $15.0 million in cash. The facilities are 100% leased to Magnolia Health Systems, Inc. pursuant to a 15-year initial term triple-net master lease with two ten-year renewal options at an initial lease rate of 9.0% with annual escalators. This transaction was accounted for as an asset acquisition and less than $0.1 million of transaction costs were capitalized. On August 9, 2017, the Company acquired four behavioral health and substance abuse treatment facilities from subsidiaries of AAC Holdings, Inc. (the “AAC Portfolio”) for an aggregate purchase price of $25.0 million in cash. The facilities are comprised of two standalone intensive outpatient treatment facilities in Las Vegas, Nevada and Arlington, Texas, a 110-bed sober living facility in Las Vegas and a 56-bed sober living facility in Arlington that is expected to expand to 131 beds by the end of 2018. The properties are 100% leased to AAC Holdings, Inc. pursuant to a 15-year initial term triple-net master lease with two five-year renewal options at an initial lease rate of 8.75% with annual escalators. This transaction was accounted for as an asset acquisition and less than $0.1 million of transaction costs were capitalized. 2017 Mortgage Notes Receivable Funding On January 30, 2017, the Company invested $12.5 million through a newly originated interest-only loan at an interest rate of 9.6% and secured by a first mortgage on a licensed general acute care surgical hospital that consists of 23,300 square feet with four operating rooms, two special procedure rooms, four inpatient rooms and four full-size extended recovery rooms. Beginning on October 1, 2017, the Company had the exclusive option to purchase the hospital. In November 2017, the Company exercised its option and has agreed to acquire the property for a purchase price of approximately $17.5 million, which will be satisfied by applying the $12.5 million aggregate principal amount outstanding on the mortgage note to the purchase price and $5.0 million in cash consideration. This transaction is expected to close in the fourth quarter of 2017, subject to customary closing conditions. Upon closing, the Company will lease the property to AD Hospital East, LLC pursuant to a 15-year triple net lease with two ten-year renewal options at an initial yield of 9.6%, with annual rent escalators. The lease will contain certain operator and personal guarantees, which are subject to future reduction based on maintaining certain minimum financial covenants, and will be secured by certain additional assets related to the hospital owned by the guarantor. On August 1, 2017, the Company funded a $6.7 million mortgage note receivable to a subsidiary of Medistar Corporation, which is secured by land and an existing building in Webster, Texas. Interest accrues at a rate of 10% per annum and is payable upon the maturity date of the loan on December 31, 2017. The borrower intends to redevelop the existing property into an integrated medical facility with approximately 48,000 rentable square feet, with construction expected to commence in the fourth quarter of 2017. The Company is considering funding the redevelopment of the facility through a construction mortgage note receivable totaling approximately $15.5 million, which would replace the existing mortgage note receivable and may include an option to purchase the property in a sale-leaseback transaction upon satisfactory completion of the redevelopment. Concentrations of Credit Risks The following table contains information regarding tenant concentration in the Company’s portfolio, based on the percentage of revenue for the nine months ended September 30, 2017 and 2016, related to tenants, or affiliated tenants, that exceed 10% of revenues. % of Total Revenue for the nine months ended September 30, 2017 2016 BSW Health (1) 24.6% 3.5% GruenePointe Holdings 24.1% 30.2% Fundamental Healthcare 15.2% 17.5% Life Generations Healthcare 14.4% 18.3% Vibra Healthcare 13.2% 16.1% (1) The Lakeway Hospital lease with Baylor Scott & White Health (“BSW Health”) commenced on September 1, 2016. The following table contains information regarding the geographic concentration of the properties in the Company’s portfolio as of September 30, 2017, which includes percentage of rental income for the nine months ended September 30, 2017 and 2016 (dollars in thousands). % of Total % of Rental Income State Number of Properties Gross Investment Real Estate Property Investments Nine months ended September 30, 2017 Nine months ended September 30, 2016 Texas 16 $ 283,705 52.0% 61.0% 55.6% California 7 154,727 28.3% 24.3% 30.0% Nevada 4 62,397 11.4% 10.1% 10.2% South Carolina 1 20,000 3.7% 3.4% 4.2% Indiana 2 15,003 2.7% 0.6% - Connecticut 1 10,120 1.9% 0.6% - 31 $ 545,952 100.0% 100.0% 100.0%

Debt

Debt	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
Debt	Note 4 – Debt The table below details the Company’s debt balance at September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 December 31, 2016 Term loan- secured $ 125,000 $ - Revolving credit facility- secured 82,500 144,000 Unamortized deferred financing costs (718 ) - $ 206,782 $ 144,000 On February 10, 2017, the Company entered into a second amended and restated credit agreement, which provides for a $300 million revolving credit facility that matures in February 2021 and a $125 million term loan that matures in February 2022. The revolving credit facility has one 12-month extension option, subject to certain conditions, including the payment of a 0.15% extension fee. The new facility replaced the Company’s prior $300 million secured revolving credit facility, which was scheduled to mature in November 2017. The Company incurred fees associated with the amended credit facility of approximately $2.7 million, of which $1.9 million is associated with the revolving credit facility and $0.8 million is associated with the term loan. Amounts outstanding under the amended credit facility bear interest at LIBOR plus a margin between 1.75% and 3.00% or a base rate plus a margin between 0.75% and 2.00%, in each case depending on the Company’s leverage. The revolving credit facility includes an unused facility fee of 0.25% of the amount of the unused portion of the revolving credit facility if amounts borrowed are equal to or greater than 50.0% of the total commitments or 0.35% if amounts borrowed are less than 50.0% of such commitments. Prior to the February 10, 2017 amendment, amounts outstanding under the facility bore interest at LIBOR plus a margin between 2.75% and 3.75% or a base rate plus a margin between 2.00% and 2.50%, in each case depending on the Company’s leverage. The amended credit agreement also includes an accordion feature that allows the total borrowing capacity, including the term loan component, to be increased to up to $700 million, subject to certain conditions, including obtaining additional commitments from lenders. The amount available to borrow under the amended credit facility is limited according to a borrowing base valuation of assets owned by subsidiaries of the Company’s operating partnership. The amended credit facility is secured by a pledge of the Company’s operating partnership’s equity interests in its subsidiaries that own borrowing base assets, which is substantially all of the Company’s assets. The amended credit agreement includes the ability to convert to an unsecured credit facility when certain conditions are met, including the Company having a minimum gross asset value of $1.0 billion, a minimum borrowing base of $500 million, less than 50% leverage and continued compliance with the covenants under the amended credit agreement. At September 30, 2017 and 2016, the weighted average interest rate under the amended credit facility was 3.4% and 3.8%, respectively. Total costs related to the revolving credit facility at September 30, 2017 were $3.3 million, gross ($2.8 million, net). These costs are included in other assets on the consolidated balance sheet at September 30, 2017 and will be amortized to interest expense through February 2021, the maturity date of the revolving credit facility. The total amount of deferred financing costs associated with the term loan at September 30, 2017 was $0.8 million, gross ($0.7 million, net). These costs are netted against the balance outstanding under the term loan on the Company’s consolidated balance sheet and will be amortized to interest expense through February 2022, the maturity date of the term loan. The Company recognized amortization expense of deferred financing costs, included in interest expense on the consolidated statements of income, of $0.2 million and $0.8 million for the three and nine months ended September 30, 2017, respectively. Amortization expense of deferred financing costs was $0.4 million and $2.0 million for the three and nine months ended September 30, 2016, respectively. The amortization expense for the nine months ended September 30, 2016 includes approximately $0.3 million of unamortized deferred financing costs associated with a credit facility amendment that was expensed in May 2016. The maximum available capacity under the amended credit facility was $260.8 million at September 30, 2017. At November 7, 2017, the Company had $207.5 million Interest Rate Swap Agreements To mitigate exposure to interest rate risk, on February 10, 2017, the Company entered into four interest rate swap agreements, effective April 10, 2017, on the full $125 million term loan to fix the variable LIBOR interest rate at 1.84%, plus the LIBOR spread under the amended credit agreement, which was 1.75% at November 7, 2017. The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Amounts reported in accumulated other comprehensive income (loss) related to these interest rate swaps will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months, the Company estimates that an additional $0.5 million will be reclassified from other comprehensive income (loss) as an increase to interest expense. The fair value of the Company’s derivative financial instruments at September 30, 2017 was a liability of less than $ 0.1 The table below details the location in the consolidated financial statements of the loss recognized on interest rate derivatives designated as cash flow hedges for the three and nine months ended September 30, 2017 (dollars in thousands). The Company did not have any interest rate derivatives for the three and nine months ended September 30, 2016. Three months ended September 30, 2017 Nine months ended September 30, 2017 Amount of loss recognized in other comprehensive income (loss) $ (85 ) $ (441 ) Amount of loss reclassified from accumulated other comprehensive loss into interest expense (200 ) (433 ) Total other comprehensive income (loss) $ 115 $ (8 ) As of September 30, 2017, the fair value of the interest rate swaps in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements, was approximately $0.1 0.1 Covenants The amended credit agreement contains customary financial and operating covenants, including covenants relating to the Company’s total leverage ratio, fixed charge coverage ratio, tangible net worth, maximum distribution/payout ratio and restrictions on recourse debt, secured debt and certain investments. The credit agreement also contains customary events of default, in certain cases subject to customary cure periods, including among others, nonpayment of principal or interest, material breach of representations and warranties, and failure to comply with covenants. Any event of default, if not cured or waived, could result in the acceleration of any outstanding indebtedness under the credit agreement. The Company was in compliance with all financial covenants as of September 30, 2017.

Other Assets

Other Assets	9 Months Ended
	Sep. 30, 2017
Other Assets [Abstract]
Other Assets	Note 5 – Other Assets Items included in Other Assets on the Company’s consolidated balance sheets as of September 30, 2017 and December 31, 2016 are detailed in the table below (dollars in thousands): September 30, 2017 December 31, 2016 Straight-line rent receivable $ 10,789 $ 6,470 Tenant allowances and lease incentives, net 8,314 8,624 Deferred financing costs, net 2,759 1,465 Prepaid assets and deposits 2,135 3,174 Pre-acquisition costs 1,014 883 Interest and accounts receivable 328 561 Note receivable 325 450 Capitalized pre-offering costs 224 - Corporate property, net 156 206 Surety bond deposit - 9,412 Restricted cash - 262 $ 26,044 $ 31,507 As discussed in Note 7, Lakeway Regional Medical Center (“LRMC”), the prior tenant at Lakeway Hospital, deposited approximately $9.4 million with the Company as collateral for the surety bond that is included in Other Assets on the consolidated balance sheet at December 31, 2016. The Company also recorded a corresponding liability related to this deposit included in Accounts Payable and Accrued Liabilities on the consolidated balance sheet at December 31, 2016. In August 2017, the Company released the $9.4 million, including accrued interest, after LRMC obtained a favorable final judgment with no risk of further appeals in a litigation matter, which resulted in the elimination of the $9.4 million from both Other Assets and Accounts Payable and Accrued Liabilities on the consolidated balance sheet at September 30, 2017.

Incentive Plan

Incentive Plan	9 Months Ended
	Sep. 30, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Incentive Plan	N ote 6 - Incentive Plan The Company’s Amended and Restated 2014 Equity Incentive Plan (the “Plan”) provides for the grant of stock options, share awards (including restricted common stock and restricted stock units), stock appreciation rights, dividend equivalent rights, performance awards, annual incentive cash awards and other equity-based awards, including Long Term Incentive Plan (“LTIP”) units, which are convertible on a one-for-one basis into OP units. As of September 30, 2017, the Plan had 3,356,723 shares authorized for issuance with 2,261,930 shares available for future issuance, subject to certain adjustments set forth in the Plan. Restricted Stock Awards of restricted stock are awards of the Company’s common stock that are subject to restrictions on transferability and other restrictions as established by the Company’s compensation committee on the date of grant that are generally subject to forfeiture if employment terminates prior to vesting. Upon vesting, all restrictions would lapse. Except to the extent restricted under the award agreement, a participant awarded restricted stock will have all of the rights of a stockholder as to those shares, including, without limitation, the right to vote and the right to receive dividends on the shares. The awards generally cliff vest over three years or vest ratably over three years from the date of grant. The value of the awards is determined based on the market value of the Company’s common stock on the date of grant. The Company expenses the cost of restricted stock ratably over the vesting period. Restricted Stock Units The Company’s restricted stock unit (“RSU”) awards represent the right to receive unrestricted shares of common stock based on the achievement of Company performance objectives as determined by the Company’s compensation committee. Grants of RSUs prior to 2016 generally entitle recipients to shares of common stock equal to 0% up to 100% of the number of RSUs granted at the vesting date, based on two independent criteria measured over a three-year period – (i) the Company’s absolute total stockholder return (“TSR”) and (ii) Company’s TSR relative to the MSCI US REIT Index (symbol: RMS). Grants of RSUs in 2016, granted on December 30, 2016, generally entitle recipients to shares of common stock equal to 0% up to 150% of the number of RSUs granted at the vesting date, based on four independent criteria measured over a three-year period – (i) the Company’s growth in gross real estate investments, (ii) the Company’s growth in Adjusted Funds From Operations (“AFFO”) per share, (iii) the Company’s absolute TSR and (iv) the Company’s TSR relative to the FTSE NAREIT Equity Healthcare REIT Index. RSUs are not eligible to vote or subject to receive dividend equivalents prior to vesting. Dividend equivalents are credited to the recipient and are paid only to the extent the applicable criteria are met, the RSUs vest, and the related common stock is issued. The grant date fair value of RSUs subject to vesting based on the Company’s absolute TSR and TSR relative to a REIT index is estimated using a Monte Carlo simulation that utilizes inputs such as expected future volatility of the Company’s common stock, volatilities of certain peer companies included in the applicable indexes upon which the relative TSR performance is measured, estimated risk-free interest rate and the expected service periods of three years. The grant date fair value of RSUs subject to vesting based on the Company’s growth in gross real estate investments and the Company’s growth in AFFO per share is determined based on the market value of the Company’s common stock on the date of grant. The Company assesses the probability of achievement of the growth in gross real estate investments and growth in AFFO per share and records expense for the awards based on the probable achievement of these metrics. The Company recognizes the cost of RSUs ratably over the vesting period. The following table summarizes the stock-based award activity for the nine months ended September 30, 2017 and 2016: Restricted Stock Awards Weighted-Average Grant Date Fair Value Per Restricted Stock Award RSU Awards Weighted-Average Grant Date Fair Value Per RSU Outstanding as of December 31, 2016 352,793 $ 14.57 575,775 $ 8.51 Granted 33,780 11.10 - - Vested (123,726 ) 15.02 - - Cancelled (5,368 ) 15.00 - - Forfeited - - (158,927 ) 6.53 Outstanding as of September 30, 2017 257,479 $ 13.90 416,848 $ 9.26 Restricted Stock Awards Weighted-Average Grant Date Fair Value Per Restricted Stock Award RSU Awards Weighted-Average Grant Date Fair Value Per RSU Outstanding as of December 31, 2015 280,080 $ 15.49 359,025 $ 7.91 Granted 16,665 15.00 - - Vested (14,812 ) 15.18 - - Forfeited - - - - Outstanding as of September 30, 2016 281,933 $ 15.47 359,025 $ 7.91 During the nine months ended September 30, 2017, 123,726 restricted shares of common stock granted to certain employees of the Company and non-employee directors vested. Of the restricted shares that vested, 18,611 shares were surrendered by employees to satisfy their tax obligations. All cancelled shares for the nine months ended September 30, 2017 relate to non-employee director compensation and is described in Note 8 under the heading “Arrangements with BlueMountain.” RSUs are included in the preceding tables as if the participants earn shares equal to 100% of the units granted. In addition, 158,927 RSUs previously granted to employees in 2014 did not vest and were forfeited because the criteria for vesting were not achieved. The table below summarizes compensation expense related to share-based payments, included in general and administrative expenses, for the three and nine months ended September 30, 2017 and 2016 (in thousands): For the three months ended September 30, For the nine months ended September 30, 2017 2016 2017 2016 Restricted stock $ 433 $ 396 $ 1,506 $ 1,217 Restricted stock units 350 237 1,167 710 Stock-based compensation $ 783 $ 633 $ 2,673 $ 1,927 The remaining unrecognized cost from stock-based awards at September 30, 2017 was approximately $3.3 million and will be recognized over a weighted-average period of 1.6 years.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2017
Commitments And Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 7 - Commitments and Contingencies Commitments In April 2017, the Company agreed to make available an aggregate amount of up to $11.0 million for the construction and equipping of certain new surgical suites at Mountain’s Edge Hospital, subject to certain terms and conditions. The Company will provide advances over an estimated period as construction occurs, which is expected to occur through December 2018. The base rent associated with this property will be increased by an amount equal to 9.25% of the amount advanced, as advances are made. As of November 7, 2017, approximately $ 0.6 Surety Bond On February 2, 2016, the Company agreed to provide a surety bond of $9.4 million for a litigation judgment against LRMC in the event LRMC was unable to fund the entire amount of the judgment. On September 1, 2016, LRMC deposited with the Company $9.4 million of the net proceeds from the sale of their operations to BSW Health as collateral to secure the surety bond, which is included in both Other Assets and Accounts Payable and Accrued Liabilities on the consolidated balance sheet at December 31, 2016. The Company recognized a surety bond fee of approximately $0.2 million in interest and other income on the consolidated statement of operations for the three and nine months ended September 30, 2016. In August 2017, the Company released the escrowed funds of $9.4 million along with accrued interest after LRMC obtained a favorable final judgement with no risk of further appeals. Contingencies From time to time, the Company or its properties may be subject to claims and suits in the ordinary course of business. The Company’s lessees and borrowers have indemnified, and are obligated to continue to indemnify, the Company against all liabilities arising from the operations of the properties and are further obligated to indemnify it against environmental or title problems affecting the real estate underlying such facilities. The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on its consolidated financial condition, results of operations or cash flows.

Equity

Equity	9 Months Ended
	Sep. 30, 2017
Equity [Abstract]
Equity	Note 8 - Equity Common Stock Dividends The following table reflects the common stock dividends paid during or related to 2017. Quarter Quarterly Dividend Date of Declaration Date of Record Date Paid/Payable 4th Quarter 2016 $ 0.21 January 3, 2017 January 17, 2017 January 31, 2017 1st Quarter 2017 $ 0.21 May 3, 2017 May 17, 2017 May 31, 2017 2nd Quarter 2017 $ 0.21 August 2, 2017 August 16, 2017 August 30, 2017 3rd Quarter 2017 $ 0.21 November 1, 2017 November 15, 2017 November 29, 2017 Arrangements with BlueMountain In connection with BlueMountain Capital Management, LLC’s (“BlueMountain”) purchase of shares of the Company’s common stock in a private placement in July 2014, the Company entered into the BlueMountain Rights Agreement with BlueMountain, which currently allows for BlueMountain to designate two directors on the Company’s board of directors. Pursuant to BlueMountain’s internal policies, all compensation payable to the BlueMountain director designees who are employees of BlueMountain is paid or transferred to BlueMountain, including an aggregate of 16,108 restricted shares of common stock granted to the BlueMountain director designees in 2014 and 2015. Due to adverse tax implications for BlueMountain related to its receipt of restricted stock, the Company and BlueMountain agreed to the following, which occurred on March 28, 2017: (i) BlueMountain forfeited 10,740 vested shares of common stock previously granted to the BlueMountain director designees; (ii) the Company repurchased and cancelled the remaining 5,368 unvested restricted shares of common stock held by BlueMountain for approximately $50,000; and (iii) BlueMountain repaid to the Company approximately $29,000, which represented all dividends previously paid on the 16,108 restricted shares previously granted to the BlueMountain director designees. Noncontrolling interest The Company owns Lakeway Hospital through a consolidated partnership, which, based on a total equity cash contribution of $2.0 million, is owned 51% by the Company and 49% by an entity that is owned indirectly by a physicians group and a non-physician investor. The partnership was formed on March 20, 2015. The Company’s equity contribution to the Lakeway Partnership was $1.0 million, and the Company’s transfer of the original $50.0 million note and $23.0 million of cash to the Lakeway Partnership was structured as an intercompany $73.0 million loan (the “Lakeway Intercompany Mortgage Loan”) to the Lakeway Partnership that is secured by a first mortgage lien on Lakeway Hospital. The Lakeway Intercompany Mortgage Loan has a ten-year term and requires payments of principal and interest at a rate of 8.0% per annum based on a 25-year amortization schedule. The interest rate on the Lakeway Intercompany Mortgage Loan will reset after five years based upon then-current market rates. At September 30, 2017 and December 31, 2016, the Lakeway Intercompany Mortgage Loan had an outstanding principal balance of $71.0 million and $71.8 million, respectively.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2017
Earnings Per Share [Abstract]
Earnings Per Share	Note 9 - Earnings per Share The Company applies the two-class method for determining earnings per common share as its outstanding restricted shares of common stock with non-forfeitable dividend rights are considered participating securities. The following table sets forth the computation of earnings per common share for the three and nine months ended September 30, 2017 and 2016 (amounts in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, Numerator: 2017 2016 2017 2016 Net income $ 6,266 $ 4,734 $ 17,473 $ 5,940 Less: Net (income) loss attributable to noncontrolling interest (941 ) (821 ) (2,821 ) 665 Less: Dividends on preferred shares - (2,464 ) - (7,394 ) Net income (loss) attributable to common stockholders 5,325 1,449 14,652 (789 ) Less: Allocation to participating securities (54 ) (120 ) (211 ) (182 ) Net income (loss) available to common stockholders $ 5,271 $ 1,329 $ 14,441 $ (971 ) Denominator Basic weighted-average common shares 31,467 10,964 31,429 10,961 Dilutive potential common shares 39 - 31 - Diluted weighted-average common shares 31,506 10,964 31,460 10,961 Basic and diluted earnings (loss) per common share $ 0.17 $ 0.12 $ 0.46 $ (0.09 ) The effects of RSUs outstanding were excluded from the calculation of diluted earnings (loss) per common share for the three and nine months ended September 30, 2016 because their effects were not dilutive.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2017
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Note 10 - Fair Value of Financial Instruments Financial Assets and Liabilities Measured at Fair Value The Company’s financial assets and liabilities measured at fair value on a recurring basis currently include derivative financial instruments. These derivative financial instruments are valued in the market using discounted cash flow techniques. These techniques incorporate Level 1 and Level 2 inputs. The market inputs are utilized in the discounted cash flow calculation considering the instrument’s term, notional amount, discount rate and credit risk. Significant inputs to the derivative valuation model for interest rate swaps are observable in active markets and are classified as Level 2 in the hierarchy. The fair value of the Company’s interest rate swaps liability, which is included in accounts payable and accrued liabilities on the consolidated balance sheet, was less than $0.1 million at September 30, 2017. The Company did not have any financial assets or liabilities measured at fair value at December 31, 2016. See Note 4 for further discussion regarding the Company’s interest rate swap agreements. Financial Assets and Liabilities Not Carried at Fair Value The carrying amounts of cash and cash equivalents, restricted cash, receivables and payables are reasonable estimates of their fair value as of September 30, 2017 due to their short-term nature (Level 1). The fair value of the Company’s mortgage and other notes receivable as of September 30, 2017 is estimated by using Level 2 inputs such as discounting the estimated future cash flows using current market rates for similar loans that would be made to borrowers with similar credit ratings and for the same remaining maturities. At September 30, 2017, the Company’s indebtedness was comprised of borrowings under the credit facility, including both a term loan and revolver component, that bear interest at LIBOR plus a margin. The fair value of borrowings under the credit facility is considered to be equivalent to their carrying values as the debt is at variable rates currently available and resets on a monthly basis. Fair value estimates are made at a specific point in time, are subjective in nature, and involve uncertainties and matters of significant judgment. Settlement at such fair value amounts may not be possible. As of September 30, 2017, the fair value of the Company’s $29.2 million mortgage notes receivable was estimated to be approximately $29.3 million.

Accounting Policies and Relat18

Accounting Policies and Related Matters (Policies)	9 Months Ended
	Sep. 30, 2017
Accounting Policies [Abstract]
Derivatives	Derivatives: In the normal course of business, the Company is subject to risk from adverse fluctuations in interest rates. The Company has chosen to manage this risk through the use of derivative financial instruments, primarily interest rate swaps. Counterparties to these contracts are major financial institutions. The Company is exposed to credit loss in the event of nonperformance by these counterparties. The Company does not use derivative instruments for trading or speculative purposes. The Company’s objective in managing exposure to interest risk is to limit the impact on cash flows. To qualify for hedge accounting, the Company’s interest rate swaps must effectively reduce the risk exposure that they are designed to hedge. In addition, at inception of a qualifying cash flow hedging relationship, the underlying transactions must be, and be expected to remain, probable of occurring in accordance with the Company’s related assertions. All of the Company’s hedges are cash flow hedges. The Company recognizes all derivative instruments as assets or liabilities at their fair value in the Consolidated Balance Sheets. Changes in the fair value of derivative instruments that are not designated as hedges or that do not meet the criteria of hedge accounting are recognized in earnings. For derivatives designed in qualified cash flow hedging relationships, the change in fair value of the effective portion of the derivatives is recognized in accumulated other comprehensive income (loss), whereas the change in fair value of the ineffective portion is recognized in earnings. Gains and losses are reclassified from accumulated other comprehensive income (loss) into earnings once the underlying hedged transaction is recognized in earnings.
Recent Accounting Developments	Recent Accounting Developments: On January 1, 2017, the Company adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which amends the accounting for share-based payment transactions, including income tax effects, equity versus liability classification and classification on the statement of cash flows. The adoption of this guidance had no impact on the Company’s consolidated results of operations, financial condition, statement of cash flows or liquidity. In January 2017, the FASB issued ASU No. 2017-01, “Clarifying the Definition of a Business,” that clarifies the framework for determining whether an integrated set of assets and activities meets the definition of a business. The revised framework establishes a screen for determining whether an integrated set of assets and activities is a business and narrows the definition of a business, which is expected to result in fewer transactions being accounted for as business combinations. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. ASU 2017-01 will be effective for fiscal years, and for interim periods within those fiscal years, beginning January 1, 2018. Early application of this standard is generally allowed for acquisitions after the standard was issued but before the acquisition has been reflected in a company’s financial statements. The Company has applied the provisions of ASU 2017-01 beginning with its real estate acquisitions in 2017. The adoption of ASU 2017-01 did not have a material effect on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities.” The purpose of this updated guidance is to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. The transition guidance provides companies with the option of early adopting the new standard using a modified retrospective transition method in any interim period after issuance of the update, or alternatively requires adoption for fiscal years beginning January 1, 2019. This adoption method will require recognition of the cumulative effect of initially applying the standard as an adjustment to accumulated other comprehensive income (loss) with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year of adoption. The Company continues to assess all potential impacts of the standard but does not currently expect adoption to have a material impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” a comprehensive new revenue recognition standard that supersedes most of the existing revenue recognition guidance. This standard’s core principle is that a company will recognize revenue when it transfers goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date,” which deferred the effective date of this standard by one year. This standard becomes effective for the Company on January 1, 2018 and for interim periods therein. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The Company continues to evaluate this standard and preliminary analyses indicate that the standard is not expected to have a significant impact on the Company’s consolidated financial position, results of operations and cash flows since the Company’s revenues consist primarily of rental income from leasing arrangements, which are specifically excluded from the guidance in ASU 2014-09. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheet and making targeted improvements to lessor accounting. The guidance requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The guidance will be effective beginning January 1, 2019. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new accounting standard on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326),” which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The standard also requires additional disclosures related to significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. The amended guidance is effective for fiscal years, and interim periods within those years, beginning January 1, 2020 with early adoption permitted for the fiscal years, and interim periods within those fiscal years, beginning January 1, 2019. The Company is evaluating the impact of adopting this new accounting standard on the Company’s consolidated financial statements and currently expects that it will not have a material impact. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows - Restricted Cash,” which required that a statement of cash flows explains the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for fiscal years, and interim periods within those years, beginning January 1, 2018. The adoption of this guidance will change the presentation of restricted cash on the Company’s consolidated statement of cash flows. However, it will have no impact on the Company’s consolidated results of operations, financial condition, or liquidity.

Investment Activity (Tables)

Investment Activity (Tables)	9 Months Ended
	Sep. 30, 2017
Schedule of Real Estate Investments	During the nine months ended September 30, 2017, the Company made the following real estate investments, which are described in more detail below (dollars in thousands): Investment Date Number of Properties/Loans Investment Type (1) Gross Investment Advanced Diagnostics Hospital East Mortgage Loan January 2017 1 MTG $ 12,500 Woodlake at Tolland Nursing and Rehabilitation Center June 2017 1 SNF 10,120 Magnolia Portfolio July 2017 2 SNF 15,003 Medistar Gemini Mortgage Loan August 2017 1 MTG 6,700 AAC Portfolio August 2017 4 BH 25,020 Total 9 $ 69,343 (1) MTG- Mortgage Note Receivable; SNF- Skilled Nursing Facility; BH- Behavioral Health Facility
Sales Revenue, Net | Credit Concentration Risk
Concentrations of Credit Risks	The following table contains information regarding tenant concentration in the Company’s portfolio, based on the percentage of revenue for the nine months ended September 30, 2017 and 2016, related to tenants, or affiliated tenants, that exceed 10% of revenues. % of Total Revenue for the nine months ended September 30, 2017 2016 BSW Health (1) 24.6% 3.5% GruenePointe Holdings 24.1% 30.2% Fundamental Healthcare 15.2% 17.5% Life Generations Healthcare 14.4% 18.3% Vibra Healthcare 13.2% 16.1% (1) The Lakeway Hospital lease with Baylor Scott & White Health (“BSW Health”) commenced on September 1, 2016.
Sales Revenue, Net | Geographic Concentration Risk
Concentrations of Credit Risks	The following table contains information regarding the geographic concentration of the properties in the Company’s portfolio as of September 30, 2017, which includes percentage of rental income for the nine months ended September 30, 2017 and 2016 (dollars in thousands). % of Total % of Rental Income State Number of Properties Gross Investment Real Estate Property Investments Nine months ended September 30, 2017 Nine months ended September 30, 2016 Texas 16 $ 283,705 52.0% 61.0% 55.6% California 7 154,727 28.3% 24.3% 30.0% Nevada 4 62,397 11.4% 10.1% 10.2% South Carolina 1 20,000 3.7% 3.4% 4.2% Indiana 2 15,003 2.7% 0.6% - Connecticut 1 10,120 1.9% 0.6% - 31 $ 545,952 100.0% 100.0% 100.0%

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
Schedule of Debt Balance	The table below details the Company’s debt balance at September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 December 31, 2016 Term loan- secured $ 125,000 $ - Revolving credit facility- secured 82,500 144,000 Unamortized deferred financing costs (718 ) - $ 206,782 $ 144,000
Summary of Loss Recognized On Interest Rate Derivative Designated As Cash Flow Hedges	The table below details the location in the consolidated financial statements of the loss recognized on interest rate derivatives designated as cash flow hedges for the three and nine months ended September 30, 2017 (dollars in thousands). The Company did not have any interest rate derivatives for the three and nine months ended September 30, 2016. Three months ended September 30, 2017 Nine months ended September 30, 2017 Amount of loss recognized in other comprehensive income (loss) $ (85 ) $ (441 ) Amount of loss reclassified from accumulated other comprehensive loss into interest expense (200 ) (433 ) Total other comprehensive income (loss) $ 115 $ (8 )

Other Assets (Tables)

Other Assets (Tables)	9 Months Ended
	Sep. 30, 2017
Other Assets [Abstract]
Schedule of Other Assets on Consolidated Balance Sheet	Items included in Other Assets on the Company’s consolidated balance sheets as of September 30, 2017 and December 31, 2016 are detailed in the table below (dollars in thousands): September 30, 2017 December 31, 2016 Straight-line rent receivable $ 10,789 $ 6,470 Tenant allowances and lease incentives, net 8,314 8,624 Deferred financing costs, net 2,759 1,465 Prepaid assets and deposits 2,135 3,174 Pre-acquisition costs 1,014 883 Interest and accounts receivable 328 561 Note receivable 325 450 Capitalized pre-offering costs 224 - Corporate property, net 156 206 Surety bond deposit - 9,412 Restricted cash - 262 $ 26,044 $ 31,507

Incentive Plan (Tables)

Incentive Plan (Tables)	9 Months Ended
	Sep. 30, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Stock-Based Award Activity	The following table summarizes the stock-based award activity for the nine months ended September 30, 2017 and 2016: Restricted Stock Awards Weighted-Average Grant Date Fair Value Per Restricted Stock Award RSU Awards Weighted-Average Grant Date Fair Value Per RSU Outstanding as of December 31, 2016 352,793 $ 14.57 575,775 $ 8.51 Granted 33,780 11.10 - - Vested (123,726 ) 15.02 - - Cancelled (5,368 ) 15.00 - - Forfeited - - (158,927 ) 6.53 Outstanding as of September 30, 2017 257,479 $ 13.90 416,848 $ 9.26 Restricted Stock Awards Weighted-Average Grant Date Fair Value Per Restricted Stock Award RSU Awards Weighted-Average Grant Date Fair Value Per RSU Outstanding as of December 31, 2015 280,080 $ 15.49 359,025 $ 7.91 Granted 16,665 15.00 - - Vested (14,812 ) 15.18 - - Forfeited - - - - Outstanding as of September 30, 2016 281,933 $ 15.47 359,025 $ 7.91
Summary of Share Based Compensation Expense	The table below summarizes compensation expense related to share-based payments, included in general and administrative expenses, for the three and nine months ended September 30, 2017 and 2016 (in thousands): For the three months ended September 30, For the nine months ended September 30, 2017 2016 2017 2016 Restricted stock $ 433 $ 396 $ 1,506 $ 1,217 Restricted stock units 350 237 1,167 710 Stock-based compensation $ 783 $ 633 $ 2,673 $ 1,927

Equity (Tables)

Equity (Tables)	9 Months Ended
	Sep. 30, 2017
Equity [Abstract]
Schedule of Common Stock Dividend	The following table reflects the common stock dividends paid during or related to 2017. Quarter Quarterly Dividend Date of Declaration Date of Record Date Paid/Payable 4th Quarter 2016 $ 0.21 January 3, 2017 January 17, 2017 January 31, 2017 1st Quarter 2017 $ 0.21 May 3, 2017 May 17, 2017 May 31, 2017 2nd Quarter 2017 $ 0.21 August 2, 2017 August 16, 2017 August 30, 2017 3rd Quarter 2017 $ 0.21 November 1, 2017 November 15, 2017 November 29, 2017

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2017
Earnings Per Share [Abstract]
Computation of Earnings Per Common Share	The following table sets forth the computation of earnings per common share for the three and nine months ended September 30, 2017 and 2016 (amounts in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, Numerator: 2017 2016 2017 2016 Net income $ 6,266 $ 4,734 $ 17,473 $ 5,940 Less: Net (income) loss attributable to noncontrolling interest (941 ) (821 ) (2,821 ) 665 Less: Dividends on preferred shares - (2,464 ) - (7,394 ) Net income (loss) attributable to common stockholders 5,325 1,449 14,652 (789 ) Less: Allocation to participating securities (54 ) (120 ) (211 ) (182 ) Net income (loss) available to common stockholders $ 5,271 $ 1,329 $ 14,441 $ (971 ) Denominator Basic weighted-average common shares 31,467 10,964 31,429 10,961 Dilutive potential common shares 39 - 31 - Diluted weighted-average common shares 31,506 10,964 31,460 10,961 Basic and diluted earnings (loss) per common share $ 0.17 $ 0.12 $ 0.46 $ (0.09 )

Organization and Nature of Bu25

Organization and Nature of Business - Additional Information (Details) $ in Millions	9 Months Ended
	Sep. 30, 2017USD ($)PropertyMortgage
Organization And Nature Of Business [Line Items]
Investment in real estate properties and mortgage notes receivable | $	$ 537.5
Number of real estate properties | Property	31
Number of mortgage notes receivable | Mortgage	3
Ownership interest	100.00%
Lakeway Hospital
Organization And Nature Of Business [Line Items]
Ownership percentage by parent	51.00%
MedEquities Realty Operating Partnership, LP
Organization And Nature Of Business [Line Items]
Ownership interest	100.00%

Investment Activity - Schedule

Investment Activity - Schedule of Real Estate Investments (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2017USD ($)Investment
Investment Activity [Line Items]
Number of Properties/Loans | Investment	9
Gross Investment | $	$ 69,343
Advanced Diagnostics Hospital East Mortgage Loan | MTG
Investment Activity [Line Items]
Investment Date	2017-01
Number of Properties/Loans | Investment	1
Gross Investment | $	$ 12,500
Woodlake at Tolland Nursing and Rehabilitation Center | SNF
Investment Activity [Line Items]
Investment Date	2017-06
Number of Properties/Loans | Investment	1
Gross Investment | $	$ 10,120
Magnolia Portfolio | SNF
Investment Activity [Line Items]
Investment Date	2017-07
Number of Properties/Loans | Investment	2
Gross Investment | $	$ 15,003
Medistar Gemini Mortgage Loan | MTG
Investment Activity [Line Items]
Investment Date	2017-08
Number of Properties/Loans | Investment	1
Gross Investment | $	$ 6,700
AAC Portfolio | BH
Investment Activity [Line Items]
Investment Date	2017-08
Number of Properties/Loans | Investment	4
Gross Investment | $	$ 25,020

Investment Activity - 2017 Real

Investment Activity - 2017 Real Estate Acquisitions - Additional Information (Details)	Aug. 09, 2017USD ($)BedLeaseFacility	Jul. 31, 2017USD ($)BedLeaseFacility	Jun. 30, 2017USD ($)BedLease	Dec. 31, 2018Bed
Investment Activity [Line Items]
Lease renewal term	5 years
Subsidiaries of AAC Holdings, Inc
Investment Activity [Line Items]
Aggregate purchase price	$ 25,000,000
Percentage of leased property	100.00%
Initial term of lease	15 years
Number of lease renewal options | Lease	2
Percentage of annual escalators	8.75%
Number of behavioral health and substance abuse treatment facilities | Facility	4
Subsidiaries of AAC Holdings, Inc | Scenario, Forecast
Investment Activity [Line Items]
Number of sober living facility | Bed				131
Subsidiaries of AAC Holdings, Inc | Maximum
Investment Activity [Line Items]
Transaction costs capitalized	$ 100,000
Las Vegas, Nevada and Arlington, Texas | Subsidiaries of AAC Holdings, Inc
Investment Activity [Line Items]
Number of standalone intensive outpatient treatment facilities | Facility	2
Las Vegas | Subsidiaries of AAC Holdings, Inc
Investment Activity [Line Items]
Number of sober living facility | Bed	110
Arlington | Subsidiaries of AAC Holdings, Inc
Investment Activity [Line Items]
Number of sober living facility | Bed	56
Real Estate Investment
Investment Activity [Line Items]
Percentage of leased property		100.00%
Initial term of lease		15 years
Percentage of annual escalators		9.00%
Number of skilled nursing facilities | Facility		2
Real Estate Investment | Maximum
Investment Activity [Line Items]
Transaction costs capitalized		$ 100,000
Real Estate Investment | Magnolia Health Systems, Inc
Investment Activity [Line Items]
Lease renewal term		10 years
Real Estate Investment | Indiana
Investment Activity [Line Items]
Aggregate purchase price		$ 15,000,000
Number of licensed beds | Bed		160
Real Estate Investment | NEVADA | Magnolia Health Systems, Inc
Investment Activity [Line Items]
Number of lease renewal options | Lease		2
Real Estate Investment | Tolland Nursing & Rehabilitation Center
Investment Activity [Line Items]
Number of skilled nursing facilities acquired | Bed			130
Aggregate purchase price			$ 10,000,000
Percentage of leased property			100.00%
Initial term of lease			12 years
Number of lease renewal options | Lease			2
Lease renewal term			10 years
Percentage of annual escalators			9.00%
Transaction costs capitalized			$ 100,000

Investment Activity - 2017 Mort

Investment Activity - 2017 Mortgage Notes Receivable Funding - Additional Information (Details) $ in Thousands	Nov. 07, 2017USD ($)Lease	Aug. 09, 2017	Aug. 01, 2017USD ($)ft²	Jan. 30, 2017USD ($)ft²Room	Sep. 30, 2017USD ($)	Dec. 31, 2016USD ($)
Investment Activity [Line Items]
Mortgage notes receivable, net				$ 12,500	$ 29,120	$ 9,915
Interest-only loan interest rate				9.60%
Area of hospital building | ft²				23,300
Number of operating rooms | Room				4
Number of special procedure rooms | Room				2
Number of inpatient rooms | Room				4
Number of full-size extended recovery rooms | Room				4
Purchase option description					Beginning on October 1, 2017, the Company had the exclusive option to purchase the hospital.
Lease renewal term		5 years
Medistar Corporation
Investment Activity [Line Items]
Mortgage notes receivable, net			$ 6,700
Interest-only loan interest rate			10.00%
Area of hospital building | ft²			48,000
Increase in mortgage notes receivable, net			$ 15,500
Subsequent Event
Investment Activity [Line Items]
Mortgage notes receivable, net	$ 12,500
Aggregate purchase price	17,500
Cash consideration	$ 5,000
Subsequent Event | AD Hospital East, LLC
Investment Activity [Line Items]
Initial term of lease	15 years
Number of lease renewal options | Lease	2
Lease renewal term	10 years
Percentage of annual rent escalators	9.60%

Investment Activity - Schedul29

Investment Activity - Schedule of Tenant Concentration of Revenue (Details) - Credit Concentration Risk - Sales Revenue, Net		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016
BSW Health
Concentration Risk [Line Items]
Concentration risk percentage	[1]	24.60%	3.50%
Gruene Pointe Holdings
Concentration Risk [Line Items]
Concentration risk percentage		24.10%	30.20%
Fundamental Healthcare
Concentration Risk [Line Items]
Concentration risk percentage		15.20%	17.50%
Life Generations Healthcare
Concentration Risk [Line Items]
Concentration risk percentage		14.40%	18.30%
Vibra Healthcare
Concentration Risk [Line Items]
Concentration risk percentage		13.20%	16.10%
[1]	The Lakeway Hospital lease with Baylor Scott & White Health (“BSW Health”) commenced on September 1, 2016.

Investment Activity - Schedul30

Investment Activity - Schedule of Geographic Concentration of Properties (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2017USD ($)Property	Sep. 30, 2016
Concentration Risk [Line Items]
Number of real estate properties | Property	31
Gross Investment | $	$ 545,952
Percentage of Total Real Estate Property Investments	100.00%
Geographic Concentration Risk | Sales Revenue, Net
Concentration Risk [Line Items]
Percentage of Rental Income	100.00%	100.00%
Texas
Concentration Risk [Line Items]
Number of real estate properties | Property	16
Gross Investment | $	$ 283,705
Percentage of Total Real Estate Property Investments	52.00%
Texas | Geographic Concentration Risk | Sales Revenue, Net
Concentration Risk [Line Items]
Percentage of Rental Income	61.00%	55.60%
California
Concentration Risk [Line Items]
Number of real estate properties | Property	7
Gross Investment | $	$ 154,727
Percentage of Total Real Estate Property Investments	28.30%
California | Geographic Concentration Risk | Sales Revenue, Net
Concentration Risk [Line Items]
Percentage of Rental Income	24.30%	30.00%
NEVADA
Concentration Risk [Line Items]
Number of real estate properties | Property	4
Gross Investment | $	$ 62,397
Percentage of Total Real Estate Property Investments	11.40%
NEVADA | Geographic Concentration Risk | Sales Revenue, Net
Concentration Risk [Line Items]
Percentage of Rental Income	10.10%	10.20%
South Carolina
Concentration Risk [Line Items]
Number of real estate properties | Property	1
Gross Investment | $	$ 20,000
Percentage of Total Real Estate Property Investments	3.70%
South Carolina | Geographic Concentration Risk | Sales Revenue, Net
Concentration Risk [Line Items]
Percentage of Rental Income	3.40%	4.20%
Indiana
Concentration Risk [Line Items]
Number of real estate properties | Property	2
Gross Investment | $	$ 15,003
Percentage of Total Real Estate Property Investments	2.70%
Indiana | Geographic Concentration Risk | Sales Revenue, Net
Concentration Risk [Line Items]
Percentage of Rental Income	0.60%
Connecticut
Concentration Risk [Line Items]
Number of real estate properties | Property	1
Gross Investment | $	$ 10,120
Percentage of Total Real Estate Property Investments	1.90%
Connecticut | Geographic Concentration Risk | Sales Revenue, Net
Concentration Risk [Line Items]
Percentage of Rental Income	0.60%

Debt - Summary of Debt (Detail)

Debt - Summary of Debt (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	May 31, 2016
Debt Instrument [Line Items]
Unamortized deferred financing costs	$ (718)
Debt, net	206,782	$ 144,000
Term loan- secured
Debt Instrument [Line Items]
Line of credit facility maximum borrowing capacity	125,000
Revolving credit facility- secured
Debt Instrument [Line Items]
Line of credit facility outstanding amount	$ 82,500	$ 144,000
Unamortized deferred financing costs			$ (300)

Debt - Additional Information (

Debt - Additional Information (Details)	Nov. 07, 2017USD ($)	Feb. 10, 2017USD ($)Agreement	Feb. 09, 2017USD ($)	Sep. 30, 2017USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2017USD ($)	Sep. 30, 2016USD ($)	Dec. 31, 2016USD ($)	May 31, 2016USD ($)
Debt Instrument [Line Items]
Line of credit facility maximum borrowing capacity			$ 300,000,000	$ 260,800,000		$ 260,800,000
Line of credit facility maturity date			2017-11
Commitment fees paid		$ 2,700,000
Debt instrument description						The revolving credit facility has one 12-month extension option, subject to certain conditions, including the payment of a 0.15% extension fee.
Debt instrument, extension fee						0.15%
Debt instrument collateral amount		1,000,000,000
Line of credit facility minimum borrowing base		$ 500,000,000
Unamortized deferred financing costs				718,000		$ 718,000
Number of interest rate swap agreements | Agreement		4
Interest rate swap agreement effective date		Apr. 10, 2017
Estimated additional reclassification from other comprehensive income (loss) to interest expense						500,000
Fair value interest rate swap on net liability position including accrued interest but excluding adjustment for nonperformance risk				100,000		100,000
Provisions breached to settle under agreement at aggregate termination value				100,000		100,000
Subsequent Event
Debt Instrument [Line Items]
Line of credit facility outstanding amount	$ 207,500,000
Maximum
Debt Instrument [Line Items]
Line of credit facility leverage ratio		50.00%
Maximum | Interest Rate Swap Agreements | Accounts Payable And Accrued Liabilities
Debt Instrument [Line Items]
Fair value of derivative financial instruments				100,000		100,000
LIBOR | Minimum [Member]
Debt Instrument [Line Items]
Debt instrument interest rate		1.75%	2.75%
LIBOR | Maximum
Debt Instrument [Line Items]
Debt instrument interest rate		3.00%	3.75%
Base Rate | Minimum [Member]
Debt Instrument [Line Items]
Debt instrument interest rate		0.75%	2.00%
Base Rate | Maximum
Debt Instrument [Line Items]
Debt instrument interest rate		2.00%	2.50%
Term Loan
Debt Instrument [Line Items]
Line of credit facility maximum borrowing capacity		$ 125,000,000
Line of credit facility maturity date		2022-02
Commitment fees paid		$ 800,000
Deferred financing costs, gross				800,000		800,000
Debt financing costs, net				$ 700,000		$ 700,000
Term Loan | Subsequent Event
Debt Instrument [Line Items]
Line of credit facility outstanding amount	$ 125,000,000
Accordion Feature Debt
Debt Instrument [Line Items]
Line of credit facility maximum borrowing capacity		700,000,000
Secured Revolving Credit facility
Debt Instrument [Line Items]
Line of credit facility maximum borrowing capacity		$ 300,000,000
Line of credit facility maturity date		2021-02
Commitment fees paid		$ 1,900,000
Debt instrument, weighted average interest				3.40%	3.80%	3.40%	3.80%
Costs related to revolving credit facility, gross				$ 3,300,000		$ 3,300,000
Costs related to revolving credit facility, net				2,800,000		2,800,000
Amortization expense of deferred financing costs				200,000	$ 400,000	800,000	$ 2,000,000
Unamortized deferred financing costs									$ 300,000
Line of credit facility outstanding amount				$ 82,500,000		$ 82,500,000		$ 144,000,000
Secured Revolving Credit facility | Subsequent Event
Debt Instrument [Line Items]
Debt instrument, weighted average interest	2.99%
Line of credit facility outstanding amount	$ 82,500,000
Line of credit facility additional borrowing capacity	$ 53,300,000
Secured Revolving Credit facility | Minimum [Member]
Debt Instrument [Line Items]
Line of credit facility unused fees						0.25%
Line of credit facility usage fees						50.00%
Secured Revolving Credit facility | Maximum
Debt Instrument [Line Items]
Line of credit facility unused fees						0.35%
Line of credit facility usage fees						50.00%
Secured Revolving Credit facility | LIBOR
Debt Instrument [Line Items]
Debt instrument interest rate		1.84%
Secured Revolving Credit facility | LIBOR | Subsequent Event
Debt Instrument [Line Items]
Debt instrument interest rate	1.75%

Debt - Summary of Loss Recogniz

Debt - Summary of Loss Recognized On Interest Rate Derivative Designated As Cash Flow Hedges (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2017
Debt Disclosure [Abstract]
Amount of loss recognized in other comprehensive income (loss)	$ (85)	$ (441)
Amount of loss reclassified from accumulated other comprehensive loss into interest expense	(200)	(433)
Total other comprehensive income (loss)	$ 115	$ (8)

Other Assets - Summary of Other

Other Assets - Summary of Other Assets on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Other Assets
Total Other Assets	$ 26,044	$ 31,507
Other Assets
Other Assets
Straight-line rent receivable	10,789	6,470
Tenant allowances and lease incentives, net	8,314	8,624
Deferred financing costs, net	2,759	1,465
Prepaid assets and deposits	2,135	3,174
Pre-acquisition costs	1,014	883
Interest and accounts receivable	328	561
Note receivable	325	450
Capitalized pre-offering costs	224
Corporate property, net	$ 156	206
Surety bond deposit		9,412
Restricted cash		$ 262

Other Assets - Additional Infor

Other Assets - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Aug. 31, 2017	Sep. 30, 2017	Dec. 31, 2016	Sep. 01, 2016	Feb. 02, 2016
Other Assets
Other Assets
Surety bond deposit			$ 9,412
Lakeway Regional Medical Center | Surety Bond
Other Assets
Surety bond deposit				$ 9,400	$ 9,400
Lakeway Regional Medical Center | Other Assets
Other Assets
Surety bond deposit			$ 9,400
Lakeway Regional Medical Center | Accrued Interest | Surety Bond
Other Assets
Funds released in litigation matter	$ 9,400
Lakeway Regional Medical Center | Other Assets And Accounts Payable And Accrued Liabilities
Other Assets
Litigation elimination amount		$ 9,400

Incentive Plan - Additional Inf

Incentive Plan - Additional Information (Details) - USD ($) $ in Millions	Dec. 30, 2016	Dec. 31, 2015	Sep. 30, 2017	Sep. 30, 2016
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized cost from stock-based awards			$ 3.3
Weighted average recognition period			1 year 7 months 7 days
Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Awards vesting description			The awards generally cliff vest over three years or vest ratably over three years from the date of grant.
Awards vesting period			3 years
Common stock vested			123,726	14,812
Restricted Stock | Certain Employee and Non Employee Directors
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock vested			123,726
Restricted Stock | Employee
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares surrendered to satisfy tax obligation			18,611
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage on number of RSUs granted			100.00%
Awards measurement period	3 years	3 years
Expected service periods			3 years
Common stock not vested and were forfeited			158,927
Restricted Stock Units | Employee
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock not vested and were forfeited			158,927
Restricted Stock Units | Minimum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage on number of RSUs granted	0.00%	0.00%
Restricted Stock Units | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage on number of RSUs granted	150.00%	100.00%
2014 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares authorized			3,356,723
Shares available for future issuance			2,261,930

Incentive Plan - Summary of Sto

Incentive Plan - Summary of Stock-Based Award Activity (Details) - $ / shares	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Restricted Stock Awards
Number of Shares
Outstanding at beginning of the period	352,793	280,080
Granted	33,780	16,665
Vested	(123,726)	(14,812)
Cancelled	(5,368)
Outstanding at end of the period	257,479	281,933
Weighted-Average Grant Date Fair Value Per Share
Outstanding at beginning of the period	$ 14.57	$ 15.49
Granted	11.10	15
Vested	15.02	15.18
Cancelled	15
Outstanding at end of the period	$ 13.90	$ 15.47
RSU Awards
Number of Shares
Outstanding at beginning of the period	575,775	359,025
Forfeited	(158,927)
Outstanding at end of the period	416,848	359,025
Weighted-Average Grant Date Fair Value Per Share
Outstanding at beginning of the period	$ 8.51	$ 7.91
Forfeited	6.53
Outstanding at end of the period	$ 9.26	$ 7.91

Incentive Plan - Summary of Com

Incentive Plan - Summary of Compensation Expense Related to Share-based Payments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock based compensation	$ 783	$ 633	$ 2,673	$ 1,927
Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock based compensation	433	396	1,506	1,217
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock based compensation	$ 350	$ 237	$ 1,167	$ 710

Commitment and Contingencies -

Commitment and Contingencies - Additional Information (Details) - USD ($)	1 Months Ended		3 Months Ended	9 Months Ended
	Aug. 31, 2017	Apr. 30, 2017	Sep. 30, 2016	Sep. 30, 2016	Nov. 07, 2017	Sep. 01, 2016	Feb. 02, 2016
Surety Bond
Loss Contingencies [Line Items]
Interest and other income			$ 200,000	$ 200,000
Surety Bond | Lakeway Regional Medical Center
Loss Contingencies [Line Items]
Surety bond deposit received						$ 9,400,000	$ 9,400,000
Surety Bond | Lakeway Regional Medical Center | Accrued Interest
Loss Contingencies [Line Items]
Escrowed funds released	$ 9,400,000
Mountains' Edge Hospital
Loss Contingencies [Line Items]
Aggregate amount available for construction and equipping of new surgical suites		$ 11,000,000
Percentage of base rent increased on amount advanced		9.25%
Mountains' Edge Hospital | Subsequent Event
Loss Contingencies [Line Items]
Fund available pursuant to the commitment for construction					$ 600,000

Equity - Schedule of Common Sto

Equity - Schedule of Common Stock Dividend (Details) - $ / shares	3 Months Ended					9 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Class Of Stock [Line Items]
Quarterly Dividend	$ 0.21				$ 0.42	$ 0.63	$ 0.63
Common Stock
Class Of Stock [Line Items]
Quarterly Dividend	$ 0.21	$ 0.21	$ 0.21	$ 0.21
Date of Declaration	Nov. 1, 2017	Aug. 2, 2017	May 3, 2017	Jan. 3, 2017
Date of Record	Nov. 15, 2017	Aug. 16, 2017	May 17, 2017	Jan. 17, 2017
Date Paid/Payable	Nov. 29, 2017	Aug. 30, 2017	May 31, 2017	Jan. 31, 2017

Equity - Additional Information

Equity - Additional Information (Details)	Jan. 30, 2017	Sep. 30, 2017USD ($)Directorshares	Sep. 30, 2016shares	Dec. 31, 2015shares	Dec. 31, 2014shares	Dec. 31, 2016USD ($)
Class Of Stock [Line Items]
Interest-only loan interest rate	9.60%
Lakeway Partnership
Class Of Stock [Line Items]
Cash contribution		$ 2,000,000
Ownership percentage by parent		51.00%
Equity method investment ownership percentage		49.00%
Investment in subsidiary by noncontrolling interest		$ 1,000,000
Lakeway mortgage note receivable foreclosure		50,000,000
Additional cash contribution to acquire real estate		$ 23,000,000
Intercompany Mortgage Loan, term		10 years
Interest-only loan interest rate		8.00%
Intercompany Mortgage Loan, amortization schedule		25 years
Intercompany Mortgage Loan, outstanding principal balance		$ 71,000,000				$ 71,800,000
Lakeway Partnership | First Mortgage
Class Of Stock [Line Items]
Intercompany Mortgage Loan		$ 73,000,000
Restricted Stock
Class Of Stock [Line Items]
Common stock granted | shares		33,780	16,665
BlueMountain Capital Management LLC | Board of Directors | Restricted Stock
Class Of Stock [Line Items]
Number of directors designated | Director		2
Common stock granted | shares				16,108	16,108
Forfeited vested shares | shares		10,740
Common stock repurchased and cancelled, shares | shares		5,368
Common stock repurchased and cancelled, value		$ 50,000
Repayment of dividends		$ 29,000

Earnings Per Share - Computatio

Earnings Per Share - Computation of Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Earnings Per Share [Abstract]
Net income	$ 6,266	$ 4,734	$ 17,473	$ 5,940
Less: Net (income) loss attributable to noncontrolling interest	(941)	(821)	(2,821)	665
Less: Dividends on preferred shares		(2,464)		(7,394)
Net income (loss) attributable to common stockholders	5,325	1,449	14,652	(789)
Less: Allocation to participating securities	(54)	(120)	(211)	(182)
Net income (loss) available to common stockholders	$ 5,271	$ 1,329	$ 14,441	$ (971)
Basic weighted-average common shares	31,467	10,964	31,429	10,961
Dilutive potential common shares	39		31
Diluted weighted-average common shares	31,506	10,964	31,460	10,961
Basic and diluted earnings (loss) per common share	$ 0.17	$ 0.12	$ 0.46	$ (0.09)

Fair Value of Financial Instr43

Fair Value of Financial Instruments - Additional information (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Financial assets measured at fair value		$ 0
Financial liabilities measured at fair value		$ 0
Mortgage notes receivable, gross	$ 29,200,000
Estimated Fair Value
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Fair value of mortgage notes receivable	29,300,000
Interest Rate Swap Agreements | Accounts Payable And Accrued Liabilities | Maximum
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Fair value of derivative financial instruments	$ 100,000