Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 30, 2016 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Community Healthcare Trust Inc | |
Entity Central Index Key | 1,631,569 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 12,889,654 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Real estate properties | ||
Land | $ 19,317 | $ 13,216 |
Buildings, improvements, and lease intangibles | 140,322 | 119,716 |
Personal property | 69 | 35 |
Total real estate properties | 159,708 | 132,967 |
Less accumulated depreciation | (8,018) | (5,203) |
Total real estate properties, net | 151,690 | 127,764 |
Cash and cash equivalents | 1,571 | 2,018 |
Mortgage notes receivable, net | 23,277 | 10,897 |
Other assets, net | 2,704 | 2,124 |
Total assets | 179,242 | 142,803 |
Liabilities | ||
Revolving credit facility | 55,000 | 17,000 |
Accounts payable and accrued liabilities | 1,299 | 812 |
Other liabilities | 3,349 | 2,721 |
Total liabilities | $ 59,648 | $ 20,533 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued and outstanding | $ 0 | $ 0 |
Common stock, $0.01 par value; 450,000,000 shares authorized; 7,714,654 and 7,596,940 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 77 | 76 |
Additional paid-in capital | 127,697 | 127,578 |
Cumulative net loss | (1,340) | (1,456) |
Cumulative dividends | (6,840) | (3,928) |
Total stockholders’ equity | 119,594 | 122,270 |
Total liabilities and stockholders' equity | $ 179,242 | $ 142,803 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 450,000,000 | 450,000,000 |
Common Stock, shares issued | 7,714,654 | 7,596,940 |
Common Stock, shares outstanding | 7,714,654 | 7,596,940 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Compehrensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
REVENUES | ||
Rental income | $ 3,673 | $ 0 |
Tenant reimbursements | 957 | 0 |
Mortgage interest | 536 | 0 |
Revenues | 5,166 | 0 |
EXPENSES | ||
Property operating | 1,049 | 0 |
General and administrative | 806 | 0 |
Depreciation and amortization | 2,815 | 0 |
Expenses | 4,670 | 0 |
OTHER INCOME (EXPENSE) | ||
Interest expense | (380) | 0 |
Other Income (Expense) | (380) | 0 |
NET INCOME | 116 | 0 |
COMPREHENSIVE INCOME | $ 116 | $ 0 |
INCOME PER COMMON SHARE: | ||
Net income per common share – Basic (in dollars per share) | $ 0.02 | $ 0 |
Net income per common share – Diluted (in dollars per share) | $ 0.02 | $ 0 |
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-BASIC | 7,511,183 | 200,000 |
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-DILUTED | 7,562,644 | 200,000 |
DIVIDENDS DECLARED, PER COMMON SHARE, DURING THE PERIOD | $ 0.3775 | $ 0 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid in Capital [Member] | Cumulative Net Income (Deficit) [Member] | Cumulative Dividends [Member] |
Beginning Balance at Dec. 31, 2015 | $ 122,270 | $ 0 | $ 76 | $ 127,578 | $ (1,456) | $ (3,928) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 120 | 1 | 119 | |||
Net income | 116 | 116 | ||||
Dividends to common stockholders ($0.3775 per share) | (2,912) | (2,912) | ||||
Ending Balance at Mar. 31, 2016 | $ 119,594 | $ 0 | $ 77 | $ 127,697 | $ (1,340) | $ (6,840) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) | 3 Months Ended |
Mar. 31, 2016$ / shares | |
Cumulative Dividends [Member] | |
Dividends to common stockholders, per share (in dollars per share) | $ 0.3775 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
OPERATING ACTIVITIES | ||
Net income | $ 116,000 | $ 0 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,906,000 | 0 |
Stock-based compensation | 120,000 | 0 |
Straight-line rent receivable | (95,376) | 0 |
Reduction in contingent purchase price | (188,000) | 0 |
Changes in operating assets and liabilities: | ||
Other assets | (564,000) | 0 |
Accounts payable and accrued liabilities | 455,000 | 0 |
Other liabilities | (164,000) | 0 |
Net cash provided by operating activities | 2,586,000 | 0 |
INVESTING ACTIVITIES | ||
Acquisitions of real estate | (25,326,000) | 0 |
Funding of mortgage notes receivable | (12,406,000) | 0 |
Capital expenditures on existing real estate properties | (389,000) | 0 |
Net cash used in investing activities | (38,121,000) | 0 |
FINANCING ACTIVITIES | ||
Net borrowings on revolving credit facility | 38,000,000 | 0 |
Dividends paid | (2,912,000) | 0 |
Net cash provided by financing activities | 35,088,000 | 0 |
Decrease in cash and cash equivalents | (447,000) | 0 |
Cash and cash equivalents, beginning of period | 2,018,000 | 2,000 |
Cash and cash equivalents, end of period | 1,571,000 | 2,000 |
Supplemental Cash Flow Information: | ||
Interest paid | $ 294,000 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Business Overview Community Healthcare Trust Incorporated (the ‘‘Company’’, ‘‘we’’, ‘‘our’’) was organized in the State of Maryland on March 28, 2014. The Company is a fully-integrated healthcare real estate company that owns and acquires real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers in non-urban markets. The Company conducts its business through an UPREIT structure in which its properties are owned by its operating partnership, either directly or through subsidiaries. The Company is the sole general partner, owning 100% of the operating partnership ("OP") units. On May 27, 2015, the Company completed its initial public offering of 7,187,500 shares of common stock, including 937,500 shares of common stock issued in connection with the exercise in full of the underwriters' option to purchase additional shares, and received net proceeds of approximately $ 125.2 million from the offering. Concurrently, the Company issued 123,683 shares of common stock for approximately $2.3 million in net proceeds in private placements to certain officers and directors. In June 2015, the Company entered into a $ 75.0 million syndicated senior revolving credit facility (the "Credit Facility"). In April 2016, the Company completed a follow-on offering of 5,175,000 shares of its common stock, including 675,000 shares of common stock issued in connection with the exercise in full of the underwriters’ option to purchase additional shares, and received net proceeds of approximately $ 86.8 million from the offering. As of March 31, 2016 , the Company had investments of approximately $183.0 million in 46 real estate properties and mortgages, located in 18 states, totaling over 1.0 million square feet in the aggregate. Basis of Presentation The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. This interim financial information should be read in conjunction with the financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this report, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and in the Company's prospectus, filed with the Securities and Exchange Commission on April 8, 2016 pursuant to Rule 424(b). Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2016 . Principles of Consolidation Our Condensed Consolidated Financial Statements include the accounts of the Company, its wholly owned subsidiaries, and may also include joint ventures, partnerships and variable interest entities, or VIEs, where the Company controls the operating activities. All material intercompany accounts and transactions have been eliminated. Management must make judgments regarding the Company's level of influence or control over an entity and whether or not the Company is the primary beneficiary of a variable interest entity. Consideration of various factors include, but is not limited to, the Company's ability to direct the activities that most significantly impact the entity's governing body, the size and seniority of the Company's investment, the Company's ability and the rights of other investors to participate in policy making decisions, the Company's ability to replace the manager and/or liquidate the entity. Management's ability to correctly assess its influence or control over an entity when determining the primary beneficiary of a VIE affects the presentation of these entities in the Company's consolidated financial statements. If it is determined that the Company is the primary beneficiary of a VIE, the Company's consolidated financial statements would include the operating results of the VIE rather than the results of the variable interest in the VIE. Untimely or inaccurate financial information provided to the Company or deficiencies in the VIEs internal control over financial reporting could impact the Company's consolidated financial statements and its own internal control over financial reporting. In September 2015, the Company acquired an $11.0 million mortgage note receivable. The Company identified the borrower as a VIE, but management determined that the Company was not the primary beneficiary of the VIE. Jumpstart Our Business Startups Act of 2012 The Jumpstart Our Business Startups Act of 2012, or the JOBS Act, permits the Company, as an ‘‘emerging growth company,’’ to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. Management has elected to ‘‘opt out’’ of this provision and, as a result, will be required to comply with new or revised accounting standards as required when they are adopted. The decision to opt out of the extended transition period under the JOBS Act is irrevocable. Use of Estimates in the Condensed Consolidated Financial Statements Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may materially differ from those estimates. Segment Reporting The Company acquires and owns healthcare-related real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers in non-urban markets. The Company is managed as one reporting unit, rather than multiple reporting units, for internal reporting purposes and for internal decision-making. Therefore, the Company discloses its operating results in a single segment. Cash and Cash Equivalents Cash and cash equivalents includes short-term investments with original maturities of three months or less when purchased. Real Estate Properties Real estate properties are recorded at cost or at fair value if acquired in a transaction that is a business combination under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations ("ASC 805"). Cost or fair value at the time of acquisition is allocated between land, buildings, tenant improvements, lease and other intangibles, and personal property, as applicable. Depreciation and amortization of real estate assets and liabilities in place as of March 31, 2016 , is recognized on a straight-line basis over the estimated useful life of the asset. The estimated useful lives at March 31, 2016 are as follows: Buildings 20 - 40 years Building improvements 3.0 - 29.5 years Tenant improvements 2.3 - 3.2 years Lease intangibles 1.2 - 9.3 years Personal property 3 -10 years Accounting for Acquisitions of Real Estate Properties Real estate properties are recorded at cost or, if acquired through business combination, at fair value. The allocation of real estate property acquisitions may include land, building and improvements, personal property, and identified intangible assets and liabilities (consisting of above- and below-market leases, in-place leases, and tenant relationships) based on the evaluation of information and estimates available at that date in accordance with the provisions of ASC 805, and we allocate the purchase price based on these assessments. We make estimates of the acquisition date fair value of the tangible and intangible assets and acquired liabilities using information obtained from multiple sources as a result of pre-acquisition due diligence, tax records, and other sources. Based on these estimates, we recognize the acquired assets and liabilities at their estimated fair values. Initial valuations are subject to change until the information is finalized, no later than 12 months from the acquisition date. We expense transaction costs associated with business combinations in the period incurred. In accordance with ASC 805, the fair value of tangible property assets acquired considers the value of the property as if vacant determined by comparable sales and other relevant data. The determination of fair value involves the use of significant judgment and estimation. We value land based on various inputs, which may include internal analysis of recently acquired properties, existing comparable properties within our portfolio, or third party appraisals or valuations based on comparable sales. In recognizing identified intangible assets and liabilities of an acquired property, the value of above-or-below market leases is estimated based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between contractual amounts to be received pursuant to the leases and management’s estimate of market lease rates measured over a period equal to the estimated remaining term of the lease. In the case of a below-market lease, the Company would also evaluate any renewal options associated with that lease to determine if the intangible should include those periods. The capitalized above-market or below-market lease intangibles are amortized as a reduction from or an addition to rental income over the estimated remaining term of the respective leases. In determining the value of in-place leases and tenant relationships, management considers current market conditions and costs to execute similar leases in arriving at an estimate of the carrying costs during the expected lease-up period from vacant to existing occupancy. In estimating carrying costs, management includes real estate taxes, insurance, other property operating expenses, estimates of lost rental revenue during the expected lease-up periods, and costs to execute similar leases, including leasing commissions. The values assigned to in-place leases and tenant relationships are amortized over the estimated remaining term of the lease. If a lease terminates prior to its scheduled expiration, all unamortized costs related to that lease are written off. Asset Impairments The Company assesses the potential for impairment of identifiable, definite-lived, intangible assets and long-lived assets, including real estate properties, whenever events occur or a change in circumstances indicates that the carrying value might not be fully recoverable. Indicators of impairment may include significant under-performance of an asset relative to historical or expected operating results; significant changes in the Company’s use of assets or the strategy for its overall business; plans to sell an asset before its depreciable life has ended; the expiration of a significant portion of leases in a property; or significant negative economic trends or negative industry trends for the Company or its operators. In addition, the Company’s review for possible impairment may include those assets subject to purchase options and those impacted by casualties, such as tornadoes and hurricanes. If management determines that the carrying value of the Company’s assets may not be fully recoverable based on the existence of any of the factors above, or others, management would measure and record an impairment charge based on the estimated fair value of the property or the estimated fair value less costs to sell the property. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. In calculating fair value, a company must maximize the use of observable market inputs, minimize the use of unobservable market inputs and disclose in the form of an outlined hierarchy the details of such fair value measurements. A hierarchy of valuation techniques is defined to determine whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created the following fair value hierarchy: • Level 1 – quoted prices for identical instruments in active markets. • Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Executed purchase and sale agreements, that are binding agreements, are categorized as level one inputs. Brokerage estimates, letters of intent, or unexecuted purchase and sale agreements are considered to be level three as they are non-binding in nature. Lease Accounting We, as lessor, make a determination with respect to each of our leases whether they should be accounted for as operating leases or capital leases. The classification criteria is based on estimates regarding the fair value of the leased facilities, minimum lease payments, effective cost of funds, the economic useful life of the facilities, the existence of a bargain purchase option, and certain other terms in the lease agreements. We believe all of our leases meet the accounting criteria to be accounted for as operating leases. Payments received under operating leases are accounted for in the Condensed Consolidated Statement of Comprehensive Income as rental revenue for actual cash rent collected plus or minus a straight-line adjustment for estimated minimum lease escalators. Assets subject to operating leases are reported as real estate investments in the Condensed Consolidated Balance Sheets. Substantially all of our leases contain fixed or formula-based rent escalators. To the extent that the escalator increases are tied to a fixed index or rate, lease payments are accounted for on a straight-line basis over the life of the lease. Revenue Recognition The Company recognizes rental revenue when it is realized or realizable and earned. There are four criteria that must all be met before a Company may recognize revenue, including persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered (i.e., the tenant has taken possession of and controls the physical use of the leased asset), the price has been fixed or is determinable, and collectability is reasonably assured. The Company derives most of its revenues from its real estate property and mortgage notes portfolio. The Company's rental and mortgage interest income is recognized based on contractual arrangements with its tenants and borrowers. Rental income is recognized as earned over the life of the lease agreement on a straight-line basis. Recognizing rental revenue on a straight-line basis for leases may result in recognizing revenue in amounts more or less than amounts currently due from tenants. If management determines that the collectability of straight-line rents is not reasonably assured, the amount of future revenue recognized may be limited to amounts contractually owed and, where appropriate, establish an allowance for estimated losses. Straight-line rent included in rental income was approximately $95,376 for the three months ended March 31, 2016. No straight line rent was recognized in the first quarter of 2015. Mortgage interest income is recognized based on the interest rates, maturity dates and amortization periods set forth within each note agreement. Fees received related to its mortgage notes are amortized to mortgage interest income on a straight-line basis which approximates amortization under the effective interest method. The Company also accrues operating expense recoveries based on the contractual terms of its leases and late fees based on the contractual terms of its leases or notes, which are included in rental income or mortgage interest income, as applicable. Operating expense recoveries and late fees included in rental income were approximately $1.0 million and $73,430 , respectively, for the three months ended March 31, 2016. No operating expense recoveries or late fees were recognized in the first quarter of 2015. Income received but not yet earned is deferred until such time it is earned. Deferred revenue, included in other liabilities, was approximately $ 0.4 million at March 31, 2016 . No deferred revenue was recognized in the first quarter of 2015. Allowance for Doubtful Accounts and Credit Losses Accounts Receivable Management monitors the aging and collectability of its accounts receivable balances on an ongoing basis. Whenever deterioration in the timeliness of payment from a tenant is noted, management investigates and determines the reason or reasons for the delay. Considering all information gathered, management’s judgment is exercised in determining whether a receivable is potentially uncollectible and, if so, how much or what percentage may be uncollectible. Among the factors management considers in determining collectability are: the type of contractual arrangement under which the receivable was recorded (e.g., triple net lease, gross lease, or other type of agreement); the tenant’s reason for slow payment; industry influences under which the tenant operates; evidence of willingness and ability of the tenant to pay the receivable; credit-worthiness of the tenant; collateral, security deposit, letters of credit or other monies held as security; tenant’s historical payment pattern; other contractual agreements between the tenant and the Company; relationship between the tenant and the Company; the state in which the tenant operates; and the existence of a guarantor and the willingness and ability of the guarantor to pay the receivable. Considering these factors and others, management concludes whether all or some of the aged receivable balance is likely uncollectible. Upon determining that some portion of the receivable is likely uncollectible, the Company will record a provision for bad debts for the amount it expects will be uncollectible. When efforts to collect a receivable are exhausted, the receivable amount is charged off against the allowance. At March 31, 2016 and December 31, 2015 , the Company had a provision for bad debts of approximately $8,087 and $71,000 , respectively. Mortgage Note Receivable The Company had two mortgage notes receivable outstanding as of March 31, 2016 with an aggregate principal balance of $23.5 million , maturing through January 31, 2027. The mortgage notes are interest only for the first year. Thereafter, monthly principal and interest payments will be due through the maturity date unless the Company exercises its purchase options on the properties securing the mortgage notes. The Company evaluates collectability of its mortgage notes and records allowances on the notes as necessary. A loan is impaired when it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan as scheduled, including both contractual interest and principal payments. This assessment also includes an evaluation of the loan collateral. If a mortgage loan becomes past due, the Company will review the specific circumstances and may discontinue the accrual of interest on the loan. The loan is not returned to accrual status until the debtor has demonstrated the ability to continue debt service in accordance with the contractual terms. Loans placed on non-accrual status will be accounted for on a cash basis, in which income is recognized only upon the receipt of cash, or on a cost-recovery basis, in which all cash receipts reduce the carrying value of the loan, based on the Company's expectation of future collectability. Stock-Based Compensation The Company's 2014 Incentive Plan is intended to attract and retain qualified persons upon whom, in large measure, our sustained progress, growth and profitability depend, to motivate the participants to achieve long-term company goals and to more closely align the participants’ interests with those of our other stockholders by providing them with a proprietary interest in our growth and performance. The two distinct programs under the 2014 Incentive Plan are the Alignment of Interest Program and the Officer Incentive Program. It is anticipated that our executive officers, officers, employees, consultants and non-employee directors will be eligible to participate in the 2014 Incentive Plan. Currently, only the Company’s officers and directors are participants in the 2014 Incentive Plan. The 2014 Incentive Plan currently reserves 7% of the Company’s outstanding common stock for issuance as awards. The 2014 Incentive Plan is administered by the Company’s compensation committee, which interprets the 2014 Incentive Plan and has broad discretion to select the eligible persons to whom awards will be granted, as well as the type, size and terms and conditions of each award, including the number of shares subject to awards and the expiration date of, and the vesting schedule or other restrictions (including, without limitation, restrictive covenants) applicable to, awards. The Company recognizes share-based payments to its officers and directors in its Condensed Consolidated Financial Statements on a straight-line basis over the requisite service period based on the fair value of the award on the measurement date. Intangible Assets Intangible assets with indefinite lives are not amortized, but are tested at least annually for impairment. Intangible assets with finite lives are amortized over their respective lives to their estimated residual values and are reviewed for impairment only when impairment indicators are present. Identifiable intangible assets of the Company are generally comprised of in-place lease intangible assets and deferred financing costs. In-place lease intangible assets are amortized on a straight-line basis over the applicable lives of the assets. Deferred financing costs are amortized to interest expense over the term of the related credit facility or other debt instrument using the straight-line method, which approximates amortization under the effective interest method. Contingent Liabilities From time to time, the Company may be subject to loss contingencies arising from legal proceedings and similar matters. Additionally, while the Company maintains comprehensive liability and property insurance with respect to each of its properties, the Company may be exposed to unforeseen losses related to uninsured or under-insured damages. Management will monitor any matter that may present a contingent liability, and, on a quarterly basis, will review any reserves and accruals relating to the liabilities, adjusting provisions as necessary in view of changes in available information. Liabilities for contingencies are first recorded when a loss is determined to be both probable and can be reasonably estimated. Changes in estimates regarding the exposure to a contingent loss will be reflected as adjustments to the related liability in the periods when they occur and will be disclosed in the notes to the Condensed Consolidated Financial Statements. On occasion, the Company may also have acquisitions which include contingent consideration. Accounting for business combinations require the Company to estimate the fair value of any contingent purchase consideration at the acquisition date. Management will monitor these contingencies on a quarterly basis. Changes in estimates regarding the fair value contingent purchase consideration will be reflected as adjustments to the related liability and recognized as an adjustment to property operating expense in the periods when they occur and will be disclosed in the notes to the Condensed Consolidated Financial Statements. The Company has recorded contingent liabilities, included in other liabilities, related to certain acquisitions of $1.0 million and $1.2 million , respectively, at March 31, 2016 and December 31 2015. Income Taxes The Company has elected to be taxed as a real estate investment trust ("REIT"), as defined under the Internal Revenue Code. We have also elected for one of our subsidiaries to be treated as a taxable REIT subsidiary ("TRS"), which is subject to federal and state income taxes. No provision has been made for federal income taxes for the REIT, however, the Company has provided federal and state income taxes for the TRS. The Company intends at all times to qualify as a REIT under Sections 856 and 860 of the Internal Revenue Code of 1986, as amended. The Company must distribute at least 90% per annum of its REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with generally accepted accounting principles) and meet other requirements to continue to qualify as a real estate investment trust. The Company classifies interest and penalties related to uncertain tax positions, if any, in the Condensed Consolidated Statement of Comprehensive Income as a component of general and administrative expenses. Sales and Use Taxes The Company must pay sales and use taxes to certain state tax authorities based on rent collected from tenants in properties located in those states. The Company is generally reimbursed for those taxes by those tenants. The Company accounts for the payments to the taxing authority and subsequent reimbursement from the tenant on a net basis, included in tenant reimbursement revenue on the Company’s Condensed Consolidated Statement of Comprehensive Income. Concentration of Credit Risks Our credit risks primarily relate to cash and cash equivalents and our mortgage notes receivable. Cash and cash equivalents are primarily held in bank accounts and overnight investments. We maintain our bank deposit accounts with large financial institutions in amounts that often exceed federally-insured limits. We have not experienced any losses in such accounts. Earnings per Share Basic earnings per common share is calculated using weighted average shares outstanding less issued and outstanding non-vested shares of common stock. Diluted earnings per common share is calculated using weighted average shares outstanding plus the dilutive effect of the non-vested shares of common stock using the treasury stock method and the average stock price during the period. New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board's (“FASB”) issued Accounting Standards Update ("ASU") No. 2016-02, Leases . This standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing. If the lessor doesn’t convey risks and rewards or control, an operating lease results. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessors for sales-type, direct financing, and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of our pending adoption of the new standard on our Consolidated Financial Statements. On January 1, 2016, the Company adopted ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments . This standard eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize measurement-period adjustments, including its effect on earnings and goodwill, in the period in which the amount of the adjustment is determined. The adoption of this standard has not had a material impact on Consolidated Financial Statements. On January 1, 2016, the Company adopted ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . This standard requires debt issuance costs to be reported in the balance sheet as a direct reduction from the face amount of the note in which it is directly related. The staff of the Securities and Exchange Commission has indicated that it will not object to an entity deferring and presenting debt issuance costs related to lines-of-credit as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company has elected to continue to present its debt issuance costs related to its Credit Facility as an asset. As such, the adoption of the standard has not had an impact on our Condensed Consolidated Financial Statements. On January 1, 2016, the Company adopted ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis . This standard includes changes to both the variable interest model and the voting model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity, and (3) the primary beneficiary determination. The adoption of this standard did not have a material impact on our Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, as amended by ASU No. 2015-14, Revenue from Contracts with Customers , a comprehensive new revenue recognition standard that supersedes most existing revenue recognition guidance, including sales of real estate. 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. However, leasing contracts, representing the major source of the Company's revenues, are not within the scope of the new standard and will continue to be accounted for under existing standards. This new standard is effective for the Company for annual and interim periods beginning on January 1, 2018 with early adoption permitted. The Company has not yet determined the effects on the Consolidated Financial Statements and related notes resulting from the adoption of this new standard. |
Real Estate Investments
Real Estate Investments | 3 Months Ended |
Mar. 31, 2016 | |
Real Estate [Abstract] | |
Real Estate Investments | Real Estate Investments At March 31, 2016 , the Company had investments of approximately $183.0 million in 46 real estate properties, mortgages and corporate property. The following table summarizes the Company's investments. (Dollars in thousands) Number of Facilities Land Buildings, Improvements, and Lease Intangibles Personal Property Total Accumulated Depreciation Medical office: Florida 4 $ 4,138 $ 23,762 $ — $ 27,900 $ 247 Texas 3 3,096 12,089 — 15,185 942 Kansas 2 1,379 10,497 — 11,876 1,122 Illinois 1 821 8,666 — 9,487 447 Kentucky 1 484 4,122 — 4,606 194 Other states 4 759 8,958 — 9,717 692 15 10,677 68,094 — 78,771 3,644 Physician clinics: Kansas 3 1,558 10,713 — 12,271 587 Florida 3 — 5,950 — 5,950 165 Alabama 1 533 2,663 — 3,196 33 Pennsylvania 1 330 2,770 — 3,100 434 Wisconsin 1 412 2,588 — 3,000 203 Other states 2 151 2,956 — 3,107 278 11 2,984 27,640 — 30,624 1,700 Ambulatory surgery centers: Illinois 1 2,100 5,401 — 7,501 — Michigan 1 300 5,595 — 5,895 282 Texas 1 528 4,072 — 4,600 299 Arizona 1 227 2,473 — 2,700 187 Colorado 1 375 2,325 — 2,700 78 Other states 3 652 4,575 — 5,227 598 8 4,182 24,441 — 28,623 1,444 Dialysis clinics: Kentucky 1 193 3,423 — 3,616 242 Texas 1 181 2,955 — 3,136 140 Colorado 1 259 2,791 — 3,050 177 Ohio 1 66 1,199 — 1,265 107 Georgia 1 62 1,039 — 1,101 87 Tennessee 1 28 572 — 600 29 6 789 11,979 — 12,768 782 Oncology centers: Alabama 3 415 4,385 — 4,800 415 3 415 4,385 — 4,800 415 Behavioral facilities: Indiana 1 270 2,651 — 2,921 28 1 270 2,651 — 2,921 28 Corporate property — — 1,132 69 1,201 5 Total owned properties 44 $ 19,317 $ 140,322 $ 69 $ 159,708 $ 8,018 Mortgage notes receivable, net 2 — — — 23,277 — Total real estate investments 46 $ 19,317 $ 140,322 $ 69 $ 182,985 $ 8,018 |
Real Estate Leases
Real Estate Leases | 3 Months Ended |
Mar. 31, 2016 | |
Leases [Abstract] | |
Real Estate Leases | Real Estate Leases The Company’s properties are generally leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2030. The Company’s leases generally require the lessee to pay minimum rent, with fixed rent renewal terms or increases based on a Consumer Price Index and additional rent, which may include taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property. Future minimum lease payments under the non-cancelable operating leases due the Company for the years ending December 31, as of March 31, 2016 , are as follows (in thousands): 2016 (nine months ending December 31) $ 11,543 2017 14,013 2018 11,401 2019 8,449 2020 6,587 2021 and thereafter 25,998 $ 77,991 |
Real Estate Acquisitions
Real Estate Acquisitions | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Real Estate Acquisitions | Real Estate Acquisitions Property Acquisitions During the first quarter of 2016, the Company acquired four real estate properties totaling approximately 146,443 square feet for an aggregate purchase price of approximately $25.4 million , including cash consideration of approximately $25.6 million . Upon acquisition, the properties were approximately 95.6% leased in the aggregate with lease expirations ranging from 2017 through 2026 . The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the property acquisitions during the first quarter of 2016. Estimated Fair Value Estimated Useful Life (In thousands) (In years) Land $ 6,101 Buildings 14,947 30 Intangibles: At-market lease intangibles 5,304 2.9 - 6.3 Below-market lease intangibles (923 ) 8.8 Total intangibles 4,381 Accounts payable, accrued liabilities and other liabilities assumed (1) (32 ) Prorated rent and operating expense reimbursement amounts collected (71 ) Expenses paid, including closing costs 283 Total cash consideration $ 25,609 (1) Includes security deposits received and property taxes payable prior to the acquisition. Mortgage Notes Receivable During the first quarter of 2016, the Company funded a $12.5 million mortgage note secured by an 85,000 square foot behavioral facility in Illinois which matures on January 31, 2027 . The Company received a loan fee from the transaction totaling $93,750 which has been deferred and will be recognized into income on a straight-line basis, which approximates the effective interest method, through the maturity of the mortgage note. The mortgage loan requires interest only payments to us through January 2017 and has a stated fixed interest rate of 11% . Thereafter, monthly principal and interest payments will be due through maturity. The Company has an option to purchase the property through January 31, 2017 for a fixed amount. The Company exercised its purchase option in April 2016 and expects to close on the property during the second quarter of 2016. |
Revolving Credit Facility
Revolving Credit Facility | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | Revolving Credit Facility On June 3, 2015, the Company entered into the Credit Facility, that matures on June 3, 2018 with two options to extend the facility, subject to the satisfaction of certain conditions, for an additional year each for an extension fee of 0.25% of the aggregate commitments. The Credit Facility also includes an accordion feature that provides the Company with additional capacity, subject to the satisfaction of customary terms and conditions, including obtaining additional commitments from lenders, of up to $ 125.0 million, for a total facility size of up to $ 200.0 million. The Company’s material subsidiaries are guarantors of the obligations under the Credit Facility. The amount available for the Company to borrow from time to time under the Credit Facility is limited according to a borrowing base valuation of certain unencumbered properties owned by subsidiaries of our operating partnership that guarantee the facility. Amounts outstanding under the Credit Facility bear annual interest at a floating rate that is based, at the Company’s option, on either: (i) LIBOR plus 2.50% to 3.00% or (ii) a base rate plus 1.50% to 2.00% , in each case, depending upon the Company’s leverage ratio. In addition, the Company is obligated to pay an annual fee equal to 0.25% of the amount of the unused portion of the Credit Facility if amounts borrowed are greater than 50% of the borrowing capacity under the Credit Facility and 0.35% of the unused portion of the Credit Facility if amounts borrowed are less than or equal to 50% of the borrowing capacity under the Credit Facility. At March 31, 2016 , the Company had $55.0 million outstanding under the Credit Facility and had a remaining borrowing capacity of $20.0 million . The Company's weighted average interest rate at March 31, 2016 was 3.6% . In April 2016, the Company repaid in full $55.0 million outstanding under the Credit Facility with proceeds from its equity offering discussed in more detail in Note 9. The Company’s ability to borrow under the Credit Facility is subject to its ongoing compliance with a number of customary affirmative and negative covenants, including limitations with respect to liens, indebtedness, distributions, mergers, consolidations, investments, restricted payments and asset sales, as well as financial maintenance covenants. The Company was in compliance with its financial covenants under its Credit Facility at March 31, 2016 . |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock The following table provides a reconciliation of the beginning and ending common stock balances for the three months ended March 31, 2016 and for the year ended December 31, 2015 : Three Months Ended March 31, 2016 Year Ended December 31, 2015 Balance, beginning of period 7,596,940 200,000 Issuance of common stock — 7,311,183 Restricted stock-based awards 117,714 85,757 Balance, end of period 7,714,654 7,596,940 |
Income Per Common Share
Income Per Common Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Income Per Common Share | Income Per Common Share The following table sets forth the computation of basic and diluted income per common share. Three Months Ended March 31, (Dollars in thousands, except per share data) 2016 2015 Net income $ 116 $ — Weighted average Common Shares outstanding Weighted average Common Shares outstanding 7,696,544 200,000 Unvested restricted stock (185,361 ) — Weighted average Common Shares outstanding–Basic 7,511,183 200,000 Weighted average Common Shares–Basic 7,511,183 200,000 Dilutive effect of restricted stock 51,461 — Weighted average Common Shares outstanding –Diluted 7,562,644 200,000 Basic Income per Common Share $ 0.02 $ — Diluted Income per Common Share $ 0.02 $ — |
Incentive Plan
Incentive Plan | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Incentive Plan | Incentive Plan Under the Company's 2014 Incentive Plan, awards may be made in the form of restricted stock, cash or a combination of both. On January 15, 2016, the Company's officers and employees received 58,857 shares of restricted common stock and the Company granted an additional 58,857 shares of restricted common stock to its officers and employees, in lieu of salary, that will cliff vest in eight years. Once shares have been issued, the recipient has the right to receive dividends and the right to vote the shares. Compensation expense recognized during the three months ended March 31, 2016 from the amortization of the value of the Company's officer, employee and director shares over the applicable vesting periods was approximately $0.1 million . |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Property Acquisition Since March 31, 2016, the Company has acquired one real estate property totaling approximately 54,800 square feet for an aggregate purchase price of approximately $10.4 million , including cash consideration of approximately $10.4 million . Upon acquisition, the property was 81.9% leased with lease expiration dates through 2019. The Company used net proceeds from its April 12, 2016 equity offering to fund this acquisition. Dividend Declared On May 2, 2016, the Company’s Board of Directors declared a quarterly common stock dividend in the amount of $ 0.38 per share. The dividend is payable on June 3, 2016 to stockholders of record on May 20, 2016. Equity Offering In April 2016, the Company completed a public offering of 5,175,000 shares of its common stock, including 675,000 shares of common stock issued in connection with the exercise in full of the underwriters’ option to purchase additional shares, and received net proceeds of approximately $ 86.8 million from the offering. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. This interim financial information should be read in conjunction with the financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this report, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and in the Company's prospectus, filed with the Securities and Exchange Commission on April 8, 2016 pursuant to Rule 424(b). Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2016 . |
Principles of Consolidation | Principles of Consolidation Our Condensed Consolidated Financial Statements include the accounts of the Company, its wholly owned subsidiaries, and may also include joint ventures, partnerships and variable interest entities, or VIEs, where the Company controls the operating activities. All material intercompany accounts and transactions have been eliminated. Management must make judgments regarding the Company's level of influence or control over an entity and whether or not the Company is the primary beneficiary of a variable interest entity. Consideration of various factors include, but is not limited to, the Company's ability to direct the activities that most significantly impact the entity's governing body, the size and seniority of the Company's investment, the Company's ability and the rights of other investors to participate in policy making decisions, the Company's ability to replace the manager and/or liquidate the entity. Management's ability to correctly assess its influence or control over an entity when determining the primary beneficiary of a VIE affects the presentation of these entities in the Company's consolidated financial statements. If it is determined that the Company is the primary beneficiary of a VIE, the Company's consolidated financial statements would include the operating results of the VIE rather than the results of the variable interest in the VIE. Untimely or inaccurate financial information provided to the Company or deficiencies in the VIEs internal control over financial reporting could impact the Company's consolidated financial statements and its own internal control over financial reporting. In September 2015, the Company acquired an $11.0 million mortgage note receivable. The Company identified the borrower as a VIE, but management determined that the Company was not the primary beneficiary of the VIE. |
Use of Estimates in the Condensed Consolidated Financial Statements | Use of Estimates in the Condensed Consolidated Financial Statements Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may materially differ from those estimates. |
Segment Reporting | Segment Reporting The Company acquires and owns healthcare-related real estate properties that are leased to hospitals, doctors, healthcare systems or other healthcare service providers in non-urban markets. The Company is managed as one reporting unit, rather than multiple reporting units, for internal reporting purposes and for internal decision-making. Therefore, the Company discloses its operating results in a single segment. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents includes short-term investments with original maturities of three months or less when purchased. |
Real Estate Properties/Accounting for Acquisitions of Real Estate Properties | Real Estate Properties Real estate properties are recorded at cost or at fair value if acquired in a transaction that is a business combination under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations ("ASC 805"). Cost or fair value at the time of acquisition is allocated between land, buildings, tenant improvements, lease and other intangibles, and personal property, as applicable. Accounting for Acquisitions of Real Estate Properties Real estate properties are recorded at cost or, if acquired through business combination, at fair value. The allocation of real estate property acquisitions may include land, building and improvements, personal property, and identified intangible assets and liabilities (consisting of above- and below-market leases, in-place leases, and tenant relationships) based on the evaluation of information and estimates available at that date in accordance with the provisions of ASC 805, and we allocate the purchase price based on these assessments. We make estimates of the acquisition date fair value of the tangible and intangible assets and acquired liabilities using information obtained from multiple sources as a result of pre-acquisition due diligence, tax records, and other sources. Based on these estimates, we recognize the acquired assets and liabilities at their estimated fair values. Initial valuations are subject to change until the information is finalized, no later than 12 months from the acquisition date. We expense transaction costs associated with business combinations in the period incurred. In accordance with ASC 805, the fair value of tangible property assets acquired considers the value of the property as if vacant determined by comparable sales and other relevant data. The determination of fair value involves the use of significant judgment and estimation. We value land based on various inputs, which may include internal analysis of recently acquired properties, existing comparable properties within our portfolio, or third party appraisals or valuations based on comparable sales. In recognizing identified intangible assets and liabilities of an acquired property, the value of above-or-below market leases is estimated based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between contractual amounts to be received pursuant to the leases and management’s estimate of market lease rates measured over a period equal to the estimated remaining term of the lease. In the case of a below-market lease, the Company would also evaluate any renewal options associated with that lease to determine if the intangible should include those periods. The capitalized above-market or below-market lease intangibles are amortized as a reduction from or an addition to rental income over the estimated remaining term of the respective leases. In determining the value of in-place leases and tenant relationships, management considers current market conditions and costs to execute similar leases in arriving at an estimate of the carrying costs during the expected lease-up period from vacant to existing occupancy. In estimating carrying costs, management includes real estate taxes, insurance, other property operating expenses, estimates of lost rental revenue during the expected lease-up periods, and costs to execute similar leases, including leasing commissions. The values assigned to in-place leases and tenant relationships are amortized over the estimated remaining term of the lease. If a lease terminates prior to its scheduled expiration, all unamortized costs related to that lease are written off. |
Asset Impairment | Asset Impairments The Company assesses the potential for impairment of identifiable, definite-lived, intangible assets and long-lived assets, including real estate properties, whenever events occur or a change in circumstances indicates that the carrying value might not be fully recoverable. Indicators of impairment may include significant under-performance of an asset relative to historical or expected operating results; significant changes in the Company’s use of assets or the strategy for its overall business; plans to sell an asset before its depreciable life has ended; the expiration of a significant portion of leases in a property; or significant negative economic trends or negative industry trends for the Company or its operators. In addition, the Company’s review for possible impairment may include those assets subject to purchase options and those impacted by casualties, such as tornadoes and hurricanes. If management determines that the carrying value of the Company’s assets may not be fully recoverable based on the existence of any of the factors above, or others, management would measure and record an impairment charge based on the estimated fair value of the property or the estimated fair value less costs to sell the property. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. In calculating fair value, a company must maximize the use of observable market inputs, minimize the use of unobservable market inputs and disclose in the form of an outlined hierarchy the details of such fair value measurements. A hierarchy of valuation techniques is defined to determine whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created the following fair value hierarchy: • Level 1 – quoted prices for identical instruments in active markets. • Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Executed purchase and sale agreements, that are binding agreements, are categorized as level one inputs. Brokerage estimates, letters of intent, or unexecuted purchase and sale agreements are considered to be level three as they are non-binding in nature. |
Lease Accounting | Lease Accounting We, as lessor, make a determination with respect to each of our leases whether they should be accounted for as operating leases or capital leases. The classification criteria is based on estimates regarding the fair value of the leased facilities, minimum lease payments, effective cost of funds, the economic useful life of the facilities, the existence of a bargain purchase option, and certain other terms in the lease agreements. We believe all of our leases meet the accounting criteria to be accounted for as operating leases. Payments received under operating leases are accounted for in the Condensed Consolidated Statement of Comprehensive Income as rental revenue for actual cash rent collected plus or minus a straight-line adjustment for estimated minimum lease escalators. Assets subject to operating leases are reported as real estate investments in the Condensed Consolidated Balance Sheets. Substantially all of our leases contain fixed or formula-based rent escalators. To the extent that the escalator increases are tied to a fixed index or rate, lease payments are accounted for on a straight-line basis over the life of the lease. |
Revenue Recognition | Revenue Recognition The Company recognizes rental revenue when it is realized or realizable and earned. There are four criteria that must all be met before a Company may recognize revenue, including persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered (i.e., the tenant has taken possession of and controls the physical use of the leased asset), the price has been fixed or is determinable, and collectability is reasonably assured. The Company derives most of its revenues from its real estate property and mortgage notes portfolio. The Company's rental and mortgage interest income is recognized based on contractual arrangements with its tenants and borrowers. Rental income is recognized as earned over the life of the lease agreement on a straight-line basis. Recognizing rental revenue on a straight-line basis for leases may result in recognizing revenue in amounts more or less than amounts currently due from tenants. If management determines that the collectability of straight-line rents is not reasonably assured, the amount of future revenue recognized may be limited to amounts contractually owed and, where appropriate, establish an allowance for estimated losses. Straight-line rent included in rental income was approximately $95,376 for the three months ended March 31, 2016. No straight line rent was recognized in the first quarter of 2015. Mortgage interest income is recognized based on the interest rates, maturity dates and amortization periods set forth within each note agreement. Fees received related to its mortgage notes are amortized to mortgage interest income on a straight-line basis which approximates amortization under the effective interest method. The Company also accrues operating expense recoveries based on the contractual terms of its leases and late fees based on the contractual terms of its leases or notes, which are included in rental income or mortgage interest income, as applicable. Operating expense recoveries and late fees included in rental income were approximately $1.0 million and $73,430 , respectively, for the three months ended March 31, 2016. No operating expense recoveries or late fees were recognized in the first quarter of 2015. Income received but not yet earned is deferred until such time it is earned. Deferred revenue, included in other liabilities, was approximately $ 0.4 million at March 31, 2016 . No deferred revenue was recognized in the first quarter of 2015. |
Allowance for Doubtful Accounts and Credit Losses | Allowance for Doubtful Accounts and Credit Losses Accounts Receivable Management monitors the aging and collectability of its accounts receivable balances on an ongoing basis. Whenever deterioration in the timeliness of payment from a tenant is noted, management investigates and determines the reason or reasons for the delay. Considering all information gathered, management’s judgment is exercised in determining whether a receivable is potentially uncollectible and, if so, how much or what percentage may be uncollectible. Among the factors management considers in determining collectability are: the type of contractual arrangement under which the receivable was recorded (e.g., triple net lease, gross lease, or other type of agreement); the tenant’s reason for slow payment; industry influences under which the tenant operates; evidence of willingness and ability of the tenant to pay the receivable; credit-worthiness of the tenant; collateral, security deposit, letters of credit or other monies held as security; tenant’s historical payment pattern; other contractual agreements between the tenant and the Company; relationship between the tenant and the Company; the state in which the tenant operates; and the existence of a guarantor and the willingness and ability of the guarantor to pay the receivable. Considering these factors and others, management concludes whether all or some of the aged receivable balance is likely uncollectible. Upon determining that some portion of the receivable is likely uncollectible, the Company will record a provision for bad debts for the amount it expects will be uncollectible. When efforts to collect a receivable are exhausted, the receivable amount is charged off against the allowance. At March 31, 2016 and December 31, 2015 , the Company had a provision for bad debts of approximately $8,087 and $71,000 , respectively. Mortgage Note Receivable The Company had two mortgage notes receivable outstanding as of March 31, 2016 with an aggregate principal balance of $23.5 million , maturing through January 31, 2027. The mortgage notes are interest only for the first year. Thereafter, monthly principal and interest payments will be due through the maturity date unless the Company exercises its purchase options on the properties securing the mortgage notes. The Company evaluates collectability of its mortgage notes and records allowances on the notes as necessary. A loan is impaired when it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan as scheduled, including both contractual interest and principal payments. This assessment also includes an evaluation of the loan collateral. If a mortgage loan becomes past due, the Company will review the specific circumstances and may discontinue the accrual of interest on the loan. The loan is not returned to accrual status until the debtor has demonstrated the ability to continue debt service in accordance with the contractual terms. Loans placed on non-accrual status will be accounted for on a cash basis, in which income is recognized only upon the receipt of cash, or on a cost-recovery basis, in which all cash receipts reduce the carrying value of the loan, based on the Company's expectation of future collectability. |
Stock-based Compensation | Stock-Based Compensation The Company's 2014 Incentive Plan is intended to attract and retain qualified persons upon whom, in large measure, our sustained progress, growth and profitability depend, to motivate the participants to achieve long-term company goals and to more closely align the participants’ interests with those of our other stockholders by providing them with a proprietary interest in our growth and performance. The two distinct programs under the 2014 Incentive Plan are the Alignment of Interest Program and the Officer Incentive Program. It is anticipated that our executive officers, officers, employees, consultants and non-employee directors will be eligible to participate in the 2014 Incentive Plan. Currently, only the Company’s officers and directors are participants in the 2014 Incentive Plan. The 2014 Incentive Plan currently reserves 7% of the Company’s outstanding common stock for issuance as awards. The 2014 Incentive Plan is administered by the Company’s compensation committee, which interprets the 2014 Incentive Plan and has broad discretion to select the eligible persons to whom awards will be granted, as well as the type, size and terms and conditions of each award, including the number of shares subject to awards and the expiration date of, and the vesting schedule or other restrictions (including, without limitation, restrictive covenants) applicable to, awards. The Company recognizes share-based payments to its officers and directors in its Condensed Consolidated Financial Statements on a straight-line basis over the requisite service period based on the fair value of the award on the measurement date. |
Intangible Assets | Intangible Assets Intangible assets with indefinite lives are not amortized, but are tested at least annually for impairment. Intangible assets with finite lives are amortized over their respective lives to their estimated residual values and are reviewed for impairment only when impairment indicators are present. Identifiable intangible assets of the Company are generally comprised of in-place lease intangible assets and deferred financing costs. In-place lease intangible assets are amortized on a straight-line basis over the applicable lives of the assets. Deferred financing costs are amortized to interest expense over the term of the related credit facility or other debt instrument using the straight-line method, which approximates amortization under the effective interest method. |
Contingent Liabilities | Contingent Liabilities From time to time, the Company may be subject to loss contingencies arising from legal proceedings and similar matters. Additionally, while the Company maintains comprehensive liability and property insurance with respect to each of its properties, the Company may be exposed to unforeseen losses related to uninsured or under-insured damages. Management will monitor any matter that may present a contingent liability, and, on a quarterly basis, will review any reserves and accruals relating to the liabilities, adjusting provisions as necessary in view of changes in available information. Liabilities for contingencies are first recorded when a loss is determined to be both probable and can be reasonably estimated. Changes in estimates regarding the exposure to a contingent loss will be reflected as adjustments to the related liability in the periods when they occur and will be disclosed in the notes to the Condensed Consolidated Financial Statements. On occasion, the Company may also have acquisitions which include contingent consideration. Accounting for business combinations require the Company to estimate the fair value of any contingent purchase consideration at the acquisition date. Management will monitor these contingencies on a quarterly basis. Changes in estimates regarding the fair value contingent purchase consideration will be reflected as adjustments to the related liability and recognized as an adjustment to property operating expense in the periods when they occur and will be disclosed in the notes to the Condensed Consolidated Financial Statements. The Company has recorded contingent liabilities, included in other liabilities, related to certain acquisitions of $1.0 million and $1.2 million , respectively, at March 31, 2016 and December 31 2015. |
Income Taxes/Sales and Use Taxes | Income Taxes The Company has elected to be taxed as a real estate investment trust ("REIT"), as defined under the Internal Revenue Code. We have also elected for one of our subsidiaries to be treated as a taxable REIT subsidiary ("TRS"), which is subject to federal and state income taxes. No provision has been made for federal income taxes for the REIT, however, the Company has provided federal and state income taxes for the TRS. The Company intends at all times to qualify as a REIT under Sections 856 and 860 of the Internal Revenue Code of 1986, as amended. The Company must distribute at least 90% per annum of its REIT taxable income to its stockholders (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with generally accepted accounting principles) and meet other requirements to continue to qualify as a real estate investment trust. The Company classifies interest and penalties related to uncertain tax positions, if any, in the Condensed Consolidated Statement of Comprehensive Income as a component of general and administrative expenses. Sales and Use Taxes The Company must pay sales and use taxes to certain state tax authorities based on rent collected from tenants in properties located in those states. The Company is generally reimbursed for those taxes by those tenants. The Company accounts for the payments to the taxing authority and subsequent reimbursement from the tenant on a net basis, included in tenant reimbursement revenue on the Company’s Condensed Consolidated Statement of Comprehensive Income. |
Concentration of Credit Risk | Concentration of Credit Risks Our credit risks primarily relate to cash and cash equivalents and our mortgage notes receivable. Cash and cash equivalents are primarily held in bank accounts and overnight investments. We maintain our bank deposit accounts with large financial institutions in amounts that often exceed federally-insured limits. We have not experienced any losses in such accounts. |
Earnings Per Share | Earnings per Share Basic earnings per common share is calculated using weighted average shares outstanding less issued and outstanding non-vested shares of common stock. Diluted earnings per common share is calculated using weighted average shares outstanding plus the dilutive effect of the non-vested shares of common stock using the treasury stock method and the average stock price during the period. |
New Accounting Pronouncements | New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board's (“FASB”) issued Accounting Standards Update ("ASU") No. 2016-02, Leases . This standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing. If the lessor doesn’t convey risks and rewards or control, an operating lease results. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessors for sales-type, direct financing, and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of our pending adoption of the new standard on our Consolidated Financial Statements. On January 1, 2016, the Company adopted ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments . This standard eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize measurement-period adjustments, including its effect on earnings and goodwill, in the period in which the amount of the adjustment is determined. The adoption of this standard has not had a material impact on Consolidated Financial Statements. On January 1, 2016, the Company adopted ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . This standard requires debt issuance costs to be reported in the balance sheet as a direct reduction from the face amount of the note in which it is directly related. The staff of the Securities and Exchange Commission has indicated that it will not object to an entity deferring and presenting debt issuance costs related to lines-of-credit as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company has elected to continue to present its debt issuance costs related to its Credit Facility as an asset. As such, the adoption of the standard has not had an impact on our Condensed Consolidated Financial Statements. On January 1, 2016, the Company adopted ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis . This standard includes changes to both the variable interest model and the voting model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity, and (3) the primary beneficiary determination. The adoption of this standard did not have a material impact on our Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU No. 2014-09, as amended by ASU No. 2015-14, Revenue from Contracts with Customers , a comprehensive new revenue recognition standard that supersedes most existing revenue recognition guidance, including sales of real estate. 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. However, leasing contracts, representing the major source of the Company's revenues, are not within the scope of the new standard and will continue to be accounted for under existing standards. This new standard is effective for the Company for annual and interim periods beginning on January 1, 2018 with early adoption permitted. The Company has not yet determined the effects on the Consolidated Financial Statements and related notes resulting from the adoption of this new standard. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of property, plant, and equipment estimated useful lives | The estimated useful lives at March 31, 2016 are as follows: Buildings 20 - 40 years Building improvements 3.0 - 29.5 years Tenant improvements 2.3 - 3.2 years Lease intangibles 1.2 - 9.3 years Personal property 3 -10 years |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Real Estate [Abstract] | |
Schedule of real estate property investments | At March 31, 2016 , the Company had investments of approximately $183.0 million in 46 real estate properties, mortgages and corporate property. The following table summarizes the Company's investments. (Dollars in thousands) Number of Facilities Land Buildings, Improvements, and Lease Intangibles Personal Property Total Accumulated Depreciation Medical office: Florida 4 $ 4,138 $ 23,762 $ — $ 27,900 $ 247 Texas 3 3,096 12,089 — 15,185 942 Kansas 2 1,379 10,497 — 11,876 1,122 Illinois 1 821 8,666 — 9,487 447 Kentucky 1 484 4,122 — 4,606 194 Other states 4 759 8,958 — 9,717 692 15 10,677 68,094 — 78,771 3,644 Physician clinics: Kansas 3 1,558 10,713 — 12,271 587 Florida 3 — 5,950 — 5,950 165 Alabama 1 533 2,663 — 3,196 33 Pennsylvania 1 330 2,770 — 3,100 434 Wisconsin 1 412 2,588 — 3,000 203 Other states 2 151 2,956 — 3,107 278 11 2,984 27,640 — 30,624 1,700 Ambulatory surgery centers: Illinois 1 2,100 5,401 — 7,501 — Michigan 1 300 5,595 — 5,895 282 Texas 1 528 4,072 — 4,600 299 Arizona 1 227 2,473 — 2,700 187 Colorado 1 375 2,325 — 2,700 78 Other states 3 652 4,575 — 5,227 598 8 4,182 24,441 — 28,623 1,444 Dialysis clinics: Kentucky 1 193 3,423 — 3,616 242 Texas 1 181 2,955 — 3,136 140 Colorado 1 259 2,791 — 3,050 177 Ohio 1 66 1,199 — 1,265 107 Georgia 1 62 1,039 — 1,101 87 Tennessee 1 28 572 — 600 29 6 789 11,979 — 12,768 782 Oncology centers: Alabama 3 415 4,385 — 4,800 415 3 415 4,385 — 4,800 415 Behavioral facilities: Indiana 1 270 2,651 — 2,921 28 1 270 2,651 — 2,921 28 Corporate property — — 1,132 69 1,201 5 Total owned properties 44 $ 19,317 $ 140,322 $ 69 $ 159,708 $ 8,018 Mortgage notes receivable, net 2 — — — 23,277 — Total real estate investments 46 $ 19,317 $ 140,322 $ 69 $ 182,985 $ 8,018 |
Real Estate Leases (Tables)
Real Estate Leases (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Leases [Abstract] | |
Schedule of future minimum lease payments for operating leases | Future minimum lease payments under the non-cancelable operating leases due the Company for the years ending December 31, as of March 31, 2016 , are as follows (in thousands): 2016 (nine months ending December 31) $ 11,543 2017 14,013 2018 11,401 2019 8,449 2020 6,587 2021 and thereafter 25,998 $ 77,991 |
Real Estate Acquisitions (Table
Real Estate Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed in the property acquisitions during the first quarter of 2016. Estimated Fair Value Estimated Useful Life (In thousands) (In years) Land $ 6,101 Buildings 14,947 30 Intangibles: At-market lease intangibles 5,304 2.9 - 6.3 Below-market lease intangibles (923 ) 8.8 Total intangibles 4,381 Accounts payable, accrued liabilities and other liabilities assumed (1) (32 ) Prorated rent and operating expense reimbursement amounts collected (71 ) Expenses paid, including closing costs 283 Total cash consideration $ 25,609 (1) Includes security deposits received and property taxes payable prior to the acquisition. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Schedule of reconciliation of common stock | The following table provides a reconciliation of the beginning and ending common stock balances for the three months ended March 31, 2016 and for the year ended December 31, 2015 : Three Months Ended March 31, 2016 Year Ended December 31, 2015 Balance, beginning of period 7,596,940 200,000 Issuance of common stock — 7,311,183 Restricted stock-based awards 117,714 85,757 Balance, end of period 7,714,654 7,596,940 |
Income Per Common Share (Tables
Income Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | The following table sets forth the computation of basic and diluted income per common share. Three Months Ended March 31, (Dollars in thousands, except per share data) 2016 2015 Net income $ 116 $ — Weighted average Common Shares outstanding Weighted average Common Shares outstanding 7,696,544 200,000 Unvested restricted stock (185,361 ) — Weighted average Common Shares outstanding–Basic 7,511,183 200,000 Weighted average Common Shares–Basic 7,511,183 200,000 Dilutive effect of restricted stock 51,461 — Weighted average Common Shares outstanding –Diluted 7,562,644 200,000 Basic Income per Common Share $ 0.02 $ — Diluted Income per Common Share $ 0.02 $ — |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Business Overview (Details) ft² in Millions | May. 27, 2015USD ($)shares | Apr. 30, 2016USD ($)shares | May. 31, 2015USD ($)shares | Mar. 31, 2016USD ($)ft²statereal_estate_propertyshares | Dec. 31, 2015USD ($)shares | Jun. 30, 2015USD ($) |
Accounting Policies [Abstract] | ||||||
General partner ownership | 100.00% | |||||
Value of real estate property investments and mortgages | $ | $ 182,985,000 | |||||
Number of real estate properties | real_estate_property | 46 | |||||
Number of states in which real estate investments are in | state | 18 | |||||
Area of real estate property (in square feet) | ft² | 1 | |||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares of common stock issued | shares | 0 | 7,311,183 | ||||
Net proceeds from initial public offering | $ | $ 125,200,000 | |||||
Net proceeds from private placement | $ | $ 2,300,000 | |||||
Provision for bad debts | $ | $ 8,087 | $ 71,000 | ||||
Private Placement [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares of common stock issued | shares | 123,683 | |||||
Second Public Offering [Member] | Subsequent Event [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares of common stock issued | shares | 5,175,000 | |||||
Net proceeds from second public offering | $ | $ 86,800,000 | |||||
Over-Allotment Option [Member] | Subsequent Event [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares of common stock issued | shares | 675,000 | |||||
Senior Revolving Credit Facility [Member] | Line of Credit [Member] | Revolving Credit Facility [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Maximum borrowing capacity | $ | $ 75,000,000 | |||||
Common Stock [Member] | IPO [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares of common stock issued | shares | 7,187,500 | |||||
Common Stock [Member] | Over-Allotment Option [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares of common stock issued | shares | 937,500 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies - Consolidation and Segments (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016USD ($)reporting_unit | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | |
Accounting Policies [Abstract] | |||
Number of reporting units | reporting_unit | 1 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Mortgage note receivable | $ 23,277 | $ 10,897 | |
Mortgage Receivable [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Mortgage note receivable | $ 23,500 | $ 11,000 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Real Estate Properties and Mortgage Note Receivable (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016USD ($)mortgage_note_receivable | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | |
Real Estate Properties [Line Items] | |||
Number of mortgage note receivables | mortgage_note_receivable | 2 | ||
Mortgage note receivable | $ | $ 23,277 | $ 10,897 | |
Mortgage Receivable [Member] | |||
Real Estate Properties [Line Items] | |||
Number of mortgage note receivables | mortgage_note_receivable | 2 | ||
Mortgage note receivable | $ | $ 23,500 | $ 11,000 | |
Buildings [Member] | |||
Real Estate Properties [Line Items] | |||
Estimated useful life (in years) | 30 years | ||
Buildings [Member] | Minimum [Member] | |||
Real Estate Properties [Line Items] | |||
Estimated useful life (in years) | 20 years | ||
Buildings [Member] | Maximum [Member] | |||
Real Estate Properties [Line Items] | |||
Estimated useful life (in years) | 40 years | ||
Building Improvements [Member] | Minimum [Member] | |||
Real Estate Properties [Line Items] | |||
Estimated useful life (in years) | 3 years | ||
Building Improvements [Member] | Maximum [Member] | |||
Real Estate Properties [Line Items] | |||
Estimated useful life (in years) | 29 years 6 months | ||
Tenant Improvements [Member] | Minimum [Member] | |||
Real Estate Properties [Line Items] | |||
Estimated useful life (in years) | 2 years 3 months 18 days | ||
Tenant Improvements [Member] | Maximum [Member] | |||
Real Estate Properties [Line Items] | |||
Estimated useful life (in years) | 3 years 2 months 12 days | ||
Lease Intangibles [Member] | Minimum [Member] | |||
Real Estate Properties [Line Items] | |||
Estimated useful life (in years) | 1 year 2 months | ||
Lease Intangibles [Member] | Maximum [Member] | |||
Real Estate Properties [Line Items] | |||
Estimated useful life (in years) | 9 years 4 months | ||
Personal Property [Member] | Minimum [Member] | |||
Real Estate Properties [Line Items] | |||
Estimated useful life (in years) | 3 years | ||
Personal Property [Member] | Maximum [Member] | |||
Real Estate Properties [Line Items] | |||
Estimated useful life (in years) | 10 years |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Deferred Revenue Arrangement [Line Items] | ||
Straight line rent | $ 95,376 | $ 0 |
Operating expense recoveries | 1,000,000 | 0 |
Late fees | 73,430 | |
Other Liabilities [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue | $ 400,000 | $ 0 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Share-Based Compensation/Contingent Liabilities (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2016USD ($)program | Dec. 31, 2015USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Contingent liabilities | $ | $ 1 | $ 1.2 |
2014 Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of programs under plan | program | 2 | |
Common Stock [Member] | 2014 Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of shares reserved for future issuance | 7.00% |
Real Estate Investments - Addit
Real Estate Investments - Additional Information (Details) $ in Thousands | Mar. 31, 2016USD ($)real_estate_property |
Real Estate [Abstract] | |
Value of real estate property investments and mortgages | $ | $ 182,985 |
Number of real estate properties | real_estate_property | 46 |
Real Estate Investments - Sched
Real Estate Investments - Schedule of Real Estate Property Investments (Details) $ in Thousands | Mar. 31, 2016USD ($)mortgage_note_receivablereal_estate_property | Dec. 31, 2015USD ($) |
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 46 | |
Land | $ 19,317 | $ 13,216 |
Buildings, Improvements, and Lease Intangibles | 140,322 | 119,716 |
Personal Property | 69 | 35 |
Total real estate properties | 159,708 | 132,967 |
Accumulated Depreciation | $ 8,018 | 5,203 |
Number of mortgage note receivables | mortgage_note_receivable | 2 | |
Mortgage notes receivable, net | $ 23,277 | $ 10,897 |
Value of real estate property investments and mortgages | $ 182,985 | |
Medical office [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 15 | |
Land | $ 10,677 | |
Buildings, Improvements, and Lease Intangibles | 68,094 | |
Total real estate properties | 78,771 | |
Accumulated Depreciation | $ 3,644 | |
Medical office [Member] | Florida [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 4 | |
Land | $ 4,138 | |
Buildings, Improvements, and Lease Intangibles | 23,762 | |
Total real estate properties | 27,900 | |
Accumulated Depreciation | $ 247 | |
Medical office [Member] | Illinois [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 821 | |
Buildings, Improvements, and Lease Intangibles | 8,666 | |
Total real estate properties | 9,487 | |
Accumulated Depreciation | $ 447 | |
Medical office [Member] | Kansas [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 2 | |
Land | $ 1,379 | |
Buildings, Improvements, and Lease Intangibles | 10,497 | |
Total real estate properties | 11,876 | |
Accumulated Depreciation | $ 1,122 | |
Medical office [Member] | Kentucky [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 484 | |
Buildings, Improvements, and Lease Intangibles | 4,122 | |
Total real estate properties | 4,606 | |
Accumulated Depreciation | $ 194 | |
Medical office [Member] | Other States [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 4 | |
Land | $ 759 | |
Buildings, Improvements, and Lease Intangibles | 8,958 | |
Total real estate properties | 9,717 | |
Accumulated Depreciation | $ 692 | |
Medical office [Member] | Texas [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 3 | |
Land | $ 3,096 | |
Buildings, Improvements, and Lease Intangibles | 12,089 | |
Total real estate properties | 15,185 | |
Accumulated Depreciation | $ 942 | |
Physician clinics [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 11 | |
Land | $ 2,984 | |
Buildings, Improvements, and Lease Intangibles | 27,640 | |
Total real estate properties | 30,624 | |
Accumulated Depreciation | $ 1,700 | |
Physician clinics [Member] | Alabama [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 533 | |
Buildings, Improvements, and Lease Intangibles | 2,663 | |
Total real estate properties | 3,196 | |
Accumulated Depreciation | $ 33 | |
Physician clinics [Member] | Florida [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 3 | |
Land | $ 0 | |
Buildings, Improvements, and Lease Intangibles | 5,950 | |
Total real estate properties | 5,950 | |
Accumulated Depreciation | $ 165 | |
Physician clinics [Member] | Kansas [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 3 | |
Land | $ 1,558 | |
Buildings, Improvements, and Lease Intangibles | 10,713 | |
Total real estate properties | 12,271 | |
Accumulated Depreciation | $ 587 | |
Physician clinics [Member] | Other States [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 2 | |
Land | $ 151 | |
Buildings, Improvements, and Lease Intangibles | 2,956 | |
Total real estate properties | 3,107 | |
Accumulated Depreciation | $ 278 | |
Physician clinics [Member] | Pennsylvania [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 330 | |
Buildings, Improvements, and Lease Intangibles | 2,770 | |
Total real estate properties | 3,100 | |
Accumulated Depreciation | $ 434 | |
Physician clinics [Member] | Wisconsin [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 412 | |
Buildings, Improvements, and Lease Intangibles | 2,588 | |
Total real estate properties | 3,000 | |
Accumulated Depreciation | $ 203 | |
Ambulatory surgery centers [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 8 | |
Land | $ 4,182 | |
Buildings, Improvements, and Lease Intangibles | 24,441 | |
Total real estate properties | 28,623 | |
Accumulated Depreciation | $ 1,444 | |
Ambulatory surgery centers [Member] | Arizona [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 227 | |
Buildings, Improvements, and Lease Intangibles | 2,473 | |
Total real estate properties | 2,700 | |
Accumulated Depreciation | $ 187 | |
Ambulatory surgery centers [Member] | Colorado [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 375 | |
Buildings, Improvements, and Lease Intangibles | 2,325 | |
Total real estate properties | 2,700 | |
Accumulated Depreciation | $ 78 | |
Ambulatory surgery centers [Member] | Illinois [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 2,100 | |
Buildings, Improvements, and Lease Intangibles | 5,401 | |
Total real estate properties | 7,501 | |
Accumulated Depreciation | $ 0 | |
Ambulatory surgery centers [Member] | Michigan [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 300 | |
Buildings, Improvements, and Lease Intangibles | 5,595 | |
Total real estate properties | 5,895 | |
Accumulated Depreciation | $ 282 | |
Ambulatory surgery centers [Member] | Other States [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 3 | |
Land | $ 652 | |
Buildings, Improvements, and Lease Intangibles | 4,575 | |
Total real estate properties | 5,227 | |
Accumulated Depreciation | $ 598 | |
Ambulatory surgery centers [Member] | Texas [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 528 | |
Buildings, Improvements, and Lease Intangibles | 4,072 | |
Total real estate properties | 4,600 | |
Accumulated Depreciation | $ 299 | |
Dialysis clinics [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 6 | |
Land | $ 789 | |
Buildings, Improvements, and Lease Intangibles | 11,979 | |
Total real estate properties | 12,768 | |
Accumulated Depreciation | $ 782 | |
Dialysis clinics [Member] | Colorado [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 259 | |
Buildings, Improvements, and Lease Intangibles | 2,791 | |
Total real estate properties | 3,050 | |
Accumulated Depreciation | $ 177 | |
Dialysis clinics [Member] | Georgia [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 62 | |
Buildings, Improvements, and Lease Intangibles | 1,039 | |
Total real estate properties | 1,101 | |
Accumulated Depreciation | $ 87 | |
Dialysis clinics [Member] | Kentucky [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 193 | |
Buildings, Improvements, and Lease Intangibles | 3,423 | |
Total real estate properties | 3,616 | |
Accumulated Depreciation | $ 242 | |
Dialysis clinics [Member] | Ohio [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 66 | |
Buildings, Improvements, and Lease Intangibles | 1,199 | |
Total real estate properties | 1,265 | |
Accumulated Depreciation | $ 107 | |
Dialysis clinics [Member] | Tennessee [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 28 | |
Buildings, Improvements, and Lease Intangibles | 572 | |
Total real estate properties | 600 | |
Accumulated Depreciation | $ 29 | |
Dialysis clinics [Member] | Texas [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 181 | |
Buildings, Improvements, and Lease Intangibles | 2,955 | |
Total real estate properties | 3,136 | |
Accumulated Depreciation | $ 140 | |
Oncology centers [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 3 | |
Land | $ 415 | |
Buildings, Improvements, and Lease Intangibles | 4,385 | |
Total real estate properties | 4,800 | |
Accumulated Depreciation | $ 415 | |
Oncology centers [Member] | Alabama [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 3 | |
Land | $ 415 | |
Buildings, Improvements, and Lease Intangibles | 4,385 | |
Total real estate properties | 4,800 | |
Accumulated Depreciation | $ 415 | |
Behavioral facilities [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 270 | |
Buildings, Improvements, and Lease Intangibles | 2,651 | |
Total real estate properties | 2,921 | |
Accumulated Depreciation | $ 28 | |
Behavioral facilities [Member] | Indiana [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 1 | |
Land | $ 270 | |
Buildings, Improvements, and Lease Intangibles | 2,651 | |
Total real estate properties | 2,921 | |
Accumulated Depreciation | $ 28 | |
Corporate property [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 0 | |
Land | $ 0 | |
Buildings, Improvements, and Lease Intangibles | 1,132 | |
Personal Property | 69 | |
Total real estate properties | 1,201 | |
Accumulated Depreciation | $ 5 | |
Total Properties [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Facilities | real_estate_property | 44 | |
Land | $ 19,317 | |
Buildings, Improvements, and Lease Intangibles | 140,322 | |
Personal Property | 69 | |
Total real estate properties | 159,708 | |
Accumulated Depreciation | $ 8,018 |
Real Estate Leases (Details)
Real Estate Leases (Details) $ in Thousands | Mar. 31, 2016USD ($) |
Leases [Abstract] | |
2016 (nine months ending December 31) | $ 11,543 |
2,017 | 14,013 |
2,018 | 11,401 |
2,019 | 8,449 |
2,020 | 6,587 |
2021 and thereafter | 25,998 |
Total | $ 77,991 |
Real Estate Acquisitions (Detai
Real Estate Acquisitions (Details) | 3 Months Ended | ||
Mar. 31, 2016USD ($)ft²real_estate_property | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of properties acquired | real_estate_property | 4 | ||
Area of real estate property (in square feet) | ft² | 146,443 | ||
Aggregate purchase price | $ 25,400,000 | ||
Cash consideration | $ 25,609,000 | ||
Percentage of properties that were leased at acquisition | 95.60% | ||
Mortgage note receivable | $ 23,277,000 | $ 10,897,000 | |
Mortgage Receivable [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Mortgage note receivable | 23,500,000 | $ 11,000,000 | |
Loan and commitment fees received | $ 93,750 | ||
Stated fixed interest rate of mortgage loan receivable | 11.00% | ||
Mortgage Receivable [Member] | Illinois [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Mortgage note receivable | $ 12,500,000 | ||
Mortgage Receivable [Member] | Illinois [Member] | Behavioral Facility [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Area of real estate property (in square feet) | ft² | 85,000 |
Real Estate Acquisitions - Asse
Real Estate Acquisitions - Assets Acquired and Liabilities Assumed (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |
Land | $ 6,101 |
Buildings | 14,947 |
Intangibles: | |
Below-market lease intangibles | (923) |
Total intangibles | $ 4,381 |
Below-market lease estimated useful (in years) | 8 years 9 months 18 days |
Accounts payable, accrued liabilities and other liabilities assumed | $ (32) |
Prorated rent and operating expense reimbursement amounts collected | (71) |
Expenses paid, including closing costs | 283 |
Total cash consideration | 25,609 |
At Market Leases [Member] | |
Intangibles: | |
Lease intangibles | $ 5,304 |
Minimum [Member] | At Market Leases [Member] | |
Intangibles: | |
Estimated useful life (in years) | 2 years 10 months 24 days |
Maximum [Member] | At Market Leases [Member] | |
Intangibles: | |
Estimated useful life (in years) | 6 years 3 months 18 days |
Buildings [Member] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |
Estimated useful life (in years) | 30 years |
Buildings [Member] | Minimum [Member] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |
Estimated useful life (in years) | 20 years |
Buildings [Member] | Maximum [Member] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |
Estimated useful life (in years) | 40 years |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) - Line of Credit [Member] - USD ($) | Jun. 03, 2015 | Apr. 30, 2016 | Mar. 31, 2016 |
Senior Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Extension fee percentage | 0.25% | ||
Additional borrowing capacity | $ 125,000,000 | ||
Total borrowing capacity after additional capacity | $ 200,000,000 | ||
Amount outstanding | $ 55,000,000 | ||
Remaining borrowing capacity | $ 20,000,000 | ||
Weighted average interest rate | 3.60% | ||
Senior Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member] | |||
Line of Credit Facility [Line Items] | |||
Debt repaid in full amount | $ 55,000,000 | ||
Senior Revolving Credit Facility, Unused Borrowing Capacity Rate 1 [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Percentage of unused portion fee | 0.25% | ||
Percentage of borrowing capacity outstanding | 50.00% | ||
Senior Revolving Credit Facility, Unused Borrowing Capacity Rate 2 [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Percentage of unused portion fee | 0.35% | ||
Percentage of borrowing capacity outstanding | 50.00% | ||
LIBOR [Member] | Minimum [Member] | Senior Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.50% | ||
LIBOR [Member] | Maximum [Member] | Senior Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 3.00% | ||
Base Rate [Member] | Minimum [Member] | Senior Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.50% | ||
Base Rate [Member] | Maximum [Member] | Senior Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.00% |
Stockholders' Equity - Reconcil
Stockholders' Equity - Reconciliation of Common Stock (Details) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Balance, beginning of period (in shares) | 7,596,940 | 200,000 |
Issuance of common stock (in shares) | 0 | 7,311,183 |
Restricted stock-based awards (in shares) | 117,714 | 85,757 |
Balance, end of period (in shares) | 7,714,654 | 7,596,940 |
Income Per Common Share (Detail
Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Net income | $ 116 | $ 0 |
Weighted average Common Shares outstanding | ||
Weighted average Common Shares outstanding (in shares) | 7,696,544 | 200,000 |
Unvested restricted stock (in shares) | (185,361) | 0 |
Weighted average Common Shares outstanding–Basic (in shares) | 7,511,183 | 200,000 |
Weighted average Common Shares–Basic (in shares) | 7,511,183 | 200,000 |
Dilutive effect of restricted stock (in shares) | 51,461 | 0 |
Weighted average Common Shares outstanding –Diluted (in shares) | 7,562,644 | 200,000 |
Basic Income per Common Share (in dollars per share) | $ 0.02 | $ 0 |
Diluted Income per Common Share (in dollars per share) | $ 0.02 | $ 0 |
Incentive Plan (Details)
Incentive Plan (Details) - 2014 Incentive Plan [Member] - USD ($) $ in Millions | Jan. 15, 2016 | Mar. 31, 2016 |
Restricted Common Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted common stock granted (in shares) | 58,857 | |
Vesting period (in years) | 8 years | |
Compensation expense | $ 0.1 | |
Restricted Common Stock, Stock in Lieu of Compensation [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted common stock granted (in shares) | 58,857 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Thousands | May. 02, 2016$ / shares | May. 12, 2016USD ($)ft²real_estate_property | Apr. 30, 2016USD ($)shares | Mar. 31, 2016USD ($)ft²real_estate_property$ / sharesshares | Mar. 31, 2015$ / shares | Dec. 31, 2015shares |
Subsequent Event [Line Items] | ||||||
Number of properties acquired | real_estate_property | 4 | |||||
Area of real estate property (in square feet) | ft² | 146,443 | |||||
Purchase price to acquire building | $ 25,400 | |||||
Cash consideration | $ 25,609 | |||||
Percentage of building that were leased at acquisition | 95.60% | |||||
Dividend declared (in dollars per share) | $ / shares | $ 0.3775 | $ 0 | ||||
Issuance of common stock (in shares) | shares | 0 | 7,311,183 | ||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Number of properties acquired | real_estate_property | 1 | |||||
Area of real estate property (in square feet) | ft² | 54,800 | |||||
Purchase price to acquire building | $ 10,400 | |||||
Cash consideration | $ 10,400 | |||||
Percentage of building that were leased at acquisition | 81.90% | |||||
Dividend declared (in dollars per share) | $ / shares | $ 0.38 | |||||
Second Public Offering [Member] | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Issuance of common stock (in shares) | shares | 5,175,000 | |||||
Net proceeds from second public offering | $ 86,800 | |||||
Over-Allotment Option [Member] | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Issuance of common stock (in shares) | shares | 675,000 |