Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 02, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | CTRE | |
Entity Registrant Name | CareTrust REIT, Inc. | |
Entity Central Index Key | 1,590,717 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 83,883,818 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets: | ||
Real estate investments, net | $ 1,189,449 | $ 1,152,261 |
Other real estate investments, net | 18,083 | 17,949 |
Cash and cash equivalents | 15,745 | 6,909 |
Accounts and other receivables, net | 12,384 | 5,254 |
Prepaid expenses and other assets | 3,792 | 895 |
Deferred financing costs, net | 904 | 1,718 |
Total assets | 1,240,357 | 1,184,986 |
Liabilities and Equity: | ||
Senior unsecured notes payable, net | 294,963 | 294,395 |
Senior unsecured term loan, net | 99,588 | 99,517 |
Unsecured revolving credit facility | 90,000 | 165,000 |
Accounts payable and accrued liabilities | 18,510 | 17,413 |
Dividends payable | 17,246 | 14,044 |
Total liabilities | 520,307 | 590,369 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, $0.01 par value; 100,000,000 shares authorized, no shares issued and outstanding as of September 30, 2018 and December 31, 2017 | 0 | 0 |
Common stock, $0.01 par value; 500,000,000 shares authorized, 83,353,226 and 75,478,202 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 834 | 755 |
Additional paid-in capital | 915,235 | 783,237 |
Cumulative distributions in excess of earnings | (196,019) | (189,375) |
Total equity | 720,050 | 594,617 |
Total liabilities and equity | $ 1,240,357 | $ 1,184,986 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued (shares) | 0 | 0 |
Preferred stock, outstanding (shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (shares) | 500,000,000 | 500,000,000 |
Common stock, issued (shares) | 83,353,226 | 75,478,202 |
Common stock, outstanding (shares) | 83,353,226 | 75,478,202 |
Condensed Consolidated Income S
Condensed Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Revenues: | |||||||
Rental income | $ 35,332 | $ 29,404 | $ 103,856 | $ 85,254 | |||
Tenant reimbursements | 2,990 | 2,543 | 8,974 | 7,253 | |||
Independent living facilities | 871 | 825 | 2,515 | 2,407 | |||
Interest and other income | 317 | 176 | 1,235 | 1,471 | |||
Total revenues | 39,510 | 32,948 | 116,580 | 96,385 | |||
Expenses: | |||||||
Depreciation and amortization | 11,351 | 9,745 | 34,227 | 28,156 | |||
Interest expense | 6,805 | 5,592 | 21,182 | 17,690 | |||
Loss on the extinguishment of debt | 0 | 0 | 0 | 11,883 | |||
Property taxes | 2,990 | 2,543 | 8,974 | 7,253 | |||
Independent living facilities | 766 | 698 | 2,226 | 2,003 | |||
Impairment of real estate investment | 0 | 0 | 0 | 890 | |||
General and administrative | 3,088 | 3,059 | 9,638 | 8,426 | |||
Total expenses | 25,000 | 21,637 | 76,247 | 76,301 | |||
Other income: | |||||||
Gain on sale of real estate | 0 | 0 | 2,051 | 0 | |||
Gain on disposition of other real estate investment | 0 | 0 | 0 | 3,538 | |||
Net income | $ 14,510 | $ 11,311 | $ 42,384 | $ 23,622 | $ 25,874 | ||
Earnings per common share: | |||||||
Basic (in usd per share) | $ 0.18 | $ 0.15 | $ 0.54 | $ 0.33 | |||
Diluted (in usd per share) | $ 0.18 | $ 0.15 | $ 0.54 | $ 0.33 | |||
Weighted-average number of common shares: | |||||||
Basic (in shares) | 81,490 | 75,471 | 77,811 | 71,693 | |||
Diluted (in shares) | 81,490 | 75,471 | 77,811 | 71,693 | |||
Dividends declared per common share (in usd per share) | $ 0.205 | $ 0.205 | $ 0.205 | $ 0.185 | $ 0.615 | $ 0.555 | $ 0.74 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Cumulative Distributions in Excess of Earnings |
Beginning balance at Dec. 31, 2016 | $ 452,430 | $ 648 | $ 611,475 | $ (159,693) |
Beginning balance (in shares) at Dec. 31, 2016 | 64,816,350 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock, net | 170,319 | $ 106 | 170,213 | |
Issuance of common stock, net, (in shares) | 10,573,089 | |||
Vesting of restricted common stock, net of shares withheld for employee taxes | (866) | $ 1 | (867) | |
Vesting of restricted common stock, net of shares withheld for employee taxes (in shares) | 88,763 | |||
Amortization of stock-based compensation | 2,416 | 2,416 | ||
Common dividends ($0.615 and $0.74 per share for the nine months ended 9/30/2018 and year ended 12/31/2017, respectively) (in usd per share) | (55,556) | (55,556) | ||
Net income | 25,874 | 25,874 | ||
Ending balance at Dec. 31, 2017 | 594,617 | $ 755 | 783,237 | (189,375) |
Ending balance (in shares) at Dec. 31, 2017 | 75,478,202 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock, net | 130,550 | $ 78 | 130,472 | |
Issuance of common stock, net, (in shares) | 7,760,723 | |||
Vesting of restricted common stock, net of shares withheld for employee taxes | (1,289) | $ 1 | (1,290) | |
Vesting of restricted common stock, net of shares withheld for employee taxes (in shares) | 114,301 | |||
Amortization of stock-based compensation | 2,816 | 2,816 | ||
Common dividends ($0.615 and $0.74 per share for the nine months ended 9/30/2018 and year ended 12/31/2017, respectively) (in usd per share) | (49,028) | (49,028) | ||
Net income | 42,384 | 42,384 | ||
Ending balance at Sep. 30, 2018 | $ 720,050 | $ 834 | $ 915,235 | $ (196,019) |
Ending balance (in shares) at Sep. 30, 2018 | 83,353,226 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | |||||||
Common dividends (in usd per share) | $ 0.205 | $ 0.205 | $ 0.205 | $ 0.185 | $ 0.615 | $ 0.555 | $ 0.74 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 42,384 | $ 23,622 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization (including a below-market ground lease) | 34,240 | 28,168 |
Amortization of deferred financing costs | 1,453 | 1,615 |
Loss on the extinguishment of debt | 0 | 11,883 |
Amortization of stock-based compensation | 2,816 | 1,792 |
Straight-line rental income | (1,631) | (117) |
Noncash interest income | (228) | (496) |
Gain on sale of real estate | (2,051) | 0 |
Interest income distribution from other real estate investment | 0 | 1,500 |
Impairment of real estate investment | 0 | 890 |
Change in operating assets and liabilities: | ||
Accounts and other receivables, net | (5,499) | (6,948) |
Prepaid expenses and other assets | (159) | (182) |
Accounts payable and accrued liabilities | 1,065 | 5,206 |
Net cash provided by operating activities | 72,390 | 66,933 |
Cash flows from investing activities: | ||
Acquisitions of real estate | (75,621) | (222,463) |
Improvements to real estate | (5,401) | (621) |
Purchases of equipment, furniture and fixtures | (1,262) | (359) |
Investment in real estate mortgage and other loans receivable | (2,598) | 0 |
Principal payments received on real estate mortgage and other loans receivable | 893 | 0 |
Sale of other real estate investment | 0 | 7,500 |
Escrow deposits for acquisitions of real estate | (1,000) | (1,000) |
Net proceeds from the sale of real estate | 13,004 | 0 |
Net cash used in investing activities | (71,985) | (216,943) |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock, net | 130,546 | 170,414 |
Proceeds from the issuance of senior unsecured notes payable | 0 | 300,000 |
Borrowings under unsecured revolving credit facility | 60,000 | 158,000 |
Payments on senior unsecured notes payable | 0 | (267,639) |
Payments on unsecured revolving credit facility | (135,000) | (158,000) |
Payments of deferred financing costs | 0 | (6,047) |
Net-settle adjustment on restricted stock | (1,288) | (866) |
Dividends paid on common stock | (45,827) | (38,544) |
Net cash provided by financing activities | 8,431 | 157,318 |
Net increase in cash and cash equivalents | 8,836 | 7,308 |
Cash and cash equivalents, beginning of period | 6,909 | 7,500 |
Cash and cash equivalents, end of period | 15,745 | 14,808 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 15,772 | 19,349 |
Supplemental schedule of noncash operating, investing and financing activities: | ||
Increase in dividends payable | 3,202 | 2,971 |
Application of escrow deposit to acquisition of real estate | $ 0 | $ 700 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | ORGANIZATION Description of Business— CareTrust REIT, Inc.’s (“CareTrust REIT” or the “Company”) primary business consists of acquiring, financing, developing and owning real property to be leased to third-party tenants in the healthcare sector. As of September 30, 2018 , the Company owned and leased to independent operators, including The Ensign Group, Inc. (“Ensign”), 190 skilled nursing, multi-service campuses, assisted living and independent living facilities consisting of 18,693 operational beds and units located in Arizona, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Maryland, Michigan, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Carolina, Ohio, Oregon, South Dakota, Texas, Utah, Virginia, Washington and Wisconsin. The Company also owns and operates three independent living facilities which have a total of 264 units located in Texas and Utah. As of September 30, 2018 , the Company also had other real estate investments consisting of two preferred equity investments totaling $5.7 million and a mortgage loan receivable of $12.3 million . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation —The accompanying condensed consolidated financial statements of the Company reflect, for all periods presented, the historical financial position, results of operations and cash flows of the Company and its consolidated subsidiaries consisting of (i) the net-leased skilled nursing, multi-service campuses, assisted living and independent living facilities, (ii) the operations of the three independent living facilities that the Company owns and operates; and (iii) the preferred equity investments and the mortgage loan receivable. The accompanying condensed consolidated financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the disclosures required by GAAP for a complete set of annual audited financial statements. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 . In the opinion of management, all adjustments which are of a normal and recurring nature and considered necessary for a fair presentation of the results of the interim periods presented have been included. The results of operations for the interim periods are not necessarily indicative of results for the full year. All intercompany transactions and account balances within the Company have been eliminated. Estimates and Assumptions —The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that the assumptions and estimates used in preparation of the underlying consolidated financial statements are reasonable. Actual results, however, could differ from those estimates and assumptions. Real Estate Depreciation and Amortization —Real estate costs related to the acquisition and improvement of properties are capitalized and amortized over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows: Buildings 25-40 years Building improvements 10-25 years Tenant improvements Shorter of lease term or expected useful life Integral equipment, furniture and fixtures 5 years Identified intangible assets Shorter of lease term or expected useful life Real Estate Acquisition Valuation — In accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations , the Company records the acquisition of income-producing real estate as a business combination. If the acquisition does not meet the definition of a business, the Company records the acquisition as an asset acquisition. Under both methods, all assets acquired and liabilities assumed are measured at their acquisition date fair values. For transactions that are business combinations, acquisition costs are expensed as incurred and restructuring costs that do not meet the definition of a liability at the acquisition date are expensed in periods subsequent to the acquisition date. For transactions that are asset acquisitions, acquisition costs are capitalized as incurred. The Company assesses the acquisition date fair values of all tangible assets, identifiable intangibles and assumed liabilities using methods similar to those used by independent appraisers, generally utilizing a discounted cash flow analysis that applies appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company’s management to make significant assumptions to estimate market lease rates, property-operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The use of inappropriate assumptions would result in an incorrect valuation of the Company’s acquired tangible assets, identifiable intangibles and assumed liabilities, which would impact the amount of the Company’s net income. As part of the Company’s real estate acquisitions, the Company may commit to provide contingent payments to a seller or lessee (e.g., an earn-out payable upon the applicable property achieving certain financial metrics). Typically, when the contingent payments are funded, cash rent is increased by the amount funded multiplied by a rate stipulated in the agreement. Generally, if the contingent payment is an earn-out provided to the seller, the payment is capitalized to the property’s basis. If the contingent payment is an earn-out provided to the lessee, the payment is recorded as a lease incentive and is amortized as a yield adjustment over the life of the lease. Impairment of Long-Lived Assets —At each reporting period, management evaluates the Company’s real estate investments for impairment indicators, including the evaluation of the useful lives of the Company’s assets. Management also assesses the carrying value of the Company’s real estate investments whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The judgment regarding the existence of impairment indicators is based on factors such as, but not limited to, market conditions, operator performance and legal structure. If indicators of impairment are present, management evaluates the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying facilities. Provisions for impairment losses related to long-lived assets are recognized when expected future undiscounted cash flows are determined to be less than the carrying values of the assets. An adjustment is made to the net carrying value of the real estate investments for the excess of carrying value over fair value. All impairments are taken as a period cost at that time, and depreciation is adjusted going forward to reflect the new value assigned to the asset. If the Company decides to sell real estate properties, it evaluates the recoverability of the carrying amounts of the assets. If the evaluation indicates that the carrying value is not recoverable from estimated net sales proceeds, the property is written down to estimated fair value less costs to sell. In the event of impairment, the fair value of the real estate investment is determined by market research, which includes valuing the property in its current use as well as other alternative uses, and involves significant judgment. Management’s estimates of cash flows and fair values of the properties are based on current market conditions and consider matters such as rental rates and occupancies for comparable properties, recent sales data for comparable properties, and, where applicable, contracts or the results of negotiations with purchasers or prospective purchasers. The Company’s ability to accurately estimate future cash flows and estimate and allocate fair values impacts the timing and recognition of impairments. While the Company believes its assumptions are reasonable, changes in these assumptions may have a material impact on financial results. Other Real Estate Investments, Net — Included in Other Real Estate Investments, Net are two preferred equity investments and one mortgage loan receivable. Preferred equity investments are accounted for at unpaid principal balance, plus accrued return, net of reserves. The Company recognizes return income on a quarterly basis based on the outstanding investment including any accrued and unpaid return, to the extent there is outside contributed equity or cumulative earnings from operations. As the preferred member of the joint venture, the Company is not entitled to share in the joint venture’s earnings or losses. Rather, the Company is entitled to receive a preferred return, which is deferred if the cash flow of the joint venture is insufficient to pay all of the accrued preferred return. The unpaid accrued preferred return is added to the balance of the preferred equity investment up to the estimated economic outcome assuming a hypothetical liquidation of the book value of the joint venture. The Company anticipates any unpaid accrued preferred return, whether recorded or unrecorded by the Company, will be repaid upon redemption or as available cash flow is distributed from the joint venture. The Company’s mortgage loan receivable is recorded at amortized cost, which consists of the outstanding unpaid principal balance, net of unamortized costs and fees directly associated with the origination of the loan. Interest income on the Company’s mortgage loan receivable is recognized over the life of the investment using the interest method. Origination costs and fees directly related to mortgage loans receivable are amortized over the term of the loan as an adjustment to interest income. The Company evaluates at each reporting period each of its other real estate investments for indicators of impairment. An investment is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms. A reserve is established for the excess of the carrying value of the investment over its fair value. Cash and Cash Equivalents —Cash and cash equivalents consist of bank term deposits and money market funds with original maturities of three months or less at time of purchase and therefore approximate fair value. The fair value of these investments is determined based on “Level 1” inputs, which consist of unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets. The Company places its cash and short-term investments with high credit quality financial institutions. The Company’s cash and cash equivalents balance periodically exceeds federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. Prepaid expenses and other assets —Prepaid expenses and other assets consist of prepaid expenses, deposits, pre-acquisition costs and other loans receivable. Included in other loans receivable at September 30, 2018 is a bridge loan to Eduro Healthcare, LLC, (“Eduro”) under which the Company agreed to fund up to $4.0 million until the earlier of (i) the date Eduro enters into a new credit facility, (ii) the date that Eduro terminates as to any facility, or (iii) November 30, 2018 . Borrowings under the bridge loan accrue interest at a base rate of greater of prime rate or 4.75% plus margin of 2.5% . The borrowings under the bridge loan accrue interest and, as of September 30, 2018 , approximately $1.8 million has been drawn and was outstanding. Deferred Financing Costs —External costs incurred from placement of the Company’s debt are capitalized and amortized on a straight-line basis over the terms of the related borrowings, which approximates the effective interest method. Deferred financing costs on the Company’s Notes and Term Loan (each as defined in Note 6 , Debt, below) are netted against the outstanding debt amounts on the Company’s balance sheet. Deferred financing costs on the Company’s Revolving Facility (as defined in Note 6, Debt, below) are included in assets on the Company’s balance sheet. Amortization of deferred financing costs is classified as interest expense in the Company’s condensed consolidated income statements. Accumulated amortization of deferred financing costs was $4.6 million and $3.2 million at September 30, 2018 and December 31, 2017 , respectively. When financings are terminated, unamortized deferred financing costs, as well as charges incurred for the termination, are expensed at the time the termination is made. Gains and losses from the extinguishment of debt are presented within income from continuing operations in the Company’s condensed consolidated income statements. Revenue Recognition —The Company recognizes rental revenue, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, if any, from tenants under lease arrangements with minimum fixed and determinable increases on a straight-line basis over the non-cancellable term of the related leases when collectability is reasonably assured. The Company evaluates the collectability of rents and other receivables on a regular basis based on factors including, among others, payment history, the operations, the asset type and current economic conditions. Tenant recoveries related to the reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period the expenses are incurred and presented gross if the Company is the primary obligor and, with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk. For each of the three and nine months ended September 30, 2018 and 2017 , such tenant reimbursement revenues consisted of real estate taxes. Contingent revenue, if any, is not recognized until all possible contingencies have been eliminated. If the Company’s evaluation of applicable factors indicates it may not recover the full value of the receivable, the Company provides a reserve against the portion of the receivable that it estimates may not be recovered. This analysis requires the Company to determine whether there are factors indicating a receivable may not be fully collectible and to estimate the amount of the receivable that may not be collected. As of September 30, 2018 and December 31, 2017 , Accounts and other receivables, net included $1.3 million and $0.8 million for unpaid cash rents and $11.6 million and $9.6 million for other tenant receivables, respectively, of which $10.4 million was reserved as of September 30, 2018 and December 31, 2017 , related to the properties previously net leased to subsidiaries of Pristine Senior Living, LLC (“Pristine”). See Note 3, Real Estate Investments, Net for further discussion. The Company evaluates the collectability of straight-line rent receivable balances on an ongoing basis and provides reserves against receivables it determines may not be fully recoverable. The Company recorded straight-line rental income of $0.7 million and $2,000 during the three months ended September 30, 2018 and 2017 , respectively. The Company recorded straight-line rental income of $1.6 million and $0.1 million during the nine months ended September 30, 2018 and 2017 , respectively. Accounts and other receivables, net included $2.1 million and $0.5 million in straight-line rents receivable at September 30, 2018 and December 31, 2017 , respectively. Income Taxes —The Company has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). The Company believes it has been organized and has operated, and the Company intends to continue to operate, in a manner to qualify for taxation as a REIT under the Code. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute to its stockholders at least 90% of the Company’s annual REIT taxable income (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 GAAP). As a REIT, the Company generally will not be subject to federal income tax to the extent it distributes as qualifying dividends all of its REIT taxable income to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Stock-Based Compensation —The Company accounts for share-based payment awards in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). ASC 718 requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. ASC 718 requires all entities to apply a fair value-based measurement method in accounting for share-based payment transactions with directors, officers and employees except for equity instruments held by employee share ownership plans. See Note 8, Stock-Based Compensation, for further discussion. Concentration of Credit Risk —The Company is subject to concentrations of credit risk consisting primarily of operating leases on the Company’s owned properties. See Note 11, Concentration of Risk , for a discussion of major operator concentration. Segment Disclosures —The Financial Accounting Standards Board (“FASB”) accounting guidance regarding disclosures about segments of an enterprise and related information establishes standards for the manner in which public business enterprises report information about operating segments. The Company has one reportable segment consisting of investments in healthcare-related real estate assets. Earnings (Loss) Per Share —The Company calculates earnings (loss) per share (“EPS”) in accordance with ASC Topic 260, Earnings Per Share . Basic EPS is computed by dividing net income applicable to common stock by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution for all potentially-dilutive securities. Beds, Units, Occupancy and Other Measures —Beds, units, occupancy and other non-financial measures used to describe real estate investments included in these Notes to the condensed consolidated financial statements are presented on an unaudited basis and are not subject to review by the Company’s independent auditors in accordance with the standards of the Public Company Accounting Oversight Board. Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASC 842”) that sets out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASC 842 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASC 842 is expected to result in the recognition of a right-to-use asset and related liability to account for the Company’s future obligations for which it is the lessee. As of September 30, 2018 , the remaining contractual payments under the Company’s lease agreements aggregated $0.2 million . Additionally, ASC 842 will require that lessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Under ASC 842, allocated payroll costs and other costs that are incurred regardless of whether the lease is obtained will no longer be capitalized as initial direct costs and instead will be expensed as incurred. During the nine months ended September 30, 2018 , the Company did not capitalize any allocated payroll costs. Lessors will continue to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases, and operating leases. ASC 842 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. Tenant recoveries that qualify as lease components, which relate to the right to use the leased asset (e.g., property taxes, insurance), will be accounted for under ASC 842. Tenant recoveries that qualify as non-lease components, which relate to payments for goods or services that are transferred separately from the right to use the underlying asset, including tenant recoveries related to payments for maintenance activities and common area expenses, will be accounted for under the new revenue recognition ASC 606 (as defined below) upon adoption of the new lease ASC 842 on January 1, 2019 for any new lease or any modified lease. In July 2018, the FASB finalized an amendment to ASC 842 that allows lessors to elect, as a practical expedient, not to separate lease and non-lease components (such as services rendered) in a contract for the purpose of revenue recognition and disclosure. The practical expedient can only be applied to leasing arrangements for which (i) the timing and pattern of transfer are the same for the lease and non-lease components and (ii) the lease component, if accounted for separately, would be classified as an operating lease. Under this practical expedient, contracts that are predominantly lease-based would be accounted for under ASC 842, and contracts that are predominantly service-based would be accounted for under ASC 606. Further, this amendment also provides for an additional (and optional) transition method to adopt the new lease requirements by allowing entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company plans to elect this practical expedient and apply the optional transition method for its operating leases, using the cumulative-effect adjustment to the opening balance sheet as of January 1, 2019. The Company is still evaluating the full impact of the adoption of ASC 842 on January 1, 2019 to its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”) that changes the impairment model for most financial instruments by requiring companies to recognize an allowance for expected losses, rather than incurred losses as required currently by the other-than-temporary impairment model. ASU 2016-13 will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases, and off-balance-sheet credit exposures (e.g., loan commitments). ASU 2016-13 is effective for reporting periods beginning after December 15, 2019, with early adoption permitted, and will be applied as a cumulative adjustment to retained earnings as of the effective date. The Company is currently assessing the potential effect the adoption of ASU 2016-13 will have on the Company’s condensed consolidated financial statements. Recent Accounting Standards Adopted by the Company On January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”). ASC 606 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASC 606 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the ASC. ASC 606 does not apply to lease contracts within the scope of Leases (Topic 840). Based on a review of the Company’s revenue streams from independent living facilities, the Company’s consolidated financial statements include revenues generated through services provided to residents of independent living facilities that are ancillary to the residents’ contractual rights to occupy living and common-area space at the communities, such as meals, transportation and activities. While these revenue streams are subject to the application of Topic 606, the revenues associated with these services are generally recognized on a monthly basis, the period in which the related services are performed. Therefore, the adoption of ASC 606 did not have a material effect on the Company’s condensed consolidated financial statements since the revenue recognition under ASC 606 is similar to the recognition pattern prior to the adoption of ASC 606. |
Real Estate Investments, Net
Real Estate Investments, Net | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate [Abstract] | |
Real Estate Investments, Net | REAL ESTATE INVESTMENTS, NET The following tables summarize the Company’s investment in owned properties as of September 30, 2018 and December 31, 2017 (dollars in thousands): September 30, 2018 December 31, 2017 Land $ 163,665 $ 151,879 Buildings and improvements 1,168,192 1,114,605 Integral equipment, furniture and fixtures 85,592 80,729 Identified intangible assets 2,382 2,382 Real estate investments 1,419,831 1,349,595 Accumulated depreciation and amortization (230,382 ) (197,334 ) Real estate investments, net $ 1,189,449 $ 1,152,261 As of September 30, 2018 , 92 of the Company’s 193 facilities were leased to subsidiaries of Ensign under eight master leases (the “Ensign Master Leases”) which commenced on June 1, 2014. The obligations under the Ensign Master Leases are guaranteed by Ensign. A default by any subsidiary of Ensign with regard to any facility leased pursuant to an Ensign Master Lease will result in a default under all of the Ensign Master Leases. As of September 30, 2018 , annualized revenues from the Ensign Master Leases were $59.1 million and are escalated annually by an amount equal to the product of (1) the lesser of the percentage change in the Consumer Price Index (“CPI”) (but not less than zero ) or 2.5% , and (2) the prior year’s rent. In addition to rent, the subsidiaries of Ensign that are tenants under the Ensign Master Leases are solely responsible for the costs related to the leased properties (including property taxes, insurance, and maintenance and repair costs). As of September 30, 2018 , 98 of the Company’s 193 facilities were leased to various other operators under triple-net leases. All of these leases contain annual escalators based on CPI, some of which are subject to a cap, or fixed rent escalators. The Company’s three remaining properties as of September 30, 2018 are the independent living facilities that the Company owns and operates. The Company has only two identified intangible assets which relate to a below-market ground lease and three acquired operating leases. The ground lease has a remaining term of 80 years . As of September 30, 2018 , the Company’s total future minimum rental revenues for all of its tenants were (dollars in thousands): Year Amount Remaining 2018 $ 35,223 2019 141,977 2020 142,525 2021 143,094 2022 143,678 Thereafter 1,169,183 $ 1,775,680 Recent Real Estate Acquisitions The following table summarizes the Company’s acquisitions for the nine months ended September 30, 2018 (dollar amounts in thousands): Type of Property Purchase Price (1) Initial Annual Cash Rent Number of Properties Number of Beds/Units (2) Skilled nursing $ 57,074 $ 5,144 7 621 Multi-service campuses 20,277 (3) 1,564 1 122 Assisted living — — — — Total $ 77,351 $ 6,708 $ 8 743 (1) Purchase price includes capitalized acquisition costs. (2) The number of beds/units includes operating beds at acquisition date. (3) The Company has committed to fund approximately $1.4 million in revenue-producing capital expenditures over the next 24 months based on the in-place lease yield, which is included in the purchase price. Lease Amendments and Related Agreements Pristine Lease Termination. On February 27, 2018, the Company announced that it entered into a Lease Termination Agreement (the “LTA”) with Pristine for its nine remaining properties, with a target completion date of April 30, 2018. Under the LTA, Pristine agreed to continue to operate the facilities until possession could be surrendered, and the operations therein transitioned, to operator(s) designated by the Company. Among other things, Pristine also agreed to amend certain pending agreements to sell the rights to certain Ohio Medicaid beds (the “Bed Sales Agreements”) and cooperate with the Company to turn over any claim or control it might have had with respect to the sale process and the proceeds thereof, if any, to the Company. The transactions were timely completed, and on May 1, 2018, Trio Healthcare, Inc (“Trio”) took over operations in the seven facilities based primarily in the Dayton, Ohio area under a new 15 -year master lease, while Hillstone Healthcare, Inc. (“Hillstone”) assumed the operation of the two facilities in Willard and Toledo, Ohio under a new 12 -year master lease. In addition, amendments to the Bed Sales Agreements were subsequently executed, confirming the Company as the sole seller of the bed rights and the sole recipient of any proceeds therefrom. The aggregate annual base rent due under the new master leases with Trio and Hillstone is approximately $10.0 million , subject to CPI-based or fixed escalators. Under the LTA, the Company agreed, upon Pristine’s full performance of the terms thereof, to terminate Pristine’s master lease and all future obligations of the tenant thereunder; however, under the terms of the master lease the Company’s security interest in Pristine’s accounts receivable has survived any such termination. Such security interest was subject to the prior lien and security interest of Pristine’s working capital lender, Capital One, National Association (“CONA”), with whom the Company has an existing intercreditor agreement that defines the relative rights and responsibilities of CONA and with its respect to the loan and lease collateral represented by Pristine’s accounts receivable and the Company’s respective security interests therein. Sale of Real Estate Investments During the nine months ended September 30, 2018 , the Company sold three assisted living facilities consisting of 102 units located in Idaho with an aggregate carrying value of $10.9 million for an aggregate price of $13.0 million . In connection with the sale, the Company recognized a gain of $2.1 million . Impairment of Real Estate Investment During the nine months ended September 30, 2017 , the Company recorded an impairment loss of $0.9 million related to its investment in La Villa Rehab & Healthcare Center (“La Villa”). In April 2017, the Company and Ensign mutually determined that La Villa had reached the natural end of its useful life as a skilled nursing facility and that the facility was no longer economically viable, the improvements thereon could not be economically repurposed to any other use, and the cost to remove the obsolete improvements and reclaim the underlying land for redevelopment was expected to exceed the market value of the land. Ensign agreed to wind up and terminate the operations of the facility and the Company transferred title to the property to Ensign. There was no adjustment to the contractual rent under the applicable master lease. |
Other Real Estate Investments
Other Real Estate Investments | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate [Abstract] | |
Other Real Estate Investments | OTHER REAL ESTATE INVESTMENTS In July 2016, the Company completed a $2.2 million preferred equity investment with an affiliate of Cascadia Development, LLC. The preferred equity investment yields a return equal to prime plus 9.5% but in no event less than 12.0% calculated on a quarterly basis on the outstanding carrying value of the investment. The investment was used to develop a 99 -bed skilled nursing facility in Nampa, Idaho. In connection with its investment, CareTrust REIT holds an option to purchase the development at a fixed-formula price upon stabilization, with an initial lease yield of at least 9.0% . The project was completed in the fourth quarter 2017 and began lease-up during the first quarter of 2018. In September 2016, the Company completed a $2.3 million preferred equity investment with an affiliate of Cascadia Development, LLC. The preferred equity investment yields a return equal to prime plus 9.5% but in no event less than 12.0% calculated on a quarterly basis on the outstanding carrying value of the investment. The investment was used to develop a 99 -bed skilled nursing facility in Boise, Idaho. In connection with its investment, CareTrust REIT holds an option to purchase the development at a fixed-formula price upon stabilization, with an initial lease yield of at least 9.0% . The project was completed in the first quarter 2018 and began lease-up in the second quarter of 2018. During the three months ended September 30, 2017 , the Company recognized $0.2 million in interest income from its preferred equity investments. The Company recognized no interest income from its preferred equity investments in the three months ended September 30, 2018. During the nine months ended September 30, 2018 and 2017 , the Company recognized $0.2 million and $1.5 million , respectively, in interest income from its preferred equity investments, of which $0 and $975,000 , respectively, was received in cash. Any unpaid amounts were added to the outstanding carrying values of the preferred equity investments. In October 2017, the Company provided the Providence Group a mortgage loan secured by a skilled nursing facility for approximately $12.5 million , which bears a fixed interest rate of 9% . The mortgage loan requires Providence Group to make monthly principal and interest payments and is set to mature on October 26, 2020. During the three and nine months ended September 30, 2018 , the Company recognized $0.3 million and $0.9 million , respectively, of interest income related to the mortgage loan. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired long-lived assets). Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; • 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: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. Financial Instruments: Considerable judgment is necessary to estimate the fair value of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the face values, carrying amounts and fair values of the Company’s financial instruments as of September 30, 2018 and December 31, 2017 using Level 2 inputs for the Notes (as defined in Note 6, Debt, below), and Level 3, inputs for all other financial instruments, is as follows (dollars in thousands): September 30, 2018 December 31, 2017 Face Carrying Fair Face Carrying Fair Financial assets: Preferred equity investments $ 4,531 $ 5,746 $ 6,022 $ 4,531 $ 5,550 $ 5,423 Mortgage loan receivable 12,423 12,337 12,423 12,517 12,399 12,517 Financial liabilities: Senior unsecured notes payable $ 300,000 $ 294,963 $ 294,000 $ 300,000 $ 294,395 $ 307,500 Cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities: These balances approximate their fair values due to the short-term nature of these instruments. Other loans receivable : The carrying amounts were accounted for at the unpaid loan balance. These balances approximate their fair values due to the short-term nature of these instruments. Preferred equity investments : The carrying amounts were accounted for at the unpaid principal balance, plus accrued return, net of reserves, assuming a hypothetical liquidation of the book values of the joint ventures. The fair values of the preferred equity investments were estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value and other credit enhancements. Mortgage loan receivable : The mortgage loan receivable is recorded at amortized cost, which consists of the outstanding unpaid principal balance, net of unamortized costs and fees directly associated with the origination of the loan. The fair values of the mortgage loan receivable were estimated using an internal valuation model that considered the expected future cash flows of the investment, the underlying collateral value and other credit enhancements. Senior unsecured notes payable : The fair value of the Notes (as defined below) was determined using third-party quotes derived from orderly trades. Unsecured revolving credit facility and senior unsecured term loan: The fair values approximate their carrying values as the interest rates are variable and approximate prevailing market interest rates for similar debt arrangements. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | DEBT The following table summarizes the balance of the Company’s indebtedness as of September 30, 2018 and December 31, 2017 (dollars in thousands): September 30, 2018 December 31, 2017 Principal Amount Deferred Loan Fees Carrying Value Principal Amount Deferred Loan Fees Carrying Value Senior unsecured notes payable $ 300,000 $ (5,037 ) $ 294,963 $ 300,000 $ (5,605 ) $ 294,395 Senior unsecured term loan 100,000 (412 ) 99,588 100,000 (483 ) 99,517 Unsecured revolving credit facility 90,000 — 90,000 165,000 — 165,000 $ 490,000 $ (5,449 ) $ 484,551 $ 565,000 $ (6,088 ) $ 558,912 Senior Unsecured Notes Payable On May 10, 2017, the Company’s wholly owned subsidiary, CTR Partnership, L.P. (the “Operating Partnership”), and its wholly owned subsidiary, CareTrust Capital Corp. (together with the Operating Partnership, the “Issuers”), completed an underwritten public offering of $300.0 million aggregate principal amount of 5.25% Senior Notes due 2025 (the “Notes”). The Notes were issued at par, resulting in gross proceeds of $300.0 million and net proceeds of approximately $294.0 million after deducting underwriting fees and other offering expenses. The Company used the net proceeds from the offering of the Notes to redeem all $260.0 million aggregate principal amount outstanding of its 5.875% Senior Notes due 2021, including payment of the redemption price at 102.938% and all accrued and unpaid interest thereon. The Company used the remaining portion of the net proceeds of the offering to pay borrowings outstanding under its senior unsecured revolving credit facility. The Notes mature on June 1, 2025 and bear interest at a rate of 5.25% per year. Interest on the Notes is payable on June 1 and December 1 of each year, beginning on December 1, 2017. The Issuers may redeem the Notes any time before June 1, 2020 at a redemption price of 100% of the principal amount of the Notes redeemed plus accrued and unpaid interest on the Notes, if any, to, but not including, the redemption date, plus a “make-whole” premium described in the indenture governing the Notes and, at any time on or after June 1, 2020, at the redemption prices set forth in the indenture. At any time on or before June 1, 2020, up to 40% of the aggregate principal amount of the Notes may be redeemed with the net proceeds of certain equity offerings if at least 60% of the originally issued aggregate principal amount of the Notes remains outstanding. In such case, the redemption price will be equal to 105.25% of the aggregate principal amount of the Notes to be redeemed plus accrued and unpaid interest, if any, to, but not including, the redemption date. If certain changes of control of the Company occur, holders of the Notes will have the right to require the Issuers to repurchase their Notes at 101% of the principal amount plus accrued and unpaid interest, if any, to, but not including, the repurchase date. The obligations under the Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by the Company and certain of the Company’s wholly owned existing and, subject to certain exceptions, future material subsidiaries (other than the Issuers); provided, however, that such guarantees are subject to automatic release under certain customary circumstances, as described in Note 12, Summarized Condensed Consolidating Information . The indenture contains customary covenants such as limiting the ability of the Company and its restricted subsidiaries to: incur or guarantee additional indebtedness; incur or guarantee secured indebtedness; pay dividends or distributions on, or redeem or repurchase, capital stock; make certain investments or other restricted payments; sell assets; enter into transactions with affiliates; merge or consolidate or sell all or substantially all of their assets; and create restrictions on the ability of the Issuers and their restricted subsidiaries to pay dividends or other amounts to the Issuers. The indenture also requires the Company and its restricted subsidiaries to maintain a specified ratio of unencumbered assets to unsecured indebtedness. These covenants are subject to a number of important and significant limitations, qualifications and exceptions. The indenture also contains customary events of default. As of September 30, 2018 , the Company was in compliance with all applicable financial covenants under the indenture. Unsecured Revolving Credit Facility and Term Loan On August 5, 2015, the Company, CareTrust GP, LLC, the Operating Partnership, as the borrower, and certain of its wholly-owned subsidiaries entered into a credit and guaranty agreement with KeyBank National Association, as administrative agent, an issuing bank and swingline lender, and the lenders party thereto (the “Credit Agreement”). The Credit Agreement initially provided for an unsecured asset-based revolving credit facility (the “Revolving Facility”) with commitments in an aggregate principal amount of $300.0 million from a syndicate of banks and other financial institutions, and an accordion feature that allowed the Operating Partnership to increase the borrowing availability by up to an additional $200.0 million . A portion of the proceeds of the Revolving Facility were used to pay off and terminate the Company’s existing secured asset-based revolving credit facility under a credit agreement dated May 30, 2014, with SunTrust Bank, as administrative agent, and the lenders party thereto. On February 1, 2016, the Company, CareTrust GP, LLC, the Operating Partnership, as the borrower, and certain of its wholly owned subsidiaries entered into the First Amendment (the “Amendment”) to the Credit Agreement. Pursuant to the Amendment, (i) commitments in respect of the Revolving Facility were increased by $100.0 million to $400.0 million total, (ii) a new $100.0 million non-amortizing unsecured term loan (the “Term Loan” and, together with the Revolving Facility, the “Credit Facility”) was funded, and (iii) the uncommitted incremental facility was increased by $50.0 million to $250.0 million . The Revolving Facility continues to mature on August 5, 2019, subject to two , six -month extension options. The Term Loan, which matures on February 1, 2023, may be prepaid at any time subject to a 2% premium in the first year after issuance and a 1% premium in the second year after issuance. Approximately $95.0 million of the proceeds of the Term Loan were used to pay off and terminate the Company’s existing secured mortgage indebtedness under the Fifth Amended and Restated Loan Agreement, dated May 30, 2014 with General Electric Capital Corporation, as agent and lender, and the other lenders party thereto. The Company expects to use borrowings under the Credit Facility for working capital purposes, to fund acquisitions and for general corporate purposes. As of September 30, 2018 , there was $90.0 million outstanding under the Revolving Facility. The interest rates applicable to loans under the Revolving Facility are, at the Company’s option, equal to either a base rate plus a margin ranging from 0.75% to 1.40% per annum or applicable LIBOR plus a margin ranging from 1.75% to 2.40% per annum based on the debt to asset value ratio of the Company and its subsidiaries (subject to decrease at the Company’s election if the Company obtains certain specified investment grade ratings on its senior long term unsecured debt). In addition, the Company pays a commitment fee on the unused portion of the commitments under the Revolving Facility of 0.15% or 0.25% per annum, based upon usage of the Revolving Facility (unless the Company obtains certain specified investment grade ratings on its senior long term unsecured debt and elects to decrease the applicable margin as described above, in which case the Company will pay a facility fee on the revolving commitments ranging from 0.125% to 0.30% per annum based upon the credit ratings of its senior long term unsecured debt). Pursuant to the Amendment, the interest rates applicable to the Term Loan are, at the Company’s option, equal to either a base rate plus a margin ranging from 0.95% to 1.60% per annum or applicable LIBOR plus a margin ranging from 1.95% to 2.60% per annum based on the debt to asset value ratio of the Company and its subsidiaries (subject to decrease at the Company’s election if the Company obtains certain specified investment grade ratings on its senior long term unsecured debt). The Credit Facility is guaranteed, jointly and severally, by the Company and its wholly-owned subsidiaries that are party to the Credit Agreement (other than the Operating Partnership). The Credit Agreement contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, amend certain material agreements and pay certain dividends and other restricted payments. The Credit Agreement requires the Company to comply with financial maintenance covenants to be tested quarterly, consisting of a maximum debt to asset value ratio, a minimum fixed charge coverage ratio, a minimum tangible net worth, a maximum cash distributions to operating income ratio, a maximum secured debt to asset value ratio and a maximum secured recourse debt to asset value ratio. The Credit Agreement also contains certain customary events of default, including that the Company is required to operate in conformity with the requirements for qualification and taxation as a REIT. As of September 30, 2018 , the Company was in compliance with all applicable financial covenants under the Credit Agreement. Interest Expense During the three months ended September 30, 2018 , the Company incurred $6.8 million of interest expense, which included $0.5 million of amortization of deferred financing costs. During the three months ended September 30, 2017 , the Company incurred $5.6 million of interest expense, which included $0.5 million of amortization of deferred financing costs. During the nine months ended September 30, 2018 , the Company incurred $21.2 million of interest expense, which included $1.5 million of amortization of deferred financing costs. During the nine months ended September 30, 2017 , the Company incurred $17.7 million of interest expense, which included $1.6 million of amortization of deferred financing costs. As of September 30, 2018 and December 31, 2017 , the Company’s interest payable was $5.3 million and $1.4 million , respectively. Loss on the Extinguishment of Debt During the nine months ended September 30, 2017 , the loss on the extinguishment of debt included the redemption price, stated at 102.938% , of $7.6 million and a $4.2 million write-off of deferred financing costs associated with the redemption of the Company’s 5.875% Senior Notes due 2021. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Equity | EQUITY Common Stock At-The-Market Offering —During the second quarter of 2017, the Company entered into an equity distribution agreement to issue and sell, from time to time, up to $300.0 million in aggregate offering price of its common stock through an “at-the-market” equity offering program (the “ATM Program”). The following table summarizes the quarterly ATM Program activity for 2018 (in thousands, except per share amounts): For the Three Months Ended March 31, 2018 June 30, 2018 September 30, 2018 Total Number of shares — 2,989 4,772 7,761 Average sales price per share $ — $ 16.13 $ 17.62 $ 17.04 Gross proceeds* $ — $ 48,198 $ 84,077 $ 132,275 *Total gross proceeds is before $0.6 million and $1.1 million of commissions paid to the sales agents during the three months ended June 30, 2018 and September 30, 2018, respectively. As of September 30, 2018 , the Company had approximately $103.8 million available for future issuances under the ATM Program. Dividends on Common Stock —The following table summarizes the cash dividends per share of common stock declared by the Company’s Board of Directors for 2018 : For the Three Months Ended March 31, 2018 June 30, 2018 September 30, 2018 Dividends declared $ 0.205 $ 0.205 $ 0.205 Dividends payment date April 13, 2018 July 13, 2018 October 15, 2018 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION All stock-based awards are subject to the terms of the CareTrust REIT, Inc. and CTR Partnership, L.P. Incentive Award Plan (the “Plan”). The Plan provides for the granting of stock-based compensation, including stock options, restricted stock, performance awards, restricted stock units and other incentive awards to officers, employees and directors in connection with their employment with or services provided to the Company. Restricted Stock Awards — In connection with the separation of Ensign’s healthcare business and its real estate business into two separate and independently publicly traded companies (the “Spin-Off”), employees of Ensign who had unvested shares of restricted stock were given one share of CareTrust REIT unvested restricted stock totaling 207,580 shares at the Spin-Off. These restricted shares are subject to a time vesting provision only and the Company does not recognize any stock compensation expense associated with these awards. During the nine months ended September 30, 2018 , 10,960 shares vested or were forfeited. As of September 30, 2018 , there were 4,020 unvested restricted stock awards outstanding that were issued in connection with the Spin-Off. In February 2018, the Compensation Committee of the Company’s Board of Directors granted 141,060 shares of restricted stock to officers and employees. Each share had a fair market value on the date of grant of $15.13 per share, based on the market price of the Company’s common stock on that date, and the shares vest in four equal annual installments beginning on the first anniversary of the grant date. Additionally, the Compensation Committee granted 120,460 performance stock awards to officers and employees. Each share had a fair market value on the date of grant of $15.13 per share, based on the market price of the Company’s common stock on that date, and the shares may vest if the threshold performance criterion is met. In May 2018, the Compensation Committee of the Company's Board of Directors granted 26,462 shares of restricted stock to members of the Board of Directors. Each share had a fair market value on the date of grant of $16.44 per share, based on the market price of the Company's common stock on that date, and the shares vest in full on the earlier to occur of May 30, 2019 or when the Company holds its 2019 Annual Meeting. The following table summarizes the stock-based compensation expense recognized (dollars in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2018 2017 2018 2017 Stock-based compensation expense $ 988 $ 656 $ 2,816 $ 1,792 As of September 30, 2018 , there was $5.4 million of unamortized stock-based compensation expense related to unvested awards and the weighted-average remaining vesting period of such awards was 2.2 years . |
Earnings Per Common Share
Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | EARNINGS PER COMMON SHARE The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the three and nine months ended September 30, 2018 and 2017 , and reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS (amounts in thousands, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income $ 14,510 $ 11,311 $ 42,384 $ 23,622 Less: Net income allocated to participating securities (84 ) (83 ) (282 ) (277 ) Numerator for basic and diluted earnings available to common stockholders $ 14,426 $ 11,228 $ 42,102 $ 23,345 Denominator: Weighted-average basic common shares outstanding 81,490 75,471 77,811 71,693 Weighted-average diluted common shares outstanding 81,490 75,471 77,811 71,693 Earnings per common share, basic $ 0.18 $ 0.15 $ 0.54 $ 0.33 Earnings per common share, diluted $ 0.18 $ 0.15 $ 0.54 $ 0.33 The Company’s unvested restricted shares associated with its incentive award plan and unvested restricted shares issued to employees of Ensign at the Spin-Off have been excluded from the above calculation of earnings per diluted share for the three and nine months ended September 30, 2018 and 2017 , as their inclusion would have been anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES U.S. Government Settlement —In October 2013, Ensign completed and executed a settlement agreement (the “Settlement Agreement”) with the U.S. Department of Justice (“DOJ”). This settlement agreement fully and finally resolved a DOJ investigation of Ensign related primarily to claims submitted to the Medicare program for rehabilitation services provided at skilled nursing facilities in California and certain ancillary claims. Pursuant to the Settlement Agreement, Ensign made a single lump-sum remittance to the government in the amount of $48.0 million in October 2013. Ensign denied engaging in any illegal conduct and agreed to the settlement amount without any admission of wrongdoing in order to resolve the allegations and avoid the uncertainty and expense of protracted litigation. In connection with the settlement and effective as of October 1, 2013, Ensign entered into a five -year corporate integrity agreement (the “CIA”) with the Office of Inspector General-Health and Human Services. The CIA acknowledges the existence of Ensign’s current compliance program, and requires that Ensign continue, during the term of the CIA, to maintain a compliance program designed to promote compliance with the statutes, regulations, and written directives of Medicare, Medicaid, and all other Federal health care programs. Ensign is also required to maintain several elements of its existing program during the term of the CIA, including maintaining a compliance officer, a compliance committee of the board of directors, and a code of conduct. The CIA requires that Ensign conduct certain additional compliance-related activities during the term of the CIA, including various training and monitoring procedures, and maintaining a disciplinary process for compliance obligations. Participation in federal healthcare programs by Ensign is not affected by the Settlement Agreement or the CIA. In the event of an uncured material breach of the CIA, Ensign could be excluded from participation in federal healthcare programs and/or subject to prosecution. The Company is subject to certain continuing operational obligations as part of Ensign’s compliance program pursuant to the CIA, but otherwise has no liability related to the DOJ investigation. Legal Matters —The Company and its subsidiaries are and may become from time to time a party to various claims and lawsuits arising in the ordinary course of business, which are not individually or in the aggregate anticipated to have a material adverse effect on the Company’s results of operations, financial condition or cash flows. Claims and lawsuits may include matters involving general or professional liability asserted against the Company’s tenants, which are the responsibility of the Company’s tenants and for which the Company is entitled to be indemnified by its tenants under the insurance and indemnification provisions in the applicable leases. |
Concentration of Risk
Concentration of Risk | 9 Months Ended |
Sep. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risk | CONCENTRATION OF RISK Major operator concentrations – As of September 30, 2018 , Ensign leased 92 skilled nursing, multi-service campuses, assisted living and independent living facilities which had a total of 9,805 operational beds and are located in Arizona, California, Colorado, Idaho, Iowa, Nebraska, Nevada, Texas, Utah and Washington. The four states in which Ensign leases the highest concentration of properties are California, Texas, Utah and Arizona. As of September 30, 2018 , Ensign represents $59.1 million , or 42% , of the Company’s rental income on an annualized run-rate basis. Ensign is subject to the registration and reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Ensign’s financial statements, as filed with the SEC, can be found at Ensign’s website http://www.ensigngroup.net. |
Summarized Condensed Consolidat
Summarized Condensed Consolidating Information | 9 Months Ended |
Sep. 30, 2018 | |
Summarized Condensed Consolidating Information [Abstract] | |
Summarized Condensed Consolidating Information | SUMMARIZED CONDENSED CONSOLIDATING INFORMATION The Notes issued by the Operating Partnership and CareTrust Capital Corp. on May 10, 2017 are jointly and severally, fully and unconditionally, guaranteed by CareTrust REIT, Inc., as the parent guarantor (the “Parent Guarantor”), and the wholly owned subsidiaries of the Parent Guarantor other than the Issuers (collectively, the “Subsidiary Guarantors” and, together with the Parent Guarantor, the “Guarantors”), subject to automatic release under certain customary circumstances, including if the Subsidiary Guarantor is sold or sells all or substantially all of its assets, the Subsidiary Guarantor is designated “unrestricted” for covenant purposes under the indenture governing the Notes, the Subsidiary Guarantor’s guarantee of other indebtedness which resulted in the creation of the guarantee of the Notes is terminated or released, or the requirements for legal defeasance or covenant defeasance or to discharge the indenture have been satisfied. The following provides information regarding the entity structure of the Parent Guarantor, the Issuers and the Subsidiary Guarantors: CareTrust REIT, Inc. – The Parent Guarantor was formed on October 29, 2013 in anticipation of the Spin-Off and the related transactions and was a wholly owned subsidiary of Ensign prior to the effective date of the Spin-Off on June 1, 2014. The Parent Guarantor did not conduct any operations or have any business prior to the date of the consummation of the Spin-Off related transactions. CTR Partnership, L.P. and CareTrust Capital Corp. – The Issuers, each of which is a wholly owned subsidiary of the Parent Guarantor, were formed on May 8, 2014 and May 9, 2014 , respectively, in anticipation of the Spin-Off and the related transactions. The Issuers did not conduct any operations or have any business prior to the date of the consummation of the Spin-Off related transactions. Subsidiary Guarantors – The Subsidiary Guarantors consist of all of the subsidiaries of the Parent Guarantor other than the Issuers. Pursuant to Rule 3-10 of Regulation S-X, the following summarized consolidating information is provided for the Parent Guarantor, the Issuers, and the Subsidiary Guarantors. There are no subsidiaries of the Company other than the Issuers and the Subsidiary Guarantors. This summarized financial information has been prepared from the financial statements of the Company and the books and records maintained by the Company. CONDENSED CONSOLIDATING BALANCE SHEETS SEPTEMBER 30, 2018 (in thousands, except share and per share amounts) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Assets: Real estate investments, net $ — $ 856,659 $ 332,790 $ — $ 1,189,449 Other real estate investments, net — 12,337 5,746 — 18,083 Cash and cash equivalents — 15,745 — — 15,745 Accounts and other receivables, net — 9,567 2,817 — 12,384 Prepaid expenses and other assets — 3,789 3 — 3,792 Deferred financing costs, net — 904 — — 904 Investment in subsidiaries 737,296 474,524 — (1,211,820 ) — Intercompany — — 136,277 (136,277 ) — Total assets $ 737,296 $ 1,373,525 $ 477,633 $ (1,348,097 ) $ 1,240,357 Liabilities and Equity: Senior unsecured notes payable, net $ — $ 294,963 $ — $ — $ 294,963 Senior unsecured term loan, net — 99,588 — — 99,588 Unsecured revolving credit facility — 90,000 — — 90,000 Accounts payable and accrued liabilities — 15,401 3,109 — 18,510 Dividends payable 17,246 — — — 17,246 Intercompany — 136,277 — (136,277 ) — Total liabilities 17,246 636,229 3,109 (136,277 ) 520,307 Equity: Common stock, $0.01 par value; 500,000,000 shares authorized, 83,353,226 shares issued and outstanding as of September 30, 2018 834 — — — 834 Additional paid-in capital 915,235 629,525 321,761 (951,286 ) 915,235 Cumulative distributions in excess of earnings (196,019 ) 107,771 152,763 (260,534 ) (196,019 ) Total equity 720,050 737,296 474,524 (1,211,820 ) 720,050 Total liabilities and equity $ 737,296 $ 1,373,525 $ 477,633 $ (1,348,097 ) $ 1,240,357 CONDENSED CONSOLIDATING BALANCE SHEETS DECEMBER 31, 2017 (in thousands, except share and per share amounts) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Assets: Real estate investments, net $ — $ 805,826 $ 346,435 $ — $ 1,152,261 Other real estate investments, net — 12,399 5,550 — 17,949 Cash and cash equivalents — 6,909 — — 6,909 Accounts and other receivables, net — 2,945 2,309 — 5,254 Prepaid expenses and other assets — 893 2 — 895 Deferred financing costs, net — 1,718 — — 1,718 Investment in subsidiaries 619,075 444,120 — (1,063,195 ) — Intercompany — — 92,061 (92,061 ) — Total assets $ 619,075 $ 1,274,810 $ 446,357 $ (1,155,256 ) $ 1,184,986 Liabilities and Equity: Senior unsecured notes payable, net $ — $ 294,395 $ — $ — $ 294,395 Senior unsecured term loan, net — 99,517 — — 99,517 Unsecured revolving credit facility — 165,000 — — 165,000 Accounts payable and accrued liabilities — 15,176 2,237 — 17,413 Dividends payable 14,044 — — — 14,044 Intercompany — 92,061 — (92,061 ) — Total liabilities 14,044 666,149 2,237 (92,061 ) 590,369 Equity: Common stock, $0.01 par value; 500,000,000 shares authorized, 75,478,202 shares issued and outstanding as of December 31, 2017 755 — — — 755 Additional paid-in capital 783,237 546,097 321,761 (867,858 ) 783,237 Cumulative distributions in excess of earnings (178,961 ) 62,564 122,359 (195,337 ) (189,375 ) Total equity 605,031 608,661 444,120 (1,063,195 ) 594,617 Total liabilities and equity $ 619,075 $ 1,274,810 $ 446,357 $ (1,155,256 ) $ 1,184,986 CONDENSED CONSOLIDATING INCOME STATEMENTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018 (in thousands) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Revenues: Rental income $ — $ 20,554 $ 14,778 $ — $ 35,332 Tenant reimbursements — 1,804 1,186 — 2,990 Independent living facilities — — 871 — 871 Interest and other income — 317 — — 317 Total revenues — 22,675 16,835 — 39,510 Expenses: Depreciation and amortization — 6,833 4,518 — 11,351 Interest expense — 6,805 — — 6,805 Property taxes — 1,804 1,186 — 2,990 Independent living facilities — — 766 — 766 General and administrative 987 2,101 — — 3,088 Total expenses 987 17,543 6,470 — 25,000 Income in Subsidiary 15,497 10,365 — (25,862 ) — Net income $ 14,510 $ 15,497 $ 10,365 $ (25,862 ) $ 14,510 CONDENSED CONSOLIDATING INCOME STATEMENTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2017 (in thousands) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Revenues: Rental income $ — $ 14,987 $ 14,417 $ — $ 29,404 Tenant reimbursements — 1,341 1,202 — 2,543 Independent living facilities — — 825 — 825 Interest and other income — — 176 — 176 Total revenues — 16,328 16,620 — 32,948 Expenses: Depreciation and amortization — 5,014 4,731 — 9,745 Interest expense — 5,592 — — 5,592 Property taxes — 1,341 1,202 — 2,543 Independent living facilities — — 698 — 698 General and administrative 671 2,388 — — 3,059 Total expenses 671 14,335 6,631 — 21,637 Income in Subsidiary 11,982 9,989 — (21,971 ) — Net income $ 11,311 $ 11,982 $ 9,989 $ (21,971 ) $ 11,311 CONDENSED CONSOLIDATING INCOME STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 (in thousands) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Revenues: Rental income $ — $ 60,122 $ 43,734 $ — $ 103,856 Tenant reimbursements — 5,360 3,614 — 8,974 Independent living facilities — — 2,515 — 2,515 Interest and other income — 1,039 196 — 1,235 Total revenues — 66,521 50,059 — 116,580 Expenses: Depreciation and amortization — 20,488 13,739 — 34,227 Interest expense — 21,182 — — 21,182 Property taxes — 5,360 3,614 — 8,974 Independent living facilities — — 2,226 — 2,226 General and administrative 2,822 6,740 76 — 9,638 Total expenses 2,822 53,770 19,655 — 76,247 Gain on sale of real estate — 2,051 — — 2,051 Income in Subsidiary 45,206 30,404 — (75,610 ) — Net income $ 42,384 $ 45,206 $ 30,404 $ (75,610 ) $ 42,384 CONDENSED CONSOLIDATING INCOME STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 (in thousands) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Revenues: Rental income $ — $ 42,503 $ 42,751 $ — $ 85,254 Tenant reimbursements — 3,577 3,676 — 7,253 Independent living facilities — — 2,407 — 2,407 Interest and other income — — 1,471 — 1,471 Total revenues — 46,080 50,305 — 96,385 Expenses: Depreciation and amortization — 13,730 14,426 — 28,156 Interest expense — 17,690 — — 17,690 Loss on the extinguishment of debt — 11,883 — — 11,883 Property taxes — 3,577 3,676 — 7,253 Independent living facilities — — 2,003 — 2,003 Impairment of real estate investment — — 890 — 890 General and administrative 1,948 6,416 62 — 8,426 Total expenses 1,948 53,296 21,057 — 76,301 Gain on disposition of other real estate investment — — 3,538 — 3,538 Income in Subsidiary 25,570 32,786 — (58,356 ) — Net income $ 23,622 $ 25,570 $ 32,786 $ (58,356 ) $ 23,622 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 (in thousands) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Cash flows from operating activities: Net cash (used in) provided by operating activities $ (7 ) $ 28,087 $ 44,310 $ — $ 72,390 Cash flows from investing activities: Acquisitions of real estate — (75,621 ) — — (75,621 ) Improvements to real estate — (5,376 ) (25 ) — (5,401 ) Purchases of equipment, furniture and fixtures — (1,193 ) (69 ) — (1,262 ) Investment in real estate mortgage and other loans receivable — (2,598 ) — — (2,598 ) Principal payments received on real estate mortgage and other loans receivable — 893 — — 893 Escrow deposit for acquisitions of real estate — (1,000 ) — — (1,000 ) Net proceeds from the sale of real estate — 13,004 — — 13,004 Distribution from subsidiary 45,827 — — (45,827 ) — Intercompany financing (129,251 ) 44,216 — 85,035 — Net cash used in investing activities (83,424 ) (27,675 ) (94 ) 39,208 (71,985 ) Cash flows from financing activities: Proceeds from the issuance of common stock, net 130,546 — — — 130,546 Borrowings under unsecured revolving credit facility — 60,000 — — 60,000 Payments on unsecured revolving credit facility — (135,000 ) — — (135,000 ) Net-settle adjustment on restricted stock (1,288 ) — — — (1,288 ) Dividends paid on common stock (45,827 ) — — — (45,827 ) Distribution to Parent — (45,827 ) — 45,827 — Intercompany financing — 129,251 (44,216 ) (85,035 ) — Net cash provided by (used in) financing activities 83,431 8,424 (44,216 ) (39,208 ) 8,431 Net increase in cash and cash equivalents — 8,836 — — 8,836 Cash and cash equivalents beginning of period — 6,909 — — 6,909 Cash and cash equivalents end of period $ — $ 15,745 $ — $ — $ 15,745 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 (in thousands) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Cash flows from operating activities: Net cash (used in) provided by operating activities: $ (157 ) $ 17,946 $ 49,144 $ — $ 66,933 Cash flows from investing activities: Acquisitions of real estate — (222,463 ) — — (222,463 ) Improvements to real estate — (571 ) (50 ) — (621 ) Purchases of equipment, furniture and fixtures — (292 ) (67 ) — (359 ) Escrow deposit for acquisitions of real estate — (1,000 ) — — (1,000 ) Sale of other real estate investment — — 7,500 — 7,500 Distribution from subsidiary 38,544 — — (38,544 ) — Intercompany financing (169,391 ) 56,527 — 112,864 — Net cash (used in) provided by investing activities (130,847 ) (167,799 ) 7,383 74,320 (216,943 ) Cash flows from financing activities: Proceeds from the issuance of common stock, net 170,414 — — — 170,414 Proceeds from the issuance of senior unsecured notes payable — 300,000 — — 300,000 Borrowings under unsecured revolving credit facility — 158,000 — — 158,000 Payments on senior unsecured notes payable — (267,639 ) — — (267,639 ) Payments on unsecured revolving credit facility — (158,000 ) — — (158,000 ) Payments of deferred financing costs — (6,047 ) — — (6,047 ) Net-settle adjustment on restricted stock (866 ) — — — (866 ) Dividends paid on common stock (38,544 ) — — — (38,544 ) Distribution to Parent — (38,544 ) — 38,544 — Intercompany financing — 169,391 (56,527 ) (112,864 ) — Net cash provided by (used in) financing activities 131,004 157,161 (56,527 ) (74,320 ) 157,318 Net increase in cash and cash equivalents — 7,308 — — 7,308 Cash and cash equivalents beginning of period — 7,500 — — 7,500 Cash and cash equivalents end of period $ — $ 14,808 $ — $ — $ 14,808 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS The Company evaluates subsequent events in accordance with ASC Topic 855, Subsequent Events . The Company evaluates subsequent events up until the date the condensed consolidated financial statements are issued. In October 2018, the Company, in two separate transactions, acquired one skilled nursing facility and one multi-service campus. The aggregate purchase price was approximately $12.0 million , which includes estimated capitalized acquisition costs. These two acquisitions will generate initial annual cash rents of approximately $1.1 million and were funded using $7.0 million in cash on hand and $5.0 million in borrowings under the Company’s senior unsecured revolving credit facility. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation —The accompanying condensed consolidated financial statements of the Company reflect, for all periods presented, the historical financial position, results of operations and cash flows of the Company and its consolidated subsidiaries consisting of (i) the net-leased skilled nursing, multi-service campuses, assisted living and independent living facilities, (ii) the operations of the three independent living facilities that the Company owns and operates; and (iii) the preferred equity investments and the mortgage loan receivable. The accompanying condensed consolidated financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the disclosures required by GAAP for a complete set of annual audited financial statements. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 . In the opinion of management, all adjustments which are of a normal and recurring nature and considered necessary for a fair presentation of the results of the interim periods presented have been included. The results of operations for the interim periods are not necessarily indicative of results for the full year. All intercompany transactions and account balances within the Company have been eliminated. |
Estimates and Assumptions | Estimates and Assumptions —The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that the assumptions and estimates used in preparation of the underlying consolidated financial statements are reasonable. Actual results, however, could differ from those estimates and assumptions. |
Real Estate Depreciation and Amortization | Real Estate Depreciation and Amortization —Real estate costs related to the acquisition and improvement of properties are capitalized and amortized over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows: Buildings 25-40 years Building improvements 10-25 years Tenant improvements Shorter of lease term or expected useful life Integral equipment, furniture and fixtures 5 years Identified intangible assets Shorter of lease term or expected useful life |
Real Estate Acquisition Valuation | Real Estate Acquisition Valuation — In accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations , the Company records the acquisition of income-producing real estate as a business combination. If the acquisition does not meet the definition of a business, the Company records the acquisition as an asset acquisition. Under both methods, all assets acquired and liabilities assumed are measured at their acquisition date fair values. For transactions that are business combinations, acquisition costs are expensed as incurred and restructuring costs that do not meet the definition of a liability at the acquisition date are expensed in periods subsequent to the acquisition date. For transactions that are asset acquisitions, acquisition costs are capitalized as incurred. The Company assesses the acquisition date fair values of all tangible assets, identifiable intangibles and assumed liabilities using methods similar to those used by independent appraisers, generally utilizing a discounted cash flow analysis that applies appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company’s management to make significant assumptions to estimate market lease rates, property-operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The use of inappropriate assumptions would result in an incorrect valuation of the Company’s acquired tangible assets, identifiable intangibles and assumed liabilities, which would impact the amount of the Company’s net income. As part of the Company’s real estate acquisitions, the Company may commit to provide contingent payments to a seller or lessee (e.g., an earn-out payable upon the applicable property achieving certain financial metrics). Typically, when the contingent payments are funded, cash rent is increased by the amount funded multiplied by a rate stipulated in the agreement. Generally, if the contingent payment is an earn-out provided to the seller, the payment is capitalized to the property’s basis. If the contingent payment is an earn-out provided to the lessee, the payment is recorded as a lease incentive and is amortized as a yield adjustment over the life of the lease. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets —At each reporting period, management evaluates the Company’s real estate investments for impairment indicators, including the evaluation of the useful lives of the Company’s assets. Management also assesses the carrying value of the Company’s real estate investments whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The judgment regarding the existence of impairment indicators is based on factors such as, but not limited to, market conditions, operator performance and legal structure. If indicators of impairment are present, management evaluates the carrying value of the related real estate investments in relation to the future undiscounted cash flows of the underlying facilities. Provisions for impairment losses related to long-lived assets are recognized when expected future undiscounted cash flows are determined to be less than the carrying values of the assets. An adjustment is made to the net carrying value of the real estate investments for the excess of carrying value over fair value. All impairments are taken as a period cost at that time, and depreciation is adjusted going forward to reflect the new value assigned to the asset. If the Company decides to sell real estate properties, it evaluates the recoverability of the carrying amounts of the assets. If the evaluation indicates that the carrying value is not recoverable from estimated net sales proceeds, the property is written down to estimated fair value less costs to sell. In the event of impairment, the fair value of the real estate investment is determined by market research, which includes valuing the property in its current use as well as other alternative uses, and involves significant judgment. Management’s estimates of cash flows and fair values of the properties are based on current market conditions and consider matters such as rental rates and occupancies for comparable properties, recent sales data for comparable properties, and, where applicable, contracts or the results of negotiations with purchasers or prospective purchasers. The Company’s ability to accurately estimate future cash flows and estimate and allocate fair values impacts the timing and recognition of impairments. While the Company believes its assumptions are reasonable, changes in these assumptions may have a material impact on financial results. |
Other Real Estate Investments, Net | Other Real Estate Investments, Net — Included in Other Real Estate Investments, Net are two preferred equity investments and one mortgage loan receivable. Preferred equity investments are accounted for at unpaid principal balance, plus accrued return, net of reserves. The Company recognizes return income on a quarterly basis based on the outstanding investment including any accrued and unpaid return, to the extent there is outside contributed equity or cumulative earnings from operations. As the preferred member of the joint venture, the Company is not entitled to share in the joint venture’s earnings or losses. Rather, the Company is entitled to receive a preferred return, which is deferred if the cash flow of the joint venture is insufficient to pay all of the accrued preferred return. The unpaid accrued preferred return is added to the balance of the preferred equity investment up to the estimated economic outcome assuming a hypothetical liquidation of the book value of the joint venture. The Company anticipates any unpaid accrued preferred return, whether recorded or unrecorded by the Company, will be repaid upon redemption or as available cash flow is distributed from the joint venture. The Company’s mortgage loan receivable is recorded at amortized cost, which consists of the outstanding unpaid principal balance, net of unamortized costs and fees directly associated with the origination of the loan. Interest income on the Company’s mortgage loan receivable is recognized over the life of the investment using the interest method. Origination costs and fees directly related to mortgage loans receivable are amortized over the term of the loan as an adjustment to interest income. The Company evaluates at each reporting period each of its other real estate investments for indicators of impairment. An investment is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms. A reserve is established for the excess of the carrying value of the investment over its fair value. |
Cash and Cash Equivalents | Cash and Cash Equivalents —Cash and cash equivalents consist of bank term deposits and money market funds with original maturities of three months or less at time of purchase and therefore approximate fair value. The fair value of these investments is determined based on “Level 1” inputs, which consist of unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets. The Company places its cash and short-term investments with high credit quality financial institutions. The Company’s cash and cash equivalents balance periodically exceeds federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. |
Prepaid expenses and other assets | Prepaid expenses and other assets —Prepaid expenses and other assets consist of prepaid expenses, deposits, pre-acquisition costs and other loans receivable. |
Deferred Financing Costs | Deferred Financing Costs —External costs incurred from placement of the Company’s debt are capitalized and amortized on a straight-line basis over the terms of the related borrowings, which approximates the effective interest method. Deferred financing costs on the Company’s Notes and Term Loan (each as defined in Note 6 , Debt, below) are netted against the outstanding debt amounts on the Company’s balance sheet. Deferred financing costs on the Company’s Revolving Facility (as defined in Note 6, Debt, below) are included in assets on the Company’s balance sheet. Amortization of deferred financing costs is classified as interest expense in the Company’s condensed consolidated income statements. Accumulated amortization of deferred financing costs was $4.6 million and $3.2 million at September 30, 2018 and December 31, 2017 , respectively. When financings are terminated, unamortized deferred financing costs, as well as charges incurred for the termination, are expensed at the time the termination is made. Gains and losses from the extinguishment of debt are presented within income from continuing operations in the Company’s condensed consolidated income statements. |
Revenue Recognition | Revenue Recognition —The Company recognizes rental revenue, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, if any, from tenants under lease arrangements with minimum fixed and determinable increases on a straight-line basis over the non-cancellable term of the related leases when collectability is reasonably assured. The Company evaluates the collectability of rents and other receivables on a regular basis based on factors including, among others, payment history, the operations, the asset type and current economic conditions. Tenant recoveries related to the reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period the expenses are incurred and presented gross if the Company is the primary obligor and, with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk. For each of the three and nine months ended September 30, 2018 and 2017 , such tenant reimbursement revenues consisted of real estate taxes. Contingent revenue, if any, is not recognized until all possible contingencies have been eliminated. If the Company’s evaluation of applicable factors indicates it may not recover the full value of the receivable, the Company provides a reserve against the portion of the receivable that it estimates may not be recovered. This analysis requires the Company to determine whether there are factors indicating a receivable may not be fully collectible and to estimate the amount of the receivable that may not be collected. As of September 30, 2018 and December 31, 2017 , Accounts and other receivables, net included $1.3 million and $0.8 million for unpaid cash rents and $11.6 million and $9.6 million for other tenant receivables, respectively, of which $10.4 million was reserved as of September 30, 2018 and December 31, 2017 , related to the properties previously net leased to subsidiaries of Pristine Senior Living, LLC (“Pristine”). See Note 3, Real Estate Investments, Net for further discussion. The Company evaluates the collectability of straight-line rent receivable balances on an ongoing basis and provides reserves against receivables it determines may not be fully recoverable. The Company recorded straight-line rental income of $0.7 million and $2,000 during the three months ended September 30, 2018 and 2017 , respectively. The Company recorded straight-line rental income of $1.6 million and $0.1 million during the nine months ended September 30, 2018 and 2017 , respectively. Accounts and other receivables, net included $2.1 million and $0.5 million in straight-line rents receivable at September 30, 2018 and December 31, 2017 , respectively. |
Income Taxes | Income Taxes —The Company has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). The Company believes it has been organized and has operated, and the Company intends to continue to operate, in a manner to qualify for taxation as a REIT under the Code. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute to its stockholders at least 90% of the Company’s annual REIT taxable income (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 GAAP). As a REIT, the Company generally will not be subject to federal income tax to the extent it distributes as qualifying dividends all of its REIT taxable income to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. |
Stock-Based Compensation | Stock-Based Compensation —The Company accounts for share-based payment awards in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). ASC 718 requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. ASC 718 requires all entities to apply a fair value-based measurement method in accounting for share-based payment transactions with directors, officers and employees except for equity instruments held by employee share ownership plans. |
Concentration of Credit Risk | Concentration of Credit Risk —The Company is subject to concentrations of credit risk consisting primarily of operating leases on the Company’s owned properties. See Note 11, Concentration of Risk , for a discussion of major operator concentration. |
Segment Disclosures | Segment Disclosures —The Financial Accounting Standards Board (“FASB”) accounting guidance regarding disclosures about segments of an enterprise and related information establishes standards for the manner in which public business enterprises report information about operating segments. The Company has one reportable segment consisting of investments in healthcare-related real estate assets. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share —The Company calculates earnings (loss) per share (“EPS”) in accordance with ASC Topic 260, Earnings Per Share . Basic EPS is computed by dividing net income applicable to common stock by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution for all potentially-dilutive securities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASC 842”) that sets out the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASC 842 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASC 842 is expected to result in the recognition of a right-to-use asset and related liability to account for the Company’s future obligations for which it is the lessee. As of September 30, 2018 , the remaining contractual payments under the Company’s lease agreements aggregated $0.2 million . Additionally, ASC 842 will require that lessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Under ASC 842, allocated payroll costs and other costs that are incurred regardless of whether the lease is obtained will no longer be capitalized as initial direct costs and instead will be expensed as incurred. During the nine months ended September 30, 2018 , the Company did not capitalize any allocated payroll costs. Lessors will continue to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases, and operating leases. ASC 842 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. Tenant recoveries that qualify as lease components, which relate to the right to use the leased asset (e.g., property taxes, insurance), will be accounted for under ASC 842. Tenant recoveries that qualify as non-lease components, which relate to payments for goods or services that are transferred separately from the right to use the underlying asset, including tenant recoveries related to payments for maintenance activities and common area expenses, will be accounted for under the new revenue recognition ASC 606 (as defined below) upon adoption of the new lease ASC 842 on January 1, 2019 for any new lease or any modified lease. In July 2018, the FASB finalized an amendment to ASC 842 that allows lessors to elect, as a practical expedient, not to separate lease and non-lease components (such as services rendered) in a contract for the purpose of revenue recognition and disclosure. The practical expedient can only be applied to leasing arrangements for which (i) the timing and pattern of transfer are the same for the lease and non-lease components and (ii) the lease component, if accounted for separately, would be classified as an operating lease. Under this practical expedient, contracts that are predominantly lease-based would be accounted for under ASC 842, and contracts that are predominantly service-based would be accounted for under ASC 606. Further, this amendment also provides for an additional (and optional) transition method to adopt the new lease requirements by allowing entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company plans to elect this practical expedient and apply the optional transition method for its operating leases, using the cumulative-effect adjustment to the opening balance sheet as of January 1, 2019. The Company is still evaluating the full impact of the adoption of ASC 842 on January 1, 2019 to its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”) that changes the impairment model for most financial instruments by requiring companies to recognize an allowance for expected losses, rather than incurred losses as required currently by the other-than-temporary impairment model. ASU 2016-13 will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases, and off-balance-sheet credit exposures (e.g., loan commitments). ASU 2016-13 is effective for reporting periods beginning after December 15, 2019, with early adoption permitted, and will be applied as a cumulative adjustment to retained earnings as of the effective date. The Company is currently assessing the potential effect the adoption of ASU 2016-13 will have on the Company’s condensed consolidated financial statements. Recent Accounting Standards Adopted by the Company On January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”). ASC 606 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASC 606 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the ASC. ASC 606 does not apply to lease contracts within the scope of Leases (Topic 840). Based on a review of the Company’s revenue streams from independent living facilities, the Company’s consolidated financial statements include revenues generated through services provided to residents of independent living facilities that are ancillary to the residents’ contractual rights to occupy living and common-area space at the communities, such as meals, transportation and activities. While these revenue streams are subject to the application of Topic 606, the revenues associated with these services are generally recognized on a monthly basis, the period in which the related services are performed. Therefore, the adoption of ASC 606 did not have a material effect on the Company’s condensed consolidated financial statements since the revenue recognition under ASC 606 is similar to the recognition pattern prior to the adoption of ASC 606. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Estimated Useful Lives | The Company anticipates the estimated useful lives of its assets by class to be generally as follows: Buildings 25-40 years Building improvements 10-25 years Tenant improvements Shorter of lease term or expected useful life Integral equipment, furniture and fixtures 5 years Identified intangible assets Shorter of lease term or expected useful life |
Real Estate Investments, Net (T
Real Estate Investments, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate [Abstract] | |
Summary of Investment in Owned Properties | The following tables summarize the Company’s investment in owned properties as of September 30, 2018 and December 31, 2017 (dollars in thousands): September 30, 2018 December 31, 2017 Land $ 163,665 $ 151,879 Buildings and improvements 1,168,192 1,114,605 Integral equipment, furniture and fixtures 85,592 80,729 Identified intangible assets 2,382 2,382 Real estate investments 1,419,831 1,349,595 Accumulated depreciation and amortization (230,382 ) (197,334 ) Real estate investments, net $ 1,189,449 $ 1,152,261 |
Schedule of Total Future Minimum Rental Revenues | As of September 30, 2018 , the Company’s total future minimum rental revenues for all of its tenants were (dollars in thousands): Year Amount Remaining 2018 $ 35,223 2019 141,977 2020 142,525 2021 143,094 2022 143,678 Thereafter 1,169,183 $ 1,775,680 |
Schedule of Business Acquisitions | The following table summarizes the Company’s acquisitions for the nine months ended September 30, 2018 (dollar amounts in thousands): Type of Property Purchase Price (1) Initial Annual Cash Rent Number of Properties Number of Beds/Units (2) Skilled nursing $ 57,074 $ 5,144 7 621 Multi-service campuses 20,277 (3) 1,564 1 122 Assisted living — — — — Total $ 77,351 $ 6,708 $ 8 743 (1) Purchase price includes capitalized acquisition costs. (2) The number of beds/units includes operating beds at acquisition date. (3) The Company has committed to fund approximately $1.4 million in revenue-producing capital expenditures over the next 24 months based on the in-place lease yield, which is included in the purchase price. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value of Financial Instruments | A summary of the face values, carrying amounts and fair values of the Company’s financial instruments as of September 30, 2018 and December 31, 2017 using Level 2 inputs for the Notes (as defined in Note 6, Debt, below), and Level 3, inputs for all other financial instruments, is as follows (dollars in thousands): September 30, 2018 December 31, 2017 Face Carrying Fair Face Carrying Fair Financial assets: Preferred equity investments $ 4,531 $ 5,746 $ 6,022 $ 4,531 $ 5,550 $ 5,423 Mortgage loan receivable 12,423 12,337 12,423 12,517 12,399 12,517 Financial liabilities: Senior unsecured notes payable $ 300,000 $ 294,963 $ 294,000 $ 300,000 $ 294,395 $ 307,500 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table summarizes the balance of the Company’s indebtedness as of September 30, 2018 and December 31, 2017 (dollars in thousands): September 30, 2018 December 31, 2017 Principal Amount Deferred Loan Fees Carrying Value Principal Amount Deferred Loan Fees Carrying Value Senior unsecured notes payable $ 300,000 $ (5,037 ) $ 294,963 $ 300,000 $ (5,605 ) $ 294,395 Senior unsecured term loan 100,000 (412 ) 99,588 100,000 (483 ) 99,517 Unsecured revolving credit facility 90,000 — 90,000 165,000 — 165,000 $ 490,000 $ (5,449 ) $ 484,551 $ 565,000 $ (6,088 ) $ 558,912 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Summary of At-The-Market Offering Program | The following table summarizes the quarterly ATM Program activity for 2018 (in thousands, except per share amounts): For the Three Months Ended March 31, 2018 June 30, 2018 September 30, 2018 Total Number of shares — 2,989 4,772 7,761 Average sales price per share $ — $ 16.13 $ 17.62 $ 17.04 Gross proceeds* $ — $ 48,198 $ 84,077 $ 132,275 *Total gross proceeds is before $0.6 million and $1.1 million of commissions paid to the sales agents during the three months ended June 30, 2018 and September 30, 2018, respectively. |
Schedule of Dividends on Common Stock | The following table summarizes the cash dividends per share of common stock declared by the Company’s Board of Directors for 2018 : For the Three Months Ended March 31, 2018 June 30, 2018 September 30, 2018 Dividends declared $ 0.205 $ 0.205 $ 0.205 Dividends payment date April 13, 2018 July 13, 2018 October 15, 2018 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation Expense | The following table summarizes the stock-based compensation expense recognized (dollars in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2018 2017 2018 2017 Stock-based compensation expense $ 988 $ 656 $ 2,816 $ 1,792 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of Weighted-Average Common Shares Outstanding Used in Calculation of Basic EPS to Diluted EPS | The following table presents the calculation of basic and diluted EPS for the Company’s common stock for the three and nine months ended September 30, 2018 and 2017 , and reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS (amounts in thousands, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income $ 14,510 $ 11,311 $ 42,384 $ 23,622 Less: Net income allocated to participating securities (84 ) (83 ) (282 ) (277 ) Numerator for basic and diluted earnings available to common stockholders $ 14,426 $ 11,228 $ 42,102 $ 23,345 Denominator: Weighted-average basic common shares outstanding 81,490 75,471 77,811 71,693 Weighted-average diluted common shares outstanding 81,490 75,471 77,811 71,693 Earnings per common share, basic $ 0.18 $ 0.15 $ 0.54 $ 0.33 Earnings per common share, diluted $ 0.18 $ 0.15 $ 0.54 $ 0.33 |
Summarized Condensed Consolid_2
Summarized Condensed Consolidating Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Summarized Condensed Consolidating Information [Abstract] | |
Condensed Consolidating Balance Sheets | CONDENSED CONSOLIDATING BALANCE SHEETS SEPTEMBER 30, 2018 (in thousands, except share and per share amounts) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Assets: Real estate investments, net $ — $ 856,659 $ 332,790 $ — $ 1,189,449 Other real estate investments, net — 12,337 5,746 — 18,083 Cash and cash equivalents — 15,745 — — 15,745 Accounts and other receivables, net — 9,567 2,817 — 12,384 Prepaid expenses and other assets — 3,789 3 — 3,792 Deferred financing costs, net — 904 — — 904 Investment in subsidiaries 737,296 474,524 — (1,211,820 ) — Intercompany — — 136,277 (136,277 ) — Total assets $ 737,296 $ 1,373,525 $ 477,633 $ (1,348,097 ) $ 1,240,357 Liabilities and Equity: Senior unsecured notes payable, net $ — $ 294,963 $ — $ — $ 294,963 Senior unsecured term loan, net — 99,588 — — 99,588 Unsecured revolving credit facility — 90,000 — — 90,000 Accounts payable and accrued liabilities — 15,401 3,109 — 18,510 Dividends payable 17,246 — — — 17,246 Intercompany — 136,277 — (136,277 ) — Total liabilities 17,246 636,229 3,109 (136,277 ) 520,307 Equity: Common stock, $0.01 par value; 500,000,000 shares authorized, 83,353,226 shares issued and outstanding as of September 30, 2018 834 — — — 834 Additional paid-in capital 915,235 629,525 321,761 (951,286 ) 915,235 Cumulative distributions in excess of earnings (196,019 ) 107,771 152,763 (260,534 ) (196,019 ) Total equity 720,050 737,296 474,524 (1,211,820 ) 720,050 Total liabilities and equity $ 737,296 $ 1,373,525 $ 477,633 $ (1,348,097 ) $ 1,240,357 CONDENSED CONSOLIDATING BALANCE SHEETS DECEMBER 31, 2017 (in thousands, except share and per share amounts) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Assets: Real estate investments, net $ — $ 805,826 $ 346,435 $ — $ 1,152,261 Other real estate investments, net — 12,399 5,550 — 17,949 Cash and cash equivalents — 6,909 — — 6,909 Accounts and other receivables, net — 2,945 2,309 — 5,254 Prepaid expenses and other assets — 893 2 — 895 Deferred financing costs, net — 1,718 — — 1,718 Investment in subsidiaries 619,075 444,120 — (1,063,195 ) — Intercompany — — 92,061 (92,061 ) — Total assets $ 619,075 $ 1,274,810 $ 446,357 $ (1,155,256 ) $ 1,184,986 Liabilities and Equity: Senior unsecured notes payable, net $ — $ 294,395 $ — $ — $ 294,395 Senior unsecured term loan, net — 99,517 — — 99,517 Unsecured revolving credit facility — 165,000 — — 165,000 Accounts payable and accrued liabilities — 15,176 2,237 — 17,413 Dividends payable 14,044 — — — 14,044 Intercompany — 92,061 — (92,061 ) — Total liabilities 14,044 666,149 2,237 (92,061 ) 590,369 Equity: Common stock, $0.01 par value; 500,000,000 shares authorized, 75,478,202 shares issued and outstanding as of December 31, 2017 755 — — — 755 Additional paid-in capital 783,237 546,097 321,761 (867,858 ) 783,237 Cumulative distributions in excess of earnings (178,961 ) 62,564 122,359 (195,337 ) (189,375 ) Total equity 605,031 608,661 444,120 (1,063,195 ) 594,617 Total liabilities and equity $ 619,075 $ 1,274,810 $ 446,357 $ (1,155,256 ) $ 1,184,986 |
Condensed Consolidating Income Statements | CONDENSED CONSOLIDATING INCOME STATEMENTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018 (in thousands) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Revenues: Rental income $ — $ 20,554 $ 14,778 $ — $ 35,332 Tenant reimbursements — 1,804 1,186 — 2,990 Independent living facilities — — 871 — 871 Interest and other income — 317 — — 317 Total revenues — 22,675 16,835 — 39,510 Expenses: Depreciation and amortization — 6,833 4,518 — 11,351 Interest expense — 6,805 — — 6,805 Property taxes — 1,804 1,186 — 2,990 Independent living facilities — — 766 — 766 General and administrative 987 2,101 — — 3,088 Total expenses 987 17,543 6,470 — 25,000 Income in Subsidiary 15,497 10,365 — (25,862 ) — Net income $ 14,510 $ 15,497 $ 10,365 $ (25,862 ) $ 14,510 CONDENSED CONSOLIDATING INCOME STATEMENTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2017 (in thousands) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Revenues: Rental income $ — $ 14,987 $ 14,417 $ — $ 29,404 Tenant reimbursements — 1,341 1,202 — 2,543 Independent living facilities — — 825 — 825 Interest and other income — — 176 — 176 Total revenues — 16,328 16,620 — 32,948 Expenses: Depreciation and amortization — 5,014 4,731 — 9,745 Interest expense — 5,592 — — 5,592 Property taxes — 1,341 1,202 — 2,543 Independent living facilities — — 698 — 698 General and administrative 671 2,388 — — 3,059 Total expenses 671 14,335 6,631 — 21,637 Income in Subsidiary 11,982 9,989 — (21,971 ) — Net income $ 11,311 $ 11,982 $ 9,989 $ (21,971 ) $ 11,311 CONDENSED CONSOLIDATING INCOME STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 (in thousands) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Revenues: Rental income $ — $ 60,122 $ 43,734 $ — $ 103,856 Tenant reimbursements — 5,360 3,614 — 8,974 Independent living facilities — — 2,515 — 2,515 Interest and other income — 1,039 196 — 1,235 Total revenues — 66,521 50,059 — 116,580 Expenses: Depreciation and amortization — 20,488 13,739 — 34,227 Interest expense — 21,182 — — 21,182 Property taxes — 5,360 3,614 — 8,974 Independent living facilities — — 2,226 — 2,226 General and administrative 2,822 6,740 76 — 9,638 Total expenses 2,822 53,770 19,655 — 76,247 Gain on sale of real estate — 2,051 — — 2,051 Income in Subsidiary 45,206 30,404 — (75,610 ) — Net income $ 42,384 $ 45,206 $ 30,404 $ (75,610 ) $ 42,384 CONDENSED CONSOLIDATING INCOME STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 (in thousands) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Revenues: Rental income $ — $ 42,503 $ 42,751 $ — $ 85,254 Tenant reimbursements — 3,577 3,676 — 7,253 Independent living facilities — — 2,407 — 2,407 Interest and other income — — 1,471 — 1,471 Total revenues — 46,080 50,305 — 96,385 Expenses: Depreciation and amortization — 13,730 14,426 — 28,156 Interest expense — 17,690 — — 17,690 Loss on the extinguishment of debt — 11,883 — — 11,883 Property taxes — 3,577 3,676 — 7,253 Independent living facilities — — 2,003 — 2,003 Impairment of real estate investment — — 890 — 890 General and administrative 1,948 6,416 62 — 8,426 Total expenses 1,948 53,296 21,057 — 76,301 Gain on disposition of other real estate investment — — 3,538 — 3,538 Income in Subsidiary 25,570 32,786 — (58,356 ) — Net income $ 23,622 $ 25,570 $ 32,786 $ (58,356 ) $ 23,622 |
Condensed Consolidating Statements of Cash Flows | CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 (in thousands) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Cash flows from operating activities: Net cash (used in) provided by operating activities $ (7 ) $ 28,087 $ 44,310 $ — $ 72,390 Cash flows from investing activities: Acquisitions of real estate — (75,621 ) — — (75,621 ) Improvements to real estate — (5,376 ) (25 ) — (5,401 ) Purchases of equipment, furniture and fixtures — (1,193 ) (69 ) — (1,262 ) Investment in real estate mortgage and other loans receivable — (2,598 ) — — (2,598 ) Principal payments received on real estate mortgage and other loans receivable — 893 — — 893 Escrow deposit for acquisitions of real estate — (1,000 ) — — (1,000 ) Net proceeds from the sale of real estate — 13,004 — — 13,004 Distribution from subsidiary 45,827 — — (45,827 ) — Intercompany financing (129,251 ) 44,216 — 85,035 — Net cash used in investing activities (83,424 ) (27,675 ) (94 ) 39,208 (71,985 ) Cash flows from financing activities: Proceeds from the issuance of common stock, net 130,546 — — — 130,546 Borrowings under unsecured revolving credit facility — 60,000 — — 60,000 Payments on unsecured revolving credit facility — (135,000 ) — — (135,000 ) Net-settle adjustment on restricted stock (1,288 ) — — — (1,288 ) Dividends paid on common stock (45,827 ) — — — (45,827 ) Distribution to Parent — (45,827 ) — 45,827 — Intercompany financing — 129,251 (44,216 ) (85,035 ) — Net cash provided by (used in) financing activities 83,431 8,424 (44,216 ) (39,208 ) 8,431 Net increase in cash and cash equivalents — 8,836 — — 8,836 Cash and cash equivalents beginning of period — 6,909 — — 6,909 Cash and cash equivalents end of period $ — $ 15,745 $ — $ — $ 15,745 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 (in thousands) Parent Guarantor Issuers Combined Subsidiary Guarantors Elimination Consolidated Cash flows from operating activities: Net cash (used in) provided by operating activities: $ (157 ) $ 17,946 $ 49,144 $ — $ 66,933 Cash flows from investing activities: Acquisitions of real estate — (222,463 ) — — (222,463 ) Improvements to real estate — (571 ) (50 ) — (621 ) Purchases of equipment, furniture and fixtures — (292 ) (67 ) — (359 ) Escrow deposit for acquisitions of real estate — (1,000 ) — — (1,000 ) Sale of other real estate investment — — 7,500 — 7,500 Distribution from subsidiary 38,544 — — (38,544 ) — Intercompany financing (169,391 ) 56,527 — 112,864 — Net cash (used in) provided by investing activities (130,847 ) (167,799 ) 7,383 74,320 (216,943 ) Cash flows from financing activities: Proceeds from the issuance of common stock, net 170,414 — — — 170,414 Proceeds from the issuance of senior unsecured notes payable — 300,000 — — 300,000 Borrowings under unsecured revolving credit facility — 158,000 — — 158,000 Payments on senior unsecured notes payable — (267,639 ) — — (267,639 ) Payments on unsecured revolving credit facility — (158,000 ) — — (158,000 ) Payments of deferred financing costs — (6,047 ) — — (6,047 ) Net-settle adjustment on restricted stock (866 ) — — — (866 ) Dividends paid on common stock (38,544 ) — — — (38,544 ) Distribution to Parent — (38,544 ) — 38,544 — Intercompany financing — 169,391 (56,527 ) (112,864 ) — Net cash provided by (used in) financing activities 131,004 157,161 (56,527 ) (74,320 ) 157,318 Net increase in cash and cash equivalents — 7,308 — — 7,308 Cash and cash equivalents beginning of period — 7,500 — — 7,500 Cash and cash equivalents end of period $ — $ 14,808 $ — $ — $ 14,808 |
Organization - Narrative (Detai
Organization - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($)real_estate_investmentunitfacilitybed | |
Real Estate Properties [Line Items] | |
Number of living facilities | 193 |
Number of other real estate investments | real_estate_investment | 2 |
Preferred equity investment | $ | $ 5.7 |
Mortgage Loan Receivable | |
Real Estate Properties [Line Items] | |
Mortgage loan | $ | $ 12.3 |
Skilled Nursing, Assisted Living and Independent Living Facilities | Assets Leased to Ensign | |
Real Estate Properties [Line Items] | |
Number of living facilities | 190 |
Number of units available in living facilities | bed | 18,693 |
Independent Living Facilities Owned and Operated by Company | |
Real Estate Properties [Line Items] | |
Number of living facilities | 3 |
Number of units available in living facilities | unit | 264 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($)investmentfacilityloan | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)investmentfacilitysegmentloan | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Accounting Policies [Abstract] | |||||
Accumulated amortization of deferred financing costs | $ 4,600 | $ 4,600 | $ 3,200 | ||
Straight-line rental income | 700 | $ 2 | 1,631 | $ 117 | |
Deferred straight-line rents receivable | $ 2,100 | $ 2,100 | 500 | ||
Number of reportable segments | segment | 1 | ||||
Significant Accounting Policies | |||||
Number of living facilities | facility | 193 | 193 | |||
Number of preferred equity investments | investment | 2 | 2 | |||
Number of mortgage loans receivable | loan | 1 | 1 | |||
Lease Agreements | |||||
Significant Accounting Policies | |||||
Remaining contractual payments as lessee | $ 200 | $ 200 | |||
Independent Living Facilities Owned and Operated by Company | |||||
Significant Accounting Policies | |||||
Number of living facilities | facility | 3 | 3 | |||
Accrued Income Receivable | |||||
Significant Accounting Policies | |||||
Reserve on receivables | $ 1,300 | $ 1,300 | 800 | ||
Trade Accounts Receivable | |||||
Significant Accounting Policies | |||||
Reserve on receivables | $ 11,600 | $ 11,600 | 9,600 | ||
Eduro Healthcare LLC Loan | Bridge Loan | |||||
Significant Accounting Policies | |||||
Mortgage loan receivable interest rate (percent) | 4.75% | 4.75% | |||
Loans receivable | $ 1,800 | $ 1,800 | |||
Eduro Healthcare LLC Loan | Bridge Loan | Maximum | |||||
Significant Accounting Policies | |||||
Funding commitment | 4,000 | 4,000 | |||
Pristine Senior Living LLC | |||||
Significant Accounting Policies | |||||
Reserve on receivables | $ 10,400 | $ 10,400 | $ 10,400 | ||
Base Rate | Eduro Healthcare LLC Loan | Bridge Loan | |||||
Significant Accounting Policies | |||||
Margin on mortgage loan receivable interest rate (percent) | 2.50% | 2.50% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Estimated Useful Lives (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 25 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 40 years |
Building Improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Building Improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 25 years |
Integral Equipment, Furniture and Fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Real Estate Investments, Net -
Real Estate Investments, Net - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($)facilitylease | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)facilityintangible_assetunitlease | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Investment [Line Items] | |||||
Number of living facilities | facility | 193 | 193 | |||
Number of facilities not leased | facility | 3 | 3 | |||
Number of operating leases acquired | lease | 3 | ||||
Remaining lease term | 80 years | ||||
Real estate investments, net | $ 1,189,449 | $ 1,189,449 | $ 1,152,261 | ||
Net proceeds from the sale of real estate | 13,004 | $ 0 | |||
Gain on sale of real estate | 0 | $ 0 | 2,051 | 0 | |
Impairment of real estate investment | $ 0 | $ 0 | $ 0 | $ 890 | |
Off-Market Favorable Lease | |||||
Investment [Line Items] | |||||
Number of identified intangible assets | intangible_asset | 2 | ||||
Ensign Master Leases | |||||
Investment [Line Items] | |||||
Facilities subject to operating lease | facility | 92 | 92 | |||
Number of master leases | lease | 8 | 8 | |||
Annualized revenues from master leases | $ 59,100 | $ 59,100 | |||
Escalation factor for calculating revenues after year two | 0.00% | 0.00% | |||
Percentage change in the consumer price index | 2.50% | 2.50% | |||
Various Other Operators | |||||
Investment [Line Items] | |||||
Facilities subject to operating lease | facility | 98 | 98 | |||
Assisted Living Facilities | Idaho | |||||
Investment [Line Items] | |||||
Number of properties sold | facility | 3 | ||||
Number of units in properties sold | unit | 102 | ||||
Real estate investments, net | $ 10,900 | $ 10,900 | |||
Net proceeds from the sale of real estate | $ 13,000 |
Real Estate Investments, Net _2
Real Estate Investments, Net - Investment in Owned Properties (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Real Estate [Abstract] | ||
Land | $ 163,665 | $ 151,879 |
Buildings and improvements | 1,168,192 | 1,114,605 |
Integral equipment, furniture and fixtures | 85,592 | 80,729 |
Identified intangible assets | 2,382 | 2,382 |
Real estate investments | 1,419,831 | 1,349,595 |
Accumulated depreciation and amortization | (230,382) | (197,334) |
Real estate investments, net | $ 1,189,449 | $ 1,152,261 |
Real Estate Investments, Net _3
Real Estate Investments, Net - Future Minimum Rental Revenues (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Future Minimum Rental Revenues | |
Remaining 2,018 | $ 35,223 |
2,019 | 141,977 |
2,020 | 142,525 |
2,021 | 143,094 |
2,022 | 143,678 |
Thereafter | 1,169,183 |
Total | $ 1,775,680 |
Real Estate Investments, Net _4
Real Estate Investments, Net - Recent Real Estate Acquisitions (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($)propertyunit | |
Business Acquisition [Line Items] | |
Purchase Price | $ 77,351 |
Initial Annual Cash Rent | $ 6,708 |
Number of Properties | property | 8 |
Number of Beds/Units | unit | 743 |
Skilled Nursing Properties | |
Business Acquisition [Line Items] | |
Purchase Price | $ 57,074 |
Initial Annual Cash Rent | $ 5,144 |
Number of Properties | property | 7 |
Number of Beds/Units | unit | 621 |
Multi-Service Campus Properties | |
Business Acquisition [Line Items] | |
Purchase Price | $ 20,277 |
Initial Annual Cash Rent | $ 1,564 |
Number of Properties | property | 1 |
Number of Beds/Units | unit | 122 |
Funding commitment for revenue-producing capital expenditures | $ 1,400 |
Assisted Living Facilities | |
Business Acquisition [Line Items] | |
Purchase Price | 0 |
Initial Annual Cash Rent | $ 0 |
Number of Properties | property | 0 |
Number of Beds/Units | unit | 0 |
Real Estate Investments, Net _5
Real Estate Investments, Net - Lease Amendments and Related Agreements (Details) $ in Millions | May 01, 2018USD ($)facility | Feb. 27, 2018property |
Pristine Lease Termination Agreement | ||
Real Estate [Line Items] | ||
Number of properties | property | 9 | |
Pristine Lease Termination Agreement | Trio Healthcare | ||
Real Estate [Line Items] | ||
Number of transitioned facilities | 7 | |
Pristine Lease Termination Agreement | Hillstone Healthcare | ||
Real Estate [Line Items] | ||
Number of transitioned facilities | 2 | |
Trio and Hillstone Master Lease | ||
Real Estate [Line Items] | ||
Aggregate annual base rent due under master lease | $ | $ 10 | |
Trio Healthcare Master Lease | ||
Real Estate [Line Items] | ||
Lease period | 15 years | |
Hillstone Healthcare Master Lease | ||
Real Estate [Line Items] | ||
Lease period | 12 years |
Other Real Estate Investments -
Other Real Estate Investments - Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016USD ($)bed | Jul. 31, 2016USD ($)bed | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Oct. 31, 2017USD ($) | |
Real Estate Properties [Line Items] | |||||||
Preferred equity investment | $ 5,700,000 | $ 5,700,000 | |||||
Interest received in cash from preferred equity investment | 0 | $ 1,500,000 | |||||
Mortgage Loan Receivable | |||||||
Real Estate Properties [Line Items] | |||||||
Mortgage loan | 12,300,000 | 12,300,000 | |||||
Providence Group | Mortgage Loan Receivable | |||||||
Real Estate Properties [Line Items] | |||||||
Interest income | 300,000 | 900,000 | |||||
Mortgage loan | $ 12,500,000 | ||||||
Mortgage loan receivable interest rate (percent) | 9.00% | ||||||
Cascadia Development, LLC | |||||||
Real Estate Properties [Line Items] | |||||||
Preferred equity investment | $ 2,300,000 | $ 2,200,000 | |||||
Preferred equity investment minimum yield | 12.00% | 12.00% | |||||
Number of beds planned for construction | bed | 99 | 99 | |||||
Initial lease yield (percent) | 9.00% | 9.00% | |||||
Cascadia Development, LLC | Prime Rate | |||||||
Real Estate Properties [Line Items] | |||||||
Basis spread of preferred equity investment yield | 9.50% | 9.50% | |||||
Preferred Equity Investment | |||||||
Real Estate Properties [Line Items] | |||||||
Interest income | $ 0 | $ 200,000 | 200,000 | 1,500,000 | |||
Interest received in cash from preferred equity investment | $ 0 | $ 975,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value of Financial Instruments (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Financial assets: | ||
Preferred equity investment - face value | $ 4,531,000 | $ 4,531,000 |
Mortgage Loan Receivable | ||
Financial assets: | ||
Mortgage loans receivable - face value | 12,423,000 | 12,517,000 |
Senior unsecured notes payable | ||
Financial liabilities: | ||
Senior unsecured notes payable - face value | 300,000,000 | 300,000,000 |
Carrying Amount | Level 2 | Senior unsecured notes payable | ||
Financial liabilities: | ||
Senior unsecured notes payable | 294,963,000 | 294,395,000 |
Carrying Amount | Level 3 | ||
Financial assets: | ||
Preferred equity investments | 5,746,000 | 5,550,000 |
Carrying Amount | Level 3 | Mortgage Loan Receivable | ||
Financial assets: | ||
Mortgage loans receivable | 12,337,000 | 12,399,000 |
Fair Value | Level 2 | Senior unsecured notes payable | ||
Financial liabilities: | ||
Senior unsecured notes payable | 294,000,000 | 307,500,000 |
Fair Value | Level 3 | ||
Financial assets: | ||
Preferred equity investments | 6,022,000 | 5,423,000 |
Fair Value | Level 3 | Mortgage Loan Receivable | ||
Financial assets: | ||
Mortgage loans receivable | $ 12,423,000 | $ 12,517,000 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Principal Amount | $ 490,000 | $ 565,000 |
Deferred Loan Fees | (5,449) | (6,088) |
Carrying Value | 484,551 | 558,912 |
Senior unsecured notes payable | ||
Debt Instrument [Line Items] | ||
Principal Amount | 300,000 | 300,000 |
Deferred Loan Fees | (5,037) | (5,605) |
Carrying Value | 294,963 | 294,395 |
Senior unsecured term loan | ||
Debt Instrument [Line Items] | ||
Principal Amount | 100,000 | 100,000 |
Deferred Loan Fees | (412) | (483) |
Carrying Value | 99,588 | 99,517 |
Unsecured revolving credit facility | ||
Debt Instrument [Line Items] | ||
Principal Amount | 90,000 | 165,000 |
Deferred Loan Fees | 0 | 0 |
Carrying Value | $ 90,000 | $ 165,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) | May 10, 2017USD ($) | Feb. 01, 2016USD ($)extension_option | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Aug. 05, 2015USD ($) |
Line of Credit Facility [Line Items] | ||||||||
Long-term Debt | $ 484,551,000 | $ 484,551,000 | $ 558,912,000 | |||||
Outstanding amounts under Credit Facility | 490,000,000 | 490,000,000 | 565,000,000 | |||||
Interest expense | 6,805,000 | $ 5,592,000 | 21,182,000 | $ 17,690,000 | ||||
Amortization of deferred financing costs | 500,000 | $ 500,000 | 1,500,000 | $ 1,600,000 | ||||
Interest payable | $ 5,300,000 | 5,300,000 | 1,400,000 | |||||
Loss on extinguishment of debt before write off of deferred financing costs | 7,600,000 | |||||||
Write off of deferred financing costs | $ 4,200,000 | |||||||
Senior Unsecured Notes | 5.25% Senior Notes due 2025 | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, face amount | $ 300,000,000 | |||||||
Interest rate, stated percentage | 5.25% | |||||||
Gross proceeds from issuance of senior notes | $ 300,000,000 | |||||||
Net proceeds from issuance of senior notes | $ 294,000,000 | |||||||
Debt instrument, redemption price, percentage | 100.00% | |||||||
Debt instrument, redemption price, percentage upon change of control | 101.00% | |||||||
Senior Unsecured Notes | 5.25% Senior Notes due 2025 | Debt Instrument, Redemption, Period One | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, redemption price, percentage | 105.25% | |||||||
Senior Unsecured Notes | 5.25% Senior Notes due 2025 | Debt Instrument, Redemption, Period One | Maximum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, redemption price, percentage of principal amount | 40.00% | |||||||
Senior Unsecured Notes | 5.25% Senior Notes due 2025 | Debt Instrument, Redemption, Period One | Minimum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Percentage of aggregate principal amount of notes outstanding | 60.00% | |||||||
Senior Unsecured Notes | 5.875% Senior Notes due 2021 | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Interest rate, stated percentage | 5.875% | 5.875% | 5.875% | |||||
Payment for redemption of senior notes | $ 260,000,000 | |||||||
Debt instrument, redemption price, percentage | 102.938% | 102.938% | ||||||
Revolving Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Long-term Debt | $ 90,000,000 | $ 90,000,000 | 165,000,000 | |||||
Outstanding amounts under Credit Facility | $ 90,000,000 | $ 90,000,000 | $ 165,000,000 | |||||
Revolving Facility | Unsecured Revolving Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit facility, borrowing capacity | $ 300,000,000 | |||||||
Line of credit facility, accordion feature | $ 200,000,000 | |||||||
Revolving Facility | Unsecured Revolving Credit Facility | Maximum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit facility, commitment fee percentage | 0.25% | |||||||
Line of credit facility, facility fee percentage | 0.30% | |||||||
Revolving Facility | Unsecured Revolving Credit Facility | Maximum | Base Rate | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread | 1.40% | |||||||
Revolving Facility | Unsecured Revolving Credit Facility | Maximum | LIBOR | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread | 2.40% | |||||||
Revolving Facility | Unsecured Revolving Credit Facility | Minimum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit facility, commitment fee percentage | 0.15% | |||||||
Line of credit facility, facility fee percentage | 0.125% | |||||||
Revolving Facility | Unsecured Revolving Credit Facility | Minimum | Base Rate | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread | 0.75% | |||||||
Revolving Facility | Unsecured Revolving Credit Facility | Minimum | LIBOR | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread | 1.75% | |||||||
Revolving Facility | Revolving Credit Facility As Amended | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit facility, borrowing capacity | $ 400,000,000 | |||||||
Line of credit facility, increase to borrowing capacity | 100,000,000 | |||||||
Line of credit facility, increase to uncommitted incremental facility | 50,000,000 | |||||||
Line of credit facility, uncommitted incremental facility limit | $ 250,000,000 | |||||||
Number of extension options | extension_option | 2 | |||||||
Line of credit facility, extension period | 6 months | |||||||
Revolving Facility | Revolving Credit Facility As Amended | Maximum | Base Rate | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread | 1.60% | |||||||
Revolving Facility | Revolving Credit Facility As Amended | Maximum | LIBOR | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread | 2.60% | |||||||
Revolving Facility | Revolving Credit Facility As Amended | Minimum | Base Rate | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread | 0.95% | |||||||
Revolving Facility | Revolving Credit Facility As Amended | Minimum | LIBOR | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, basis spread | 1.95% | |||||||
Revolving Facility | Senior unsecured term loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit facility, borrowing capacity | $ 100,000,000 | |||||||
Line of credit facility, prepayment premium in first year | 2.00% | |||||||
Line of credit facility, prepayment premium in second year | 1.00% | |||||||
Mortgage Notes Payable | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Payments on the mortgage notes payable | $ 95,000,000 |
Equity - ATM Offering (Details)
Equity - ATM Offering (Details) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | |
ATM Program activity | ||||||
Gross proceeds | $ 130,546,000 | $ 170,414,000 | ||||
At-The-Market Offering | ||||||
Class of Stock [Line Items] | ||||||
Remaining offering amount available | $ 103,800,000 | $ 103,800,000 | ||||
ATM Program activity | ||||||
Number of shares (in shares) | 4,772 | 2,989 | 0 | 7,761 | ||
Average sales price per share (in usd per share) | $ 17.62 | $ 16.13 | $ 0 | $ 17.04 | ||
Gross proceeds | $ 84,077,000 | $ 48,198,000 | $ 0 | $ 132,275,000 | ||
Commissions paid on stock issuance | $ 1,100,000 | $ 600,000 | ||||
At-The-Market Offering | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Authorized aggregate offering price of common stock | $ 300,000,000 |
Equity - Dividends on Common St
Equity - Dividends on Common Stock (Details) - $ / shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Dividends per share of common stock | |||||||
Dividends declared per common share (in usd per share) | $ 0.205 | $ 0.205 | $ 0.205 | $ 0.185 | $ 0.615 | $ 0.555 | $ 0.74 |
Dividends payment date | Oct. 15, 2018 | Jul. 13, 2018 | Apr. 13, 2018 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | Jun. 01, 2014shares | May 31, 2018$ / sharesshares | Feb. 28, 2018installment$ / sharesshares | Sep. 30, 2018USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unamortized stock-based compensation expense related to unvested awards | $ | $ 5.4 | |||
Weighted average remaining vesting period related to expense recognition | 2 years 2 months | |||
Ensign Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock award conversion ratio related to the spin-off | 1 | |||
Restricted Stock Award | Ensign Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock awards unvested during spin-off (in shares) | 207,580 | |||
Shares vested (in shares) | 10,960 | |||
Unvested stock awards outstanding (in shares) | 4,020 | |||
Restricted Stock Award | Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of awards granted (in shares) | 141,060 | |||
Award grant date fair value (in usd per share) | $ / shares | $ 15.13 | |||
Number of equal annual vesting installments | installment | 4 | |||
Restricted Stock Award | Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of awards granted (in shares) | 26,462 | |||
Award grant date fair value (in usd per share) | $ / shares | $ 16.44 | |||
Performance Stock Award | Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of awards granted (in shares) | 120,460 | |||
Award grant date fair value (in usd per share) | $ / shares | $ 15.13 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Stock-based compensation expense | $ 988 | $ 656 | $ 2,816 | $ 1,792 |
Earnings Per Common Share - Rec
Earnings Per Common Share - Reconciliation of Weighted-Average Common Shares Outstanding Used in Calculation of Basic EPS to Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Numerator: | |||||
Net income | $ 14,510 | $ 11,311 | $ 42,384 | $ 23,622 | $ 25,874 |
Less: Net income allocated to participating securities | (84) | (83) | (282) | (277) | |
Numerator for basic and diluted earnings available to common stockholders | $ 14,426 | $ 11,228 | $ 42,102 | $ 23,345 | |
Denominator: | |||||
Weighted-average basic common shares outstanding (in shares) | 81,490 | 75,471 | 77,811 | 71,693 | |
Weighted-average diluted common shares outstanding (in shares) | 81,490 | 75,471 | 77,811 | 71,693 | |
Earnings per common share, basic (in usd per share) | $ 0.18 | $ 0.15 | $ 0.54 | $ 0.33 | |
Earnings per common share, diluted (in usd per share) | $ 0.18 | $ 0.15 | $ 0.54 | $ 0.33 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - Ensign - USD ($) $ in Millions | Oct. 01, 2013 | Oct. 31, 2013 |
Loss Contingencies [Line Items] | ||
Single lump-sum remittance to the government | $ 48 | |
Corporate integrity agreement period | 5 years |
Concentration of Risk - Narrati
Concentration of Risk - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)facility | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)statefacilitybed | Sep. 30, 2017USD ($) | |
Concentration Risk [Line Items] | ||||
Number of living facilities | 193 | 193 | ||
Description of highest concentration of properties | The four states in which Ensign leases the highest concentration of properties are California, Texas, Utah and Arizona. | |||
Rental income | $ | $ 35,332 | $ 29,404 | $ 103,856 | $ 85,254 |
Skilled Nursing, Assisted Living and Independent Living Facilities | Assets Leased to Ensign | ||||
Concentration Risk [Line Items] | ||||
Number of living facilities | 190 | 190 | ||
Number of units available in living facilities | bed | 18,693 | |||
Ensign | ||||
Concentration Risk [Line Items] | ||||
Number of states where Ensign leases the highest concentration of properties | state | 4 | |||
Ensign | Skilled Nursing, Assisted Living and Independent Living Facilities | Assets Leased to Ensign | ||||
Concentration Risk [Line Items] | ||||
Number of living facilities | 92 | 92 | ||
Number of units available in living facilities | bed | 9,805 | |||
Customer Concentration Risk | Rental Income | ||||
Concentration Risk [Line Items] | ||||
Rental income | $ | $ 59,100 | |||
Concentration risk (percent) | 42.00% |
Summarized Condensed Consolid_3
Summarized Condensed Consolidating Information - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Assets: | ||||
Real estate investments, net | $ 1,189,449 | $ 1,152,261 | ||
Other real estate investments, net | 18,083 | 17,949 | ||
Cash and cash equivalents | 15,745 | 6,909 | $ 14,808 | $ 7,500 |
Accounts and other receivables, net | 12,384 | 5,254 | ||
Prepaid expenses and other assets | 3,792 | 895 | ||
Deferred financing costs, net | 904 | 1,718 | ||
Investment in subsidiaries | 0 | 0 | ||
Intercompany | 0 | 0 | ||
Total assets | 1,240,357 | 1,184,986 | ||
Liabilities and Equity: | ||||
Senior unsecured notes payable, net | 294,963 | 294,395 | ||
Senior unsecured term loan, net | 99,588 | 99,517 | ||
Unsecured revolving credit facility | 90,000 | 165,000 | ||
Accounts payable and accrued liabilities | 18,510 | 17,413 | ||
Dividends payable | 17,246 | 14,044 | ||
Intercompany | 0 | 0 | ||
Total liabilities | 520,307 | 590,369 | ||
Equity: | ||||
Common stock, $0.01 par value; 500,000,000 shares authorized, 83,353,226 and 75,478,202 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 834 | 755 | ||
Additional paid-in capital | 915,235 | 783,237 | ||
Cumulative distributions in excess of earnings | (196,019) | (189,375) | ||
Total equity | 720,050 | 594,617 | 452,430 | |
Total liabilities and equity | 1,240,357 | 1,184,986 | ||
Reportable Legal Entities | Parent Guarantor | ||||
Assets: | ||||
Real estate investments, net | 0 | 0 | ||
Other real estate investments, net | 0 | 0 | ||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts and other receivables, net | 0 | 0 | ||
Prepaid expenses and other assets | 0 | 0 | ||
Deferred financing costs, net | 0 | 0 | ||
Investment in subsidiaries | 737,296 | 619,075 | ||
Intercompany | 0 | 0 | ||
Total assets | 737,296 | 619,075 | ||
Liabilities and Equity: | ||||
Senior unsecured notes payable, net | 0 | 0 | ||
Senior unsecured term loan, net | 0 | 0 | ||
Unsecured revolving credit facility | 0 | 0 | ||
Accounts payable and accrued liabilities | 0 | 0 | ||
Dividends payable | 17,246 | 14,044 | ||
Intercompany | 0 | 0 | ||
Total liabilities | 17,246 | 14,044 | ||
Equity: | ||||
Common stock, $0.01 par value; 500,000,000 shares authorized, 83,353,226 and 75,478,202 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 834 | 755 | ||
Additional paid-in capital | 915,235 | 783,237 | ||
Cumulative distributions in excess of earnings | (196,019) | (178,961) | ||
Total equity | 720,050 | 605,031 | ||
Total liabilities and equity | 737,296 | 619,075 | ||
Reportable Legal Entities | Issuers | ||||
Assets: | ||||
Real estate investments, net | 856,659 | 805,826 | ||
Other real estate investments, net | 12,337 | 12,399 | ||
Cash and cash equivalents | 15,745 | 6,909 | 14,808 | 7,500 |
Accounts and other receivables, net | 9,567 | 2,945 | ||
Prepaid expenses and other assets | 3,789 | 893 | ||
Deferred financing costs, net | 904 | 1,718 | ||
Investment in subsidiaries | 474,524 | 444,120 | ||
Intercompany | 0 | 0 | ||
Total assets | 1,373,525 | 1,274,810 | ||
Liabilities and Equity: | ||||
Senior unsecured notes payable, net | 294,963 | 294,395 | ||
Senior unsecured term loan, net | 99,588 | 99,517 | ||
Unsecured revolving credit facility | 90,000 | 165,000 | ||
Accounts payable and accrued liabilities | 15,401 | 15,176 | ||
Dividends payable | 0 | 0 | ||
Intercompany | 136,277 | 92,061 | ||
Total liabilities | 636,229 | 666,149 | ||
Equity: | ||||
Common stock, $0.01 par value; 500,000,000 shares authorized, 83,353,226 and 75,478,202 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 0 | 0 | ||
Additional paid-in capital | 629,525 | 546,097 | ||
Cumulative distributions in excess of earnings | 107,771 | 62,564 | ||
Total equity | 737,296 | 608,661 | ||
Total liabilities and equity | 1,373,525 | 1,274,810 | ||
Reportable Legal Entities | Combined Subsidiary Guarantors | ||||
Assets: | ||||
Real estate investments, net | 332,790 | 346,435 | ||
Other real estate investments, net | 5,746 | 5,550 | ||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts and other receivables, net | 2,817 | 2,309 | ||
Prepaid expenses and other assets | 3 | 2 | ||
Deferred financing costs, net | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Intercompany | 136,277 | 92,061 | ||
Total assets | 477,633 | 446,357 | ||
Liabilities and Equity: | ||||
Senior unsecured notes payable, net | 0 | 0 | ||
Senior unsecured term loan, net | 0 | 0 | ||
Unsecured revolving credit facility | 0 | 0 | ||
Accounts payable and accrued liabilities | 3,109 | 2,237 | ||
Dividends payable | 0 | 0 | ||
Intercompany | 0 | 0 | ||
Total liabilities | 3,109 | 2,237 | ||
Equity: | ||||
Common stock, $0.01 par value; 500,000,000 shares authorized, 83,353,226 and 75,478,202 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 0 | 0 | ||
Additional paid-in capital | 321,761 | 321,761 | ||
Cumulative distributions in excess of earnings | 152,763 | 122,359 | ||
Total equity | 474,524 | 444,120 | ||
Total liabilities and equity | 477,633 | 446,357 | ||
Elimination | ||||
Assets: | ||||
Real estate investments, net | 0 | 0 | ||
Other real estate investments, net | 0 | 0 | ||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Accounts and other receivables, net | 0 | 0 | ||
Prepaid expenses and other assets | 0 | 0 | ||
Deferred financing costs, net | 0 | 0 | ||
Investment in subsidiaries | (1,211,820) | (1,063,195) | ||
Intercompany | (136,277) | (92,061) | ||
Total assets | (1,348,097) | (1,155,256) | ||
Liabilities and Equity: | ||||
Senior unsecured notes payable, net | 0 | 0 | ||
Senior unsecured term loan, net | 0 | 0 | ||
Unsecured revolving credit facility | 0 | 0 | ||
Accounts payable and accrued liabilities | 0 | 0 | ||
Dividends payable | 0 | 0 | ||
Intercompany | (136,277) | (92,061) | ||
Total liabilities | (136,277) | (92,061) | ||
Equity: | ||||
Common stock, $0.01 par value; 500,000,000 shares authorized, 83,353,226 and 75,478,202 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 0 | 0 | ||
Additional paid-in capital | (951,286) | (867,858) | ||
Cumulative distributions in excess of earnings | (260,534) | (195,337) | ||
Total equity | (1,211,820) | (1,063,195) | ||
Total liabilities and equity | $ (1,348,097) | $ (1,155,256) |
Summarized Condensed Consolid_4
Summarized Condensed Consolidating Information - Condensed Consolidating Balance Sheets Share Data (Details) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Summarized Condensed Consolidating Information [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (shares) | 500,000,000 | 500,000,000 |
Common stock, issued (shares) | 83,353,226 | 75,478,202 |
Common stock, outstanding (shares) | 83,353,226 | 75,478,202 |
Summarized Condensed Consolid_5
Summarized Condensed Consolidating Information - Condensed Consolidating Income Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Revenues: | |||||
Rental income | $ 35,332 | $ 29,404 | $ 103,856 | $ 85,254 | |
Tenant reimbursements | 2,990 | 2,543 | 8,974 | 7,253 | |
Independent living facilities | 871 | 825 | 2,515 | 2,407 | |
Interest and other income | 317 | 176 | 1,235 | 1,471 | |
Total revenues | 39,510 | 32,948 | 116,580 | 96,385 | |
Expenses: | |||||
Depreciation and amortization | 11,351 | 9,745 | 34,227 | 28,156 | |
Interest expense | 6,805 | 5,592 | 21,182 | 17,690 | |
Loss on the extinguishment of debt | 0 | 0 | 0 | 11,883 | |
Property taxes | 2,990 | 2,543 | 8,974 | 7,253 | |
Independent living facilities | 766 | 698 | 2,226 | 2,003 | |
Impairment of real estate investment | 0 | 0 | 0 | 890 | |
General and administrative | 3,088 | 3,059 | 9,638 | 8,426 | |
Total expenses | 25,000 | 21,637 | 76,247 | 76,301 | |
Gain on sale of real estate | 0 | 0 | 2,051 | 0 | |
Gain on disposition of other real estate investment | 0 | 0 | 0 | 3,538 | |
Income in Subsidiary | 0 | 0 | 0 | 0 | |
Net income | 14,510 | 11,311 | 42,384 | 23,622 | $ 25,874 |
Reportable Legal Entities | Parent Guarantor | |||||
Revenues: | |||||
Rental income | 0 | 0 | 0 | 0 | |
Tenant reimbursements | 0 | 0 | 0 | 0 | |
Independent living facilities | 0 | 0 | 0 | 0 | |
Interest and other income | 0 | 0 | 0 | 0 | |
Total revenues | 0 | 0 | 0 | 0 | |
Expenses: | |||||
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Interest expense | 0 | 0 | 0 | 0 | |
Loss on the extinguishment of debt | 0 | ||||
Property taxes | 0 | 0 | 0 | 0 | |
Independent living facilities | 0 | 0 | 0 | 0 | |
Impairment of real estate investment | 0 | ||||
General and administrative | 987 | 671 | 2,822 | 1,948 | |
Total expenses | 987 | 671 | 2,822 | 1,948 | |
Gain on sale of real estate | 0 | ||||
Gain on disposition of other real estate investment | 0 | ||||
Income in Subsidiary | 15,497 | 11,982 | 45,206 | 25,570 | |
Net income | 14,510 | 11,311 | 42,384 | 23,622 | |
Reportable Legal Entities | Issuers | |||||
Revenues: | |||||
Rental income | 20,554 | 14,987 | 60,122 | 42,503 | |
Tenant reimbursements | 1,804 | 1,341 | 5,360 | 3,577 | |
Independent living facilities | 0 | 0 | 0 | 0 | |
Interest and other income | 317 | 0 | 1,039 | 0 | |
Total revenues | 22,675 | 16,328 | 66,521 | 46,080 | |
Expenses: | |||||
Depreciation and amortization | 6,833 | 5,014 | 20,488 | 13,730 | |
Interest expense | 6,805 | 5,592 | 21,182 | 17,690 | |
Loss on the extinguishment of debt | 11,883 | ||||
Property taxes | 1,804 | 1,341 | 5,360 | 3,577 | |
Independent living facilities | 0 | 0 | 0 | 0 | |
Impairment of real estate investment | 0 | ||||
General and administrative | 2,101 | 2,388 | 6,740 | 6,416 | |
Total expenses | 17,543 | 14,335 | 53,770 | 53,296 | |
Gain on sale of real estate | 2,051 | ||||
Gain on disposition of other real estate investment | 0 | ||||
Income in Subsidiary | 10,365 | 9,989 | 30,404 | 32,786 | |
Net income | 15,497 | 11,982 | 45,206 | 25,570 | |
Reportable Legal Entities | Combined Subsidiary Guarantors | |||||
Revenues: | |||||
Rental income | 14,778 | 14,417 | 43,734 | 42,751 | |
Tenant reimbursements | 1,186 | 1,202 | 3,614 | 3,676 | |
Independent living facilities | 871 | 825 | 2,515 | 2,407 | |
Interest and other income | 0 | 176 | 196 | 1,471 | |
Total revenues | 16,835 | 16,620 | 50,059 | 50,305 | |
Expenses: | |||||
Depreciation and amortization | 4,518 | 4,731 | 13,739 | 14,426 | |
Interest expense | 0 | 0 | 0 | 0 | |
Loss on the extinguishment of debt | 0 | ||||
Property taxes | 1,186 | 1,202 | 3,614 | 3,676 | |
Independent living facilities | 766 | 698 | 2,226 | 2,003 | |
Impairment of real estate investment | 890 | ||||
General and administrative | 0 | 0 | 76 | 62 | |
Total expenses | 6,470 | 6,631 | 19,655 | 21,057 | |
Gain on sale of real estate | 0 | ||||
Gain on disposition of other real estate investment | 3,538 | ||||
Income in Subsidiary | 0 | 0 | 0 | 0 | |
Net income | 10,365 | 9,989 | 30,404 | 32,786 | |
Elimination | |||||
Revenues: | |||||
Rental income | 0 | 0 | 0 | 0 | |
Tenant reimbursements | 0 | 0 | 0 | 0 | |
Independent living facilities | 0 | 0 | 0 | 0 | |
Interest and other income | 0 | 0 | 0 | 0 | |
Total revenues | 0 | 0 | 0 | 0 | |
Expenses: | |||||
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Interest expense | 0 | 0 | 0 | 0 | |
Loss on the extinguishment of debt | 0 | ||||
Property taxes | 0 | 0 | 0 | 0 | |
Independent living facilities | 0 | 0 | 0 | 0 | |
Impairment of real estate investment | 0 | ||||
General and administrative | 0 | 0 | 0 | 0 | |
Total expenses | 0 | 0 | 0 | 0 | |
Gain on sale of real estate | 0 | ||||
Gain on disposition of other real estate investment | 0 | ||||
Income in Subsidiary | (25,862) | (21,971) | (75,610) | (58,356) | |
Net income | $ (25,862) | $ (21,971) | $ (75,610) | $ (58,356) |
Summarized Condensed Consolid_6
Summarized Condensed Consolidating Information - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net cash (used in) provided by operating activities | $ 72,390 | $ 66,933 |
Cash flows from investing activities: | ||
Acquisitions of real estate | (75,621) | (222,463) |
Improvements to real estate | (5,401) | (621) |
Purchases of equipment, furniture and fixtures | (1,262) | (359) |
Investment in real estate mortgage and other loans receivable | (2,598) | 0 |
Principal payments received on real estate mortgage and other loans receivable | 893 | 0 |
Escrow deposits for acquisitions of real estate | (1,000) | (1,000) |
Net proceeds from the sale of real estate | 13,004 | 0 |
Sale of other real estate investment | 0 | 7,500 |
Distribution from subsidiary | 0 | 0 |
Intercompany financing | 0 | 0 |
Net cash used in investing activities | (71,985) | (216,943) |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock, net | 130,546 | 170,414 |
Proceeds from the issuance of senior unsecured notes payable | 0 | 300,000 |
Borrowings under unsecured revolving credit facility | 60,000 | 158,000 |
Payments on senior unsecured notes payable | 0 | (267,639) |
Payments on unsecured revolving credit facility | (135,000) | (158,000) |
Payments of deferred financing costs | 0 | (6,047) |
Net-settle adjustment on restricted stock | (1,288) | (866) |
Dividends paid on common stock | (45,827) | (38,544) |
Distribution to Parent | 0 | 0 |
Intercompany financing | 0 | 0 |
Net cash provided by financing activities | 8,431 | 157,318 |
Net increase in cash and cash equivalents | 8,836 | 7,308 |
Cash and cash equivalents, beginning of period | 6,909 | 7,500 |
Cash and cash equivalents, end of period | 15,745 | 14,808 |
Reportable Legal Entities | Parent Guarantor | ||
Cash flows from operating activities: | ||
Net cash (used in) provided by operating activities | (7) | (157) |
Cash flows from investing activities: | ||
Acquisitions of real estate | 0 | 0 |
Improvements to real estate | 0 | 0 |
Purchases of equipment, furniture and fixtures | 0 | 0 |
Investment in real estate mortgage and other loans receivable | 0 | |
Principal payments received on real estate mortgage and other loans receivable | 0 | |
Escrow deposits for acquisitions of real estate | 0 | 0 |
Net proceeds from the sale of real estate | 0 | |
Sale of other real estate investment | 0 | |
Distribution from subsidiary | 45,827 | 38,544 |
Intercompany financing | (129,251) | (169,391) |
Net cash used in investing activities | (83,424) | (130,847) |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock, net | 130,546 | 170,414 |
Proceeds from the issuance of senior unsecured notes payable | 0 | |
Borrowings under unsecured revolving credit facility | 0 | 0 |
Payments on senior unsecured notes payable | 0 | |
Payments on unsecured revolving credit facility | 0 | 0 |
Payments of deferred financing costs | 0 | |
Net-settle adjustment on restricted stock | (1,288) | (866) |
Dividends paid on common stock | (45,827) | (38,544) |
Distribution to Parent | 0 | 0 |
Intercompany financing | 0 | 0 |
Net cash provided by financing activities | 83,431 | 131,004 |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 |
Cash and cash equivalents, end of period | 0 | 0 |
Reportable Legal Entities | Issuers | ||
Cash flows from operating activities: | ||
Net cash (used in) provided by operating activities | 28,087 | 17,946 |
Cash flows from investing activities: | ||
Acquisitions of real estate | (75,621) | (222,463) |
Improvements to real estate | (5,376) | (571) |
Purchases of equipment, furniture and fixtures | (1,193) | (292) |
Investment in real estate mortgage and other loans receivable | (2,598) | |
Principal payments received on real estate mortgage and other loans receivable | 893 | |
Escrow deposits for acquisitions of real estate | (1,000) | (1,000) |
Net proceeds from the sale of real estate | 13,004 | |
Sale of other real estate investment | 0 | |
Distribution from subsidiary | 0 | 0 |
Intercompany financing | 44,216 | 56,527 |
Net cash used in investing activities | (27,675) | (167,799) |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock, net | 0 | 0 |
Proceeds from the issuance of senior unsecured notes payable | 300,000 | |
Borrowings under unsecured revolving credit facility | 60,000 | 158,000 |
Payments on senior unsecured notes payable | (267,639) | |
Payments on unsecured revolving credit facility | (135,000) | (158,000) |
Payments of deferred financing costs | (6,047) | |
Net-settle adjustment on restricted stock | 0 | 0 |
Dividends paid on common stock | 0 | 0 |
Distribution to Parent | (45,827) | (38,544) |
Intercompany financing | 129,251 | 169,391 |
Net cash provided by financing activities | 8,424 | 157,161 |
Net increase in cash and cash equivalents | 8,836 | 7,308 |
Cash and cash equivalents, beginning of period | 6,909 | 7,500 |
Cash and cash equivalents, end of period | 15,745 | 14,808 |
Reportable Legal Entities | Combined Subsidiary Guarantors | ||
Cash flows from operating activities: | ||
Net cash (used in) provided by operating activities | 44,310 | 49,144 |
Cash flows from investing activities: | ||
Acquisitions of real estate | 0 | 0 |
Improvements to real estate | (25) | (50) |
Purchases of equipment, furniture and fixtures | (69) | (67) |
Investment in real estate mortgage and other loans receivable | 0 | |
Principal payments received on real estate mortgage and other loans receivable | 0 | |
Escrow deposits for acquisitions of real estate | 0 | 0 |
Net proceeds from the sale of real estate | 0 | |
Sale of other real estate investment | 7,500 | |
Distribution from subsidiary | 0 | 0 |
Intercompany financing | 0 | 0 |
Net cash used in investing activities | (94) | 7,383 |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock, net | 0 | 0 |
Proceeds from the issuance of senior unsecured notes payable | 0 | |
Borrowings under unsecured revolving credit facility | 0 | 0 |
Payments on senior unsecured notes payable | 0 | |
Payments on unsecured revolving credit facility | 0 | 0 |
Payments of deferred financing costs | 0 | |
Net-settle adjustment on restricted stock | 0 | 0 |
Dividends paid on common stock | 0 | 0 |
Distribution to Parent | 0 | 0 |
Intercompany financing | (44,216) | (56,527) |
Net cash provided by financing activities | (44,216) | (56,527) |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 |
Cash and cash equivalents, end of period | 0 | 0 |
Elimination | ||
Cash flows from operating activities: | ||
Net cash (used in) provided by operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Acquisitions of real estate | 0 | 0 |
Improvements to real estate | 0 | 0 |
Purchases of equipment, furniture and fixtures | 0 | 0 |
Investment in real estate mortgage and other loans receivable | 0 | |
Principal payments received on real estate mortgage and other loans receivable | 0 | |
Escrow deposits for acquisitions of real estate | 0 | 0 |
Net proceeds from the sale of real estate | 0 | |
Sale of other real estate investment | 0 | |
Distribution from subsidiary | (45,827) | (38,544) |
Intercompany financing | 85,035 | 112,864 |
Net cash used in investing activities | 39,208 | 74,320 |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock, net | 0 | 0 |
Proceeds from the issuance of senior unsecured notes payable | 0 | |
Borrowings under unsecured revolving credit facility | 0 | 0 |
Payments on senior unsecured notes payable | 0 | |
Payments on unsecured revolving credit facility | 0 | 0 |
Payments of deferred financing costs | 0 | |
Net-settle adjustment on restricted stock | 0 | 0 |
Dividends paid on common stock | 0 | 0 |
Distribution to Parent | 45,827 | 38,544 |
Intercompany financing | (85,035) | (112,864) |
Net cash provided by financing activities | (39,208) | (74,320) |
Net increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 |
Cash and cash equivalents, end of period | $ 0 | $ 0 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) $ in Thousands | 1 Months Ended | 9 Months Ended |
Oct. 31, 2018USD ($)propertytransaction | Sep. 30, 2018USD ($)property | |
Subsequent Event [Line Items] | ||
Number of properties acquired | property | 8 | |
Aggregate purchase price | $ 77,351 | |
Initial annual cash rents | $ 6,708 | |
Skilled Nursing Properties | ||
Subsequent Event [Line Items] | ||
Number of properties acquired | property | 7 | |
Aggregate purchase price | $ 57,074 | |
Initial annual cash rents | $ 5,144 | |
Multi-Service Campus Properties | ||
Subsequent Event [Line Items] | ||
Number of properties acquired | property | 1 | |
Aggregate purchase price | $ 20,277 | |
Initial annual cash rents | $ 1,564 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of acquisition transactions | transaction | 2 | |
Aggregate purchase price | $ 12,000 | |
Initial annual cash rents | 1,100 | |
Cash paid for acquisition | 7,000 | |
Borrowings utilized to fund acquisition | $ 5,000 | |
Subsequent Event | Skilled Nursing Properties | ||
Subsequent Event [Line Items] | ||
Number of properties acquired | property | 1 | |
Subsequent Event | Multi-Service Campus Properties | ||
Subsequent Event [Line Items] | ||
Number of properties acquired | property | 1 |