Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 26, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | New Senior Investment Group Inc. | |
Entity Central Index Key | 1,610,114 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 82,148,869 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Real estate investments: | ||
Land | $ 182,238 | $ 182,238 |
Buildings, improvements and other | 2,352,135 | 2,329,524 |
Accumulated depreciation | (341,250) | (275,794) |
Net real estate property | 2,193,123 | 2,235,968 |
Acquired lease and other intangible assets | 8,638 | 264,438 |
Accumulated amortization | (2,788) | (249,198) |
Net real estate intangibles | 5,850 | 15,240 |
Net real estate investments | 2,198,973 | 2,251,208 |
Cash and cash equivalents | 157,365 | 137,327 |
Straight-line rent receivables | 3,321 | 82,445 |
Receivables and other assets, net | 41,352 | 37,047 |
Total Assets | 2,401,011 | 2,508,027 |
Liabilities | ||
Mortgage notes payable, net | 1,951,884 | 1,907,928 |
Due to affiliates | 15,339 | 9,550 |
Accrued expenses and other liabilities | 54,029 | 84,664 |
Total Liabilities | 2,021,252 | 2,002,142 |
Commitments and contingencies (Note 14) | ||
Equity | ||
Preferred Stock $0.01 par value, 100,000,000 shares authorized and none issued or outstanding as of both June 30, 2018 and December 31, 2017 | 0 | 0 |
Common stock $0.01 par value, 2,000,000,000 shares authorized and 82,148,869 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 821 | 821 |
Additional paid-in capital | 898,135 | 898,132 |
Accumulated deficit | (519,197) | (393,068) |
Total Equity | 379,759 | 505,885 |
Total Liabilities and Equity | $ 2,401,011 | $ 2,508,027 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Equity | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 82,148,869 | 82,148,869 |
Common stock, shares outstanding (in shares) | 82,148,869 | 82,148,869 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Revenues | |||||
Resident fees and services | $ 116,178 | $ 84,708 | $ 288,005 | $ 257,473 | |
Rental revenue | 1,582 | 28,247 | 37,825 | 84,741 | |
Total revenues | 117,760 | 112,955 | 325,830 | 342,214 | |
Expenses | |||||
Property operating expense | 77,066 | 58,609 | 192,675 | 176,861 | |
Depreciation and amortization | 22,373 | 35,126 | 73,619 | 108,587 | |
Interest expense | 29,268 | 23,898 | 76,946 | 70,469 | |
Acquisition, transaction and integration expense | 1,559 | 675 | 13,130 | 1,469 | |
Management fees and incentive compensation to affiliate | 3,688 | 3,824 | 11,127 | 14,402 | |
General and administrative expense | 3,219 | 3,958 | 10,111 | 11,695 | |
Loss on extinguishment of debt | 0 | 0 | 58,544 | 672 | |
Other expense | 782 | 1,484 | 2,194 | 1,645 | |
Total expenses | 137,955 | 127,574 | 438,346 | 385,800 | |
Gain on sale of real estate | 0 | 0 | 0 | 22,546 | |
Gain on lease termination | 0 | 0 | 40,090 | 0 | |
Loss before income taxes | (20,195) | (14,619) | (72,426) | (21,040) | |
Income tax expense (benefit) | 104 | (80) | 303 | 273 | |
Net loss | $ (20,299) | $ (14,539) | $ (72,729) | $ (21,313) | |
Earnings Per Share, Diluted | [1] | $ (0.25) | $ (0.18) | $ (0.89) | $ (0.26) |
Weighted Average Number of Shares Outstanding, Diluted | [2] | 82,148,869 | 82,148,869 | 82,148,869 | 82,144,090 |
Weighted average number of shares of common stock outstanding | |||||
Common Stock, Dividends, Per Share, Declared | $ 0.13 | $ 0.26 | $ 0.65 | $ 0.78 | |
Triple Net Lease Properties [Member] | |||||
Revenues | |||||
Resident fees and services | $ 0 | $ 0 | $ 0 | $ 0 | |
Expenses | |||||
Property operating expense | 0 | 0 | 0 | 0 | |
Managed Properties [Member] | |||||
Revenues | |||||
Rental revenue | 0 | 0 | $ 0 | $ 0 | |
Expenses | |||||
Property operating expense | $ 77,066 | $ 58,609 | |||
[1] | Basic earnings per share (“EPS”) is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing net income by the weighted average number of shares of common stock outstanding plus the additional dilutive effect, if any, of common stock equivalents during each period. | ||||
[2] | ll outstanding options were excluded from the diluted share calculation as their effect would have been anti-dilutive. |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands | Total | Common Stock [Member] | Accumulated Deficit [Member] | Additional Paid-in Capital [Member] |
Equity at Dec. 31, 2017 | $ 505,885 | $ 821 | $ (393,068) | $ 898,132 |
Equity (in shares) at Dec. 31, 2017 | 82,148,869 | 82,148,869 | ||
Increase (Decrease) in Equity [Roll Forward] | ||||
Fair value of stock options issued | $ 3 | $ 0 | 0 | 3 |
Dividends declared | (53,400) | 0 | (53,400) | 0 |
Net loss | (72,729) | 0 | (72,729) | 0 |
Equity at Sep. 30, 2018 | $ 379,759 | $ 821 | $ (519,197) | $ 898,135 |
Equity (in shares) at Sep. 30, 2018 | 82,148,869 | 82,148,869 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
Cash Flows From Operating Activities | |||
Net loss | $ (72,729,000) | $ (21,313,000) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation of tangible assets and amortization of intangible assets | 73,654,000 | 108,698,000 | |
Amortization of deferred financing costs | 9,396,000 | 6,997,000 | |
Amortization of deferred revenue, net | 2,346,000 | 219,000 | |
Amortization of premium on mortgage notes payable | 0 | (456,000) | |
Non-cash straight line rent | (5,192,000) | (13,527,000) | |
Gain on sale of real estate | 0 | (22,546,000) | |
Non-cash adjustment on lease termination (A) | [1] | 29,910,000 | 0 |
Gain on lease termination | 40,090,000 | 0 | |
Loss on extinguishment of debt | 58,544,000 | 672,000 | |
Provision for uncollectible receivables | 1,630,000 | 1,719,000 | |
Other non-cash expense | 2,308,000 | 1,296,000 | |
Changes in: | |||
Receivables and other assets, net | (5,046,000) | (1,072,000) | |
Due to affiliates | 5,789,000 | 3,945,000 | |
Accrued expenses and other liabilities | 10,916,000 | 7,304,000 | |
Net cash provided by operating activities | 111,526,000 | 71,936,000 | |
Cash Flows From Investing Activities | |||
Proceeds from the sale of real estate, net | 0 | 47,354,000 | |
Capital expenditures, net of insurance proceeds | (13,605,000) | (14,476,000) | |
Net cash (used in) provided by investing activities | (13,605,000) | 32,878,000 | |
Cash Flows From Financing Activities | |||
Principal payments of mortgage notes payable and capital lease obligations | (16,063,000) | (19,304,000) | |
Proceeds from Notes Payable | 720,000,000 | 0 | |
Repayments of mortgage notes payable | (663,788,000) | (27,968,000) | |
Payment of exit fee on extinguishment of debt | (51,886,000) | (311,000) | |
Payment of deferred financing costs | (13,663,000) | (579,000) | |
Purchase of interest rate caps | (341,000) | 0 | |
Payment of common stock dividend | (53,400,000) | (64,073,000) | |
Net cash used in financing activities | (79,141,000) | (112,235,000) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 18,780,000 | (7,421,000) | |
Cash, cash equivalents and restricted cash, beginning of period | 157,485,000 | 97,517,000 | |
Cash, cash equivalents and restricted cash, end of period | 176,265,000 | 90,096,000 | |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid during the period for interest expense | 67,323,000 | 63,860,000 | |
Income Taxes Paid | 326,000 | 274,000 | |
Supplemental Disclosure of Non-Cash Investing and Financing Activities | |||
Issuance of common stock | 0 | 214,000 | |
Capital Lease Obligations Incurred | 273 | 0 | |
Property, Plant and Equipment, Additions | [2] | 10,065,000 | 0 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | |||
Cash and cash equivalents | 137,327,000 | 58,048,000 | |
Restricted cash | [3] | 20,158,000 | 39,469,000 |
Cash, cash equivalents and restricted cash, beginning of period | 157,485,000 | 97,517,000 | |
Cash and cash equivalents | 157,365,000 | 48,379,000 | |
Restricted cash | [3] | 18,900,000 | 41,717,000 |
Cash, cash equivalents and restricted cash, end of period | 176,265,000 | $ 90,096,000 | |
Holiday Acquisitions Holdings LLC [Member] | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Gain on lease termination | [1] | 40,090,000 | |
Cash Flows From Financing Activities | |||
Payment of deferred financing costs | (12,300,000) | ||
Purchase of interest rate caps | $ (100,000) | ||
[1] | Primarily includes the non-cash write-offs of straight-line rent receivables and net above-market rent lease intangible assets, offset by the fair value of furniture, fixtures, equipment and other improvements received by us as a result of the Lease Termination (as defined in Note 1). Refer to Note 3 for additional details related to the Lease Termination. | ||
[2] | Fair value of furniture, fixtures, equipment and other improvements received by us as a result of the Lease Termination. Refer to Note 3 for additional details related to the Lease Termination. | ||
[3] | Consists of (i) amounts held by lenders in tax, insurance, replacement reserve and other escrow accounts and (ii) security deposits, which are included in “Receivables and other assets, net” in the Consolidated Balance Sheets. |
ORGANIZATION
ORGANIZATION | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION New Senior is a REIT primarily focused on investing in private pay senior housing properties. As of September 30, 2018 , we owned a diversified portfolio of 133 primarily private pay senior housing properties located across 37 states. We are listed on the New York Stock Exchange (“NYSE”) under the symbol “SNR” and are headquartered in New York, New York. We operate in two reportable segments: (1) Managed Properties and (2) Triple Net Lease Properties. Managed Properties – We have engaged property managers to manage 132 of our properties on a day-to-day basis under the Managed Properties segment. These properties consist of 102 independent living (“IL”) facilities and 30 assisted living/memory care (“AL/MC”) facilities. Our managed properties are managed by Holiday Retirement (“Holiday”), a portfolio company that is majority owned by private equity funds managed by an affiliate of FIG LLC (the “Manager”), a subsidiary of Fortress Investment Group LLC (“Fortress”), FHC Property Management LLC (together with its subsidiaries, “Blue Harbor”), an affiliate of the Manager, Jerry Erwin Associates, Inc. (“JEA”), Thrive Senior Living LLC (“Thrive”), Grace Management, Inc. (“Grace”) and Watermark Retirement Communities, Inc. (“Watermark”) under property management agreements. Pursuant to the property management agreements, the property managers are responsible for the day-to-day operations of our senior housing properties and are entitled to a management fee in accordance with the terms of the property management agreements. Our property management agreements have initial five -year or ten -year terms, with successive, automatic one -year renewal periods. We pay property management fees of 5% to 7% of effective gross income pursuant to our property management agreements with Holiday and, in certain cases, Holiday is eligible to earn an incentive fee based on operating performance. We pay property management fees of 3 % to 7 % of gross revenues and, for certain properties, (i) a property management fee based on a percentage of net operating income (“NOI”) and (ii) when eligible, an incentive fee based on operating performance, pursuant to our property management agreements with other managers. On May 9, 2018, we entered into a lease termination agreement to terminate our triple net leases with affiliates of Holiday relating to 51 IL properties (the “Holiday Portfolio”). The lease termination was effective May 14, 2018 (the “Lease Termination”). Concurrently with the Lease Termination, we entered into property management agreements with Holiday to manage the properties in the Holiday Portfolio following the Lease Termination in exchange for a property management fee. As a result, such properties are now included in the Managed Properties segment. Refer to Note 3 for additional details related to the Lease Termination. Triple Net Lease Properties – We own one Continuing Care Retirement Community (“CCRC”) in the United States and lease this property to a healthcare operating company under a triple net lease agreement. In a triple net lease arrangement, the lessee agrees to operate and maintain the property at its own expense, including maintenance, utilities, taxes, insurance, repairs, capital improvements and the payroll expense of property-level employees. Our triple net lease agreement has an initial term of 15 years and includes a renewal option and annual rent increases ranging from 2.75 % to 3.25 %. |
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 and Principles of Consolidation The accompanying consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP’’) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated financial statements include the accounts of New Senior and its consolidated subsidiaries. All significant intercompany transactions and balances have been eliminated. We consolidate those entities in which we have control over significant operating, financial and investing decisions of the entity. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included on Form 10-K for the year ended December 31, 2017 , as filed with the SEC. Certain prior period amounts have been reclassified to conform to the current period’s presentation. Use of Estimates Management is required to make estimates and assumptions when preparing financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the accompanying consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from management’s estimates. Significant Accounting Policies There were no material changes to our significant accounting policies disclosed in our Form 10-K for the year ended December 31, 2017 . Recently Adopted Accounting Pronouncements On January 1, 2018, we adopted ASU 2014-09, Revenues from Contracts with Customers (“ASC 606”) using the modified retrospective method of adoption. This standard requires revenue to be recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. The adoption did not result in an adjustment to beginning retained earnings and did not have a significant impact on our consolidated financial statements. Substantially all of our revenue has been generated through our triple net lease and managed property leasing arrangements, which are specifically excluded from ASC 606, and are accounted for under other applicable GAAP standards. We account for ancillary revenue under ASC 606. The timing and pattern of revenue recognition of our ancillary revenue under ASC 606 is consistent with that under the prior accounting model. Additionally, real estate sales are within the scope of ASC 606, as amended by ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASU 2017-05”). ASU 2017-05 clarifies the scope of subtopic 610-20, Other Income - Gains and Losses from Derecognition of Nonfinancial Assets, and adds guidance for partial sales of nonfinancial assets. Under these models, income recognition for real estate sales is largely based on the transfer of control versus continuing involvement under the current guidance. As a result, more transactions may qualify as sales of real estate and gains or losses may be recognized earlier. Sales of our real estate are generally not executory across points in time and our performance obligations from these contracts are expected to fall within a single period. On January 1, 2018, we adopted ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash , which requires that the statement of cash flows include a reconciliation and explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This standard impacts the presentation of our Consolidated Statements of Cash Flows as activity between cash and cash equivalents and restricted cash is no longer presented in our operating, financing or investing activities. Upon adoption, the changes in classification within the statement of cash flows is applied retrospectively to all periods presented. As a result of the retrospective application, our net cash provided by operating activities increased by $ 6.8 million and our net cash provided by investing activities decreased by $ 4.6 million for the nine months ended September 30, 2017 . On January 1, 2018, we adopted ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments , which provides guidance on how certain cash receipts and cash payments are to be presented and classified on the statement of cash flows. The adoption of this standard did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases . This standard amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The effective date of the standard will be for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and early adoption is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The new standard provides a number of optional practical expedients in transition. We expect to elect the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We continue to assess the guidance and the impact it may have on our consolidated financial statements and have initiated a review to identify embedded leases as well as non-lease components, if any, in our lease agreements. We currently believe the most significant effects relate to (1) the recognition of new right-of-use assets and lease liabilities on our balance sheets for our operating leases where we are the lessee and (2) providing new disclosures about our leasing activities. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments . This standard replaces the current incurred loss methodology with a methodology that reflects expected credit losses. Under this methodology, a company would recognize an impairment allowance equal to its current estimate of all contractual cash flows that it does not expect to collect from financial assets measured at amortized cost. The effective date of the standard will be for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and early adoption is permitted beginning after December 15, 2018. We are assessing the impact this guidance may have on our consolidated financial statements. |
LEASE TERMINATION AND PROPERTY
LEASE TERMINATION AND PROPERTY MANAGEMENT AGREEMENT WITH HOLIDAY (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
LEASE TERMINATION AND PROPERTY MANAGEMENT AGREEMENT WITH HOLIDAY [Abstract] | |
Unusual or Infrequent Items, or Both, Disclosure [Text Block] | LEASE TERMINATION On May 9, 2018, we entered into a lease termination agreement with affiliates of Holiday to terminate our triple net leases relating to the Holiday Portfolio. The Lease Termination was effective May 14, 2018. We received total consideration of $115.6 million , including a $70.0 million termination payment and retention of $45.6 million in security deposits held by us. In connection with the Lease Termination, we also assumed ownership of certain furniture, fixtures, equipment and other improvements with a fair market value of $10.1 million . As a result of the Lease Termination, we recognized a gain on lease termination of $40.1 million after adjusting for write-offs of straight-line rent receivables of $84.3 million and net above-market rent lease intangible assets of $1.2 million . Concurrently with the Lease Termination, we entered into property management agreements with Holiday pursuant to which we pay a management fee equal to a monthly base fee in the amount of 5% of effective gross income in the first year of the term and 4.5% of effective gross income for the remainder of the term. In addition, Holiday is eligible to earn an annual incentive fee of up to 2% of effective gross income if the Holiday Portfolio achieves certain performance thresholds. The agreements may be terminated without penalty after the first year of the term. |
DISPOSITIONS
DISPOSITIONS | 9 Months Ended |
Sep. 30, 2018 | |
Dispositions [Abstract] | |
DISPOSITIONS | DISPOSITIONS We did not have any dispositions during the nine months ended September 30, 2018 . During the nine months ended September 30, 2017 , we sold two AL/MC and two IL properties in the Managed Properties segment for a combined sale price of $ 48.5 million , and recognized a gain on sale of $ 22.5 million , net of selling costs which is included in “Gain on sale of real estate” in the Consolidated Statements of Operations. In connection with this sale, we repaid $ 28.0 million of debt. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING We operate in two reportable business segments: Managed Properties and Triple Net Lease Properties. Under our Managed Properties segment, we invest in senior housing properties throughout the United States and engage property managers to manage those senior housing properties. Under our Triple Net Lease Properties segment, we invest in senior housing and healthcare properties throughout the United States and lease those properties to healthcare operating companies under triple net leases that obligate the tenants to pay all property-related expenses, including maintenance, utilities, taxes, insurance, repairs, capital improvements and the payroll expense of property-level employees. We evaluate performance of the combined properties in each reportable business segment based on segment NOI. We define NOI as total revenues less property-level operating expenses, which include property management fees and travel cost reimbursements. We believe that net income, as defined by GAAP, is the most appropriate earnings measurement. However, we believe that segment NOI serves as a useful supplement to net income because it allows investors, analysts and management to measure unlevered property-level operating results and to compare our operating results between periods and to the operating results of other real estate companies on a consistent basis. Segment NOI should not be considered as an alternative to net income as determined in accordance with GAAP. Effective May 14, 2018, we terminated our triple net leases with respect to the properties in the Holiday Portfolio and concurrently entered into property management agreements with Holiday with respect to such properties. The NOI for such properties following the Lease Termination has been included in the Managed Properties segment. This resulted in a significant increase in the segment NOI of the Managed Properties with a corresponding decrease in the segment NOI of the Triple Net Lease Properties during the three and nine months ended September 30, 2018 . In addition, assets related to such properties are included in the Managed Properties segment as of September 30, 2018 , resulting in a significant increase in the Managed Properties segment assets, and a corresponding decrease in the Triple Net Lease Properties segment assets as of September 30, 2018 . Depreciation and amortization, interest expense, acquisition, transaction and integration expense, management fees and incentive compensation to affiliate, general and administrative expense, loss on extinguishment of debt, other expense, gain on sale of real estate, gain on lease termination and income tax expense are not allocated to individual segments for purposes of assessing segment performance. There are no intersegment sales. Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Triple Net Lease Properties Managed Properties Consolidated Triple Net Lease Properties Managed Consolidated Revenues Resident fees and services $ — $ 116,178 $ 116,178 $ — $ 84,708 $ 84,708 Rental revenue 1,582 — 1,582 28,247 — 28,247 Less: Property operating expense — 77,066 77,066 — 58,609 58,609 Segment NOI $ 1,582 $ 39,112 $ 40,694 $ 28,247 $ 26,099 $ 54,346 Depreciation and amortization 22,373 35,126 Interest expense 29,268 23,898 Acquisition, transaction and integration expense 1,559 675 Management fees and incentive compensation to affiliate 3,688 3,824 General and administrative expense 3,219 3,958 Other expense 782 1,484 Total expenses 60,889 68,965 Loss before income taxes (20,195 ) (14,619 ) Income tax expense (benefit) 104 (80 ) Net loss $ (20,299 ) $ (14,539 ) Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Triple Net Lease Properties Managed Consolidated Triple Net Lease Properties Managed Consolidated Revenues Resident fees and services $ — $ 288,005 $ 288,005 $ — $ 257,473 $ 257,473 Rental revenue 37,825 — 37,825 84,741 — 84,741 Less: Property operating expense — 192,675 192,675 — 176,861 176,861 Segment NOI $ 37,825 $ 95,330 $ 133,155 $ 84,741 $ 80,612 $ 165,353 Depreciation and amortization 73,619 108,587 Interest expense 76,946 70,469 Acquisition, transaction and integration expense 13,130 1,469 Management fees and incentive compensation to affiliate 11,127 14,402 General and administrative expense 10,111 11,695 Loss on extinguishment of debt 58,544 672 Other expense 2,194 1,645 Total expenses 245,671 208,939 Gain on sale of real estate — 22,546 Gain on lease termination 40,090 — Loss before income taxes (72,426 ) (21,040 ) Income tax expense 303 273 Net loss $ (72,729 ) $ (21,313 ) Property operating expense includes property management fees, property-level payroll expense and travel reimbursement costs. See Note 11 for additional information on these expenses related to Blue Harbor and Holiday. Assets by reportable business segment are reconciled to total assets as follows: September 30, 2018 December 31, 2017 Amount Percentage Amount Percentage Managed Properties $ 2,249,851 93.7 % $ 1,430,957 57.1 % Triple Net Lease Properties 59,423 2.5 % 980,666 39.1 % All other assets (A) 91,737 3.8 % 96,404 3.8 % Total assets $ 2,401,011 100.0 % $ 2,508,027 100.0 % (A) Primarily consists of corporate cash which is not directly attributable to our reportable business segments. No rental revenue was attributable to our triple net leases with Holiday, which were terminated in May 2018, for the three months ended September 30, 2018 . Holiday accounted for 19.7% of our total revenues for the three months ended September 30, 2017 , and 10.2% and 19.5% for the nine months ended September 30, 2018 and 2017 , respectively. The decrease in rental revenue received from Holiday is due to the Lease Termination as it only includes rental revenue received by us until the Lease Termination. The following table presents the percentage of total revenues by geographic location: As of and for the nine months ended September 30, 2018 As of and for the nine months ended September 30, 2017 Number of Communities % of Total Revenue Number of Communities % of Total Revenue Florida 15 12.3 % 24 19.0 % California 11 11.2 % 11 10.0 % Texas 13 9.6 % 19 12.2 % North Carolina 9 7.2 % 9 6.5 % Pennsylvania 7 6.9 % 7 6.0 % Oregon 9 5.9 % 9 4.9 % Other 69 46.9 % 69 41.4 % Total 133 100.0 % 148 100.0 % |
REAL ESTATE INVESTMENTS
REAL ESTATE INVESTMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate [Abstract] | |
REAL ESTATE INVESTMENTS | REAL ESTATE INVESTMENTS September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Depreciation Net Carrying Value Gross Carrying Amount Accumulated Depreciation Net Carrying Value Land $ 182,238 $ — $ 182,238 $ 182,238 $ — $ 182,238 Building and improvements 2,225,615 (256,239 ) 1,969,376 2,216,461 (208,540 ) 2,007,921 Furniture, fixtures and equipment 126,520 (85,011 ) 41,509 113,063 (67,254 ) 45,809 Total real estate investments $ 2,534,373 $ (341,250 ) $ 2,193,123 $ 2,511,762 $ (275,794 ) $ 2,235,968 Depreciation expense was $ 22.3 million and $ 23.6 million for the three months ended September 30, 2018 and 2017 , respectively, and $ 65.5 million and $ 70.4 million for the nine months ended September 30, 2018 and 2017 , respectively. The following table summarizes our real estate intangibles: September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted Average Remaining Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted Average Remaining Amortization Period Above/below market lease intangibles, net (A) $ — $ — $ — N/A $ 1,607 $ (380 ) $ 1,227 12.9 years In-place lease and other intangibles 8,638 (2,788 ) 5,850 41.9 years 262,831 (248,818 ) 14,013 18.3 years Total intangibles $ 8,638 $ (2,788 ) $ 5,850 $ 264,438 $ (249,198 ) $ 15,240 (A) Represents balances related to the triple net leases with affiliates of Holiday, which were written-off in conjunction with the Lease Termination. Amortization expense was $ 0.1 million and $ 11.5 million for the three months ended September 30, 2018 and 2017 , respectively, and $ 8.2 million and $ 38.2 million for the nine months ended September 30, 2018 and 2017 , respectively. During the nine months ended September 30, 2018 , we wrote-off $254.2 million of fully amortized in-place lease and other intangible assets. We evaluated long-lived assets, primarily consisting of our real estate investments, for impairment indicators. In performing this evaluation, market conditions and our current intentions with respect to holding or disposing of the asset are considered. Where indicators of impairment are present, we evaluated whether the sum of the expected future undiscounted cash flows is less than book value. Based on such assessment, the future undiscounted cash flows of the underlying operations exceeds the carrying value of such real estate investments, including definite lived intangible assets. Therefore, we did not recognize any impairment loss during the periods presented. Impact of hurricanes The Company has completed an initial assessment of the financial impact of Hurricane Florence. The Company operates six communities in areas impacted by Hurricane Florence. These communities have not sustained material damage to date. During the third quarter of 2018, the Company recognized $0.6 million for damage remediation and other incremental costs which are included in “Other expense” in the Consolidated Statements of Operations. The Company does not expect additional remediation costs in subsequent periods to be material. During the third quarter of 2017, the Company recognized $1.5 million for damage remediation and other incremental costs for 25 properties impacted by Hurricane Irma, which are included in “Other expense” in the Consolidated Statements of Operations. |
STRAIGHT-LINE RENT RECEIVABLES
STRAIGHT-LINE RENT RECEIVABLES | 9 Months Ended |
Sep. 30, 2018 | |
STRAIGHT-LINE RENT RECEIVABLES [Abstract] | |
STRAIGHT-LINE RENT RECEIVABLES | STRAIGHT-LINE RENT RECEIVABLES Rental revenue from the Triple Net Lease Properties segment is recognized on a straight-line basis over the applicable term of the lease when collectability is reasonably assured. Recognizing rental revenue on a straight-line basis typically results in recognizing revenue in excess of cash amounts contractually due from our tenants during the first half of the lease term, creating a straight-line rent receivable. Our straight-line rent receivables were $ 3.3 million and $ 82.4 million as of September 30, 2018 and December 31, 2017 , respectively. The decrease in straight-line rent receivables is due to the write-off of $84.3 million in conjunction with the Lease Termination, effective as of May 14, 2018, and is included in the “Gain on lease termination” in the Consolidated Statements of Operations. Refer to Note 3 for additional details related to the Lease Termination. We assess the collectability of straight-line rent receivables on an ongoing basis. This assessment is based on several qualitative and quantitative factors, including and as appropriate, the payment history of the triple net lease tenant, the tenant’s ability to satisfy its lease obligations, the value of the underlying collateral or deposit, if any, and current economic conditions. We considered the timeliness of lease payments, compliance with lease terms, security and other deposits posted by the tenant and collateral provided by the lease guarantor and determined no reserve was necessary for the periods presented. |
RECEIVABLES AND OTHER ASSETS, N
RECEIVABLES AND OTHER ASSETS, NET | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
RECEIVABLES AND OTHER ASSETS, NET | RECEIVABLES AND OTHER ASSETS, NET September 30, 2018 December 31, 2017 Escrows held by lenders (A) $ 16,471 $ 16,936 Prepaid expenses 4,361 4,490 Resident receivables, net 3,246 2,672 Deferred tax assets, net 5,384 5,475 Security deposits 2,429 3,222 Income tax receivable 890 802 Other assets and receivables 8,571 3,450 Total receivables and other assets $ 41,352 $ 37,047 (A) Represents amounts held by lenders in tax, insurance, replacement reserve and other escrow accounts that are related to mortgage notes collateralized by New Senior’s properties. The following table summarizes the allowance for doubtful accounts and the related provision for uncollectible receivables: Nine Months Ended September 30, 2018 2017 Balance, beginning of period $ 938 $ 976 Provision for uncollectible receivables 1,630 1,719 Write-offs, net of recoveries (1,281 ) (1,710 ) Balance, end of period $ 1,287 $ 985 The provision for resident receivables and related write-offs are included in “Property operating expense” in the Consolidated Statements of Operations. |
MORTGAGE NOTES PAYABLE, NET
MORTGAGE NOTES PAYABLE, NET | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
MORTGAGE NOTES PAYABLE, NET | MORTGAGE NOTES PAYABLE, NET September 30, 2018 December 31, 2017 Outstanding Face Amount Carrying Value (A) Maturity Date Stated Interest Rate Weighted Average Maturity (Years) Outstanding Face Amount Carrying Value (A) Managed Properties Fixed Rate $ 561,933 $ 559,086 Aug 2019 - Sep 2025 3.65% to 4.93% 5.8 $ 563,526 $ 560,182 Floating Rate (B)(C) 1,352,879 1,342,387 May 2019 - May 2022 1M LIBOR 1.9 640,880 636,166 Triple Net Lease Properties Fixed Rate (D) — — — — 0.0 669,656 660,646 Floating Rate (E) 50,456 50,411 Apr 2019 3M LIBOR 0.6 51,036 50,934 Total $ 1,965,268 $ 1,951,884 3.0 $ 1,925,098 $ 1,907,928 (A) The totals are reported net of deferred financing costs of $ 13.4 million and $ 17.2 million as of September 30, 2018 and December 31, 2017 , respectively. (B) Substantially all of these loans have LIBOR caps that range between 3.30% and 3.71% as of September 30, 2018 . (C) I ncludes loans with an outstanding face amount of $720.0 million as of September 30, 2018 , for which interest rates will increase by 0.50% in November 2018 and an additional 0.50% in February 2019. (D) The amounts as of December 31, 2017 represent loans under previous terms, which were refinanced and replaced in May 2018. See below for further information. (E) We have an option to extend the maturity date to April 2020, subject to a fee of 0.125 % of the then-outstanding principal balance. The carrying value of the collateral relating to the fixed rate and floating rate mortgages was $ 0.6 billion and $ 1.6 billion as of September 30, 2018 and $1.5 billion and $0.8 billion as of December 31, 2017 , respectively. The fair values of mortgage notes payable as of September 30, 2018 and December 31, 2017 were $ 1.9 billion and $ 1.9 billion , respectively. Mortgage notes payable are not measured at fair value in the Consolidated Balance Sheets. The disclosed fair value of mortgage notes payable, classified as level 3 within the fair value hierarchy, is based on a discounted cash flow valuation model. Significant inputs in the model include amounts and timing of expected future cash flows and market yields which are constructed based on inputs implied from similar debt offerings. In May 2018, we repaid $663.8 million of secured loans in conjunction with the Lease Termination. We recognized a loss on extinguishment of debt of $58.5 million , comprised of $51.9 million in prepayment penalties and $6.6 million in the write-off of deferred financing costs on the loans. The repayment was facilitated by a one-year secured term loan of $720.0 million (the “Term Loan”). We incurred a total of $12.3 million in deferred financing costs, which have been capitalized and amortized over the life of the Term Loan and the amortization is included in interest expense on the Consolidated Statements of Operations. Deferred financing costs are reported as a direct deduction from the carrying amount of the related mortgage notes payable on the Consolidated Balance Sheets. In February 2018, we exercised an option to extend a balloon payment of $50.7 million from April 2018 to April 2019. During the nine months ended September 30, 2017 , we repaid $ 28.0 million of debt associated with the sale of two AL/MC and two IL properties in the Managed Properties segment and recognized a loss on extinguishment of debt of $ 0.7 million , which represents the write-off of related unamortized deferred financing costs and other exit fees. Our mortgage notes payable contain various customary financial and other covenants, in some cases including Debt Service Coverage Ratio and Project Yield, as defined in the agreements. We were in compliance with the covenants in our mortgage notes payable agreements as of September 30, 2018 . Interest rate caps In May 2018, we paid $0.1 million to enter into an interest rate cap on the Term Loan, which caps LIBOR at 3.50% , has a notional value of $720.0 million and is effective through May 2019. In March 2018, we paid $0.3 million to renew an interest rate cap on our floating rate debt, which caps LIBOR at 3.66% , has a notional value of $591.2 million and is effective through April 2020. Our interest rate caps are level 2 instruments and we estimate the fair value based on pricing models that consider inputs including forward yield curves, cap strike rates, cap volatility and discount rates. We recognized fair value losses of $ 0.1 million and $ 0.0 million for the three months ended September 30, 2018 and 2017 , respectively, and $ 0.3 million and $ 0.1 million for the nine months ended September 30, 2018 and 2017 , respectively, which are included in “Other expense” in the Consolidated Statements of Operations and “Other non-cash expense” in the Consolidated Statements of Cash Flows. The fair value was $ 0.1 million as of September 30, 2018 and is included in “Receivables and other assets, net” in the Consolidated Balance Sheets. The fair value as of December 31, 2017 was not material. |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | ACCRUED EXPENSES AND OTHER LIABILITIES September 30, 2018 December 31, 2017 Security deposits payable (A) $ 2,829 $ 46,291 Escrow liabilities (B) 700 6,664 Accounts payable 13,834 9,794 Mortgage interest payable 6,520 6,297 Deferred revenue, net 8,658 6,315 Rent collected in advance 3,062 2,091 Property tax payable 10,947 3,331 Other liabilities 7,479 3,881 Total accrued expenses and other liabilities $ 54,029 $ 84,664 (A) Decrease from December 31, 2017 represents the retention of security deposits by us as a result of the Lease Termination. Refer to Note 3 for additional details related to the Lease Termination. (B) Represents amounts held by lenders in tax, insurance, replacement reserve and other escrow accounts that are related to mortgage notes collateralized by New Senior’s triple net lease properties. |
TRANSACTIONS WITH AFFILIATES
TRANSACTIONS WITH AFFILIATES | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH AFFILIATES | TRANSACTIONS WITH AFFILIATES Management Agreements We are party to a management agreement (the “Management Agreement”) with the Manager, under which the Manager advises us on various aspects of our business and manages our day-to-day operations, subject to the supervision of our board of directors. For its management services, the Manager is entitled to a base management fee of 1.5 % per annum of our gross equity. Gross equity is generally defined as the equity invested by Drive Shack Inc. (“Drive Shack”) (including cash contributed to us) as of the completion of the spin-off from Drive Shack, plus the aggregate offering price from stock offerings, plus certain capital contributions to subsidiaries, less capital distributions (calculated without regard to depreciation and amortization) and repurchases of common stock, calculated and payable monthly in arrears in cash. We incurred management fees of $ 3.7 million and $ 3.8 million during the three months ended September 30, 2018 and 2017 , respectively, and $ 11.1 million and $ 11.5 million during the nine months ended September 30, 2018 and 2017 , respectively, under the Management Agreement, which are included in “Management fees and incentive compensation to affiliate” in the Consolidated Statements of Operations. As of September 30, 2018 and December 31, 2017 , we had a payable for management fees of $ 3.7 million and $ 1.3 million , respectively, which is included in “Due to affiliates” in the Consolidated Balance Sheets. The Manager is entitled to receive, on a quarterly basis, incentive compensation on a cumulative, but not compounding basis, in an amount equal to the product of (A) 25 % of the dollar amount by which (1)(a) funds from operations (as defined in the Management Agreement) before the incentive compensation per share of common stock, plus (b) gains (or losses) from sales of property per share of common stock, plus (c) internal and third party acquisition-related expenses, plus (d) unconsummated transaction expenses, and plus (e) other non-routine items (as defined in the Management Agreement), exceed (2) an amount equal to (a) the weighted average value per share of the equity invested by Drive Shack in the assets of New Senior (including cash contributed to us) as of the completion of the spin-off and the price per share of our common stock in any offerings by us (adjusted for prior capital dividends or capital distributions, which shall be calculated without regard to depreciation and amortization and repurchases of common stock) multiplied by (b) a simple interest rate of 10 % per annum, multiplied by (B) the weighted average number of shares of common stock outstanding. The Manager did not earn incentive compensation during the three and nine months ended September 30, 2018 and the three months ended September 30, 2017 . The Manager earned incentive compensation of $2.9 million during the nine months ended September 30, 2017 , which is included in “Management fees and incentive compensation to affiliate” in the Consolidated Statements of Operations. The Manager is also entitled to receive, upon the successful completion of an equity offering, options with respect to 10% of the number of shares sold in the offering with an exercise price equal to the price paid by the purchaser in the offering. Because the Manager’s employees perform certain legal, accounting, due diligence, asset management and other services that outside professionals or outside consultants otherwise would perform, the Manager is paid or reimbursed, pursuant to the Management Agreement, for the cost of performing such tasks, provided that such costs and reimbursements are no greater than those which would be paid to outside professionals or consultants on an arm’s-length basis. We are also required to pay all operating expenses, except those specifically required to be borne by the Manager under the Management Agreement. We are required to pay expenses that include, but are not limited to, issuance and transaction costs incidental to the sourcing, evaluation, acquisition, management, disposition, and financing of our investments, legal, underwriting, sourcing, asset management and accounting and auditing fees and expenses, the compensation and expenses of independent directors, the costs associated with the establishment and maintenance of any credit facilities and other indebtedness (including commitment fees, legal fees, closing costs, etc.), expenses associated with other securities offerings, the costs of printing and mailing proxies and reports to our stockholders, costs incurred by employees or agents of the Manager for travel on our behalf, costs associated with any computer software or hardware that is used by us, costs to obtain liability insurance to indemnify directors and officers and the compensation and expenses of our transfer agent. The following table summarizes our reimbursement to the Manager for costs incurred for tasks and other services performed by the Manager under the Management Agreement: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Included in: General and administrative expense $ 1,463 $ 1,723 $ 4,734 $ 5,630 Acquisition, transaction and integration expense 206 494 1,054 1,144 Total reimbursements to the Manager $ 1,669 $ 2,217 $ 5,788 $ 6,774 As of September 30, 2018 and December 31, 2017 , we had a payable for Manager reimbursements of $ 2.0 million and $ 1.3 million , respectively, which is included in “Due to affiliates” in the Consolidated Balance Sheets. Property Management Agreements Within our Managed Properties segment, we are party to property management agreements with Blue Harbor, an affiliate of Fortress, and Holiday, a portfolio company that is majority owned by a private equity fund managed by an affiliate of Fortress, to manage most of its senior housing properties. Pursuant to these property management agreements, we pay monthly property management fees. For AL/MC properties managed by Blue Harbor and Holiday, we pay management fees equal to 6 % of effective gross income for the first two years and 7 % thereafter. For IL properties managed by Blue Harbor and Holiday, we generally pay management fees equal to 5 % of effective gross income. For certain property management agreements, we may also pay an incentive fee based on operating performance of the properties. No incentive fees were incurred during the nine months ended September 30, 2018 and 2017 . Property management fees are included in “Property operating expense” in the Consolidated Statements of Operations. Other amounts paid to affiliated managers that are included in property operating expense are payroll expense and travel reimbursement costs. The payroll expense is structured as a reimbursement to the property manager, who is the employer of record. In May 2018, concurrently with the Lease Termination, we entered into property management agreements with Holiday, pursuant to which we pay a management fee equal to a monthly base fee in the amount of 5% of effective gross income in the first year and 4.5% of effective gross income for the remainder of the term. In addition, Holiday is eligible to earn an annual incentive fee of up to 2% of effective gross income if the Holiday Portfolio achieves certain performance thresholds. The agreements may be terminated without penalty after the first year of the term. Refer to Note 3 for additional details related to the Lease Termination. The following table summarizes property management fees and reimbursements paid to property managers affiliated with Fortress: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Property management fees $ 5,909 $ 4,523 $ 14,749 $ 14,156 Travel reimbursement costs 56 77 169 242 Property-level payroll expenses 28,526 23,081 71,760 71,692 As of September 30, 2018 and December 31, 2017 , we had payables for property management fees of $ 2.0 million and $ 1.4 million , respectively, and property-level payroll expenses of $ 7.7 million and $ 5.6 million , respectively, which are included in “Due to affiliates” in the Consolidated Balance Sheets. The property management agreements with affiliated managers have initial terms of 5 or 10 years and provide for automatic one -year extensions after the initial term, subject to termination rights. Triple Net Lease Agreements On May 9, 2018, we entered into a lease termination agreement to terminate our triple net leases with affiliates of Holiday. The Lease Termination was effective May 14, 2018. We received total consideration of $115.6 million , including a $70.0 million termination payment and retention of $45.6 million in security deposits held by us. Prior to the Lease Termination, we received monthly rent payments in accordance with the terms of the leases. No payments were received during the three months ended September 30, 2018 . We received $ 18.6 million during the three months ended September 30, 2017 , and $ 28.5 million and $ 55.7 million during the nine months ended September 30, 2018 and 2017 , respectively. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES New Senior is organized and conducts its operations to qualify as a REIT under the requirements of the Internal Revenue Code of 1986, as amended (the “Code”). However, certain of our activities are conducted through our taxable REIT subsidiary (“TRS”) and therefore are subject to federal and state income taxes at regular corporate tax rates. The following table presents the provision for income taxes: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Current Federal $ — $ — $ (42 ) $ — State and local 100 67 254 221 Total current provision 100 67 212 221 Deferred Federal (94 ) (60 ) (15 ) 92 State and local 98 (87 ) 106 (40 ) Total deferred provision 4 (147 ) 91 52 Total provision for income taxes $ 104 $ (80 ) $ 303 $ 273 The following table presents the significant components of deferred tax assets: September 30, 2018 December 31, 2017 Deferred tax assets: Prepaid fees and rent $ 849 $ 790 Net operating losses 4,084 4,050 Deferred rent 328 949 Tax credits — 42 Other 123 99 Total deferred tax assets 5,384 5,930 Less valuation allowance — — Net deferred tax assets 5,384 5,930 Deferred tax liabilities: Depreciation and amortization — 455 Total deferred tax liabilities — 455 Total net deferred tax assets $ 5,384 $ 5,475 In assessing the recoverability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income by the TRS during the periods in which temporary differences become deductible and before the net operating loss carryforward expires. We have not recorded a valuation allowance against our deferred tax assets as of September 30, 2018 or December 31, 2017 as management believes that it is more likely than not that our deferred tax assets will be realized. On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. The Act includes a number of significant changes to existing U.S. corporate income tax laws, most notably a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent, effective January 1, 2018. We measure deferred tax assets using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, our deferred tax assets were remeasured to reflect the reduction in the U.S. corporate income tax rate, resulting in a non-recurring $ 3.0 million increase in income tax expense for the year ended December 31, 2017 and a corresponding decrease of the same amount in our deferred tax assets as of December 31, 2017. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
EQUITY | EQUITY In the first quarter of 2018, strike prices for outstanding options were reduced by $ 1.04 , reflecting the portion of our 2017 dividends which were deemed return of capital. In March 2018, we granted options to a new director relating to 5,000 shares of common stock, the grant date fair value of which was not material. As of September 30, 2018 , approximately 1.3 million shares of our common stock were held by Fortress, through its affiliates, and its principals. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES As of September 30, 2018 , management believes there are no material contingencies that would affect our results of operations, cash flows or financial position. Certain Obligations, Liabilities and Litigation We are and may become subject to various obligations, liabilities, investigations, inquiries and litigation assumed in connection with or arising from our on-going business, as well as acquisitions, sales, leasing and other activities. These obligations and liabilities (including the costs associated with investigations, inquiries and litigation) may be greater than expected or may not be known in advance. Any such obligations or liabilities could have a material adverse effect on our financial position, cash flows and results of operations, particularly if we are not entitled to indemnification, or if a responsible third party fails to indemnify us. Certain Tax-Related Covenants If we are treated as a successor to Drive Shack under applicable U.S. federal income tax rules, and if Drive Shack failed to qualify as a REIT for a taxable year ending on or before December 31, 2015, we could be prohibited from electing to be a REIT. Accordingly, in the separation and distribution agreement entered into to effect our spin-off from Drive Shack (“Separation and Distribution Agreement”), Drive Shack (i) represented that it had no knowledge of any fact or circumstance that would cause us to fail to qualify as a REIT, (ii) covenanted to use commercially reasonable efforts to cooperate with New Senior as necessary to enable us to qualify for taxation as a REIT and receive customary legal opinions concerning REIT status, including providing information and representations to us and our tax counsel with respect to the composition of Drive Shack’s income and assets, the composition of its stockholders and its operation as a REIT, and (iii) covenanted to use its reasonable best efforts to maintain its REIT status for each of Drive Shack’s taxable years ending on or before December 31, 2015 (unless Drive Shack obtains an opinion from a nationally recognized tax counsel or a private letter ruling from the Internal Revenue Service (“IRS”) to the effect that Drive Shack’s failure to maintain its REIT status will not cause us to fail to qualify as a REIT under the successor REIT rule referred to above). Proceedings Indemnified and Defended by Third Parties From time to time, we are party to certain legal actions, regulatory investigations and claims for which third parties are contractually obligated to indemnify, defend and hold us harmless. While we are presently not being defended by any tenant and other obligated third parties in these types of matters, there is no assurance that our tenants, their affiliates or other obligated third parties will defend us in these matters in the future, or that such parties will have sufficient assets, income and access to financing to enable them to satisfy their defense and indemnification obligations to us. Environmental Costs As a commercial real estate owner, we are subject to potential environmental costs. As of September 30, 2018 , management is not aware of any environmental concerns that would have a material adverse effect on our financial position or results of operations. Capital Improvement and Repair Commitments We have agreed to make $ 1.0 million available for capital improvements during the 15 year lease period to the triple net lease property under Watermark, none of which has been funded as of September 30, 2018 . Upon funding these capital improvements, we will be entitled to a rent increase. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS These consolidated financial statements include a discussion of material events, if any, which have occurred subsequent to September 30, 2018 (referred to as subsequent events) through the issuance of the consolidated financial statements. On October 29, 2018, the Company’s board of directors declared a cash dividend on its common stock of $0.13 per common share for the quarter ended September 30, 2018 . The dividend is payable on December 21, 2018 to shareholders of record on December 7, 2018. On October 10, 2018, we refinanced the Term Loan with a seven-year secured loan of $720.0 million bearing interest at LIBOR plus 2.32% . We incurred approximately $11.6 million of expenses related to the refinancing, which will be capitalized and amortized over the life of the loan. We expect to write off approximately $6.2 million of deferred financing costs associated with the Term Loan. In October 2018, we paid $2.5 million to enter into an interest rate cap on the refinancing of the Term Loan, which caps LIBOR at 3.68%, has a notional value of $720.0 million and is effective through November 1, 2021. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The accompanying consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP’’) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated financial statements include the accounts of New Senior and its consolidated subsidiaries. All significant intercompany transactions and balances have been eliminated. We consolidate those entities in which we have control over significant operating, financial and investing decisions of the entity. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included on Form 10-K for the year ended December 31, 2017 , as filed with the SEC. |
Reclassifications | Certain prior period amounts have been reclassified to conform to the current period’s presentation. |
Use of Estimates | Use of Estimates Management is required to make estimates and assumptions when preparing financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the accompanying consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from management’s estimates. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements On January 1, 2018, we adopted ASU 2014-09, Revenues from Contracts with Customers (“ASC 606”) using the modified retrospective method of adoption. This standard requires revenue to be recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. The adoption did not result in an adjustment to beginning retained earnings and did not have a significant impact on our consolidated financial statements. Substantially all of our revenue has been generated through our triple net lease and managed property leasing arrangements, which are specifically excluded from ASC 606, and are accounted for under other applicable GAAP standards. We account for ancillary revenue under ASC 606. The timing and pattern of revenue recognition of our ancillary revenue under ASC 606 is consistent with that under the prior accounting model. Additionally, real estate sales are within the scope of ASC 606, as amended by ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASU 2017-05”). ASU 2017-05 clarifies the scope of subtopic 610-20, Other Income - Gains and Losses from Derecognition of Nonfinancial Assets, and adds guidance for partial sales of nonfinancial assets. Under these models, income recognition for real estate sales is largely based on the transfer of control versus continuing involvement under the current guidance. As a result, more transactions may qualify as sales of real estate and gains or losses may be recognized earlier. Sales of our real estate are generally not executory across points in time and our performance obligations from these contracts are expected to fall within a single period. On January 1, 2018, we adopted ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash , which requires that the statement of cash flows include a reconciliation and explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This standard impacts the presentation of our Consolidated Statements of Cash Flows as activity between cash and cash equivalents and restricted cash is no longer presented in our operating, financing or investing activities. Upon adoption, the changes in classification within the statement of cash flows is applied retrospectively to all periods presented. As a result of the retrospective application, our net cash provided by operating activities increased by $ 6.8 million and our net cash provided by investing activities decreased by $ 4.6 million for the nine months ended September 30, 2017 . On January 1, 2018, we adopted ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments , which provides guidance on how certain cash receipts and cash payments are to be presented and classified on the statement of cash flows. The adoption of this standard did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases . This standard amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The effective date of the standard will be for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and early adoption is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The new standard provides a number of optional practical expedients in transition. We expect to elect the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We continue to assess the guidance and the impact it may have on our consolidated financial statements and have initiated a review to identify embedded leases as well as non-lease components, if any, in our lease agreements. We currently believe the most significant effects relate to (1) the recognition of new right-of-use assets and lease liabilities on our balance sheets for our operating leases where we are the lessee and (2) providing new disclosures about our leasing activities. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments . This standard replaces the current incurred loss methodology with a methodology that reflects expected credit losses. Under this methodology, a company would recognize an impairment allowance equal to its current estimate of all contractual cash flows that it does not expect to collect from financial assets measured at amortized cost. The effective date of the standard will be for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and early adoption is permitted beginning after December 15, 2018. We are assessing the impact this guidance may have on our consolidated financial statements. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | |
Segment Reporting | Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Triple Net Lease Properties Managed Properties Consolidated Triple Net Lease Properties Managed Consolidated Revenues Resident fees and services $ — $ 116,178 $ 116,178 $ — $ 84,708 $ 84,708 Rental revenue 1,582 — 1,582 28,247 — 28,247 Less: Property operating expense — 77,066 77,066 — 58,609 58,609 Segment NOI $ 1,582 $ 39,112 $ 40,694 $ 28,247 $ 26,099 $ 54,346 Depreciation and amortization 22,373 35,126 Interest expense 29,268 23,898 Acquisition, transaction and integration expense 1,559 675 Management fees and incentive compensation to affiliate 3,688 3,824 General and administrative expense 3,219 3,958 Other expense 782 1,484 Total expenses 60,889 68,965 Loss before income taxes (20,195 ) (14,619 ) Income tax expense (benefit) 104 (80 ) Net loss $ (20,299 ) $ (14,539 ) Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Triple Net Lease Properties Managed Consolidated Triple Net Lease Properties Managed Consolidated Revenues Resident fees and services $ — $ 288,005 $ 288,005 $ — $ 257,473 $ 257,473 Rental revenue 37,825 — 37,825 84,741 — 84,741 Less: Property operating expense — 192,675 192,675 — 176,861 176,861 Segment NOI $ 37,825 $ 95,330 $ 133,155 $ 84,741 $ 80,612 $ 165,353 Depreciation and amortization 73,619 108,587 Interest expense 76,946 70,469 Acquisition, transaction and integration expense 13,130 1,469 Management fees and incentive compensation to affiliate 11,127 14,402 General and administrative expense 10,111 11,695 Loss on extinguishment of debt 58,544 672 Other expense 2,194 1,645 Total expenses 245,671 208,939 Gain on sale of real estate — 22,546 Gain on lease termination 40,090 — Loss before income taxes (72,426 ) (21,040 ) Income tax expense 303 273 Net loss $ (72,729 ) $ (21,313 ) Property operating expense includes property management fees, property-level payroll expense and travel reimbursement costs. See Note 11 for additional information on these expenses related to Blue Harbor and Holiday. Assets by reportable business segment are reconciled to total assets as follows: September 30, 2018 December 31, 2017 Amount Percentage Amount Percentage Managed Properties $ 2,249,851 93.7 % $ 1,430,957 57.1 % Triple Net Lease Properties 59,423 2.5 % 980,666 39.1 % All other assets (A) 91,737 3.8 % 96,404 3.8 % Total assets $ 2,401,011 100.0 % $ 2,508,027 100.0 % |
Percentage of Total Revenues by Geographic Location | The following table presents the percentage of total revenues by geographic location: As of and for the nine months ended September 30, 2018 As of and for the nine months ended September 30, 2017 Number of Communities % of Total Revenue Number of Communities % of Total Revenue Florida 15 12.3 % 24 19.0 % California 11 11.2 % 11 10.0 % Texas 13 9.6 % 19 12.2 % North Carolina 9 7.2 % 9 6.5 % Pennsylvania 7 6.9 % 7 6.0 % Oregon 9 5.9 % 9 4.9 % Other 69 46.9 % 69 41.4 % Total 133 100.0 % 148 100.0 % |
REAL ESTATE INVESTMENTS (Tables
REAL ESTATE INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate [Abstract] | |
Real Estate Investments | September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Depreciation Net Carrying Value Gross Carrying Amount Accumulated Depreciation Net Carrying Value Land $ 182,238 $ — $ 182,238 $ 182,238 $ — $ 182,238 Building and improvements 2,225,615 (256,239 ) 1,969,376 2,216,461 (208,540 ) 2,007,921 Furniture, fixtures and equipment 126,520 (85,011 ) 41,509 113,063 (67,254 ) 45,809 Total real estate investments $ 2,534,373 $ (341,250 ) $ 2,193,123 $ 2,511,762 $ (275,794 ) $ 2,235,968 |
Real Estate Intangibles | The following table summarizes our real estate intangibles: September 30, 2018 December 31, 2017 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted Average Remaining Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted Average Remaining Amortization Period Above/below market lease intangibles, net (A) $ — $ — $ — N/A $ 1,607 $ (380 ) $ 1,227 12.9 years In-place lease and other intangibles 8,638 (2,788 ) 5,850 41.9 years 262,831 (248,818 ) 14,013 18.3 years Total intangibles $ 8,638 $ (2,788 ) $ 5,850 $ 264,438 $ (249,198 ) $ 15,240 |
RECEIVABLES AND OTHER ASSETS,_2
RECEIVABLES AND OTHER ASSETS, NET (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Receivables and Other Assets, Net | September 30, 2018 December 31, 2017 Escrows held by lenders (A) $ 16,471 $ 16,936 Prepaid expenses 4,361 4,490 Resident receivables, net 3,246 2,672 Deferred tax assets, net 5,384 5,475 Security deposits 2,429 3,222 Income tax receivable 890 802 Other assets and receivables 8,571 3,450 Total receivables and other assets $ 41,352 $ 37,047 (A) Represents amounts held by lenders in tax, insurance, replacement reserve and other escrow accounts that are related to mortgage notes collateralized by New Senior’s properties. |
Allowance for Doubtful Accounts and Related Provision for Resident Receivables | The following table summarizes the allowance for doubtful accounts and the related provision for uncollectible receivables: Nine Months Ended September 30, 2018 2017 Balance, beginning of period $ 938 $ 976 Provision for uncollectible receivables 1,630 1,719 Write-offs, net of recoveries (1,281 ) (1,710 ) Balance, end of period $ 1,287 $ 985 |
MORTGAGE NOTES PAYABLE, NET (Ta
MORTGAGE NOTES PAYABLE, NET (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable, Net | September 30, 2018 December 31, 2017 Outstanding Face Amount Carrying Value (A) Maturity Date Stated Interest Rate Weighted Average Maturity (Years) Outstanding Face Amount Carrying Value (A) Managed Properties Fixed Rate $ 561,933 $ 559,086 Aug 2019 - Sep 2025 3.65% to 4.93% 5.8 $ 563,526 $ 560,182 Floating Rate (B)(C) 1,352,879 1,342,387 May 2019 - May 2022 1M LIBOR 1.9 640,880 636,166 Triple Net Lease Properties Fixed Rate (D) — — — — 0.0 669,656 660,646 Floating Rate (E) 50,456 50,411 Apr 2019 3M LIBOR 0.6 51,036 50,934 Total $ 1,965,268 $ 1,951,884 3.0 $ 1,925,098 $ 1,907,928 (A) The totals are reported net of deferred financing costs of $ 13.4 million and $ 17.2 million as of September 30, 2018 and December 31, 2017 , respectively. (B) Substantially all of these loans have LIBOR caps that range between 3.30% and 3.71% as of September 30, 2018 . (C) I ncludes loans with an outstanding face amount of $720.0 million as of September 30, 2018 , for which interest rates will increase by 0.50% in November 2018 and an additional 0.50% in February 2019. (D) The amounts as of December 31, 2017 represent loans under previous terms, which were refinanced and replaced in May 2018. See below for further information. (E) We have an option to extend the maturity date to April 2020, subject to a fee of 0.125 % of the then-outstanding principal balance. |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | September 30, 2018 December 31, 2017 Security deposits payable (A) $ 2,829 $ 46,291 Escrow liabilities (B) 700 6,664 Accounts payable 13,834 9,794 Mortgage interest payable 6,520 6,297 Deferred revenue, net 8,658 6,315 Rent collected in advance 3,062 2,091 Property tax payable 10,947 3,331 Other liabilities 7,479 3,881 Total accrued expenses and other liabilities $ 54,029 $ 84,664 (A) Decrease from December 31, 2017 represents the retention of security deposits by us as a result of the Lease Termination. Refer to Note 3 for additional details related to the Lease Termination. (B) Represents amounts held by lenders in tax, insurance, replacement reserve and other escrow accounts that are related to mortgage notes collateralized by New Senior’s triple net lease properties. |
TRANSACTIONS WITH AFFILIATES Tr
TRANSACTIONS WITH AFFILIATES Transactions With Affiliates (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Transactions With Affiliates [Abstract] | |
Reimbursement to the Manager for Services Performed by the Manager | The following table summarizes our reimbursement to the Manager for costs incurred for tasks and other services performed by the Manager under the Management Agreement: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Included in: General and administrative expense $ 1,463 $ 1,723 $ 4,734 $ 5,630 Acquisition, transaction and integration expense 206 494 1,054 1,144 Total reimbursements to the Manager $ 1,669 $ 2,217 $ 5,788 $ 6,774 |
Property Management Fees and Other Expenses Reimbursed to Property Managers | The following table summarizes property management fees and reimbursements paid to property managers affiliated with Fortress: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Property management fees $ 5,909 $ 4,523 $ 14,749 $ 14,156 Travel reimbursement costs 56 77 169 242 Property-level payroll expenses 28,526 23,081 71,760 71,692 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | The following table presents the provision for income taxes: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Current Federal $ — $ — $ (42 ) $ — State and local 100 67 254 221 Total current provision 100 67 212 221 Deferred Federal (94 ) (60 ) (15 ) 92 State and local 98 (87 ) 106 (40 ) Total deferred provision 4 (147 ) 91 52 Total provision for income taxes $ 104 $ (80 ) $ 303 $ 273 |
Deferred Tax Assets | The following table presents the significant components of deferred tax assets: September 30, 2018 December 31, 2017 Deferred tax assets: Prepaid fees and rent $ 849 $ 790 Net operating losses 4,084 4,050 Deferred rent 328 949 Tax credits — 42 Other 123 99 Total deferred tax assets 5,384 5,930 Less valuation allowance — — Net deferred tax assets 5,384 5,930 Deferred tax liabilities: Depreciation and amortization — 455 Total deferred tax liabilities — 455 Total net deferred tax assets $ 5,384 $ 5,475 |
ORGANIZATION (Details)
ORGANIZATION (Details) | 9 Months Ended |
Sep. 30, 2018segmentProperty | |
Organization [Abstract] | |
Number of Real Estate Properties | 133 |
Number of states in which properties are located | 37 |
Number of reportable segments | segment | 2 |
Managed Properties [Member] | |
Organization [Abstract] | |
Number of Real Estate Properties | 132 |
Extension period after initial term of Property Management Agreements | 1 year |
Managed Properties [Member] | Minimum [Member] | |
Organization [Abstract] | |
Initial term of Property Management Agreements | 5 years |
Managed Properties [Member] | Maximum [Member] | |
Organization [Abstract] | |
Initial term of Property Management Agreements | 10 years |
Managed Properties [Member] | Holiday Acquisitions Holdings LLC [Member] | Minimum [Member] | |
Organization [Abstract] | |
Percentage of property's effective gross income paid as property management fees | 5.00% |
Managed Properties [Member] | Holiday Acquisitions Holdings LLC [Member] | Maximum [Member] | |
Organization [Abstract] | |
Percentage of property's effective gross income paid as property management fees | 7.00% |
Managed Properties [Member] | Other Property Managers [Member] | Minimum [Member] | |
Organization [Abstract] | |
Percentage of property's gross revenues paid as property management fees | 3.00% |
Managed Properties [Member] | Other Property Managers [Member] | Maximum [Member] | |
Organization [Abstract] | |
Percentage of property's gross revenues paid as property management fees | 7.00% |
Managed Properties [Member] | Independent Living Properties [Member] | |
Organization [Abstract] | |
Number of Real Estate Properties | 102 |
Managed Properties [Member] | Independent Living Properties [Member] | Holiday Acquisitions Holdings LLC [Member] | |
Organization [Abstract] | |
Number of Real Estate Properties | 51 |
Managed Properties [Member] | Assisted Living and Memory Care Properties [Member] | |
Organization [Abstract] | |
Number of Real Estate Properties | 30 |
Triple Net Lease Properties [Member] | Minimum [Member] | |
Organization [Abstract] | |
Term of lease agreements | 15 years |
Rent increase percentage in lease agreements | 2.75% |
Triple Net Lease Properties [Member] | Maximum [Member] | |
Organization [Abstract] | |
Rent increase percentage in lease agreements | 3.25% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Revenue Recognition [Abstract] | |
Adjustment to net cash provided by operating activities due to adoption of ASU 2016-18 | $ 6.8 |
Adjustment to net cash provided by investing activities due to adoption of ASU 2016-18 | $ 4.6 |
LEASE TERMINATION AND PROPERT_2
LEASE TERMINATION AND PROPERTY MANAGEMENT AGREEMENT WITH HOLIDAY (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | ||
Segment Reporting Information [Line Items] | ||||||
Gain on lease termination | $ 0 | $ 0 | $ 40,090,000 | $ 0 | ||
Consideration Received, Lease Termination Agreement | 115,600,000 | |||||
Termination Payment, Lease Termination Agreement | 70,000,000 | |||||
Security Deposit | 2,429,000 | 2,429,000 | $ 3,222,000 | |||
Property, Plant and Equipment, Additions | [1] | 10,065,000 | $ 0 | |||
Deferred Rent Asset, Net, Current | 84,316,000 | $ 84,316,000 | ||||
Incentive fee percentage | 2.00% | |||||
Holiday Acquisitions Holdings LLC [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Other Intangible Assets, Net | 1,192,000 | $ 1,192,000 | ||||
Gain on lease termination | [2] | 40,090,000 | ||||
Security Deposit | $ 45,600,000 | $ 45,600,000 | ||||
Managed Properties [Member] | Holiday Acquisitions Holdings LLC [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Percentage of property's effective gross income paid as property management fees, year two and onward | 4.50% | |||||
Percentage of property's effective gross income paid as property management fees, year one | 5.00% | |||||
[1] | Fair value of furniture, fixtures, equipment and other improvements received by us as a result of the Lease Termination. Refer to Note 3 for additional details related to the Lease Termination. | |||||
[2] | Primarily includes the non-cash write-offs of straight-line rent receivables and net above-market rent lease intangible assets, offset by the fair value of furniture, fixtures, equipment and other improvements received by us as a result of the Lease Termination (as defined in Note 1). Refer to Note 3 for additional details related to the Lease Termination. |
DISPOSITIONS (Details)
DISPOSITIONS (Details) $ in Thousands | Jan. 31, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) |
Discontinued Operations and Disposal Groups [Abstract] | |||||
Sale price | $ 48,500 | ||||
Gain on sale of real estate | $ 22,546 | $ 0 | $ 0 | $ 0 | $ 22,546 |
Early repayment of debt | 663,788 | 27,968 | |||
Mortgages [Member] | |||||
Discontinued Operations and Disposal Groups [Abstract] | |||||
Early repayment of debt | $ (663,800) | $ 28,000 | |||
Managed Properties [Member] | Independent Living Properties [Member] | |||||
Discontinued Operations and Disposal Groups [Abstract] | |||||
Number of properties sold | 2 | 2 | |||
Managed Properties [Member] | Assisted Living and Memory Care Properties [Member] | |||||
Discontinued Operations and Disposal Groups [Abstract] | |||||
Number of properties sold | 2 | 2 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | Jan. 31, 2017USD ($) | Sep. 30, 2018USD ($)Property | Sep. 30, 2017USD ($)Property | Sep. 30, 2018USD ($)segmentProperty | Sep. 30, 2017USD ($)Property | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||||||
Number of reportable segments | segment | 2 | ||||||
Assets | $ 2,401,011 | $ 2,401,011 | $ 2,508,027 | ||||
Percentage of assets | 100.00% | 100.00% | 100.00% | ||||
Revenues | |||||||
Resident fees and services | $ 116,178 | $ 84,708 | $ 288,005 | $ 257,473 | |||
Rental revenue | 1,582 | 28,247 | 37,825 | 84,741 | |||
Less: Property operating expense | 77,066 | 58,609 | 192,675 | 176,861 | |||
Segment NOI | 40,694 | 54,346 | 133,155 | 165,353 | |||
Depreciation and amortization | 22,373 | 35,126 | 73,619 | 108,587 | |||
Interest expense | 29,268 | 23,898 | 76,946 | 70,469 | |||
Acquisition, transaction and integration expense | 1,559 | 675 | 13,130 | 1,469 | |||
Management fees and incentive compensation to affiliate | 3,688 | 3,824 | 11,127 | 14,402 | |||
General and administrative expense | 3,219 | 3,958 | 10,111 | 11,695 | |||
Loss on extinguishment of debt | 0 | 0 | 58,544 | 672 | |||
Other expense | 782 | 1,484 | 2,194 | 1,645 | |||
Total expenses | 60,889 | 68,965 | 245,671 | 208,939 | |||
Gain on sale of real estate | $ 22,546 | 0 | 0 | 0 | 22,546 | ||
Gain on lease termination | 0 | 0 | 40,090 | 0 | |||
Loss before income taxes | (20,195) | (14,619) | (72,426) | (21,040) | |||
Total provision for income taxes | 104 | (80) | 303 | 273 | |||
Net loss | $ (20,299) | (14,539) | $ (72,729) | (21,313) | |||
Major Customers [Abstract] | |||||||
Number of communities | Property | 133 | 133 | |||||
Nonsegment and Other [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Assets | [1] | $ 91,737 | $ 91,737 | $ 96,404 | |||
Percentage of assets | [1] | 3.80% | 3.80% | 3.80% | |||
Triple Net Lease Properties [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Assets | $ 59,423 | $ 59,423 | $ 980,666 | ||||
Percentage of assets | 2.50% | 2.50% | 39.10% | ||||
Revenues | |||||||
Resident fees and services | $ 0 | 0 | $ 0 | 0 | |||
Less: Property operating expense | 0 | 0 | 0 | 0 | |||
Segment NOI | 1,582 | 28,247 | 37,825 | 84,741 | |||
Managed Properties [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Assets | $ 2,249,851 | $ 2,249,851 | $ 1,430,957 | ||||
Percentage of assets | 93.70% | 93.70% | 57.10% | ||||
Revenues | |||||||
Rental revenue | $ 0 | 0 | $ 0 | 0 | |||
Less: Property operating expense | 77,066 | 58,609 | |||||
Segment NOI | $ 39,112 | $ 26,099 | $ 95,330 | $ 80,612 | |||
Major Customers [Abstract] | |||||||
Number of communities | Property | 132 | 132 | |||||
Sales Revenue, Net [Member] | |||||||
Major Customers [Abstract] | |||||||
Number of communities | Property | 133 | 148 | 133 | 148 | |||
Percentage of revenue | 100.00% | 100.00% | |||||
Sales Revenue, Net [Member] | Florida | |||||||
Major Customers [Abstract] | |||||||
Number of communities | Property | 15 | 24 | 15 | 24 | |||
Percentage of revenue | 12.30% | 19.00% | |||||
Sales Revenue, Net [Member] | California | |||||||
Major Customers [Abstract] | |||||||
Number of communities | Property | 11 | 11 | 11 | 11 | |||
Percentage of revenue | 11.20% | 10.00% | |||||
Sales Revenue, Net [Member] | Texas | |||||||
Major Customers [Abstract] | |||||||
Number of communities | Property | 13 | 19 | 13 | 19 | |||
Percentage of revenue | 9.60% | 12.20% | |||||
Sales Revenue, Net [Member] | North Carolina | |||||||
Major Customers [Abstract] | |||||||
Number of communities | Property | 9 | 9 | 9 | 9 | |||
Percentage of revenue | 7.20% | 6.50% | |||||
Sales Revenue, Net [Member] | Pennsylvania | |||||||
Major Customers [Abstract] | |||||||
Number of communities | Property | 7 | 7 | 7 | 7 | |||
Percentage of revenue | 6.90% | 6.00% | |||||
Sales Revenue, Net [Member] | Oregon | |||||||
Major Customers [Abstract] | |||||||
Number of communities | Property | 9 | 9 | 9 | 9 | |||
Percentage of revenue | 5.90% | 4.90% | |||||
Sales Revenue, Net [Member] | Other | |||||||
Major Customers [Abstract] | |||||||
Number of communities | Property | 69 | 69 | 69 | 69 | |||
Percentage of revenue | 46.90% | 41.40% | |||||
Tenant for Holiday Portfolios [Member] | Sales Revenue, Net [Member] | |||||||
Major Customers [Abstract] | |||||||
Percentage of revenue | 19.70% | 10.20% | 19.50% | ||||
[1] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOjRjZGY0MTk0ZmJkMjQwYjM4Y2ZiZTk5NTQzN2UxOTBjfFRleHRTZWxlY3Rpb246NzNBREZCN0M0OTgzMUQ0MENGM0FBRkY2NzUyM0VCMUMM} |
REAL ESTATE INVESTMENTS, Real E
REAL ESTATE INVESTMENTS, Real Estate Assets and Intangible Assets (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 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation expense | $ 22,300 | $ 23,600 | $ 65,500 | $ 70,400 | |
Real Estate Investments, Net [Abstract] | |||||
Gross carrying amount | 2,534,373 | 2,534,373 | $ 2,511,762 | ||
Accumulated depreciation | (341,250) | (341,250) | (275,794) | ||
Net real estate property | 2,193,123 | 2,193,123 | 2,235,968 | ||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | 100 | $ 11,500 | 8,200 | $ 38,200 | |
Fully amortized in-place lease and other intangibles, write-off | 254,200 | ||||
Real Estate Intangibles [Abstract] | |||||
Gross carrying amount | 8,638 | 8,638 | 264,438 | ||
Accumulated amortization | (2,788) | (2,788) | (249,198) | ||
Net real estate intangibles | 5,850 | 5,850 | 15,240 | ||
Land [Member] | |||||
Real Estate Investments, Net [Abstract] | |||||
Gross carrying amount | 182,238 | 182,238 | 182,238 | ||
Accumulated depreciation | 0 | 0 | 0 | ||
Net real estate property | 182,238 | 182,238 | 182,238 | ||
Building and Improvements [Member] | |||||
Real Estate Investments, Net [Abstract] | |||||
Gross carrying amount | 2,225,615 | 2,225,615 | 2,216,461 | ||
Accumulated depreciation | (256,239) | (256,239) | (208,540) | ||
Net real estate property | 1,969,376 | 1,969,376 | 2,007,921 | ||
Furniture, Fixtures and Equipment [Member] | |||||
Real Estate Investments, Net [Abstract] | |||||
Gross carrying amount | 126,520 | 126,520 | 113,063 | ||
Accumulated depreciation | (85,011) | (85,011) | (67,254) | ||
Net real estate property | 41,509 | 41,509 | 45,809 | ||
Above/Below Market Lease Intangibles, Net [Member] | |||||
Real Estate Intangibles [Abstract] | |||||
Gross carrying amount | 0 | 0 | 1,607 | ||
Accumulated amortization | 0 | 0 | (380) | ||
Net real estate intangibles | 0 | 0 | $ 1,227 | ||
Weighted average remaining amortization period | 12 years 11 months | ||||
In-Place Lease and Other Intangibles [Member] | |||||
Real Estate Intangibles [Abstract] | |||||
Gross carrying amount | 8,638 | 8,638 | $ 262,831 | ||
Accumulated amortization | (2,788) | (2,788) | (248,818) | ||
Net real estate intangibles | $ 5,850 | $ 5,850 | $ 14,013 | ||
Weighted average remaining amortization period | 41 years 11 months | 18 years 4 months |
STRAIGHT-LINE RENT RECEIVABLES
STRAIGHT-LINE RENT RECEIVABLES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
STRAIGHT-LINE RENT RECEIVABLES [Abstract] | ||
Straight-line rent receivables | $ 3,321 | $ 82,445 |
Deferred Rent Asset, Net, Current | $ 84,316 |
RECEIVABLES AND OTHER ASSETS,_3
RECEIVABLES AND OTHER ASSETS, NET (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | ||
Receivables and Other Assets [Abstract] | ||||
Escrows held by lenders | [1] | $ 16,471 | $ 16,936 | |
Prepaid expenses | 4,361 | 4,490 | ||
Resident receivables, net | 3,246 | 2,672 | ||
Deferred tax assets, net | 5,384 | 5,475 | ||
Security deposits | 2,429 | 3,222 | ||
Income tax receivable | 890 | 802 | ||
Other assets and receivables | 8,571 | 3,450 | ||
Total receivables and other assets | 41,352 | $ 37,047 | ||
Allowance for Doubtful Accounts [Roll Forward] | ||||
Balance, beginning of period | 938 | $ 976 | ||
Provision for uncollectible receivables | 1,630 | 1,719 | ||
Write-offs, net of recoveries | (1,281) | (1,710) | ||
Balance, end of period | $ 1,287 | $ 985 | ||
[1] | Represents amounts held by lenders in tax, insurance, replacement reserve and other escrow accounts that are related to mortgage notes collateralized by New Senior’s properties. |
MORTGAGE NOTES PAYABLE, NET (De
MORTGAGE NOTES PAYABLE, NET (Details) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |||||
Mortgage Notes Payable [Abstract] | |||||||||
Outstanding face amount | $ 1,965,268,000 | $ 1,965,268,000 | $ 1,925,098,000 | ||||||
Carrying value | [1] | 1,951,884,000 | $ 1,951,884,000 | 1,907,928,000 | |||||
Weighted average maturity (years) | 3 years | ||||||||
Balloon payment extension fee, percentage | 0.125% | ||||||||
Early repayment of debt | $ 663,788,000 | $ 27,968,000 | |||||||
Loss on extinguishment of debt | 0 | $ 0 | 58,544,000 | 672,000 | |||||
Payment of exit fee on extinguishment of debt | (51,886,000) | (311,000) | |||||||
Write off of Deferred Debt Issuance Cost | 6.6 | ||||||||
Payments of Financing Costs | 13,663,000 | 579,000 | |||||||
Payments for Derivative Instrument, Financing Activities | 341,000 | 0 | |||||||
Derivative, Notional Amount | 591,200,000 | 591,200,000 | |||||||
Fair value adjustment on interest rate caps | 100,000 | 0 | 300,000 | 100,000 | |||||
Interest rate cap, fair value | 100,000 | $ 100,000 | |||||||
LIBOR [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Basis spread on variable rate | 3.66% | ||||||||
Mortgage Notes Payable [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Deferred financing costs | 13,400,000 | $ 13,400,000 | 17,200,000 | ||||||
Early repayment of debt | (663,800,000) | $ 28,000,000 | |||||||
Mortgage Notes Payable [Member] | Level 3 [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Fair value of mortgage notes payable | 1,900,000,000 | 1,900,000,000 | 1,900,000,000 | ||||||
Mortgage Notes Payable [Member] | Fixed Rate [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Carrying value of collateral | 600,000,000 | 600,000,000 | 1,500,000,000 | ||||||
Mortgage Notes Payable [Member] | Floating Rate [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Carrying value of collateral | 1,600,000,000 | $ 1,600,000,000 | 800,000,000 | ||||||
Managed Properties [Member] | Mortgage Notes Payable [Member] | LIBOR [Member] | Minimum [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Basis spread on variable rate | 3.30% | ||||||||
Managed Properties [Member] | Mortgage Notes Payable [Member] | LIBOR [Member] | Maximum [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Basis spread on variable rate | 3.71% | ||||||||
Managed Properties [Member] | Mortgage Notes Payable [Member] | Fixed Rate [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Outstanding face amount | 561,933,000 | $ 561,933,000 | 563,526,000 | ||||||
Carrying value | [1] | 559,086,000 | $ 559,086,000 | 560,182,000 | |||||
Stated interest rate | 3.65% to 4.93% | ||||||||
Weighted average maturity (years) | 5 years 9 months | ||||||||
Payments for Derivative Instrument, Financing Activities | $ (300,000) | ||||||||
Managed Properties [Member] | Mortgage Notes Payable [Member] | Fixed Rate [Member] | Minimum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 3.65% | ||||||||
Managed Properties [Member] | Mortgage Notes Payable [Member] | Fixed Rate [Member] | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 4.93% | ||||||||
Managed Properties [Member] | Mortgage Notes Payable [Member] | Floating Rate [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Outstanding face amount | [2],[3] | 1,352,879,000 | $ 1,352,879,000 | 640,880,000 | |||||
Carrying value | [1],[2],[3] | 1,342,387,000 | $ 1,342,387,000 | 636,166,000 | |||||
Stated interest rate | [2],[3] | 1M LIBOR + 2.20% to 1M LIBOR + 7.00% | |||||||
Weighted average maturity (years) | [2],[3] | 1 year 11 months | |||||||
Managed Properties [Member] | Mortgage Notes Payable [Member] | Floating Rate [Member] | LIBOR [Member] | Minimum [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Basis spread on variable rate | 2.20% | ||||||||
Managed Properties [Member] | Mortgage Notes Payable [Member] | Floating Rate [Member] | LIBOR [Member] | Maximum [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Basis spread on variable rate | 2.70% | ||||||||
Triple Net Lease Properties [Member] | Mortgage Notes Payable [Member] | Fixed Rate [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Outstanding face amount | [2] | 0 | $ 0 | 669,656,000 | [4] | ||||
Carrying value | [1],[2] | 0 | $ 0 | 660,646,000 | [4] | ||||
Stated interest rate | [2] | 0 | |||||||
Weighted average maturity (years) | [2] | 0 years | |||||||
Triple Net Lease Properties [Member] | Mortgage Notes Payable [Member] | Fixed Rate [Member] | Minimum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 3.80% | ||||||||
Triple Net Lease Properties [Member] | Mortgage Notes Payable [Member] | Fixed Rate [Member] | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 7.40% | ||||||||
Triple Net Lease Properties [Member] | Mortgage Notes Payable [Member] | Floating Rate [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Outstanding face amount | 50,456,000 | [5] | $ 50,456,000 | [5] | 51,036,000 | ||||
Carrying value | [1] | $ 50,411,000 | [5] | $ 50,411,000 | [5] | $ 50,934,000 | |||
Stated interest rate | 3M LIBOR + 3.00% | ||||||||
Weighted average maturity (years) | 7 months | ||||||||
Triple Net Lease Properties [Member] | Mortgage Notes Payable [Member] | Floating Rate [Member] | LIBOR [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Basis spread on variable rate | 3.00% | ||||||||
Assisted Living and Memory Care Properties [Member] | Managed Properties [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Number of properties sold | 2 | 2 | |||||||
Independent Living Properties [Member] | Managed Properties [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Number of properties sold | 2 | 2 | |||||||
Holiday Acquisitions Holdings LLC [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Basis spread on variable rate | 0.50% | ||||||||
Loss on extinguishment of debt | $ (58,500,000) | ||||||||
Payments of Financing Costs | $ 12,300,000 | ||||||||
Payments for Derivative Instrument, Financing Activities | 100,000 | ||||||||
Derivative, Notional Amount | $ 720,000,000 | $ 720,000,000 | |||||||
Holiday Acquisitions Holdings LLC [Member] | LIBOR [Member] | |||||||||
Mortgage Notes Payable [Abstract] | |||||||||
Basis spread on variable rate | 3.50% | ||||||||
[1] | The totals are reported net of deferred financing costs of $13.4 million and $17.2 million as of September 30, 2018 and December 31, 2017, respectively. | ||||||||
[2] | Includes loans with an outstanding face amount of $720.0 million as of September 30, 2018, for which interest rates will increase by 0.50% in November 2018 and an additional 0.50% in February 2019. | ||||||||
[3] | Substantially all of these loans have LIBOR caps that range between 3.30% and 3.71% as of September 30, 2018. | ||||||||
[4] | The amounts as of December 31, 2017 represent loans under previous terms, which were refinanced and replaced in May 2018. See below for further information. | ||||||||
[5] | We have an option to extend the maturity date to April 2020, subject to a fee of 0.125% of the then-outstanding principal balance. |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Accounts Payable and Accrued Liabilities [Abstract] | |||
Security deposits payable (A) | [1] | $ 2,829 | $ 46,291 |
Escrow liabilities | [2] | 700 | 6,664 |
Accounts payable | 13,834 | 9,794 | |
Mortgage interest payable | 6,520 | 6,297 | |
Deferred revenue, net | 8,658 | 6,315 | |
Rent collected in advance | 3,062 | 2,091 | |
Property tax payable | 10,947 | 3,331 | |
Other liabilities | 7,479 | 3,881 | |
Total accrued expenses and other liabilities | $ 54,029 | $ 84,664 | |
[1] | Decrease from December 31, 2017 represents the retention of security deposits by us as a result of the Lease Termination. Refer to Note 3 for additional details related to the Lease Termination. | ||
[2] | Represents amounts held by lenders in tax, insurance, replacement reserve and other escrow accounts that are related to mortgage notes collateralized by New Senior’s triple net lease properties. |
TRANSACTIONS WITH AFFILIATES (D
TRANSACTIONS WITH AFFILIATES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Management Agreements [Abstract] | |||||
Management fees and incentive compensation to affiliate | $ 3,688 | $ 3,824 | $ 11,127 | $ 14,402 | |
Due to affiliates | 15,339 | 15,339 | $ 9,550 | ||
Property Management Agreements [Abstract] | |||||
Property management fees | 5,909 | 4,523 | 14,749 | 14,156 | |
Travel reimbursement costs | 56 | 77 | 169 | 242 | |
Property-level payroll expenses | 28,526 | 23,081 | 71,760 | 71,692 | |
Consideration Received, Lease Termination Agreement | 115,600 | ||||
Termination Payment, Lease Termination Agreement | 70,000 | ||||
Security Deposit | 2,429 | 2,429 | 3,222 | ||
Triple Net Lease Agreements [Abstract] | |||||
Rental revenue | 1,582 | 28,247 | $ 37,825 | 84,741 | |
Incentive fee percentage | 2.00% | ||||
Manager [Member] | |||||
Management Agreements [Abstract] | |||||
Management fee rate payable | 1.50% | ||||
Management fees and incentive compensation to affiliate | 3,700 | 3,800 | $ 11,100 | 11,500 | |
Percentage used in calculation of annual incentive compensation paid to Manager | 25.00% | ||||
Interest rate used in calculation of annual incentive compensation paid to Manager | 10.00% | ||||
Reimbursement to manager for tasks and other services under the management agreement | 1,669 | 2,217 | $ 5,788 | 6,774 | |
Manager [Member] | General and Administrative Expense [Member] | |||||
Management Agreements [Abstract] | |||||
Reimbursement to manager for tasks and other services under the management agreement | 1,463 | 1,723 | 4,734 | 5,630 | |
Manager [Member] | Acquisition, Transaction and Integration Expense [Member] | |||||
Management Agreements [Abstract] | |||||
Reimbursement to manager for tasks and other services under the management agreement | 206 | 494 | 1,054 | 1,144 | |
Manager [Member] | Management Fees Under Management Agreement [Member] | |||||
Management Agreements [Abstract] | |||||
Due to affiliates | 3,700 | 3,700 | 1,300 | ||
Manager [Member] | Reimbursement for Tasks and Other Services Performed Under the Management Agreement [Member] | |||||
Management Agreements [Abstract] | |||||
Due to affiliates | 2,000 | 2,000 | 1,300 | ||
Property Managers [Member] | Property Management Fees Under Property Management Agreement [Member] | |||||
Management Agreements [Abstract] | |||||
Due to affiliates | 2,000 | 2,000 | 1,400 | ||
Property Managers [Member] | Reimbursement of Property-Level Payroll Expenses Under Property Management Agreement [Member] | |||||
Management Agreements [Abstract] | |||||
Due to affiliates | 7,700 | 7,700 | $ 5,600 | ||
Holiday Acquisitions Holdings LLC [Member] | |||||
Property Management Agreements [Abstract] | |||||
Security Deposit | 45,600 | $ 45,600 | |||
Managed Properties [Member] | |||||
Property Management Agreements [Abstract] | |||||
Extension period after initial term of Property Management Agreements | 1 year | ||||
Triple Net Lease Agreements [Abstract] | |||||
Rental revenue | $ 0 | 0 | $ 0 | 0 | |
Managed Properties [Member] | Blue Harbor and Holiday [Member] | Assisted Living and Memory Care Properties [Member] | |||||
Property Management Agreements [Abstract] | |||||
Percentage of property's gross income paid as property management fees for first two years | 6.00% | ||||
Percentage of property's gross income paid as property management fees thereafter | 7.00% | ||||
Initial term of Property Management Agreements | 2 years | ||||
Managed Properties [Member] | Blue Harbor and Holiday [Member] | Independent Living Properties [Member] | |||||
Property Management Agreements [Abstract] | |||||
Percentage of property's effective gross income paid as property management fees | 5.00% | ||||
Managed Properties [Member] | Property Managers [Member] | |||||
Property Management Agreements [Abstract] | |||||
Extension period after initial term of Property Management Agreements | 1 year | ||||
Managed Properties [Member] | Holiday Acquisitions Holdings LLC [Member] | |||||
Property Management Agreements [Abstract] | |||||
Percentage of property's effective gross income paid as property management fees, year one | 5.00% | ||||
Triple Net Lease Agreements [Abstract] | |||||
Percentage of property's effective gross income paid as property management fees, year two and onward | 4.50% | ||||
Triple Net Lease Properties [Member] | Holiday Acquisitions Holdings LLC [Member] | |||||
Triple Net Lease Agreements [Abstract] | |||||
Rental revenue | $ 18,600 | $ 28,500 | $ 55,700 | ||
Minimum [Member] | Managed Properties [Member] | |||||
Property Management Agreements [Abstract] | |||||
Initial term of Property Management Agreements | 5 years | ||||
Minimum [Member] | Managed Properties [Member] | Property Managers [Member] | |||||
Property Management Agreements [Abstract] | |||||
Initial term of Property Management Agreements | 5 years | ||||
Minimum [Member] | Managed Properties [Member] | Holiday Acquisitions Holdings LLC [Member] | |||||
Property Management Agreements [Abstract] | |||||
Percentage of property's effective gross income paid as property management fees | 5.00% | ||||
Maximum [Member] | Managed Properties [Member] | |||||
Property Management Agreements [Abstract] | |||||
Initial term of Property Management Agreements | 10 years | ||||
Maximum [Member] | Managed Properties [Member] | Property Managers [Member] | |||||
Property Management Agreements [Abstract] | |||||
Initial term of Property Management Agreements | 10 years | ||||
Maximum [Member] | Managed Properties [Member] | Holiday Acquisitions Holdings LLC [Member] | |||||
Property Management Agreements [Abstract] | |||||
Percentage of property's effective gross income paid as property management fees | 7.00% |
INCOME TAXES (Details)
INCOME TAXES (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 | |
Income Tax Disclosure [Abstract] | |||||
Prior federal corporate income tax rate | 35.00% | ||||
Federal corporate tax rate under the tax cuts and jobs act | 21.00% | ||||
Adjustment to deferred tax assets | $ 3,000 | ||||
Current | |||||
Federal | $ 0 | $ 0 | $ (42) | $ 0 | |
State and local | 100 | 67 | 254 | 221 | |
Total current provision | 100 | 67 | 212 | 221 | |
Deferred | |||||
Federal | (94) | (60) | (15) | 92 | |
State and local | 98 | (87) | 106 | (40) | |
Total deferred provision | 4 | (147) | 91 | 52 | |
Total provision for income taxes | 104 | $ (80) | 303 | $ 273 | |
Deferred tax assets: | |||||
Prepaid fees and rent | 849 | 849 | 790 | ||
Net operating losses | 4,084 | 4,084 | 4,050 | ||
Deferred rent | 328 | 328 | 949 | ||
Tax credits | 0 | 0 | 42 | ||
Other | 123 | 123 | 99 | ||
Total deferred tax assets | 5,384 | 5,384 | 5,930 | ||
Less valuation allowance | 0 | 0 | 0 | ||
Net deferred tax assets | 5,384 | 5,384 | 5,930 | ||
Deferred tax liabilities: | |||||
Depreciation and amortization | 0 | 0 | 455 | ||
Total deferred tax liabilities | 0 | 0 | 455 | ||
Deferred tax assets, net | $ 5,384 | $ 5,384 | $ 5,475 |
EQUITY (Details)
EQUITY (Details) | Sep. 30, 2018$ / sharesshares |
Equity [Abstract] | |
Strike price reduction for outstanding options | $ / shares | $ 1.04 |
Number of options granted to new director | 5,000 |
Fortress Investment Group, LLC [Member] | |
Related Party Transaction [Line Items] | |
Common stock outstanding | 1,300,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Triple Net Lease [Member] - Watermark [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Capital Improvement and Repair Commitments [Abstract] | |
Lease period | 15 years |
Additional Capital Improvements [Member] | |
Capital Improvement and Repair Commitments [Abstract] | |
Capital improvements | $ 1,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | |
Subsequent Event [Line Items] | ||||||
Common Stock, Dividends, Per Share, Declared | $ 0.13 | $ 0.26 | $ 0.65 | $ 0.78 | ||
Derivative, Notional Amount | $ 591,200,000 | $ 591,200,000 | ||||
Payments of Financing Costs | 13,663,000 | $ 579,000 | ||||
Write off of Deferred Debt Issuance Cost | 6.6 | |||||
Payments for Derivative Instrument, Financing Activities | 341,000 | $ 0 | ||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Common Stock, Dividends, Per Share, Declared | $ 0.13 | |||||
Derivative, Notional Amount | $ 720,000,000 | $ 720,000,000 | ||||
Payments of Financing Costs | 11,600,000 | |||||
Write off of Deferred Debt Issuance Cost | 6,200,000 | |||||
Payments for Derivative Instrument, Financing Activities | $ 2,505,000 | |||||
Holiday Acquisitions Holdings LLC [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Derivative, Notional Amount | $ 720,000,000 | 720,000,000 | ||||
Payments of Financing Costs | 12,300,000 | |||||
Payments for Derivative Instrument, Financing Activities | $ 100,000 |