Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 03, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | LTC PROPERTIES INC | |
Entity Central Index Key | 887,905 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 39,570,769 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Real estate investments: | ||
Land | $ 121,897 | $ 116,096 |
Buildings and improvements | 1,227,044 | 1,185,467 |
Accumulated depreciation and amortization | (294,725) | (275,861) |
Operating real estate property, net | 1,054,216 | 1,025,702 |
Properties held-for-sale, net of accumulated depreciation: 2017—$4,264; 2016—$0 | 6,381 | |
Real property investments, net | 1,060,597 | 1,025,702 |
Mortgage loans receivable, net of loan loss reserve: 2017—$2,234; 2016—$2,315 | 221,861 | 229,801 |
Real estate investments, net | 1,282,458 | 1,255,503 |
Notes receivable, net of loan loss reserve: 2017—$166; 2016—$166 | 16,402 | 16,427 |
Investment in unconsolidated joint ventures | 29,862 | 25,221 |
Investments, net | 1,328,722 | 1,297,151 |
Other assets: | ||
Cash and cash equivalents | 3,842 | 7,991 |
Debt issue costs related to bank borrowing | 1,080 | 1,847 |
Interest receivable | 13,650 | 9,683 |
Straight-line rent receivable, net of allowance for doubtful accounts: 2017—$901; 2016—$960 | 61,070 | 55,276 |
Prepaid expenses and other assets | 22,829 | 22,948 |
Total assets | 1,431,193 | 1,394,896 |
LIABILITIES | ||
Bank borrowings | 55,000 | 107,100 |
Senior unsecured notes, net of debt issue costs: 2017—$1,183; 2016—$1,009 | 582,950 | 502,291 |
Accrued interest | 4,108 | 4,675 |
Accrued incentives and earn-outs | 8,790 | 12,229 |
Accrued expenses and other liabilities | 23,710 | 28,553 |
Total liabilities | 674,558 | 654,848 |
Stockholders' equity: | ||
Common stock: $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2017—39,571; 2016—39,221 | 396 | 392 |
Capital in excess of par value | 855,746 | 839,005 |
Cumulative net income | 1,080,949 | 1,013,443 |
Cumulative distributions | (1,180,456) | (1,112,792) |
Total equity | 756,635 | 740,048 |
Total liabilities and equity | $ 1,431,193 | $ 1,394,896 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Properties held-for-sale, accumulated depreciation | $ 4,264 | $ 0 |
Mortgage loans receivable, loan loss reserve | 2,234 | 2,315 |
Notes receivable, net of loan loss reserve | 166 | 166 |
Straight-line rent receivable, allowance for doubtful accounts | $ 901 | $ 960 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 39,571,000 | 39,221,000 |
Common stock, shares outstanding | 39,571,000 | 39,221,000 |
Senior Unsecured Notes | ||
Debt issue costs, net | $ 1,183 | $ 1,009 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Rental income | $ 33,233 | $ 33,753 | $ 103,533 | $ 98,705 |
Interest income from mortgage loans | 6,677 | 6,958 | 20,050 | 20,347 |
Interest and other income | 1,336 | 131 | 2,753 | 390 |
Total revenues | 41,246 | 40,842 | 126,336 | 119,442 |
Expenses: | ||||
Interest expense | 7,644 | 6,836 | 22,266 | 19,586 |
Depreciation and amortization | 9,519 | 9,155 | 28,186 | 26,623 |
Impairment on receivables | 1,880 | |||
(Recovery) provision for doubtful accounts | (96) | 43 | (139) | 245 |
Transaction costs | 34 | 2 | 56 | 96 |
General and administrative expenses | 4,144 | 4,464 | 13,270 | 12,864 |
Total expenses | 21,245 | 20,500 | 65,519 | 59,414 |
Operating income | 20,001 | 20,342 | 60,817 | 60,028 |
Income from unconsolidated joint ventures | 615 | 289 | 1,635 | 839 |
Gain on sale of real estate, net | 1,780 | 5,054 | 3,582 | |
Net income | 20,616 | 22,411 | 67,506 | 64,449 |
Income allocated to participating securities | (80) | (90) | (281) | (296) |
Net income available to common stockholders | $ 20,536 | $ 22,321 | $ 67,225 | $ 64,153 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 0.52 | $ 0.57 | $ 1.71 | $ 1.68 |
Diluted (in dollars per share) | $ 0.52 | $ 0.57 | $ 1.70 | $ 1.68 |
Weighted average shares used to calculate earnings per common share: | ||||
Basic (in shares) | 39,428 | 39,057 | 39,403 | 38,161 |
Diluted (in shares) | 39,748 | 39,335 | 39,738 | 38,455 |
Dividends per share declared (in dollars per share) | $ 0.57 | $ 0.54 | $ 1.71 | $ 1.62 |
Dividends paid per common share (in dollars per share) | $ 0.57 | $ 0.54 | $ 1.71 | $ 1.62 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 20,616 | $ 22,411 | $ 67,506 | $ 64,449 |
Reclassification adjustment (Note 6) | (6) | (39) | ||
Comprehensive income | $ 20,616 | $ 22,405 | $ 67,506 | $ 64,410 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
OPERATING ACTIVITIES: | ||
Net income | $ 67,506 | $ 64,449 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 28,186 | 26,623 |
Stock-based compensation expense | 3,967 | 3,149 |
Impairment on receivables | 1,880 | |
Gain on sale of real estate, net | (5,054) | (3,582) |
Income from unconsolidated joint ventures | (1,635) | (839) |
Income distributions from unconsolidated joint ventures | 1,236 | 1,409 |
Straight-line rental income | (7,362) | (8,201) |
Amortization of lease incentive | 1,681 | 1,446 |
Provision for doubtful accounts | (139) | 245 |
Non-cash interest related to contingent liabilities | 476 | 538 |
Effect of earn-out and related lease inducement write-off | (842) | |
Other non-cash items, net | 958 | 909 |
Increase in interest receivable | (3,967) | (3,898) |
Decrease in accrued interest payable | (567) | (358) |
Net change in other assets and liabilities | (10,190) | (2,245) |
Net cash provided by operating activities | 76,134 | 79,645 |
INVESTING ACTIVITIES: | ||
Investment in real estate properties | (54,804) | (73,449) |
Investment in real estate developments | (13,939) | (35,623) |
Investment in real estate capital improvements | (2,308) | (5,566) |
Capitalized interest | (627) | (1,193) |
Proceeds from sale of real estate, net | 14,106 | 17,369 |
Investment in real estate mortgage loans receivable | (9,333) | (19,113) |
Principal payments received on mortgage loans receivable | 17,351 | 2,117 |
Investment in unconsolidated joint ventures | (3,847) | (481) |
Payment of working capital reserve | (439) | (2,325) |
Advances and originations under notes receivable | (2,328) | |
Principal payments received on notes receivable | 25 | 90 |
Net cash used in investing activities | (53,815) | (120,502) |
FINANCING ACTIVITIES: | ||
Bank borrowings | 64,500 | 83,500 |
Repayment of bank borrowings | (116,600) | (127,000) |
Proceeds from issuance of senior unsecured notes | 100,000 | 77,500 |
Principal payments on senior unsecured notes | (19,167) | (16,667) |
Proceeds from common stock issued | 14,578 | 78,592 |
Stock option exercises | 202 | 159 |
Distributions paid to stockholders | (67,664) | (62,211) |
Financing costs paid | (363) | (130) |
Other | (1,954) | (2,215) |
Net cash (used in) provided by financing activities | (26,468) | 31,528 |
Decrease in cash and cash equivalents | (4,149) | (9,329) |
Cash and cash equivalents, beginning of period | 7,991 | 12,942 |
Cash and cash equivalents, end of period | 3,842 | 3,613 |
Supplemental disclosure of cash flow information: | ||
Interest paid | $ 21,877 | 19,004 |
Contingent Liabilities related to real estate investments | $ 2,000 |
General
General | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies. | |
General | 1. LTC Properties, Inc., a health care real estate investment trust (or REIT), was incorporated on May 12, 1992 in the State of Maryland and commenced operations on August 25, 1992. We invest primarily in seniors housing and health care properties primarily through sale-leaseback transactions, mortgage financing and structured finance solutions including mezzanine lending. We conduct and manage our business as one operating segment, rather than multiple operating segments, for internal reporting and internal decision making purposes. Our primary objectives are to create, sustain and enhance stockholder equity value and provide current income for distribution to stockholders through real estate investments in seniors housing and health care properties managed by experienced operators. Our primary seniors housing and health care property classifications include skilled nursing centers (or SNF), assisted living communities (or ALF), independent living communities (or ILF), memory care communities (or MC) and combinations thereof. To meet these objectives, we attempt to invest in properties that provide opportunity for additional value and current returns to our stockholders and diversify our investment portfolio by geographic location, operator, property classification and form of investment. We have prepared consolidated financial statements included herein without audit and in the opinion of management have included all adjustments necessary for a fair presentation of the consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (or SEC). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (or GAAP) have been condensed or omitted pursuant to rules and regulations governing the presentation of interim financial statements. The accompanying consolidated financial statements include the accounts of our company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2017 and 2016 are not necessarily indicative of the results for a full year. No provision has been made for federal or state income taxes. Our company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As such, we generally are not taxed on income that is distributed to our stockholders. New Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (or FASB) issued Accounting Standards Update (or ASU) 2014-09, Revenue from Contracts with Customers , which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “ an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” In doing so, companies may need to use more judgement and make more estimates than under today’s guidance. While this ASU specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate. Additionally, the FASB has begun to issue targeted updates to clarify specific implementation issues of ASU 2014-09. These updates include ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Identifying Performance Obligations and Licensing, and ASU 2016-12, Narrow-Scope Improvements and Practical Expedients. The new standard and its amendments are effective on January 1, 2018, and permit reporting entities to apply the standard using either a modified retrospective approach, by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or full retrospective approach . We have assessed our revenue streams to identify any differences in the timing, measurement or presentation of revenue recognition. We are currently evaluating the provisions of ASU 2014-09 and its related updates and will be closely monitoring developments and additional guidance to determine the potential impact of the new standard. We expect to complete our evaluation of the impact during the fourth quarter of 2017 but we do not believe this standard will have a material impact on our results of operations or financial condition, as a substantial portion of our revenues consists of rental income from leasing arrangements and interest income from loan arrangements, both of which are specifically excluded from ASU 2014-09. We expect to adopt this standard using the modified retrospective adoption method on January 1, 2018. In February 2016, the FASB issued ASU No. 2016-02 (or ASU 2016-02), Leases (Topic 842) . The objective of this ASU is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. ASU 2016-02 modifies existing guidance by requiring lessees to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance of operating leases. Consistent with present standards, we will continue to account for lease revenue on a straight-line basis for most leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after beginning of the earliest comparative period in the financial statements. In conjunction with evaluating the impact of the new revenue recognition standard, we have begun our process for implementing this guidance, including identifying any non-lease components in our lease arrangements. We will continue to evaluate this guidance and the impact to us, as both lessor and lessee, on our consolidated financial statements. In March 2016, FASB issued ASU No. 2016-07 (or ASU 2016-07), Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. ASU 2016-07 eliminates retroactive adjustment of an investment upon an investment qualifying for the equity method of accounting and requires the equity method investor to adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. ASU 2016-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The adoption of this ASU did not have a material impact on our consolidated financial statements. In March 2016, FASB issued ASU No. 2016-09 (or ASU 2016-09), Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 addresses several aspects of the accounting for share-based payment award transactions, including: ( a ) income tax consequences; ( b ) classification of awards as either equity or liabilities; and ( c ) classification on the statement of cash flows. ASU 2016-09 is effective for public companies for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The adoption of this ASU did not have a material impact on our consolidated financial statements. In August 2016, FASB issued ASU No. 2016-15 (or ASU 2016-15), Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (A Consensus of the Emerging Issues Task Force) . ASU 2016-15 provides guidance that reduces the diversity in practice of the classification of certain cash receipts and cash payments within the statement of cash flows. This guidance is effective for fiscal periods beginning after December 15, 2017 and allows for early adoption. The anticipated impact of the adoption of this guidance on the Company’s financial statements is still being evaluated. In January 2017, the FASB issued ASU No. 2017-01(or ASU 2017-01), Business Combinations (Topic 805): Clarifying Definition of a Business . ASU 2017-01 clarifies the framework for determining whether an integrated set of assets and activities meets the definition of a business. The revised framework establishes a screen for determining whether an integrated set of assets and activities is a business and narrows the definition of a business, which is expected to result in fewer transactions being accounted for as business combinations. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. This update is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for transactions that have not been reported in previously issued (or available to be issued) financial statements. We adopted ASU 2017-01 during the 2017 second quarter. Historically, our acquisitions qualified as either a business combination or asset acquisition. The adoption of this ASU did not have a material impact on the company’s results of operations or financial condition as most of our acquisitions of investment properties will continue to qualify as asset acquisitions. In February 2017, the FASB issued ASU No. 2017-05 (or ASU 2017-05), Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets. ASU 2017-05 defines an in-substance nonfinancial asset and clarifies guidance related to partial sales of nonfinancial assets. This standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. We don’t expect a material impact on the Consolidated Financial Statements and related notes from the adoption of this standard. . |
Real Estate Investments
Real Estate Investments | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate Investments | |
Real Estate Investments | 2. Real Estate Investments Assisted living communities, independent living communities, memory care communities and combinations thereof are included in the assisted living property classification (or collectively ALF). Historically, we had a property classification identified as range of care communities (or ROC) which consisted of properties providing skilled nursing and any combination of assisted living, independent living and/or memory care services. Since we only have seven ROC remaining and given that these properties derive materially all of their revenue from skilled nursing services, we elected to reclassify them into the SNF property classification. Any reference to the number of properties, number of units, number of beds, and yield on investments in real estate are unaudited and outside the scope of our independent registered public accounting firm’s review of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board. Owned Properties. The following table summarizes our investments in owned properties at September 30, 2017 (dollar amounts in thousands) : Average Percentage Number Number of Investment Gross of of SNF ALF per Type of Property Investments Investments Properties (1) Beds Units Bed/Unit Assisted Living $ 743,015 54.6 % 103 — 5,772 $ 128.73 Skilled Nursing (2) 579,758 42.6 % 76 9,276 274 $ 60.71 Under Development (3) 26,597 2.0 % — — — — Other (4) 10,216 0.8 % 1 118 — — Totals $ 1,359,586 100.0 % 180 9,394 6,046 (1) We own properties in 27 states that are leased to 27 different operators. (2) Includes seven communities previously classified as ROC with ALF units. (3) Represents three development projects consisting of two MC with a total of 132 units and a 143-bed SNF. (4) Includes three parcels of land held-for-use, and one behavioral health care hospital. Owned properties are leased pursuant to non-cancelable operating leases generally with an initial term of 10 to 15 years. Each lease is a triple net lease which requires the lessee to pay all taxes, insurance, maintenance and repairs, capital and non-capital expenditures and other costs necessary in the operations of the facilities. Many of the leases contain renewal options. The leases provide for fixed minimum base rent during the initial and renewal periods. The majority of our leases contain provisions for specified annual increases over the rents of the prior year that are generally computed in one of four ways depending on specific provisions of each lease: (i) a specified percentage increase over the prior year’s rent, generally between 2.0% and 3.0%; (ii) a calculation based on the Consumer Price Index; (iii) as a percentage of facility net patient revenues in excess of base amounts; or (iv) specific dollar increases. During the nine months ended September 30, 2017, we purchased a newly constructed 60-unit memory care community in Ohio for $15,650,000, as discussed below, and transitioned two memory care communities in our portfolio to a different operator. These three communities were added to a master lease with the same operator who took over the management of the two memory care communities previously mentioned. Annual rental income under the amended and restated master lease is approximately $6,400,000. During the nine months ended September 30, 2017, we issued a notice of default on the master lease covering two properties under development and nine additional operational memory care communities resulting from lessee’s partial payment of minimum rent. We are currently negotiating the transition of two of the operational properties to another operator in our portfolio. Additionally, we wrote off $1,880,000 of straight-line rent and other receivables related to these two properties. Subsequent to September 30, 2017, we entered into a forbearance agreement with our lessee whereby we have agreed not to pursue enforcement of our rights and remedies pertaining to known events of default under the master lease and our guarantees through December 31, 2017, with the stipulation that the lessee pay $400,000 per month toward their obligations of the master lease through December 31, 2017. Acquisitions and Developments: The following table summarizes our acquisitions for the nine months ended September 30, 2017 (dollar amounts in thousands): Total Number Number Purchase Transaction Acquisition of of Type of Property Price Costs (1) Costs Properties Beds/Units Assisted Living (2) $ 54,463 $ 341 $ 54,804 3 240 (1) Represents cost associated with our acquisitions; however, depending on the accounting treatment of our acquisitions, transaction costs may be capitalized to the properties’ basis and, for our land purchases with forward development commitments, transaction costs are capitalized as part of construction in progress. Additionally, we expense transaction costs related to the prior year due to timing and terminated transactions. (2) We acquired a 107-unit assisted living community and a 73-unit memory care community for an aggregate purchase price of $38,813. Additionally, we acquired a 60-unit memory care community for $15,650. Subsequent to September 30, 2017, we acquired a newly constructed 73-unit assisted living and memory care community in Missouri for $16,555,000. The property was added to an existing master lease agreement at an initial cash yield of 7%. The following table summarizes our acquisitions for the nine months ended September 30, 2016 (dollar amounts in thousands): Total Number Number Purchase Transaction Acquisition of of Type of Property Price Costs (1) Costs Properties Beds/Units Skilled Nursing (2) $ 16,000 $ 45 $ 16,045 1 126 Assisted Living (3) 53,550 411 53,961 4 250 Land (4) 5,425 63 5,488 — — Totals $ 74,975 $ 519 $ 75,494 5 376 (1) Represents cost associated with our acquisitions; however, depending on the accounting treatment of our acquisitions, transaction costs may be capitalized to the properties’ basis and, for our land purchases with forward development commitments, transaction costs are capitalized as part of construction in progress. Additionally, we expense transaction costs related to the prior year due to timing and terminated transactions. (2) We acquired a newly constructed 126-bed skilled nursing center in Texas. (3) We acquired a newly constructed memory care community in Kentucky for $14,250 including a $2,000 holdback, a newly constructed assisted living and memory care community in Georgia for $14,300 and two memory care communities in Kansas for an aggregate purchase price of $25,000. (4) We acquired a parcel of land and improvements and entered into a development commitment of up to $24,325, including the land and bed rights purchase, for the development of a 143-bed skilled nursing center in Kentucky. During the nine months ended September 30, 2017 and 2016, we invested the following in development and improvement projects (in thousands) : Nine months ended September 30, 2017 Nine months ended September 30, 2016 Development Improvements Development Improvements Assisted Living Communities $ 10,366 $ 951 $ 35,623 $ 2,134 Skilled Nursing Centers 3,573 1,357 - 3,432 $ 13,939 $ 2,308 $ 35,623 $ 5,566 During the nine months ended September 30, 2017, we sold four assisted living communities with a carrying value of $8,726,000 for an aggregate price of $14,250,000. These properties are located in Indiana and Iowa with a total of 175 units. As a result of this sale, we recognized a net gain on sale of $5,054,000. During the nine months ended September 30, 2016, we sold two assisted living communities located in Florida and two skilled nursing centers in Texas with an aggregate carrying value of $9,791,000 for an aggregate price of $13,600,000. As a result of these sales, we recognized a net gain on sale of $3,775,000. Also, we sold a school in New Jersey for $3,850,000 with a carrying value of $3,997,000 and recorded a loss on sale of $193,000. Mortgage Loans. The following table summarizes our investments in mortgage loans secured by first mortgages at September 30, 2017 (dollar amounts in thousands) : Number of Investment Gross SNF per Type of Property Investments Loans Properties (1) Beds Bed/Unit Skilled Nursing $ 224,095 5 21 2,764 $ 81.08 (1) We have investments in properties located in two states that include mortgages to two operators. At September 30, 2017, the mortgage loans had interest rates ranging from 9.4% to 11.2% and maturities ranging from 2019 to 2045. In addition, some loans contain certain guarantees, provide for certain facility fees and generally have 20-year to 30-year amortization schedules. The majority of the mortgage loans provide for annual increases in the interest rate based upon a specified increase of 10 to 25 basis points. The following table summarizes our mortgage loan activity for the nine months ended September 30, 2017 and 2016 (in thousands): Nine months ended September 30, 2017 2016 Origination/Funding Origination/Funding Originations and fundings under mortgage loans receivable $ 9,333 $ 19,113 Pay-offs received (16,665) (746) Scheduled principal payments received (686) (1,371) Net (decrease) increase in mortgage loans receivable $ (8,018) $ 16,996 |
Investment in Unconsolidated Jo
Investment in Unconsolidated Joint Ventures | 9 Months Ended |
Sep. 30, 2017 | |
Investment in Unconsolidated Joint Ventures | |
Investment in Unconsolidated Joint Ventures | 3. Our investment in unconsolidated joint ventures consists of a preferred equity investment and two mezzanine loans which are accounted for as an unconsolidated joint venture in accordance with GAAP. Preferred Equity Investment: We provided a total preferred capital contribution commitment of $25,650,000 to an entity (or the JV) that owns four properties in Arizona that provides independent, assisted living and memory care services. The JV is intended to be self-financing and other than our preferred capital contributions, we are not required to provide any direct support and we are not entitled to share in the JV’s earnings or losses. As a result, we believe our maximum exposure to loss related to our investment in the JV would be limited to our preferred capital contributions plus any unpaid accrued preferred return. We have concluded that the JV meets the accounting criteria to be considered a variable interest entity (or VIE). However, because we do not control the entity, nor do we have any role in the day-to-day management, we are not the primary beneficiary of the JV. Therefore, we account for our JV investment using the equity method. As the preferred member of the JV, we are entitled to receive a 15% preferred return, a portion of which is paid in cash and a portion of which is deferred. The unpaid preferred return will be accrued to the extent of the common member’s capital account balance in the underlying JV. Since the common member’s capital account balance is currently $0, we did not record the deferred portion of the preferred return during the nine months ended September 30, 2017. During the nine months ended September 30, 2017 and 2016, we funded $1,100,000 and $481,000, respectively, of the preferred capital contribution. Accordingly, we have a remaining preferred capital contribution commitment of $2,636,000. At September 30, 2017 and December 31, 2016, our preferred equity investment was $23,421,000 and $22,321,000, respectively. During the nine months ended September 30, 2017 and 2016, we recognized $1,134,000 and $839,000, respectively, in income and received $1,020,000 and $1,409,000, respectively, of cash interest from our preferred equity investment in the JV. Mezzanine Loans: During 2016, we entered into a $3,400,000 seven-year term mezzanine loan commitment for the development of a 127-unit senior housing community in Florida which will provide a combination of assisted living, memory care and independent living services. The loan agreement provides us a 15% preferred return, a portion of which is paid in cash and the remaining unpaid portion is deferred and subsequently paid to us at times set forth in the loan agreement. During 2017, we funded $2,747,000 under this mezzanine loan and withheld $653,000 which will be applied to interest. During the nine months ended September 30, 2017, we recognized $118,000 in income from unconsolidated joint ventures related to this loan. We also have a $2,900,000 mezzanine loan to develop a 99-unit senior housing community in Florida which will provide a combination of assisted living, memory care and independent living services. The loan bears interest at 10% and will escalate to 15%. Interest payments were deferred and no interest was recorded between the time of the commencement of the loan and February 1, 2017, the first payment date per the terms of the loan agreement. We used the effective interest method to recognize interest income and recorded the difference between the effective interest income and cash interest income to the loan principal balance. During the nine months ended September 30, 2017, we recognized $383,000 in income from unconsolidated joint ventures and received $216,000 of cash interest related to this loan. At September 30, 2017 and December 31, 2016, the outstanding balance under this loan was $3,041,000 and $2,900,000, respectively. |
Notes Receivable
Notes Receivable | 9 Months Ended |
Sep. 30, 2017 | |
Notes Receivable. | |
Notes Receivable | 4. Notes Receivable Notes receivable consists of mezzanine loans and other loan arrangements. The following table summarizes our notes receivable activities for the nine months ended September 30, 2017 and 2016 (dollar amounts in thousands): Nine months ended September 30, 2017 2016 Advances and originations under notes receivable $ - $ 2,328 Principal payments received under notes receivable (25) (90) Net (decrease) increase in notes receivable $ (25) $ 2,238 |
Debt Obligations
Debt Obligations | 9 Months Ended |
Sep. 30, 2017 | |
Debt Obligations | |
Debt Obligations | 5. Debt Obligations Bank Borrowings. We have an Unsecured Credit Agreement that provides for a revolving line of credit up to $600,000,000. The Unsecured Credit Agreement matures on October 14, 2018 and provides for a one-year extension option at our discretion, subject to customary conditions. Based on our leverage at September 30, 2017, the facility provides for interest annually at LIBOR plus 150 basis points and an unused commitment fee of 35 basis points. At September 30, 2017, we were in compliance with all covenants. Senior Unsecured Notes. During the nine months ended September 30, 2017, we amended our shelf agreement with affiliates and managed accounts of Prudential Investment Management, Inc. (or Prudential) to increase our shelf commitment to $337,500,000. The debt obligations by component as of September 30, 2017 and December 31, 2016 are as follows ( dollar amounts in thousands): At September 30, 2017 At December 31, 2016 Applicable Available Available Interest Outstanding for Outstanding for Debt Obligations Rate (1) Balance Borrowing Balance Borrowing Bank borrowings (2) 2.98% $ 55,000 $ 545,000 $ 107,100 $ 492,900 Senior unsecured notes, net of debt issue costs 4.49% 582,950 51,667 502,291 22,500 Total 4.36% $ 637,950 $ 596,667 $ 609,391 $ 515,400 (1) Represents weighted average of interest rate as of September 30, 2017. (2) Subsequent to September 30, 2017, we had an additional net borrowing of $15,000 under our unsecured revolving line of credit. Accordingly, we have $70,000 outstanding under our unsecured revolving line of credit with $530,000 available for borrowing. Our borrowings and repayments are as follows (in thousands): Nine months ended September 30, 2017 2016 Borrowings Repayments Borrowings Repayments Bank borrowings $ 64,500 $ (116,600) $ 83,500 $ (127,000) Senior unsecured notes 100,000 (1) (19,167) 77,500 (2) (16,667) Total $ 164,500 $ (135,767) $ 161,000 $ (143,667) (1) During the nine months ended September 30, 2017, we sold 15-year senior unsecured notes in the aggregate amount of $100,000 to a group of investors, which included Prudential, in a private placement transaction. The notes bear interest at an annual rate of 4.5%, have scheduled principal payments and mature on February 16, 2032. (2) During the nine months ended September 30, 2016, we sold 10-year senior unsecured term notes in the amount of $37,500 to Prudential. The notes bear interest at an annual fixed rate of 4.15%, have scheduled principal payments and will mature in 2028. Additionally, we sold 10-year senior unsecured notes in the amount of $40,000 to affiliated insurance company investment advisory clients of AIG Asset Management (U.S.) LLC. The notes bear interest at a coupon of 3.99%, have scheduled principal payments and will mature in 2031. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity | |
Equity | 6. Equity activity was as follows (in thousands): Total Equity Balance at December 31, 2016 $ 740,048 Net income 67,506 Proceeds from common stock issued, net of issuance costs 14,529 Stock-based compensation expense 3,967 Performance based stock units (6) Stock option exercise 202 Common stock dividends (67,664) Other (1,947) Balance at September 30, 2017 $ 756,635 Common Stock. We have an equity distribution agreement to issue and sell, from time to time, up to $200,000,000 in aggregate offering price of our company common share. During the nine months ended September 30, 2017, we sold 312,881 shares of common stock for $14,578,000 in net proceeds under our equity distribution agreement. The proceeds were used to pay down our unsecured revolving line of credit. In conjunction with the sale of common stock, we paid $260,000 as compensation to our sales agents and we reclassified $49,000 of accumulated costs associated with this agreement to additional paid in capital. Accordingly, at September 30, 2017, we had $185,162,000 available under our Equity Distribution Agreements. Also, during the nine months ended September 30, 2017 and 2016, we acquired 41,592 shares and 49,094 shares respectively, of common stock held by employees who tendered owned shares to satisfy tax withholding obligations. Available Shelf Registrations. In 2016, we filed a new automatic shelf registration statement to provide us with additional capacity to publicly offer an indeterminate amount of common stock, preferred stock, warrants, debt, depositary shares, or units. We may from time to time raise capital under the automatic registration statement we filed in 2016 (until its expiration on January 29, 2019) in amounts, at prices, and on terms to be announced when and if the securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of the offering. Distributions. We declared and paid the following cash dividends (in thousands) : Nine Months Ended September 30, 2017 September 30, 2016 Declared Paid Declared Paid Common Stock $ 67,664 (1) $ 67,664 (1) $ 62,211 (2) $ 62,211 (2) (1) Represents $0.19 per share per month for the nine months ended September 30, 2017. (2) Represents $0.18 per share per month for the nine months ended September 30, 2016. In October 2017, we declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December, payable on October 31, November 30, and December 29, 2017, respectively, to stockholders of record on October 23, November 22, and December 21, 2017, respectively. Stock-Based Compensation . During 2015, we adopted and our shareholders approved the 2015 Equity Participation Plan (or the 2015 Plan) which replaced the 2008 Equity Participation Plan (or the 2008 Plan). Under the 2015 Plan, 1,400,000 shares of common stock have been reserved for awards, including nonqualified stock option grants and restricted stock grants to officers, employees, non-employee directors and consultants. The terms of the awards granted under the 2015 Plan are set by our compensation committee at its discretion. During the nine months ended September 30, 2017 and 2016, no stock options were granted. The stock options exercised during the nine months ended September 30, 2017 and 2016 were as follows: Weighted Average Options Exercise Option Market Exercised Price Value Value (1) 2017 8,334 $ 24.31 $ 202,566 $ 410,797 2016 6,667 $ 23.79 $ 159,000 $ 311,000 (1) As of exercise date. At September 30, 2017, we had 25,000 stock options outstanding and exercisable. Compensation expense related to the vesting of stock options was $2,000 and $11,000 for the nine months ended September 30, 2017 and 2016, respectively. During the nine months ended September 30, 2017 and 2016, we cancelled 15,400 and 640 shares of restricted stock, respectively, under the 2015 Plan and 2008 Plan. Additionally, during the nine months ended September 30, 2017, we cancelled 8,706 performance-based stock units. During the nine months ended September 30, 2017 and 2016, we granted restricted stock and performance-based stock units under the 2015 Plan as follows: No. of Price per Year Shares/Units Share Vesting Period 2017 $ ratably over 3 years 57,881 $ 45.76 TSR targets (1) 7,416 $ 48.55 June 1, 2018 3,000 $ 50.50 ratably over 3 years 2016 $ ratably over 3 years 54,107 $ 46.87 TSR targets (2) 7,680 $ 46.87 June 1, 2017 (1) Vesting is based on achieving certain total shareholder return (or TSR) targets in 4 years with acceleration opportunity in 3 years. (2) Vesting is based on achieving certain TSR targets in 3.7 years with acceleration opportunity in 2.7 years. Compensation expense recognized related to the vesting of restricted common stock for the nine months ended September 30, 2017 was $3,965,000, compared to $3,138,000 for the same period in 2016. At September 30, 2017, the remaining compensation expense to be recognized related to the future service period of unvested outstanding restricted common stock and performance-based stock units are as follows: Remaining Compensation Vesting Date Expense 2017 $ 1,282,000 2018 3,947,000 2019 2,149,000 2020 259,000 $ 7,637,000 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 7. Commitments and Contingencies At September 30, 2017, we had commitments as follows (in thousands): Total Investment 2017 Commitment Remaining Commitment Funding Funded Commitment Real estate properties (See Note 2. Real Estate Investments ) $ 60,274 (1) $ 12,120 $ 28,456 $ 31,818 Accrued incentives and earn-out liabilities (2) 14,000 — — 14,000 Lease incentives 7,113 438 438 6,675 Mortgage loans (See Note 2.Real Estate Investments ) 51,000 (1) 9,333 14,672 36,328 Joint venture investments (See Note 3. Investments in Unconsolidated Joint Ventures ) 25,650 1,101 23,014 2,636 Notes receivable (See Note 4. Notes Receivable ) 500 — — 500 Totals $ 158,537 $ 22,992 $ 66,580 $ 91,957 (1) Represents commitments to purchase land and improvements, if applicable, and to develop, re-develop, renovate or expand seniors housing and health care properties. (2) During the three and nine months ended September 30, 2017, we recorded non‑cash interest expense of $125 and $476, respectively, related to these contingent liabilities. At September 30, 2017, the fair value of our contingent payments was $8,790. As part of a lease arrangement, we committed to provide the lessee a lease incentive payment upon the properties covered under the lease achieving a certain rent coverage ratios. Based on the projected performance at lease commencement, the lease incentive payment was deemed probable and estimable; therefore, we recorded the contingent lease incentive liability and the related lease incentive asset. The contingent lease incentive liability was accreting up to the settlement amount of the estimated payment date and the related lease incentive asset was amortizing as a yield adjustment over the life of the lease. During the third quarter of 2017, upon reviewing the current projections of the properties, we concluded that as a result of the lessee changing its business model, the payment of the contingent lease incentive was not probable and the current projections do not support the properties achieving the required rent coverage ratios within the exercisable period. Accordingly, we wrote off the accrued incentive liability of $3,476,000 and the related lease incentive asset of $2,634,000 resulting in income of $842,000 which was included in the interest and other income line item in our consolidated statement of income. We are a party from time to time to various general and professional liability claims and lawsuits asserted against the lessees or borrowers of our properties, which in our opinion are not singularly or in the aggregate material to our results of operations or financial condition. These types of claims and lawsuits may include matters involving general or professional liability, which we believe under applicable legal principles are not our responsibility as a non-possessory landlord or mortgage holder. We believe that these matters are the responsibility of our lessees and borrowers pursuant to general legal principles and pursuant to insurance and indemnification provisions in the applicable leases or mortgages. We intend to continue to vigorously defend such claims. |
Major Operators
Major Operators | 9 Months Ended |
Sep. 30, 2017 | |
Major Operators | |
Major Operators | 8. Major Operators We have four operators from each of which we derive approximately 10% or more of our combined rental revenue and interest income from mortgage loans. The following table sets forth information regarding our major operators as of September 30, 2017: Number of Number of Percentage of SNF ALF Total Total Operator SNF ALF Beds Units Revenue (1) Assets Prestige Healthcare 22 — 2,798 93 16.7 % 16.1 % Senior Lifestyle Corporation — 23 — 1,457 11.9 % 11.5 % Brookdale Senior Living — 37 — 1,702 9.7 % 5.1 % Senior Care Centers 11 — 1,444 — 9.6 % 7.9 % Totals 33 60 4,242 3,252 % % (1) Includes rental income and interest income from mortgage loans. Our financial position and ability to make distributions may be adversely affected if Prestige Healthcare, Senior Lifestyle Corporation, Brookdale Senior Living, Senior Care Centers, or any of our lessees and borrowers face financial difficulties, including any bankruptcies, inability to emerge from bankruptcy, insolvency or general downturn in business of any such operator, or in the event any such operator does not renew and/or extend its relationship with us. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share | |
Net Income Per Common Share | 9. Earnings per Share The following table sets forth the computation of basic and diluted net income per share ( in thousands, except per share amounts ): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net income $ 20,616 $ 22,411 $ 67,506 $ 64,449 Less net income allocated to participating securities: Non-forfeitable dividends on participating securities (80) (85) (269) (284) Income allocated to participating securities — (5) (12) (12) Total net income allocated to participating securities (80) (90) (281) (296) Net income available to common stockholders 20,536 22,321 67,225 64,153 Effect of dilutive securities: Participating securities 80 90 281 296 Net income for diluted net income per share $ 20,616 $ 22,411 $ 67,506 $ 64,449 Shares for basic net income per share 39,428 39,057 39,403 38,161 Effect of dilutive securities: Stock options 9 13 11 13 Performance-based stock units 170 108 170 108 Participating securities 141 157 154 173 Total effect of dilutive securities 320 278 335 294 Shares for diluted net income per share 39,748 39,335 39,738 38,455 Basic net income per share $ 0.52 $ 0.57 $ 1.71 $ 1.68 Diluted net income per share $ 0.52 $ 0.57 $ 1.70 $ 1.68 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | 10. Fair Value Measurements In accordance with the accounting guidance regarding the fair value option for financial assets and financial liabilities, entities are permitted to choose to measure certain financial assets and liabilities at fair value, with the change in unrealized gains and losses reported in earnings. We did not elect the fair value option for any of our financial assets and financial liabilities. The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments. We do not invest our cash in auction rate securities. The carrying value and fair value of our financial instruments as of September 30, 2017 and December 31, 2016 assuming election of fair value for our financial assets and financial liabilities were as follows ( in thousands ): At September 30, 2017 At December 31, 2016 Carrying Fair Carrying Fair Value Value Value Value Mortgage loans receivable $ 221,861 $ 271,666 (1) $ 229,801 $ 294,319 (1) Bank borrowings 55,000 55,000 (2) 107,100 107,100 (2) Senior unsecured notes, net of debt issue costs 582,950 589,396 (3) 502,291 498,915 (3) Accrued incentives and earn-outs 8,790 8,790 (4) 12,229 12,229 (4) (1) Our investment in mortgage loans receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash inflows of the mortgage loans receivable at September 30, 2017 and December 31, 2016 was 8.8% and 8.2%, respectively. (2) Our bank borrowings bear interest at a variable interest rate. The estimated fair value of our bank borrowings approximated their carrying values at September 30, 2017 and December 31, 2016 based upon prevailing market interest rates for similar debt arrangements. (3) Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is measured based upon management’s estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities. At September 30, 2017, the discount rate used to value our future cash outflow of our senior unsecured notes was 4.10% for those maturing before year 2026 and 4.30% for those maturing at or beyond year 2026. At December 31, 2016, the discount rate used to value our future cash outflow of our senior unsecured notes was 4.47% for those maturing before year 2026 and 4.60% for those maturing at or beyond year 2026. (4) Our accrued incentives and earn-outs are classified as Level 3. We estimated the fair value of the accrued incentives and earn‑out payments using a discounted cash flow analysis. The discount rate that we use consists of a risk‑free U.S. Treasury rate plus a company specific credit spread which we believe is acceptable by willing market participants. The discount rate used to value our accrued incentives and earn-outs was 5.9% a t both September 30, 2017 and December 31, 2016 . |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events | |
Subsequent Events | 11. Subsequent to September 30, 2017 the following events occurred: Real Estate: We acquired a newly constructed 73-unit assisted living and memory care community in Missouri for $16,555,000. The property was added to an existing master lease agreement at an initial cash yield of 7%. Debt Obligations: We had a net borrowing of $15,000,000 under our unsecured revolving line of credit. Accordingly, we have $70,000,000 outstanding under our unsecured revolving line of credit with $530,000,000 available for borrowing. Equity: We declared a monthly cash dividend of $0.19 per share on our common stock for the months of October, November and December 2017, payable on October 31, November 30, and December 29, 2017, respectively to stockholders of record on October 23, November 22, and December 21, 2017, respectively. |
General (Policies)
General (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies. | |
Basis of Presentation | We have prepared consolidated financial statements included herein without audit and in the opinion of management have included all adjustments necessary for a fair presentation of the consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (or SEC). Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (or GAAP) have been condensed or omitted pursuant to rules and regulations governing the presentation of interim financial statements. The accompanying consolidated financial statements include the accounts of our company and its wholly-owned subsidiaries. |
Reclassifications | All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2017 and 2016 are not necessarily indicative of the results for a full year. |
Income taxes | No provision has been made for federal or state income taxes. Our company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As such, we generally are not taxed on income that is distributed to our stockholders. |
New Accounting Pronouncement | New Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (or FASB) issued Accounting Standards Update (or ASU) 2014-09, Revenue from Contracts with Customers , which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “ an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” In doing so, companies may need to use more judgement and make more estimates than under today’s guidance. While this ASU specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate. Additionally, the FASB has begun to issue targeted updates to clarify specific implementation issues of ASU 2014-09. These updates include ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Identifying Performance Obligations and Licensing, and ASU 2016-12, Narrow-Scope Improvements and Practical Expedients. The new standard and its amendments are effective on January 1, 2018, and permit reporting entities to apply the standard using either a modified retrospective approach, by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or full retrospective approach . We have assessed our revenue streams to identify any differences in the timing, measurement or presentation of revenue recognition. We are currently evaluating the provisions of ASU 2014-09 and its related updates and will be closely monitoring developments and additional guidance to determine the potential impact of the new standard. We expect to complete our evaluation of the impact during the fourth quarter of 2017 but we do not believe this standard will have a material impact on our results of operations or financial condition, as a substantial portion of our revenues consists of rental income from leasing arrangements and interest income from loan arrangements, both of which are specifically excluded from ASU 2014-09. We expect to adopt this standard using the modified retrospective adoption method on January 1, 2018. In February 2016, the FASB issued ASU No. 2016-02 (or ASU 2016-02), Leases (Topic 842) . The objective of this ASU is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. ASU 2016-02 modifies existing guidance by requiring lessees to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance of operating leases. Consistent with present standards, we will continue to account for lease revenue on a straight-line basis for most leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after beginning of the earliest comparative period in the financial statements. In conjunction with evaluating the impact of the new revenue recognition standard, we have begun our process for implementing this guidance, including identifying any non-lease components in our lease arrangements. We will continue to evaluate this guidance and the impact to us, as both lessor and lessee, on our consolidated financial statements. In March 2016, FASB issued ASU No. 2016-07 (or ASU 2016-07), Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. ASU 2016-07 eliminates retroactive adjustment of an investment upon an investment qualifying for the equity method of accounting and requires the equity method investor to adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. ASU 2016-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The adoption of this ASU did not have a material impact on our consolidated financial statements. In March 2016, FASB issued ASU No. 2016-09 (or ASU 2016-09), Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 addresses several aspects of the accounting for share-based payment award transactions, including: ( a ) income tax consequences; ( b ) classification of awards as either equity or liabilities; and ( c ) classification on the statement of cash flows. ASU 2016-09 is effective for public companies for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The adoption of this ASU did not have a material impact on our consolidated financial statements. In August 2016, FASB issued ASU No. 2016-15 (or ASU 2016-15), Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (A Consensus of the Emerging Issues Task Force) . ASU 2016-15 provides guidance that reduces the diversity in practice of the classification of certain cash receipts and cash payments within the statement of cash flows. This guidance is effective for fiscal periods beginning after December 15, 2017 and allows for early adoption. The anticipated impact of the adoption of this guidance on the Company’s financial statements is still being evaluated. In January 2017, the FASB issued ASU No. 2017-01(or ASU 2017-01), Business Combinations (Topic 805): Clarifying Definition of a Business . ASU 2017-01 clarifies the framework for determining whether an integrated set of assets and activities meets the definition of a business. The revised framework establishes a screen for determining whether an integrated set of assets and activities is a business and narrows the definition of a business, which is expected to result in fewer transactions being accounted for as business combinations. Acquisitions of integrated sets of assets and activities that do not meet the definition of a business are accounted for as asset acquisitions. This update is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for transactions that have not been reported in previously issued (or available to be issued) financial statements. We adopted ASU 2017-01 during the 2017 second quarter. Historically, our acquisitions qualified as either a business combination or asset acquisition. The adoption of this ASU did not have a material impact on the company’s results of operations or financial condition as most of our acquisitions of investment properties will continue to qualify as asset acquisitions. In February 2017, the FASB issued ASU No. 2017-05 (or ASU 2017-05), Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets. ASU 2017-05 defines an in-substance nonfinancial asset and clarifies guidance related to partial sales of nonfinancial assets. This standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. We don’t expect a material impact on the Consolidated Financial Statements and related notes from the adoption of this standard. . |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate Investments | |
Summary of investments in owned properties | Owned Properties. The following table summarizes our investments in owned properties at September 30, 2017 (dollar amounts in thousands) : Average Percentage Number Number of Investment Gross of of SNF ALF per Type of Property Investments Investments Properties (1) Beds Units Bed/Unit Assisted Living $ 743,015 54.6 % 103 — 5,772 $ 128.73 Skilled Nursing (2) 579,758 42.6 % 76 9,276 274 $ 60.71 Under Development (3) 26,597 2.0 % — — — — Other (4) 10,216 0.8 % 1 118 — — Totals $ 1,359,586 100.0 % 180 9,394 6,046 (1) We own properties in 27 states that are leased to 27 different operators. (2) Includes seven communities previously classified as ROC with ALF units. (3) Represents three development projects consisting of two MC with a total of 132 units and a 143-bed SNF. (4) Includes three parcels of land held-for-use, and one behavioral health care hospital. |
Summary of investments acquired | Acquisitions and Developments: The following table summarizes our acquisitions for the nine months ended September 30, 2017 (dollar amounts in thousands): Total Number Number Purchase Transaction Acquisition of of Type of Property Price Costs (1) Costs Properties Beds/Units Assisted Living (2) $ 54,463 $ 341 $ 54,804 3 240 (1) Represents cost associated with our acquisitions; however, depending on the accounting treatment of our acquisitions, transaction costs may be capitalized to the properties’ basis and, for our land purchases with forward development commitments, transaction costs are capitalized as part of construction in progress. Additionally, we expense transaction costs related to the prior year due to timing and terminated transactions. (2) We acquired a 107-unit assisted living community and a 73-unit memory care community for an aggregate purchase price of $38,813. Additionally, we acquired a 60-unit memory care community for $15,650. Subsequent to September 30, 2017, we acquired a newly constructed 73-unit assisted living and memory care community in Missouri for $16,555,000. The property was added to an existing master lease agreement at an initial cash yield of 7%. The following table summarizes our acquisitions for the nine months ended September 30, 2016 (dollar amounts in thousands): Total Number Number Purchase Transaction Acquisition of of Type of Property Price Costs (1) Costs Properties Beds/Units Skilled Nursing (2) $ 16,000 $ 45 $ 16,045 1 126 Assisted Living (3) 53,550 411 53,961 4 250 Land (4) 5,425 63 5,488 — — Totals $ 74,975 $ 519 $ 75,494 5 376 (1) Represents cost associated with our acquisitions; however, depending on the accounting treatment of our acquisitions, transaction costs may be capitalized to the properties’ basis and, for our land purchases with forward development commitments, transaction costs are capitalized as part of construction in progress. Additionally, we expense transaction costs related to the prior year due to timing and terminated transactions. (2) We acquired a newly constructed 126-bed skilled nursing center in Texas. (3) We acquired a newly constructed memory care community in Kentucky for $14,250 including a $2,000 holdback, a newly constructed assisted living and memory care community in Georgia for $14,300 and two memory care communities in Kansas for an aggregate purchase price of $25,000. (4) We acquired a parcel of land and improvements and entered into a development commitment of up to $24,325, including the land and bed rights purchase, for the development of a 143-bed skilled nursing center in Kentucky. |
Schedule of development, improvement and construction projects | During the nine months ended September 30, 2017 and 2016, we invested the following in development and improvement projects (in thousands) : Nine months ended September 30, 2017 Nine months ended September 30, 2016 Development Improvements Development Improvements Assisted Living Communities $ 10,366 $ 951 $ 35,623 $ 2,134 Skilled Nursing Centers 3,573 1,357 - 3,432 $ 13,939 $ 2,308 $ 35,623 $ 5,566 |
Summary of investments in mortgage loans secured by first mortgages | The following table summarizes our investments in mortgage loans secured by first mortgages at September 30, 2017 (dollar amounts in thousands) : Number of Investment Gross SNF per Type of Property Investments Loans Properties (1) Beds Bed/Unit Skilled Nursing $ 224,095 5 21 2,764 $ 81.08 (1) We have investments in properties located in two states that include mortgages to two operators. |
Schedule of mortgage loan activity | The following table summarizes our mortgage loan activity for the nine months ended September 30, 2017 and 2016 (in thousands): Nine months ended September 30, 2017 2016 Origination/Funding Origination/Funding Originations and fundings under mortgage loans receivable $ 9,333 $ 19,113 Pay-offs received (16,665) (746) Scheduled principal payments received (686) (1,371) Net (decrease) increase in mortgage loans receivable $ (8,018) $ 16,996 |
Notes Receivable (Tables)
Notes Receivable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Notes Receivable. | |
Summary of notes receivable activities | The following table summarizes our notes receivable activities for the nine months ended September 30, 2017 and 2016 (dollar amounts in thousands): Nine months ended September 30, 2017 2016 Advances and originations under notes receivable $ - $ 2,328 Principal payments received under notes receivable (25) (90) Net (decrease) increase in notes receivable $ (25) $ 2,238 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Obligations | |
Schedule of Debt Obligations | . The debt obligations by component as of September 30, 2017 and December 31, 2016 are as follows ( dollar amounts in thousands): At September 30, 2017 At December 31, 2016 Applicable Available Available Interest Outstanding for Outstanding for Debt Obligations Rate (1) Balance Borrowing Balance Borrowing Bank borrowings (2) 2.98% $ 55,000 $ 545,000 $ 107,100 $ 492,900 Senior unsecured notes, net of debt issue costs 4.49% 582,950 51,667 502,291 22,500 Total 4.36% $ 637,950 $ 596,667 $ 609,391 $ 515,400 (1) Represents weighted average of interest rate as of September 30, 2017. (2) Subsequent to September 30, 2017, we had an additional net borrowing of $15,000 under our unsecured revolving line of credit. Accordingly, we have $70,000 outstanding under our unsecured revolving line of credit with $530,000 available for borrowing. |
Schedule of principal payments and amounts due at maturity | Our borrowings and repayments are as follows (in thousands): Nine months ended September 30, 2017 2016 Borrowings Repayments Borrowings Repayments Bank borrowings $ 64,500 $ (116,600) $ 83,500 $ (127,000) Senior unsecured notes 100,000 (1) (19,167) 77,500 (2) (16,667) Total $ 164,500 $ (135,767) $ 161,000 $ (143,667) (1) During the nine months ended September 30, 2017, we sold 15-year senior unsecured notes in the aggregate amount of $100,000 to a group of investors, which included Prudential, in a private placement transaction. The notes bear interest at an annual rate of 4.5%, have scheduled principal payments and mature on February 16, 2032. (2) During the nine months ended September 30, 2016, we sold 10-year senior unsecured term notes in the amount of $37,500 to Prudential. The notes bear interest at an annual fixed rate of 4.15%, have scheduled principal payments and will mature in 2028. Additionally, we sold 10-year senior unsecured notes in the amount of $40,000 to affiliated insurance company investment advisory clients of AIG Asset Management (U.S.) LLC. The notes bear interest at a coupon of 3.99%, have scheduled principal payments and will mature in 2031. |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity | |
Schedule of equity | Equity activity was as follows (in thousands): Total Equity Balance at December 31, 2016 $ 740,048 Net income 67,506 Proceeds from common stock issued, net of issuance costs 14,529 Stock-based compensation expense 3,967 Performance based stock units (6) Stock option exercise 202 Common stock dividends (67,664) Other (1,947) Balance at September 30, 2017 $ 756,635 |
Schedule of cash dividends declared and paid | We declared and paid the following cash dividends (in thousands) : Nine Months Ended September 30, 2017 September 30, 2016 Declared Paid Declared Paid Common Stock $ 67,664 (1) $ 67,664 (1) $ 62,211 (2) $ 62,211 (2) (1) Represents $0.19 per share per month for the nine months ended September 30, 2017. (2) Represents $0.18 per share per month for the nine months ended September 30, 2016. |
Schedule of options exercised | Weighted Average Options Exercise Option Market Exercised Price Value Value (1) 2017 8,334 $ 24.31 $ 202,566 $ 410,797 2016 6,667 $ 23.79 $ 159,000 $ 311,000 (1) As of exercise date. |
Schedule of restricted stock granted | No. of Price per Year Shares/Units Share Vesting Period 2017 $ ratably over 3 years 57,881 $ 45.76 TSR targets (1) 7,416 $ 48.55 June 1, 2018 3,000 $ 50.50 ratably over 3 years 2016 $ ratably over 3 years 54,107 $ 46.87 TSR targets (2) 7,680 $ 46.87 June 1, 2017 (1) Vesting is based on achieving certain total shareholder return (or TSR) targets in 4 years with acceleration opportunity in 3 years. (2) Vesting is based on achieving certain TSR targets in 3.7 years with acceleration opportunity in 2.7 years. |
Schedule of unrecognized compensation | Remaining Compensation Vesting Date Expense 2017 $ 1,282,000 2018 3,947,000 2019 2,149,000 2020 259,000 $ 7,637,000 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Schedule of commitments | At September 30, 2017, we had commitments as follows (in thousands): Total Investment 2017 Commitment Remaining Commitment Funding Funded Commitment Real estate properties (See Note 2. Real Estate Investments ) $ 60,274 (1) $ 12,120 $ 28,456 $ 31,818 Accrued incentives and earn-out liabilities (2) 14,000 — — 14,000 Lease incentives 7,113 438 438 6,675 Mortgage loans (See Note 2.Real Estate Investments ) 51,000 (1) 9,333 14,672 36,328 Joint venture investments (See Note 3. Investments in Unconsolidated Joint Ventures ) 25,650 1,101 23,014 2,636 Notes receivable (See Note 4. Notes Receivable ) 500 — — 500 Totals $ 158,537 $ 22,992 $ 66,580 $ 91,957 (1) Represents commitments to purchase land and improvements, if applicable, and to develop, re-develop, renovate or expand seniors housing and health care properties. (2) During the three and nine months ended September 30, 2017, we recorded non‑cash interest expense of $125 and $476, respectively, related to these contingent liabilities. At September 30, 2017, the fair value of our contingent payments was $8,790. |
Major Operators (Tables)
Major Operators (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Major Operators | |
Schedule of concentration of risk by major operators | Number of Number of Percentage of SNF ALF Total Total Operator SNF ALF Beds Units Revenue (1) Assets Prestige Healthcare 22 — 2,798 93 16.7 % 16.1 % Senior Lifestyle Corporation — 23 — 1,457 11.9 % 11.5 % Brookdale Senior Living — 37 — 1,702 9.7 % 5.1 % Senior Care Centers 11 — 1,444 — 9.6 % 7.9 % Totals 33 60 4,242 3,252 % % (1) Includes rental income and interest income from mortgage loans. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share | |
Schedule of basic and diluted net income per share | The following table sets forth the computation of basic and diluted net income per share ( in thousands, except per share amounts ): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net income $ 20,616 $ 22,411 $ 67,506 $ 64,449 Less net income allocated to participating securities: Non-forfeitable dividends on participating securities (80) (85) (269) (284) Income allocated to participating securities — (5) (12) (12) Total net income allocated to participating securities (80) (90) (281) (296) Net income available to common stockholders 20,536 22,321 67,225 64,153 Effect of dilutive securities: Participating securities 80 90 281 296 Net income for diluted net income per share $ 20,616 $ 22,411 $ 67,506 $ 64,449 Shares for basic net income per share 39,428 39,057 39,403 38,161 Effect of dilutive securities: Stock options 9 13 11 13 Performance-based stock units 170 108 170 108 Participating securities 141 157 154 173 Total effect of dilutive securities 320 278 335 294 Shares for diluted net income per share 39,748 39,335 39,738 38,455 Basic net income per share $ 0.52 $ 0.57 $ 1.71 $ 1.68 Diluted net income per share $ 0.52 $ 0.57 $ 1.70 $ 1.68 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Measurements | |
Schedule of carrying value and fair value of the entity's financial instruments | The carrying value and fair value of our financial instruments as of September 30, 2017 and December 31, 2016 assuming election of fair value for our financial assets and financial liabilities were as follows ( in thousands ): At September 30, 2017 At December 31, 2016 Carrying Fair Carrying Fair Value Value Value Value Mortgage loans receivable $ 221,861 $ 271,666 (1) $ 229,801 $ 294,319 (1) Bank borrowings 55,000 55,000 (2) 107,100 107,100 (2) Senior unsecured notes, net of debt issue costs 582,950 589,396 (3) 502,291 498,915 (3) Accrued incentives and earn-outs 8,790 8,790 (4) 12,229 12,229 (4) (1) Our investment in mortgage loans receivable is classified as Level 3. The fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is determined using our assumption on market conditions adjusted for market and credit risk and current returns on our investments. The discount rate used to value our future cash inflows of the mortgage loans receivable at September 30, 2017 and December 31, 2016 was 8.8% and 8.2%, respectively. (2) Our bank borrowings bear interest at a variable interest rate. The estimated fair value of our bank borrowings approximated their carrying values at September 30, 2017 and December 31, 2016 based upon prevailing market interest rates for similar debt arrangements. (3) Our obligation under our senior unsecured notes is classified as Level 3 and thus the fair value is determined using a widely accepted valuation technique, discounted cash flow analysis on the expected cash flows. The discount rate is measured based upon management’s estimates of rates currently prevailing for comparable loans available to us, and instruments of comparable maturities. At September 30, 2017, the discount rate used to value our future cash outflow of our senior unsecured notes was 4.10% for those maturing before year 2026 and 4.30% for those maturing at or beyond year 2026. At December 31, 2016, the discount rate used to value our future cash outflow of our senior unsecured notes was 4.47% for those maturing before year 2026 and 4.60% for those maturing at or beyond year 2026. (4) Our accrued incentives and earn-outs are classified as Level 3. We estimated the fair value of the accrued incentives and earn‑out payments using a discounted cash flow analysis. The discount rate that we use consists of a risk‑free U.S. Treasury rate plus a company specific credit spread which we believe is acceptable by willing market participants. The discount rate used to value our accrued incentives and earn-outs was 5.9% a t both September 30, 2017 and December 31, 2016 . |
General (Details)
General (Details) | 9 Months Ended |
Sep. 30, 2017USD ($)segment | |
Summary of Significant Accounting Policies. | |
Number of operating segments | segment | 1 |
Provision for federal or state income taxes | $ | $ 0 |
Real Estate Investments - Owned
Real Estate Investments - Owned Properties (Details) - Real Estate Investment $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($)stateitemproperty$ / item | |
Real Estate Investments | |
Gross Investments | $ | $ 1,359,586 |
Percentage of Investments | 100.00% |
Number of properties | property | 180 |
Number of states | state | 27 |
Number of operators | 27 |
Operating leases | |
Number of ways to compute annual rent increases | 4 |
Minimum | |
Operating leases | |
Initial lease term | 10 years |
Specified annual increase over the prior year's rent (as a percent) | 2.00% |
Maximum | |
Operating leases | |
Initial lease term | 15 years |
Specified annual increase over the prior year's rent (as a percent) | 3.00% |
SNF Beds | |
Real Estate Investments | |
Number of beds/units | 9,394 |
ALF Units | |
Real Estate Investments | |
Number of beds/units | 6,046 |
ROC | |
Real Estate Investments | |
Number of properties reclassified during period | property | 7 |
ALF | |
Real Estate Investments | |
Gross Investments | $ | $ 743,015 |
Percentage of Investments | 54.60% |
Number of properties | property | 103 |
Investment per Bed/Unit | $ / item | 128.73 |
ALF | ALF Units | |
Real Estate Investments | |
Number of beds/units | 5,772 |
SNF | |
Real Estate Investments | |
Gross Investments | $ | $ 579,758 |
Percentage of Investments | 42.60% |
Number of properties | property | 76 |
Investment per Bed/Unit | $ / item | 60.71 |
SNF | SNF Beds | |
Real Estate Investments | |
Number of beds/units | 9,276 |
SNF | ALF Units | |
Real Estate Investments | |
Number of beds/units | 274 |
Properties under Development | |
Real Estate Investments | |
Gross Investments | $ | $ 26,597 |
Percentage of Investments | 2.00% |
Properties under Development | Development | |
Real Estate Investments | |
Number of developments | 3 |
Properties under Development | MC Units | Development | |
Real Estate Investments | |
Number of developments | property | 2 |
Number of beds/units under development | property | 132 |
Properties under Development | SNF Beds | Development | |
Real Estate Investments | |
Number of beds/units under development | 143 |
Other | |
Real Estate Investments | |
Gross Investments | $ | $ 10,216 |
Percentage of Investments | 0.80% |
Number of properties | property | 1 |
Number of parcels of land | 3 |
Other | SNF Beds | |
Real Estate Investments | |
Number of beds/units | 118 |
Hospital | |
Real Estate Investments | |
Number of properties | property | 1 |
Real Estate Investments - Opera
Real Estate Investments - Operator changes (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Oct. 31, 2017USD ($) | Sep. 30, 2017USD ($)property | Dec. 31, 2016USD ($) | |
Other disclosures | |||
Write-off | $ | $ 1,880 | ||
Straight-line rent receivable | $ | $ 61,070 | $ 55,276 | |
Operator agreements in transition | |||
Other disclosures | |||
Number of properties | property | 3 | ||
MC | Operator agreements in transition | |||
Other disclosures | |||
Number of properties in transition | property | 2 | ||
Write-off | $ | $ 1,880 | ||
Annual rental income | $ | $ 6,400 | ||
Number of properties | property | 2 | ||
Monthly minimum rent | $ | $ 400 | ||
MC | Master lease in default | |||
Other disclosures | |||
Number of properties in transition | property | 9 | ||
Properties under Development | Master lease in default | |||
Other disclosures | |||
Number of properties in transition | property | 2 |
Real Estate Investments - Acqui
Real Estate Investments - Acquisitions (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Oct. 31, 2017USD ($)item | Sep. 30, 2017USD ($)itemproperty | Sep. 30, 2016USD ($)itemproperty | |
Real estate investments | |||
Investment Commitment | $ 158,537 | ||
SNF | Kentucky | Development | |||
Real estate investments | |||
Number of units under development | item | 143 | ||
Investment Commitment | $ 24,325 | ||
Land | |||
Real estate investments | |||
Purchase Price | 5,425 | ||
Transaction Costs | 63 | ||
Total Acquisition Costs | 5,488 | ||
2017 Acquisitions | ALF | |||
Real estate investments | |||
Purchase Price | 54,463 | ||
Transaction Costs | 341 | ||
Total Acquisition Costs | $ 54,804 | ||
Number of properties acquired | property | 3 | ||
Number of beds/units acquired | item | 240 | ||
2017 Acquisitions | ALF | ALF Units | |||
Real estate investments | |||
Number of beds/units acquired | item | 107 | ||
2017 Acquisitions | MC | Memory Care Property with 73 Units | |||
Real estate investments | |||
Number of beds/units acquired | item | 73 | ||
2017 Acquisitions | MC | Memory Care Property with 60 Units | |||
Real estate investments | |||
Purchase Price | $ 15,650 | ||
Number of beds/units acquired | item | 60 | ||
2017 Acquisitions | ALF & MC | |||
Real estate investments | |||
Purchase Price | $ 38,813 | ||
2017 Acquisitions | ALF & MC | Missouri | Subsequent Event | |||
Real estate investments | |||
Purchase Price | $ 16,555 | ||
Number of beds/units acquired | item | 73 | ||
Cash yield percentage | 7.00% | ||
2016 Acquisitions | |||
Real estate investments | |||
Purchase Price | 74,975 | ||
Transaction Costs | 519 | ||
Total Acquisition Costs | $ 75,494 | ||
Number of properties acquired | property | 5 | ||
Number of beds/units acquired | item | 376 | ||
2016 Acquisitions | SNF | |||
Real estate investments | |||
Purchase Price | $ 16,000 | ||
Transaction Costs | 45 | ||
Total Acquisition Costs | $ 16,045 | ||
Number of properties acquired | property | 1 | ||
Number of beds/units acquired | item | 126 | ||
2016 Acquisitions | SNF | Texas | |||
Real estate investments | |||
Number of beds/units acquired | item | 126 | ||
2016 Acquisitions | ALF | |||
Real estate investments | |||
Purchase Price | $ 53,550 | ||
Transaction Costs | 411 | ||
Total Acquisition Costs | $ 53,961 | ||
Number of properties acquired | property | 4 | ||
Number of beds/units acquired | item | 250 | ||
2016 Acquisitions | ALF | Kentucky | |||
Real estate investments | |||
Purchase Price | $ 14,250 | ||
2016 Acquisitions | ALF | Kentucky | Holdback | |||
Real estate investments | |||
Contingent consideration | 2,000 | ||
2016 Acquisitions | ALF | Kansas | |||
Real estate investments | |||
Purchase Price | $ 25,000 | ||
Number of properties acquired | item | 2 | ||
2016 Acquisitions | ALF & MC | Georgia | |||
Real estate investments | |||
Purchase Price | $ 14,300 |
Real Estate Investments - Devel
Real Estate Investments - Development and Improvement Projects (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Real estate investments | ||
Invested in projects | $ 22,992 | |
Development | Development and Improvement Commitments | ||
Real estate investments | ||
Invested in projects | 13,939 | $ 35,623 |
Improvements | Development and Improvement Commitments | ||
Real estate investments | ||
Invested in projects | 2,308 | 5,566 |
ALF | Development | Development and Improvement Commitments | ||
Real estate investments | ||
Invested in projects | 10,366 | 35,623 |
ALF | Improvements | Development and Improvement Commitments | ||
Real estate investments | ||
Invested in projects | 951 | 2,134 |
SNF | Development | Development and Improvement Commitments | ||
Real estate investments | ||
Invested in projects | 3,573 | |
SNF | Improvements | Development and Improvement Commitments | ||
Real estate investments | ||
Invested in projects | $ 1,357 | $ 3,432 |
Real Estate Investments - Dispo
Real Estate Investments - Disposals (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)itemproperty | Sep. 30, 2016USD ($)property | Dec. 31, 2016USD ($) | |
Disposals and other | ||||
Carrying value | $ 1,060,597 | $ 1,025,702 | ||
Gain (loss) on sale of properties | $ 1,780 | $ 5,054 | $ 3,582 | |
ALF | ||||
Disposals and other | ||||
Number of properties sold | property | 4 | |||
Number of beds or units in property sold | item | 175 | |||
Carrying value | $ 8,726 | |||
Sales price | 14,250 | |||
Gain (loss) on sale of properties | $ 5,054 | |||
ALF | Florida | ||||
Disposals and other | ||||
Number of properties sold | property | 2 | |||
SNF | Texas | ||||
Disposals and other | ||||
Number of properties sold | property | 2 | |||
ALF and SNF | Florida and Texas | ||||
Disposals and other | ||||
Carrying value | 9,791 | $ 9,791 | ||
Sales price | 13,600 | |||
Gain (loss) on sale of properties | 3,775 | |||
School | New Jersey | ||||
Disposals and other | ||||
Carrying value | $ 3,997 | 3,997 | ||
Sales price | 3,850 | |||
Gain (loss) on sale of properties | $ (193) |
Real Estate Investments - Mortg
Real Estate Investments - Mortgage Loan Activity (Details) - Mortgage Loans $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($)loanstateitemproperty$ / item | Sep. 30, 2016USD ($) | |
Mortgage Loans | ||
Originations and fundings under mortgage loans receivable | $ 9,333 | $ 19,113 |
Pay-offs received | (16,665) | (746) |
Scheduled principal payments received | (686) | (1,371) |
Net (decrease) increase in mortgage loans receivable | $ (8,018) | $ 16,996 |
Minimum | ||
Mortgage Loans | ||
Interest rate for mortgage loan (as a percent) | 9.40% | |
General amortization schedule of mortgage loans | 20 years | |
Specified basis points for annual increase in interest rate (as a percent) | 0.10% | |
Maximum | ||
Mortgage Loans | ||
Interest rate for mortgage loan (as a percent) | 11.20% | |
General amortization schedule of mortgage loans | 30 years | |
Specified basis points for annual increase in interest rate (as a percent) | 0.25% | |
SNF | ||
Mortgage Loans | ||
Gross Investments | $ 224,095 | |
Number of Loans | loan | 5 | |
Number of properties | property | 21 | |
Investment per Bed/Unit | $ / item | 81.08 | |
Number of states | state | 2 | |
Number of operators | state | 2 | |
SNF Beds | SNF | ||
Mortgage Loans | ||
Number of beds/units | item | 2,764 |
Investment in Unconsolidated 34
Investment in Unconsolidated Joint Ventures - Investment (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)loanproperty | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Investment in Unconsolidated Joint Ventures | |||||
Investment in unconsolidated joint ventures | $ 29,862 | $ 29,862 | $ 25,221 | ||
Income from unconsolidated joint ventures | $ 615 | $ 289 | 1,635 | $ 839 | |
Distribution from unconsolidated joint ventures | $ 1,236 | 1,409 | |||
Joint Venture | |||||
Investment in Unconsolidated Joint Ventures | |||||
Number of Loans | loan | 2 | ||||
Joint Venture | Not primary beneficiary | Preferred Equity Investment | |||||
Investment in Unconsolidated Joint Ventures | |||||
Total preferred capital contributions in joint venture | $ 25,650 | ||||
Number of properties owned by joint venture | property | 4 | 4 | |||
Preferred return percentage | 15.00% | ||||
Common members capital account balance | $ 0 | $ 0 | |||
Additional preferred capital contribution commitment | 1,100 | 481 | |||
Additional preferred capital contributions in joint venture committed | 2,636 | ||||
Investment in unconsolidated joint ventures | $ 23,421 | 23,421 | $ 22,321 | ||
Income from unconsolidated joint ventures | 1,134 | 839 | |||
Distribution from unconsolidated joint ventures | $ 1,020 | $ 1,409 |
Investment in Unconsolidated 35
Investment in Unconsolidated Joint Ventures - Mezzanine Loans (Details) $ in Thousands | Feb. 01, 2017USD ($) | Sep. 30, 2017USD ($)property | Dec. 31, 2016USD ($)property |
Investment in Unconsolidated Joint Ventures | |||
Notes receivable, net of loan loss reserve: 2017—$166; 2016—$166 | $ 16,402 | $ 16,427 | |
Real Estate Development Commitments, 127-unit senior housing community | Mezzanine Loans | Combination ALF, MC and ILF community | ADC Arrangement | |||
Investment in Unconsolidated Joint Ventures | |||
Loan Commitments | $ 3,400 | ||
Term of loan | 7 years | ||
Number of units | property | 127 | ||
Preferred return percentage | 15.00% | ||
Payments to fund mezzanine loan | 2,747 | ||
Amount withheld for interest | 653 | ||
Interest income | $ 118 | ||
Real Estate Development Commitments, 99-unit senior housing community | Mezzanine Loans | Combination ALF, MC and ILF community | ADC Arrangement | |||
Investment in Unconsolidated Joint Ventures | |||
Number of units | property | 99 | ||
Loans receivable | $ 3,041 | $ 2,900 | |
Interest income | $ 0 | 383 | |
Cash interest received | $ 216 | ||
Real Estate Development Commitments, 99-unit senior housing community | Mezzanine Loans | Combination ALF, MC and ILF community | ADC Arrangement | Minimum | |||
Investment in Unconsolidated Joint Ventures | |||
Stated interest rate (as a percent) | 10.00% | ||
Real Estate Development Commitments, 99-unit senior housing community | Mezzanine Loans | Combination ALF, MC and ILF community | ADC Arrangement | Maximum | |||
Investment in Unconsolidated Joint Ventures | |||
Stated interest rate (as a percent) | 15.00% |
Notes Receivable - Components (
Notes Receivable - Components (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Notes receivable activities | ||
Advances and Originations under notes receivable | $ 2,328 | |
Principal payments received under notes receivable | $ (25) | (90) |
Net increase in notes receivable | $ (25) | $ 2,238 |
Debt Obligations - Bank Borrowi
Debt Obligations - Bank Borrowings Terms (Details) - Bank Borrowings | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Debt Obligations | |
Maximum available under facility | $ 600,000,000 |
Additional extension period option | 1 year |
Unused commitment fee (as a percent) | 0.35% |
LIBOR | |
Debt Obligations | |
Basis spread over base rate (as a percent) | 1.50% |
Debt Obligations - Senior Unsec
Debt Obligations - Senior Unsecured Notes, Net (Details) | Sep. 30, 2017USD ($) |
Private Shelf Agreement Prudential | Senior Unsecured Notes | |
Debt Obligations | |
Maximum available under facility | $ 337,500,000 |
Debt Obligations - By Component
Debt Obligations - By Component (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Debt Obligations | ||||
Outstanding Balance | $ 637,950 | $ 609,391 | ||
Available for borrowing | 596,667 | 515,400 | ||
Amount borrowed | 64,500 | $ 83,500 | ||
Payments on debt | $ 19,167 | $ 16,667 | ||
Weighted Average | ||||
Debt Obligations | ||||
Applicable Interest Rate (as a percent) | 4.36% | |||
Bank Borrowings | ||||
Debt Obligations | ||||
Outstanding Balance | $ 55,000 | 107,100 | ||
Available for borrowing | $ 545,000 | 492,900 | ||
Bank Borrowings | Weighted Average | ||||
Debt Obligations | ||||
Applicable Interest Rate (as a percent) | 2.98% | |||
Senior Unsecured Notes | ||||
Debt Obligations | ||||
Outstanding Balance | $ 582,950 | 502,291 | ||
Available for borrowing | $ 51,667 | $ 22,500 | ||
Senior Unsecured Notes | Weighted Average | ||||
Debt Obligations | ||||
Applicable Interest Rate (as a percent) | 4.49% | |||
Subsequent Event | Bank Borrowings | ||||
Debt Obligations | ||||
Outstanding Balance | $ 70,000 | |||
Available for borrowing | 530,000 | |||
Amount borrowed | $ 15,000 |
Debt Obligations - Borrowings a
Debt Obligations - Borrowings and Repayments (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Borrowings | ||
Bank borrowings | $ 64,500,000 | $ 83,500,000 |
Proceeds from issuance of senior unsecured notes | 100,000,000 | 77,500,000 |
Total | 164,500,000 | 161,000,000 |
Repayments | ||
Repayment of bank borrowings | (116,600,000) | (127,000,000) |
Principal payments on senior unsecured notes | (19,167,000) | (16,667,000) |
Total | $ (135,767,000) | $ (143,667,000) |
Private Shelf Agreement Prudential | Senior Unsecured Notes | ||
Repayments | ||
Debt instrument term | 15 years | 10 years |
Face amount of debt | $ 100,000,000 | $ 37,500,000 |
Fixed interest rate (as a percent) | 4.50% | 4.15% |
Note Purchase and Private Shelf Agreement AIG | Senior Unsecured Notes | ||
Repayments | ||
Debt instrument term | 10 years | |
Face amount of debt | $ 40,000,000 | |
Fixed interest rate (as a percent) | 3.99% |
Equity - Rollforward (Details)
Equity - Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Equity activity | ||||
Balance at beginning of period | $ 740,048 | |||
Net income | $ 20,616 | $ 22,411 | 67,506 | $ 64,449 |
Proceeds from common stock issued, net of issuance costs | 14,529 | |||
Stock-based compensation expense | 3,967 | |||
Performance-based stock units | (6) | |||
Stock option exercise | 202 | |||
Common stock dividends | (67,664) | |||
Other | (1,947) | |||
Balance at end of period | $ 756,635 | $ 756,635 |
Equity - Class of Stock Disclos
Equity - Class of Stock Disclosures - Common Stock and Shelf Registrations (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Equity | ||
Net proceeds | $ 14,578,000 | $ 78,592,000 |
Common Stock | ||
Equity | ||
Number of shares repurchased | 41,592 | 49,094 |
Common Stock | Equity Distribution Agreements | ||
Equity | ||
Maximum offering capacity under shelf registration statement | $ 200,000,000 | |
Shares common stock sold | 312,881 | |
Net proceeds | $ 14,578,000 | |
Compensation paid to sales agents | 260,000 | |
Reclassification of accumulated costs to additional paid in capital | 49,000 | |
Amount available under effective shelf registration statement | $ 185,162,000 |
Equity - Class of Stock Discl43
Equity - Class of Stock Disclosures - Dividends and AOCI (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||
Oct. 31, 2017 | Sep. 30, 2017 | Aug. 31, 2017 | Jul. 31, 2017 | Jun. 30, 2017 | May 31, 2017 | Apr. 30, 2017 | Mar. 31, 2017 | Feb. 28, 2017 | Jan. 31, 2017 | Sep. 30, 2016 | Aug. 31, 2016 | Jul. 31, 2016 | Jun. 30, 2016 | May 31, 2016 | Apr. 30, 2016 | Mar. 31, 2016 | Feb. 29, 2016 | Jan. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Dividend Distributions | |||||||||||||||||||||||
Paid | $ 67,664 | $ 62,211 | |||||||||||||||||||||
Dividends per share declared (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.57 | $ 0.54 | $ 1.71 | $ 1.62 | |
Dividends paid per common share (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.57 | $ 0.54 | $ 1.71 | $ 1.62 | |
Common Stock | |||||||||||||||||||||||
Dividend Distributions | |||||||||||||||||||||||
Declared | $ 67,664 | $ 62,211 | $ 67,664 | $ 62,211 | $ 67,664 | $ 62,211 | |||||||||||||||||
Paid | $ 67,664 | $ 62,211 | |||||||||||||||||||||
Common Stock | Subsequent Event | Dividend Payable, October 31, 2017 | |||||||||||||||||||||||
Dividend Distributions | |||||||||||||||||||||||
Dividends per share declared (in dollars per share) | $ 0.19 | ||||||||||||||||||||||
Common Stock | Subsequent Event | Dividend Payable, November 30, 2017 | |||||||||||||||||||||||
Dividend Distributions | |||||||||||||||||||||||
Dividends per share declared (in dollars per share) | 0.19 | ||||||||||||||||||||||
Common Stock | Subsequent Event | Dividend Payable, December 29, 2017 | |||||||||||||||||||||||
Dividend Distributions | |||||||||||||||||||||||
Dividends per share declared (in dollars per share) | $ 0.19 |
Equity - Options (Details)
Equity - Options (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Stock Based Compensation Plans | ||
Options exercised (in shares) | 8,334 | 6,667 |
Weighted Average Exercise Price (in dollars per share) | $ 24.31 | $ 23.79 |
Value of options exercised | $ 202,566 | $ 159,000 |
Market value of options on the date of exercise | $ 410,797 | $ 311,000 |
Options outstanding at end of the period (in shares) | 25,000 | |
Options exercisable at end of the period (in shares) | 25,000 | |
2015 Plan | ||
Stock Based Compensation Plans | ||
Total shares reserved for issuance of common stock related to the conversion of preferred stock | 1,400,000 | |
Stock options granted (in shares) | 0 | 0 |
Stock options | ||
Stock Based Compensation Plans | ||
Compensation expense related to share-based award | $ 2,000 | $ 11,000 |
Equity - Restricted Stock (Deta
Equity - Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Restricted stock | ||
Restricted stock awards | ||
Cancelled (in shares) | 15,400 | 640 |
Compensation expense related to share-based award | $ 3,965 | $ 3,138 |
Performance-based stock units | ||
Restricted stock awards | ||
Cancelled (in shares) | 8,706 | |
Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 143,057 | 127,087 |
Nonvested awards | ||
Remaining compensation expense | $ 7,637 | |
2017 | Restricted stock | ||
Nonvested awards | ||
Remaining compensation expense | 1,282 | |
2018 | Restricted stock | ||
Nonvested awards | ||
Remaining compensation expense | 3,947 | |
2019 | Restricted stock | ||
Nonvested awards | ||
Remaining compensation expense | 2,149 | |
2020 | Restricted stock and performance-based stock units | ||
Nonvested awards | ||
Remaining compensation expense | $ 259 | |
Grant Date Price $45.76 | Three year vesting | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 74,760 | |
Granted (in dollars per share) | $ 45.76 | |
Vesting period | 3 years | |
Grant Date Price $45.76 | TSR Targets | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 57,881 | |
Granted (in dollars per share) | $ 45.76 | |
Vesting period | 4 years | |
Grant Date Price $45.76 | Accelerated TSR Targets | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Vesting period | 3 years | |
Grant Date Price $48.55 | Vesting Date, June 1, 2018 | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 7,416 | |
Granted (in dollars per share) | $ 48.55 | |
Grant Date Price $50.50 | Three year vesting | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 3,000 | |
Granted (in dollars per share) | $ 50.50 | |
Vesting period | 3 years | |
Grant Date Price $43.24 | Three year vesting | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 65,300 | |
Granted (in dollars per share) | $ 43.24 | |
Vesting period | 3 years | |
Grant Date Price $46.87 | TSR Targets | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 54,107 | |
Granted (in dollars per share) | $ 46.87 | |
Vesting period | 3 years 8 months 12 days | |
Grant Date Price $46.87 | Accelerated TSR Targets | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Vesting period | 2 years 8 months 12 days | |
Grant Date Price $46.87 | Vesting Date, June 1, 2017 | Restricted stock and performance-based stock units | ||
Restricted stock awards | ||
Number of shares granted | 7,680 | |
Granted (in dollars per share) | $ 46.87 |
Commitments and Contingencies -
Commitments and Contingencies - Summary of Commitments (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Commitments and Contingencies | |
Investment Commitment | $ 158,537 |
2017 Funding | 22,992 |
Commitments funded | 66,580 |
Remaining commitment | 91,957 |
Real estate properties | |
Commitments and Contingencies | |
Investment Commitment | 60,274 |
2017 Funding | 12,120 |
Commitments funded | 28,456 |
Remaining commitment | 31,818 |
Accrued incentives and earn-out liabilities | |
Commitments and Contingencies | |
Investment Commitment | 14,000 |
Remaining commitment | 14,000 |
Lease incentives | |
Commitments and Contingencies | |
Investment Commitment | 7,113 |
2017 Funding | 438 |
Commitments funded | 438 |
Remaining commitment | 6,675 |
Mortgage loans | |
Commitments and Contingencies | |
Investment Commitment | 51,000 |
2017 Funding | 9,333 |
Commitments funded | 14,672 |
Remaining commitment | 36,328 |
Joint venture investments | |
Commitments and Contingencies | |
Investment Commitment | 25,650 |
2017 Funding | 1,101 |
Commitments funded | 23,014 |
Remaining commitment | 2,636 |
Notes receivable | |
Commitments and Contingencies | |
Investment Commitment | 500 |
Remaining commitment | $ 500 |
Commitments and Contingencies47
Commitments and Contingencies - Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Contingent consideration | ||||
Non-cash interest related to contingent liabilities | $ 476 | $ 538 | ||
Accrued incentives and earn-outs | $ 8,790 | 8,790 | $ 12,229 | |
Income from write-off of contingent lease assets and liabilities | 842 | |||
Real Estate Investment | Accrued incentives and earn-out liabilities | ||||
Contingent consideration | ||||
Non-cash interest related to contingent liabilities | 125 | 476 | ||
Write-off of earn-out liability | 3,476 | |||
Write-off of lease incentive asset | 2,634 | |||
Income from write-off of contingent lease assets and liabilities | 842 | |||
Fair Value | Real Estate Investment | Accrued incentives and earn-out liabilities | ||||
Contingent consideration | ||||
Accrued incentives and earn-outs | $ 8,790 | $ 8,790 |
Major Operators (Details)
Major Operators (Details) | 9 Months Ended |
Sep. 30, 2017propertyitem | |
Major Operators | |
Number of major operators | 4 |
Prestige Healthcare | SNF | |
Major Operators | |
Number of beds | property | 22 |
Number of beds/units | 2,798 |
Prestige Healthcare | ALF | |
Major Operators | |
Number of beds/units | 93 |
Senior Lifestyle Corporation | ALF | |
Major Operators | |
Number of beds | property | 23 |
Number of beds/units | 1,457 |
Brookdale Senior Living | ALF | |
Major Operators | |
Number of beds | property | 37 |
Number of beds/units | 1,702 |
Senior Care Centers | SNF | |
Major Operators | |
Number of beds | property | 11 |
Number of beds/units | 1,444 |
Operator Concentration Risk | SNF | |
Major Operators | |
Number of beds | property | 33 |
Number of beds/units | 4,242 |
Operator Concentration Risk | ALF | |
Major Operators | |
Number of beds | property | 60 |
Number of beds/units | 3,252 |
Total Revenue | Operator Concentration Risk | |
Major Operators | |
Concentration risk (as a percent) | 47.90% |
Total Revenue | Operator Concentration Risk | Prestige Healthcare | |
Major Operators | |
Concentration risk (as a percent) | 16.70% |
Total Revenue | Operator Concentration Risk | Senior Lifestyle Corporation | |
Major Operators | |
Concentration risk (as a percent) | 11.90% |
Total Revenue | Operator Concentration Risk | Brookdale Senior Living | |
Major Operators | |
Concentration risk (as a percent) | 9.70% |
Total Revenue | Operator Concentration Risk | Senior Care Centers | |
Major Operators | |
Concentration risk (as a percent) | 9.60% |
Total Assets | Operator Concentration Risk | |
Major Operators | |
Concentration risk (as a percent) | 40.60% |
Total Assets | Credit Concentration Risk | Prestige Healthcare | |
Major Operators | |
Concentration risk (as a percent) | 16.10% |
Total Assets | Credit Concentration Risk | Senior Lifestyle Corporation | |
Major Operators | |
Concentration risk (as a percent) | 11.50% |
Total Assets | Credit Concentration Risk | Brookdale Senior Living | |
Major Operators | |
Concentration risk (as a percent) | 5.10% |
Total Assets | Credit Concentration Risk | Senior Care Centers | |
Major Operators | |
Concentration risk (as a percent) | 7.90% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net income | $ 20,616 | $ 22,411 | $ 67,506 | $ 64,449 |
Less net income allocated to participating securities: | ||||
Nonforfeitable dividends on participating securities | (80) | (85) | (269) | (284) |
Income allocated to participating securities | (5) | (12) | (12) | |
Total net income allocated to participating securities | (80) | (90) | (281) | (296) |
Net income available to common stockholders | 20,536 | 22,321 | 67,225 | 64,153 |
Effect of dilutive securities: | ||||
Participating securities | 80 | 90 | 281 | 296 |
Net income for diluted net income per share | $ 20,616 | $ 22,411 | $ 67,506 | $ 64,449 |
Reconciliation of shares | ||||
Shares for basic net income per share | 39,428 | 39,057 | 39,403 | 38,161 |
Effect of dilutive securities: (Shares) | ||||
Total effect of dilutive securities (in shares) | 320 | 278 | 335 | 294 |
Shares for diluted net income per share | 39,748 | 39,335 | 39,738 | 38,455 |
Basic (in dollars per share) | $ 0.52 | $ 0.57 | $ 1.71 | $ 1.68 |
Diluted (in dollars per share) | $ 0.52 | $ 0.57 | $ 1.70 | $ 1.68 |
Stock options | ||||
Effect of dilutive securities: (Shares) | ||||
Stock options and performance-based stock units (in shares) | 9 | 13 | 11 | 13 |
Performance-based stock units | ||||
Effect of dilutive securities: (Shares) | ||||
Stock options and performance-based stock units (in shares) | 170 | 108 | 170 | 108 |
Participating Securities | ||||
Effect of dilutive securities: (Shares) | ||||
Participating securities | 141 | 157 | 154 | 173 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair value measurements | ||
Mortgage loans receivable | $ 221,861 | $ 229,801 |
Senior unsecured notes, net of debt issue costs | 582,950 | 502,291 |
Accrued incentives and earn-outs | $ 8,790 | $ 12,229 |
Level 3 | Senior Unsecured Notes maturing before 2026 | ||
Fair value measurements | ||
Discount rate (as a percent) | 4.10% | 4.47% |
Level 3 | Senior Unsecured Notes maturing 2026 and after | ||
Fair value measurements | ||
Discount rate (as a percent) | 4.30% | 4.60% |
Level 3 | Accrued incentives and earn-out liabilities | ||
Fair value measurements | ||
Discount rate (as a percent) | 5.90% | 5.90% |
Level 3 | Mortgage Loans Receivable | ||
Fair value measurements | ||
Discount rate (as a percent) | 8.80% | 8.20% |
Carrying Value | ||
Fair value measurements | ||
Mortgage loans receivable | $ 221,861 | $ 229,801 |
Bank borrowings | 55,000 | 107,100 |
Senior unsecured notes, net of debt issue costs | 582,950 | 502,291 |
Accrued incentives and earn-outs | 8,790 | 12,229 |
Fair Value | ||
Fair value measurements | ||
Bank borrowings | 55,000 | 107,100 |
Fair Value | Level 3 | ||
Fair value measurements | ||
Mortgage loans receivable | 271,666 | 294,319 |
Senior unsecured notes, net of debt issue costs | 589,396 | 498,915 |
Accrued incentives and earn-outs | $ 8,790 | $ 12,229 |
Subsequent Events - Real Estate
Subsequent Events - Real Estate (Details) - Subsequent Event - Real Estate Investment - ALF & MC - Missouri $ in Thousands | 1 Months Ended |
Oct. 31, 2017USD ($)item | |
Real Estate Investments | |
Number of beds/units acquired | item | 73 |
Purchase Price | $ | $ 16,555 |
Cash yield percentage | 7.00% |
Subsequent Events - Debt Obliga
Subsequent Events - Debt Obligations (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Debt Obligations | ||||
Amount borrowed | $ 64,500 | $ 83,500 | ||
Outstanding Balance | 637,950 | $ 609,391 | ||
Available for borrowing | 596,667 | 515,400 | ||
Bank Borrowings | ||||
Debt Obligations | ||||
Outstanding Balance | 55,000 | 107,100 | ||
Available for borrowing | $ 545,000 | $ 492,900 | ||
Bank Borrowings | Subsequent Event | ||||
Debt Obligations | ||||
Amount borrowed | $ 15,000 | |||
Outstanding Balance | 70,000 | |||
Available for borrowing | $ 530,000 |
Subsequent Events - Equity (Det
Subsequent Events - Equity (Details) - $ / shares | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||
Oct. 31, 2017 | Sep. 30, 2017 | Aug. 31, 2017 | Jul. 31, 2017 | Jun. 30, 2017 | May 31, 2017 | Apr. 30, 2017 | Mar. 31, 2017 | Feb. 28, 2017 | Jan. 31, 2017 | Sep. 30, 2016 | Aug. 31, 2016 | Jul. 31, 2016 | Jun. 30, 2016 | May 31, 2016 | Apr. 30, 2016 | Mar. 31, 2016 | Feb. 29, 2016 | Jan. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Equity | |||||||||||||||||||||||
Dividends per share declared (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.57 | $ 0.54 | $ 1.71 | $ 1.62 | |
Dividend Payable, October 31, 2017 | Subsequent Event | Common Stock | |||||||||||||||||||||||
Equity | |||||||||||||||||||||||
Dividends per share declared (in dollars per share) | $ 0.19 | ||||||||||||||||||||||
Dividend Payable, November 30, 2017 | Subsequent Event | Common Stock | |||||||||||||||||||||||
Equity | |||||||||||||||||||||||
Dividends per share declared (in dollars per share) | 0.19 | ||||||||||||||||||||||
Dividend Payable, December 29, 2017 | Subsequent Event | Common Stock | |||||||||||||||||||||||
Equity | |||||||||||||||||||||||
Dividends per share declared (in dollars per share) | $ 0.19 |