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Real Estate Property Investments | 6 Months Ended
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Jun. 30, 2016
Real Estate Property Investments |
Real Estate Property Investments | NOTE 3. Real Estate Property Investments 2016 Acquisitions The following table summarizes the Company’s real estate acquisitions for the six months ended June 30, 2016 (in thousands):
|  | Consideration |  | Assets Acquired(1) |
|  |  |  | Liabilities |  |  |  |  | Net |
Segment |  | Cash Paid |  | Assumed |  | Real Estate |  | Intangibles |
Senior housing |  | $ | 76,362 |  | $ | 1,200 |  | $ | 71,875 |  | $ | 5,687 |
Post-acute/skilled nursing |  |  | 17,909 |  |  | — |  |  | 16,596 |  |  | 1,313 |
|  | $ | 94,271 |  | $ | 1,200 |  | $ | 88,471 |  | $ | 7,000 |
| (1) |  | The purchase price allocation is preliminary and may be subject to change. Revenues and earnings since the acquisition dates as well as the supplementary pro forma information, assuming these acquisitions occurred as of the beginning of the prior periods, were not material.
2015 Acquisitions Acquisition of Private Pay Senior Housing Portfolio (“RIDEA III”). On June 30, 2015, the Company and Brookdale Senior Living (“Brookdale”) acquired a portfolio of 35 private pay senior housing communities from Chartwell Retirement Residences, including two leasehold interests, representing 5,025 units. The portfolio was acquired under a RIDEA structure which is permitted by the Housing and Economic Recovery Act of 2008 (commonly referred to as “RIDEA”), with Brookdale owning a 10% noncontrolling interest. Brookdale has operated these communities since 2011 and continues to manage the communities under a long-term management agreement, which is cancellable under certain conditions (subject to a fee if terminated within seven years from the acquisition date). The Company paid $770 million in cash consideration, net of cash assumed, and assumed $32 million of net liabilities and $29 million of noncontrolling interests to acquire: (i) real estate with a fair value of $776 million, (ii) lease-up intangible assets with a fair value of $48 million and (iii) working capital of $7 million. As a result of the acquisition, the Company recognized a net termination fee of $8 million in rental and related revenues, which represents the termination value of the two leasehold interests. The lease-up intangible assets recognized were attributable to the value of the acquired underlying operating resident leases of the senior housing communities that were stabilized or nearly stabilized (i.e., resident occupancy above 80%). Pro Forma Results of Operations. The following unaudited pro forma consolidated results of operations assume that the RIDEA III acquisition was completed as of January 1, 2014 (in thousands, except per share data):
|  | Three Months Ended |  | Six Months Ended |
|  | June 30, 2015 |  | June 30, 2015 |
Revenues |  | $ | 651,095 |  | $ | 1,305,449 |
Net income (loss) |  |  | 171,653 |  |  | (61,945) |
Net income (loss) applicable to HCP, Inc. |  |  | 168,400 |  |  | (68,700) |
Basic earnings per common share |  |  | 0.36 |  |  | (0.15) |
Diluted earnings per common share |  |  | 0.36 |  |  | (0.15) |
2015 Other Acquisitions. The following table summarizes the Company’s real estate acquisitions for the six months ended June 30, 2015 (in thousands):
|  | Consideration |  | Assets Acquired |
|  |  |  | Liabilities |  | Noncontrolling |  |  |  |  | Net |
Segment |  | Cash Paid |  | Assumed |  | Interest |  | Real Estate |  | Intangibles |
Senior housing |  | $ | 178,888 | (1) | $ | 821 |  | $ | 3,885 |  | $ | 166,732 |  | $ | 16,862 |
Post-acute/skilled nursing |  |  | 178,707 | (1) |  | — |  |  | — |  |  | 151,663 |  |  | 27,044 |
Medical office |  |  | 377,351 |  |  | 12,851 |  |  | — |  |  | 349,650 |  |  | 40,552 |
|  | $ | 734,946 |  | $ | 13,672 |  | $ | 3,885 |  | $ | 668,045 |  | $ | 84,458 |
(1)Includes £174 million ($254 million) of the Company’s HC-One Facility (see Note 6) converted to fee ownership in a portfolio of 36 care homes located throughout the United Kingdom (“U.K.”). Construction, Tenant and Other Capital Improvements The following table summarizes the Company’s funding for construction, tenant and other capital improvements (in thousands):
|  | Six Months Ended June 30,
Segment |  | 2016 |  | 2015
Senior housing |  | $ | 65,290 |  | $ | 36,826
Post-acute/skilled nursing |  |  | 4,518 |  |  | 2,492
Life science |  |  | 97,348 |  |  | 50,548
Medical office |  |  | 55,391 |  |  | 49,534
Hospital |  |  | — |  |  | 37
|  | $ | 222,547 |  | $ | 139,437
Pending Acquisitions In May 2016, the Company announced it entered into definitive agreements to acquire a portfolio of seven private pay senior housing communities for $186 million, including the assumption of $75 million of debt maturing in 2044 at a 4.0% interest rate. Consisting of 526 assisted living and memory care units, the portfolio will be managed by Senior Lifestyle Corporation in a 100% owned RIDEA structure. This transaction is expected to close in the second half of 2016 and remains subject to regulatory and third party approvals and other customary closing conditions. Subsequent Event. In July 2016, the Company acquired two life science buildings and a parcel of land in San Diego, California for $49 million.

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- Definition Disclosure of all information related to any significant acquisition of properties. Disclosure may include methodology and assumptions, type of asset, asset classification, acquisition cost, method of acquisition and date of acquisition. + References No definition available. + Details
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