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Real Estate Property Investments | 9 Months Ended
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Sep. 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 nine months ended September 30, 2016 (in thousands):
|  | Consideration |  | Assets Acquired(1) |
|  |  |  | Mortgage and Other |  |  |  |  | Net |
Segment |  | Cash Paid |  | Liabilities Assumed |  | Real Estate |  | Intangibles |
SH NNN |  | $ | 76,362 |  | $ | 1,200 |  | $ | 71,875 |  | $ | 5,687 |
SHOP |  |  | 113,971 |  |  | 76,931 |  |  | 177,551 |  |  | 13,351 |
Life Science |  |  | 49,000 |  |  | — |  |  | 47,400 |  |  | 1,600 |
Other |  |  | 17,909 |  |  | — |  |  | 16,596 |  |  | 1,313 |
|  | $ | 257,242 |  | $ | 78,131 |  | $ | 313,422 |  | $ | 21,951 |
| (1) |  | The purchase price allocations are 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, Inc. (“Brookdale”) acquired a portfolio of 35 private pay senior housing communities from Chartwell Retirement Residences, including two leasehold interests, representing 5,025 units (reported within the Company’s SHOP segment). 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):
|  | Nine Months Ended |
|  | September 30, 2015 |
Revenues |  | $ | 1,963,402 |
Net income |  |  | 56,009 |
Net income applicable to HCP, Inc. |  |  | 46,662 |
Basic earnings per common share |  |  | 0.10 |
Diluted earnings per common share |  |  | 0.10 |
2015 Other Acquisitions. The following table summarizes the Company’s real estate acquisitions for the nine months ended September 30, 2015 (in thousands):
|  | Consideration |  | Assets Acquired(1) |
|  | Cash Paid/ |  | Liabilities |  | Noncontrolling |  |  |  |  | Net |
Segment |  | Debt Settled |  | Assumed |  | Interest |  | Real Estate |  | Intangibles |
SH NNN |  | $ | 208 |  | $ | — |  | $ | — |  | $ | 208 |  | $ | — |
SHOP |  |  | 103,296 |  |  | 1,373 |  |  | 3,885 |  |  | 102,579 |  |  | 5,975 |
Medical office |  |  | 377,351 | (2) |  | 12,849 |  |  | — |  |  | 349,649 |  |  | 40,551 |
Other |  |  | 296,226 | (3) |  | 6,854 |  |  | — |  |  | 257,960 |  |  | 45,120 |
|  | $ | 777,081 |  | $ | 21,076 |  | $ | 3,885 |  | $ | 710,396 |  | $ | 91,646 |
| (1) |  | 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.
| (2) |  | Includes $225 million for a medical office building (“MOB”) portfolio acquisition completed in June 2015 and placed in HCP Ventures V, of which, in October 2015, the Company issued a 49% noncontrolling interest for $110 million (see Note 12).
| (3) |  | 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):
|  | Nine Months Ended September 30,
Segment |  | 2016 |  | 2015
SH NNN |  | $ | 35,687 |  | $ | 27,289
SHOP |  |  | 55,795 |  |  | 49,351
Life science |  |  | 152,739 |  |  | 80,871
Medical office |  |  | 88,523 |  |  | 93,012
Other |  |  | 6,840 |  |  | 3,406
|  | $ | 339,584 |  | $ | 253,929

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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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- References No definition available. + Details
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