XML 24 R13.htm IDEA: XBRL DOCUMENT
v3.21.1

Dispositions of Real Estate and Discontinued Operations | 3 Months Ended
--- | ---
Mar. 31, 2021
Discontinued Operations and Disposal Groups [Abstract] |
Dispositions of Real Estate and Discontinued Operations | Dispositions of Real Estate and Discontinued Operations 2021 Dispositions of Real Estate Sunrise Senior Housing Portfolio In January 2021, the Company sold a portfolio of 32 SHOP assets (the “Sunrise Senior Housing Portfolio”) for $664 million, resulting in an immaterial loss on sale, which is recognized in income (loss) from discontinued operations, and provided the buyer with: (i) financing of $410 million and (ii) a commitment to finance up to $92 million of additional debt for capital expenditures, none of which has been funded as of March 31, 2021 (see Note 7). Under the Company’s definitive agreement, there are two remaining senior housing triple-net assets that are expected to be sold during the remainder of 2021, upon completion of the license transfer process. Brookdale Triple-Net Portfolio In January 2021, the Company sold 24 senior housing assets in a triple-net lease with Brookdale for $510 million, resulting in total gain on sale of $169 million, which is recognized in income (loss) from discontinued operations. Additional SHOP Portfolio In January 2021, the Company sold a portfolio of 16 SHOP assets for $230 million, resulting in total gain on sale of $59 million, which is recognized in income (loss) from discontinued operations, and provided the buyer with financing of $150 million (see Note 7). HRA Triple-Net Portfolio In February 2021, the Company sold eight senior housing assets in a triple-net lease with Harbor Retirement Associates for $132 million, resulting in total gain on sale of $33 million, which is recognized in income (loss) from discontinued operations. 2021 Other Dispositions In addition to the sales discussed above, during the three months ended March 31, 2021, the Company sold one SHOP asset for $5 million, resulting in an immaterial gain on sale, which is recognized in income (loss) from discontinued operations. SLC SHOP Portfolio In October 2020, the Company entered into a definitive agreement to sell seven SHOP assets for $115 million. The Company received a $3 million nonrefundable deposit and expects to close the transaction during the remainder of 2021. Oakmont SHOP Portfolio In April 2021, the Company sold a portfolio of 12 SHOP assets for $564 million. Discovery SHOP Portfolio In April 2021, the Company sold a portfolio of 10 SHOP assets for $334 million. Also included in this transaction was the sale of two mezzanine loans and two preferred equity investments for $21 million (collectively, “the Discovery SHOP Portfolio”). Sonata SHOP Portfolio In April 2021, the Compa ny sold a portfolio of five SHOP assets for $64 million. Other Subsequent Dispositions In April 2021, the Company sold two SHOP assets for $13 million, two senior housing triple-net assets for $7 million, and one MOB for $10 million. 2020 Dispositions of Real Estate During the three months ended March 31, 2020, the Company sold 7 SHOP assets for $36 million and 18 senior housing triple-net assets for $385 million (representative of the 18 facilities sold to Brookdale under the 2019 MTCA - see Note 3), resulting in total gain on sales of $165 million, which is recognized in income (loss) from discontinued operations. A egis NNN Portfolio In December 2020, the Company sold 10 senior housing triple-net assets (the “Aegis NNN Portfolio”) for $358 million, resulting in total gain on sale of $228 million, which is recognized in income (loss) from discontinued operations. Atria SHOP Portfolio In December 2020, the Company sold 12 SHOP assets (the “Atria SHOP Portfolio”) for $312 million, resulting in total gain on sale of $39 million, which is recognized in income (loss) from discontinued operations. The Company provided the buyer with financing of $61 million on four of the assets sold (see Note 7). 2020 Other Dispositions In addition to the sales discussed above, d uring the year ended December 31, 2020, the Company sold the following: (i) 23 SHOP assets for $190 million, (ii) 21 senior housing triple-net assets for $428 million (inclusive of the 18 facilities sold to Brookdale under the 2019 MTCA - see Note 3), (iii) 11 MOBs for $136 million (inclusive of the exercise of a purchase option by a tenant to acquire 3 MOBs in San Diego, California), (iv) 2 MOB land parcels for $3 million, and (v) 1 asset from other non-reportable segments for $1 million, resulting in total gain on sales of $283 million ($193 million of which is reported in income (loss) from discontinued operations). Held for Sale and Discontinued Operations At March 31, 2021, 9 senior housing triple-net facilities, 8 MOBs, 48 SHOP facilities, and 1 SHOP joint venture were classified as held for sale and/or discontinued operations. At December 31, 2020, 41 senior housing triple-net facilities, 6 MOBs, 97 SHOP facilities, and 1 SHOP joint venture were classified as held for sale and/or discontinued operations. During 2020, the Company established and began executing a plan to dispose of its senior housing triple-net and SHOP properties. As of December 31, 2020, the Company concluded the planned dispositions represented a strategic shift that has and will have a major effect on the Company’s operations and financial results. Therefore, assets meeting the held for sale criteria on or before March 31, 2021 are classified as discontinued operations in all periods presented herein. The following summarizes the assets and liabilities classified as discontinued operations at March 31, 2021 and December 31, 2020, which are included in assets held for sale and discontinued operations, net and liabilities related to assets held for sale and discontinued operations, net, respectively, on the consolidated balance sheets (in thousands):
| March 31, 2021 |  | December 31, 2020
ASSETS |  |  |
Real estate: |  |  |
Buildings and improvements | $ | 1,174,263 |  |  | $ | 2,553,254 |
Development costs and construction in progress | 11,136 |  |  | 21,509 |
Land | 201,699 |  |  | 355,803 |
Accumulated depreciation and amortization | (221,246) |  |  | (615,708) |
Net real estate | 1,165,852 |  |  | 2,314,858 |
Investments in and advances to unconsolidated joint ventures | 5,776 |  |  | 5,842 |
Accounts receivable, net of allowance of $5,132 and $5,873 | 13,976 |  |  | 20,500 |
Cash and cash equivalents | 40,161 |  |  | 53,085 |
Restricted cash | 5,817 |  |  | 17,168 |
Intangible assets, net | 8,539 |  |  | 24,541 |
Right-of-use asset, net | 937 |  |  | 4,109 |
Other assets, net(1) | 43,224 |  |  | 103,965 |
Total assets of discontinued operations, net | 1,284,282 |  | 2,544,068
Total medical office assets held for sale, net(2) | 90,225 |  |  | 82,238 |
Assets held for sale and discontinued operations, net | $ | 1,374,507 |  |  | $ | 2,626,306 |
LIABILITIES |  |  |
Mortgage debt | 278,172 |  |  | 318,876 |
Lease liability | 935 |  |  | 3,189 |
Accounts payable, accrued liabilities, and other liabilities | 41,977 |  |  | 79,411 |
Deferred revenue | 3,985 |  |  | 11,442 |
Total liabilities of discontinued operations, net | 325,069 |  |  | 412,918 |
Total liabilities related to medical office assets held for sale, net(2) | 3,098 |  |  | 2,819 |
Liabilities related to assets held for sale and discontinued operations, net | $ | 328,167 |  |  | $ | 415,737 |
_______________________________________ (1)Includes goodwill of $29 million as of March 31, 2021 and December 31, 2020. (2)Primarily comprised of eight MOBs with net real estate assets of $81 million and deferred revenue of $2 million as of March 31, 2021 and six MOBs with net estate assets of $73 million and deferred revenue of $2 million as of December 31, 2020. The results of discontinued operations through March 31, 2021, or the disposal date of each asset or portfolio of assets if they have been sold, are included in the consolidated results for the three months ended March 31, 2021 and 2020. Summarized financial information for discontinued operations for the three months ended March 31, 2021 and 2020 are as follows (in thousands):
| Three Months Ended March 31,
| 2021 |  | 2020
Revenues: |  |  |
Rental and related revenues | $ | 5,228 |  |  | $ | 32,371 |
Resident fees and services | 72,998 |  |  | 171,726 |
Total revenues | 78,226 |  |  | 204,097 |
Costs and expenses: |  |  |
Interest expense | 2,676 |  |  | 2,685 |
Depreciation and amortization | — |  |  | 64,164 |
Operating | 71,519 |  |  | 138,637 |
Transaction costs | 76 |  |  | 285 |
Impairments and loan loss reserves (recoveries), net | — |  |  | 28,016 |
Total costs and expenses | 74,271 |  |  | 233,787 |
Other income (expense): |  |  |
Gain (loss) on sales of real estate, net | 259,662 |  |  | 162,800 |
Other income (expense), net | 5,885 |  |  | (45) |
Total other income (expense), net | 265,547 |  |  | 162,755 |
Income (loss) before income taxes and equity income (loss) from unconsolidated joint ventures | 269,502 |  |  | 133,065 |
Income tax benefit (expense) | 821 |  |  | 3,176 |
Equity income (loss) from unconsolidated joint ventures | (315) |  |  | (833) |
Income (loss) from discontinued operations | $ | 270,008 |  |  | $ | 135,408 |
Impairments of Real Estate 2021 During the three months ended March 31, 2021, the Company did not recognize any impairment charges. 2020 During the three months ended March 31, 2020, the Company recognized an aggregate impairment charge of $31 million ($28 million of which is reported in income (loss) from discontinued operations) related to 15 SHOP assets, 2 senior housing triple-net assets, and 2 MOBs as a result of being classified as held for sale and wrote down their aggregate carrying value of $200 million to their aggregate fair value, less estimated costs to sell, of $169 million. The fair value of the impaired assets was based on forecasted sales prices, which are considered to be Level 3 measurements within the fair value hierarchy. Forecasted sales prices were determined using an income approach and/or a market approach (comparable sales model), which rely on certain assumptions by management, including: (i) market capitalization rates, (ii) comparable market transactions, (iii) estimated prices per unit, (iv) negotiations with prospective buyers, and (v) forecasted cash flow streams (lease revenue rates, expense rates, growth rates, etc.). There are inherent uncertainties in making these assumptions. For the Company’s impairment calculations during and as of the three months ended March 31, 2020, the Company estimated the fair value of each asset using either (i) market capitalization rates ranging from 7.16% to 9.92%, with a weighted average rate of 9.32% or (ii) prices per unit ranging from $38,000 to $95,000, with a weighted average price of $68,000. Deferred Tax Asset Valuation Allowance In conjunction with the Company establishing a plan during the year ended December 31, 2020 to dispose of all its SHOP assets and classifying such assets as discontinued operations, the Company concluded it was more likely than not that it would no longer realize the future value of certain deferred tax assets generated by the net operating losses of its taxable REIT subsidiary entities. Accordingly, the Company recognized a deferred tax asset valuation allowance of $33 million as of December 31, 2020. As of March 31, 2021, the Company had a deferred tax asset valuation allowance of $35 million.

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration