XML 20 R10.htm IDEA: XBRL DOCUMENT
v3.21.2

Real Estate Investments, Net | 6 Months Ended
--- | ---
Jun. 30, 2021
Real Estate [Abstract] |
Real Estate Investments, Net | REAL ESTATE INVESTMENTS, NET The following table summarizes the Company’s investment in owned properties as of June 30, 2021 and December 31, 2020 (dollars in thousands):
| June 30, 2021 |  | December 31, 2020
Land | $ | 244,740 |  |  | $ | 205,356 |
Buildings and improvements | 1,588,961 |  |  | 1,477,849 |
Integral equipment, furniture and fixtures | 101,441 |  |  | 97,836 |
Identified intangible assets | 2,658 |  |  | 2,352 |
Real estate investments | 1,937,800 |  |  | 1,783,393 |
Accumulated depreciation and amortization | (362,397) |  |  | (335,294) |
Real estate investments, net | $ | 1,575,403 |  |  | $ | 1,448,099 |
As of June 30, 2021, all 223 of the Company’s facilities wer e leased to various operators under triple-net leases. All of these leases contain annual escalators based on the percentage change in the Consumer Price Index (“CPI”) (but not less than zero), some of which are subject to a cap, or fixed rent escalators. As of June 30, 2021, the Company’s total future contractual minimum rental income for all of its tenants, excluding operating expense reimbursements, were (dollars in thousands):
Year | Amount
2021 (six months) | $ | 93,754 |
2022 | 188,644 |
2023 | 188,438 |
2024 | 187,091 |
2025 | 187,062 |
2026 | 187,166 |
Thereafter | 1,020,115 |
Total | $ | 2,052,270 |
Tenant Purchase Options Certain of the Company’s operators hold purchase options allowing them to acquire properties they currently lease from the Company. A summary of these purchase options is presented below (dollars in thousands):
Asset Type | Properties | Lease Expiration | Next Option Open Date | Option Type(1) | Current Cash Rent(2)
ALF | 7 | October 2034 | 1/1/2022 | A | $ | 3,282 |
SNF | 11 | November 2030 | 1/1/2022 | C | 4,800 |
SNF | 1 | March 2029 | 4/1/2022 | B / C(3) | 779 |
SNF / Campus | 2 | October 2032 | 1/1/2023 | B | 959 |
SNF | 4 | November 2034 | 12/1/2024 | B | 3,789 |
ALF | 2 | October 2034 | 1/1/2026 | A | 1,559 |
(1) Option type includes: A - Fixed base price plus a specified share on any appreciation. B - Fixed base price. C - Fixed capitalization rate on lease revenue. (2) Based on annualized cash revenue for contracts in place as of June 30, 2021. (3) Purchase option reflects two option types. Rental Income The following table summarizes components of the Company’s rental income (dollars in thousands):
| For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
Rental Income | 2021 |  | 2020 |  | 2021 |  | 2020
Contractual rent due(1) | $ | 47,736 |  |  | $ | 42,485 |  |  | $ | 92,907 |  |  | $ | 84,923 |
Straight-line rent | 8 |  |  | 22 |  |  | 20 |  |  | 48 |
Lease termination revenue(2) | — |  |  | — |  |  | 63 |  |  | — |
Total | $ | 47,744 |  |  | $ | 42,507 |  |  | $ | 92,990 |  |  | $ | 84,971 |
(1) Includes initial cash rent and tenant operating expense reimbursements, as adjusted for applicable rental escalators and rent increases due to capital expenditures funded by the Company. For tenants on a cash basis, this represents the lesser of the amount that would be recognized on a straight-line basis or cash that has been received. (2) During the six months ended June 30, 2021, in connection with the agreement to terminate its lease agreements with affiliates of Metron Integrated Health Systems (“Metron”) and to sell the facilities to a third-party, the Company received $0.1 million from Metron affiliates. Recent Real Estate Acquisitions The following table summarizes the Company’s acquisitions for the six months ended June 30, 2021 (dollars in thousands):
Type of Property | Purchase Price(1) |  | Initial Annual Cash Rent |  | Number of Properties |  | Number of Beds/Units(2)
Skilled nursing | $ | 25,457 |  |  | $ | 2,295 |  | (4) | 2 |  |  | 268 |
Multi-service campuses(3) | 125,708 |  |  | 8,604 |  |  | 4 |  |  | 640 |
Total | $ | 151,165 |  |  | $ | 10,899 |  |  | 6 |  |  | 908 |
(1) Purchase price includes capitalized acquisition costs. (2) The number of beds/units includes operating beds at the acquisition date. (3) Initial annual cash rent represents the first twelve months of rent upon commencement of the Company’s long-term net leases, which occurred during the three months ended June 30, 2021, upon the tenants’ receipt of licensing approval and increases to $9.4 million in the second year with CPI-based annual escalators thereafter. (4) Included within initial annual cash rent is approximately $0.8 million of initial rent which is subject to a fixed escalator in the first twelve months and increases to $0.9 million in the second year with CPI-based annual escalators thereafter. Asset Sales and Assets Held for Sale As of June 30, 2021, there were no assets classified as held for sale. During the fourth quarter of 2020, the Company met the criteria to classify one skilled nursing facility operated by affiliates of Five Oaks Healthcare, LLC as held for sale. Assets held for sale include the net book value of property the Company plans to sell within the next year. If the determination is made that the Company no longer expects to sell an asset within the next year, the asset is reclassified out of assets held for sale. On February 1, 2021, the Company closed on the sale of the one skilled nursing facility consisting of 90 beds located in Washington with a carrying value of $7.2 million, for net sales proceeds of $7.0 million. During the six months ended June 30, 2021, the Company recorded a loss of $0.2 million in connection with the sale. On February 14, 2020, the Company closed on the sale of six skilled nursing facilities formerly operated by affiliates of Metron. In connection with the sale for $36.0 million, the Company received $3.5 million in cash and provided subsidiaries of Cascade Capital Group, LLC (“Cascade”), the purchaser of the properties, with a short-term mortgage loan secured by these properties for $32.4 million. The mortgage loan bore interest at 7.5% and initially had a maturity date of March 31, 2020. In connection with the sale, the Company recognized a loss of approximately $0.1 million during the three months ended March 31, 2020. In April 2020, the mortgage loan was settled with $18.9 million in cash and a new mortgage loan for $13.9 million. In July 2020, the Company received prepayment in full, including accrued interest, for the new $13.9 million mortgage loan. See Note 4, Other Real Estate Investments, Net, for further detail on the mortgage loan. Lease Amendments Five Oaks Lease Termination and Amended Ensign Master Lease. On June 1, 2021, operating affiliates of The Ensign Group, Inc. (“Ensign”) acquired certain operations and assets of Five Oaks Healthcare, LLC (“Five Oaks”) under an agreement with Five Oaks. The agreement granted Ensign the right to occupy and operate four of the Company’s skilled nursing facilities in Washington that were previously being operated by Five Oaks. In conjunction with consenting to the transfer, the Company terminated the existing Five Oaks master lease, and amended and extended the term of an existing triple-net master lease with Ensign to include the four skilled nursing facilities. The Ensign lease, as amended, has a remaining term of approximately 15 years, with three five-year renewal options and CPI-based rent escalators. Annual cash rent under the terminated Five Oaks master lease was approximately $2.6 million, and annual cash rent under the amended Ensign lease increased by the same amount. Twenty/20 Lease Termination and New Noble Master Lease. On December 1, 2020, five assisted living facilities in Virginia operated by Twenty/20 Management, Inc. (“Twenty/20”) were transferred to affiliates of Noble VA Holdings, LLC (“Noble”). In connection with the transfer, the Company entered into a new triple-net master lease with Noble. The new lease has a remaining initial term of approximately 14 years, with two five-year renewal options and CPI-based rent escalators. Initial annual cash rent under the new lease is approximately $3.2 million.

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

X
- Definition The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 970 -URI http://asc.fasb.org/topic&trid=2156125 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 978 -URI http://asc.fasb.org/topic&trid=2134977 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 976 -URI http://asc.fasb.org/topic&trid=2134846 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 974 -URI http://asc.fasb.org/topic&trid=2156429 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 972 -URI http://asc.fasb.org/topic&trid=2134617 + Details
Name: | us-gaap_RealEstateDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration