XML 69 R26.htm IDEA: XBRL DOCUMENT
v3.19.3

Fair Value of Assets and Liabilities (Tables) | 9 Months Ended
--- | ---
Sep. 30, 2019
Fair Value Disclosures [Abstract] |
Assets and liabilities recurring and nonrecurring measured at fair value | The following table presents certain of our assets and liabilities that are measured at fair value at September 30, 2019, categorized by the level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset or liability.
|  |  |  | Fair Value at Reporting Date Using
|  |  |  | Quoted Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable Inputs
Description |  | Total |  | (Level 1) |  | (Level 2) |  | (Level 3)
Recurring Fair Value Measurements Assets: |  |  |  |  |  |  |  |
Investment in Five Star (1) |  | $ | 1,993 |  |  | $ | 1,993 |  |  | $ | — |  |  | $ | — |
Non-Recurring Fair Value Measurements Assets: |  |  |  |  |  |  |  |
Real estate properties held for sale (2) |  | $ | 63,458 |  |  | $ | — |  |  | $ | 63,458 |  |  | $ | — |
Real estate properties at fair value (3) |  | $ | 1,098 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,098 |
(1) | Our 423,500 shares of Five Star common stock are included in other assets, net in our condensed consolidated balance sheets, and are reported at fair value, which is based upon quoted market prices (Level 1 inputs). Our adjusted cost basis for these shares is $6,353 as of September 30, 2019. During the three and nine months ended September 30, 2019, we recorded an unrealized gain of $40 and an unrealized loss of $40, respectively, which are included in gains and losses on equity securities, net in our condensed consolidated statements of comprehensive income (loss), to adjust the carrying value of our investment in Five Star common shares to their fair value. See Note 12 for further information about our investment in Five Star.
(2) | We have assets in our condensed consolidated balance sheets that are measured at fair value on a nonrecurring basis. During the nine months ended September 30, 2019, we recorded impairment charges of $26,037 to reduce the carrying value of three MOBs that are classified as held for sale to their estimated sales price, based on a purchase and sale agreement that we have entered into with third party buyers for these MOBs, less estimated costs to sell, of $63,458. See Note 3 for further information about impairment charges and these and other properties we have classified as held for sale.
(3) We recorded impairment charges of $6,344 to reduce the carrying value of one senior living community to its estimated fair value of $1,098 based on a third party offer. The valuation techniques and significant unobservable inputs used in the valuation of this property are considered Level 3 inputs as defined in the fair value hierarchy under GAAP.
Schedule of carrying value and fair value of the financial instruments | The fair values of these financial instruments approximated their carrying values in our condensed consolidated financial statements as of such dates, except as follows:
|  | As of September 30, 2019 |  | As of December 31, 2018
Description |  | Carrying Amount (1) |  | Estimated Fair Value |  | Carrying Amount (1) |  | Estimated Fair Value
Senior unsecured notes |  | $ | 1,819,802 |  |  | $ | 1,885,545 |  |  | $ | 2,216,945 |  |  | $ | 2,138,202 |
Secured debts(2) |  | 698,695 |  |  | 708,513 |  |  | 744,186 |  |  | 723,003 |
|  | $ | 2,518,497 |  |  | $ | 2,594,058 |  |  | $ | 2,961,131 |  |  | $ | 2,861,205 |
(1) | Includes unamortized debt issuance costs, premiums and discounts.
(2) We assumed certain of these secured debts in connection with our acquisition of certain properties. We recorded the assumed mortgage notes at estimated fair value on the date of acquisition and we are amortizing the fair value adjustments, if any, to interest expense over the respective terms of the mortgage notes to adjust interest expense to the estimated market interest rates as of the date of acquisition.
Marketable Securities | Realized and unrealized gains and losses for our equity securities for the three and nine months ended September 30, 2019 and 2018 were as follows:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2019 |  | 2018 |  | 2019 |  | 2018
Realized gains and losses on equity securities sold (1) |  | $ | — |  |  | $ | — |  |  | $ | (41,436 | ) |  | $ | — |
Unrealized gains and losses on equity securities held |  | 40 |  |  | 35,137 |  |  | (40 | ) |  | 85,643 |
Gains and losses on equity securities, net |  | $ | 40 |  |  | $ | 35,137 |  |  | $ | (41,476 | ) |  | $ | 85,643 |
(1) See Note 12 for further information about our former investment in The RMR Group Inc., or RMR Inc.

X
- Definition Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19207-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19279-110258 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2C -URI http://asc.fasb.org/extlink&oid=99377789&loc=SL7498348-110258 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19190-110258 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19207-110258 Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (bb) -URI http://asc.fasb.org/extlink&oid=99377789&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

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

X
- Definition Tabular disclosure of realized and unrealized gain (loss) on investment in security. + References No definition available. + Details
Name: | us-gaap_GainLossOnInvestmentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of information pertaining to carrying amount and estimated fair value of short-term and long-term debt instruments or arrangements, including but not limited to, identification of terms, features, and collateral requirements. + References No definition available. + Details
Name: | us-gaap_ScheduleOfCarryingValuesAndEstimatedFairValuesOfDebtInstrumentsTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration