Real Estate Properties

9 Months Ended

Sep. 30, 2019

As of September 30, 2019, we owned 436 properties, including eight properties classified as held for sale, located in 41 states and Washington, D.C., including one MOB (two buildings) owned in a joint venture arrangement in which we own a 55% equity interest.

Impairment:

We regularly evaluate our assets for indications of impairment. Impairment indicators may include declining tenant or resident occupancy, weak or declining profitability from the property, decreasing tenant cash flows or liquidity, our decision to dispose of an asset before the end of its estimated useful life, and legislative, market or industry changes that could permanently reduce the value of an asset. If indicators of impairment are present, we evaluate the carrying value of the affected assets by comparing it to the expected future undiscounted net cash flows to be generated from those assets. If the sum of these expected future net cash flows is less than the carrying value, we reduce the net carrying value of the asset to its estimated fair value.

During the three and nine months ended September 30, 2019, we recorded impairment charges of $7,062 and $15,385, respectively, to adjust the carrying values of 16 senior living communities to their estimated fair value. These 16 senior living communities included 15 skilled nursing facilities, or SNFs, which were sold in September 2019. During the three and nine months ended September 30, 2019, we also recorded impairment charges of $26,037 and $26,133, respectively, for seven MOBs. Four of these MOBs were sold in June 2019 and three of these MOBs are classified as held for sale in our condensed consolidated balance sheet as of September 30, 2019. These impairment charges, in aggregate, are included in impairment of assets in our condensed consolidated statements of comprehensive income (loss).

Dispositions:

During the nine months ended September 30, 2019, we sold 33 properties for an aggregate sales price of $53,033, excluding closing costs, as presented in the table below. The sales of these properties do not represent significant dispositions individually or in the aggregate, nor do they represent a strategic shift. As a result, the results of the operation of these properties are included in continuing operations through the date of sale of such property in our condensed consolidated statements of comprehensive income (loss).



Date of Sale	Location	Type of Property	Number of Properties	Square Feet or Number of Units		Sales Price ⁽¹⁾		Gain (loss) on Sale
February 2019	Florida	MOB	1	60,396	sq. ft.	$	2,900	$	(69	)
March 2019	Massachusetts	MOB	1	4,400	sq. ft.	75		(58		)
May 2019 ⁽²⁾	California	SNF	3	278	units	21,500		15,207
May 2019	Colorado	MOB	1	15,647	sq. ft.	2,590		1,035
June 2019	Massachusetts	MOB	7	164,121	sq. ft.	8,042		1,590
July 2019	Massachusetts	MOB	3	103,484	sq. ft.	4,955		2,332
August 2019	Massachusetts	MOB	1	49,357	sq. ft.	2,221		812
September 2019 ⁽²⁾	Various	SNF	15	964	units	8,000		—
September 2019	Massachusetts	MOB	1	41,065	sq. ft.	2,750		1,044
			33			$	53,033	$	21,893


(1)	Sales price excludes closing costs.

(2)

Pursuant to the terms of our April 2019 transaction agreement, or the Transaction Agreement, with Five Star Senior Living Inc., or Five Star, the aggregate amount of monthly minimum rent payable to us by Five Star under our master leases with Five Star decreased from the sale of these SNFs, as they were previously leased by us to Five Star. See Note 10 for further information on the Transaction Agreement.

As of September 30, 2019, we had four properties in our MOB segment and four senior living communities with an aggregate undepreciated carrying value of $136,231 classified as held for sale in our condensed consolidated balance sheet as of September 30, 2019. Subsequent to September 30, 2019, we sold four of these properties for an aggregate sales price of $58,000, excluding closing costs.



Date of Sale	Location	Type of Property	Number of Properties	Square Feet or Number of Units		Sales Price ⁽¹⁾
October 2019	South Dakota	Independent Living/SNF	3	245	units	$	10,500
October 2019	New Jersey	MOB	1	205,439	sq. ft.	47,500
			4			$	58,000


(1)	Sales price excludes closing costs.

During the nine months ended September 30, 2019, we recorded impairment charges of $2,661 to adjust the carrying value of two MOBs to their estimated sales price less estimated costs to sell. These two MOBs are classified as held for sale in our condensed consolidated balance sheet as of September 30, 2019. During the nine months ended September 30, 2019, we also recorded impairment charges of $6,344 to adjust the carrying value of one senior living community to its estimated fair value. These impairment charges, in aggregate, are included in impairment of assets in our condensed consolidated statements of comprehensive income (loss).

As of November 6, 2019, we have 40 properties under agreements to sell for an aggregate sales price of approximately $452,804, excluding closing costs. These sales are subject to conditions; as a result, these sales may not occur, they may be delayed or their terms may change.