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Segment Reporting
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
We operate in, and report financial information for, the following two segments: Office Portfolio and senior housing operating portfolio, or SHOP. We aggregate each of these two reporting segments based on their similar operating and economic characteristics. Our Office Portfolio segment consists of medical office properties leased to medical providers and other medical related businesses, as well as life science properties leased to biotech laboratories and other similar tenants. Our SHOP segment consists of managed senior living communities that provide short term and long term residential living and in some instances care and other services for residents where we pay fees to the operator to manage the communities for our account. In addition, prior to January 1, 2020, our SHOP segment included triple net leased senior living communities that provided short term and long term residential living and in some instances care and other services for residents and from which we received rents from Five Star. Pursuant to the Restructuring Transaction, effective January 1, 2020, our previously existing master leases and management and pooling agreements with Five Star were terminated and replaced with new management and related agreements, or collectively, the New Management Agreements, for all of our senior living communities operated by Five Star. Prior periods have been recast to reflect these reportable segments for all periods presented.
We also report “non-segment” operations, which consists of triple net leased senior living communities, which are leased to operators other than Five Star from which we receive rents, and wellness centers, which we do not consider to be sufficiently
material to constitute a separate reporting segment, and any other income or expenses that are not attributable to a specific reporting segment.
 
 
For the Three Months Ended June 30, 2020
 
 
Office Portfolio
 
SHOP
 
Non-Segment
 
Consolidated
Revenues:
 
 

 
 

 
 

 
 

Rental income
 
$
95,510

 
$
—

 
$
10,697

 
$
106,207

Residents fees and services
 
—

 
304,104

 
—

 
304,104

Total revenues
 
95,510

 
304,104

 
10,697

 
410,311

 
 
 
 
 
 
 
 
 
Expenses:
 
 

 
 

 
 

 
 

Property operating expenses
 
30,893

 
271,022

 
—

 
301,915

Depreciation and amortization
 
32,234

 
33,773

 
2,818

 
68,825

General and administrative
 
—

 
—

 
7,312

 
7,312

Acquisition and certain other transaction related costs
 
—

 
—

 
87

 
87

Impairment of assets
 
538

 
30,637

 
—

 
31,175

Total expenses
 
63,665

 
335,432

 
10,217

 
409,314

 
 
 
 
 
 
 
 
 
Loss on sale of properties
 
—

 
(168
)
 
—

 
(168
)
Gains on equity securities, net
 
—

 
—

 
11,974

 
11,974

Interest and other income
 
—

 
7,346

 
390

 
7,736

Interest expense
 
(6,020
)
 
(560
)
 
(37,394
)
 
(43,974
)
Loss on early extinguishment of debt
 
(155
)
 
—

 
(26
)
 
(181
)
Income (loss) from continuing operations before income tax expense
 
25,670

 
(24,710
)
 
(24,576
)
 
(23,616
)
Income tax expense
 
—

 
—

 
(1,126
)
 
(1,126
)
Net income (loss)
 
25,670

 
(24,710
)
 
(25,702
)
 
(24,742
)
Net income attributable to noncontrolling interest
 
(1,330
)
 
—

 
—

 
(1,330
)
Net income (loss) attributable to common shareholders
 
$
24,340

 
$
(24,710
)
 
$
(25,702
)
 
$
(26,072
)

    
Under the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, the U.S. Department of Health and Human Services, or HHS, established the Provider Relief Fund. Retention and use of the funds received under the CARES Act are subject to certain terms and conditions. The terms and conditions require that the funds be utilized to compensate for lost revenues that are attributable to the COVID-19 pandemic and for eligible costs to prevent, prepare for and respond to the COVID-19 pandemic that are not covered by other sources. Further, fund recipients are required to be participating in Medicare at the time of distribution and are subject to certain other terms and conditions, including quarterly reporting requirements. In addition, fund recipients are required to have billed Medicare during 2019 and to continue to provide care after January 31, 2020 for diagnosis, testing or care for individuals with possible or actual COVID-19 cases. Any funds not used in accordance with the terms and conditions must be returned to HHS. As of June 30, 2020, we had received $10,133 in funds from the Provider Relief Fund to be used to support the operations of our managed senior living communities; we have currently determined that $7,346 of such funds meet the required terms and conditions and have therefore recognized such amount as other income with respect to our SHOP segment for the three and six months ended June 30, 2020. We currently expect to return the remaining $2,787 of such funds to HHS in August 2020 unless we determine that such funds meet the required terms and conditions and have therefore included that amount in other liabilities in our condensed consolidated financial statements as of June 30, 2020.
 
 
For the Six Months Ended June 30, 2020
 
 
Office Portfolio
 
SHOP
 
Non-Segment
 
Consolidated
Revenues:
 
 

 
 

 
 

 
 

Rental income
 
$
194,280

 
$
—

 
$
22,425

 
$
216,705

Residents fees and services
 
—

 
636,073

 
—

 
636,073

Total revenues
 
194,280

 
636,073

 
22,425

 
852,778

 
 
 
 
 
 
 
 
 
Expenses:
 
 

 
 

 
 

 
 

Property operating expenses
 
63,599

 
554,901

 
—

 
618,500

Depreciation and amortization
 
64,397

 
66,815

 
6,043

 
137,255

General and administrative
 
—

 
—

 
16,144

 
16,144

Acquisition and certain other transaction related costs
 
—

 
—

 
750

 
750

Impairment of assets
 
6,756

 
35,653

 
—

 
42,409

Total expenses
 
134,752

 
657,369

 
22,937

 
815,058

 
 
 
 
 
 
 
 
 
Gain (loss) on sale of properties
 
2,782

 
(168
)
 
—

 
2,614

Gains on equity securities, net
 
—

 
—

 
2,031

 
2,031

Interest and other income
 
—

 
7,346

 
528

 
7,874

Interest expense
 
(12,072
)
 
(1,124
)
 
(72,428
)
 
(85,624
)
Gain on lease termination

 
—

 
—

 
22,896

 
22,896

Loss on early extinguishment of debt
 
(401
)
 
—

 
(26
)
 
(427
)
Income (loss) from continuing operations before income tax expense
 
49,837

 
(15,242
)
 
(47,511
)
 
(12,916
)
Income tax expense
 
—

 
—

 
(683
)
 
(683
)
Net income (loss)
 
49,837

 
(15,242
)
 
(48,194
)
 
(13,599
)
Net income attributable to noncontrolling interest
 
(2,738
)
 
—

 
—

 
(2,738
)
Net income (loss) attributable to common shareholders
 
$
47,099

 
$
(15,242
)
 
$
(48,194
)
 
$
(16,337
)


During the six months ended June 30, 2020, interest and other income for our SHOP segment includes $7,346 of funds we received pursuant to the CARES Act.
 
 
As of June 30, 2020
 
 
Office Portfolio
 
SHOP
 
Non-Segment
 
Consolidated
Total assets
 
$
3,119,928

 
$
3,005,164

 
$
475,431

 
$
6,600,523


 
 
For the Three Months Ended June 30, 2019
 
 
Office Portfolio
 
SHOP
 
Non-Segment
 
Consolidated
Revenues:
 
 

 
 

 
 

 
 

Rental income
 
$
104,385

 
$
33,400

 
$
15,312

 
$
153,097

Residents fees and services
 
—

 
108,906

 
—

 
108,906

Total revenues
 
104,385

 
142,306

 
15,312

 
262,003

 
 
 
 
 
 
 
 
 
Expenses:
 
 

 
 

 
 

 
 

Property operating expenses
 
32,525

 
87,668

 
—

 
120,193

Depreciation and amortization
 
35,037

 
34,226

 
4,661

 
73,924

General and administrative
 
—

 
—

 
8,867

 
8,867

Acquisition and certain other transaction related costs
 
—

 
—

 
903

 
903

Impairment of assets
 
96

 
2,117

 
—

 
2,213

Total expenses
 
67,658

 
124,011

 
14,431

 
206,100

 
 
 
 
 
 
 
 
 
Gain on sale of properties
 
2,625

 
15,207

 
—

 
17,832

Dividend income
 
—

 
—

 
923

 
923

Losses on equity securities, net
 
—

 
—

 
(64,448
)
 
(64,448
)
Interest and other income
 
—

 
—

 
238

 
238

Interest expense
 
(5,988
)
 
(902
)
 
(39,522
)
 
(46,412
)
Loss on early extinguishment of debt
 
—

 
(17
)
 
—

 
(17
)
Income (loss) from continuing operations before income tax benefit and equity in earnings of an investee
 
33,364

 
32,583

 
(101,928
)
 
(35,981
)
Income tax benefit
 
—

 
—

 
35

 
35

Equity in earnings of an investee
 
—

 
—

 
130

 
130

Net income (loss)
 
33,364

 
32,583

 
(101,763
)
 
(35,816
)
Net income attributable to noncontrolling interest
 
(1,413
)
 
—

 
—

 
(1,413
)
Net income (loss) attributable to common shareholders
 
$
31,951

 
$
32,583

 
$
(101,763
)
 
$
(37,229
)

 
 
For the Six Months Ended June 30, 2019
 
 
Office Portfolio
 
SHOP
 
Non-Segment
 
Consolidated
Revenues:
 
 

 
 

 
 

 
 

Rental income
 
$
207,606

 
$
72,713

 
$
31,019

 
$
311,338

Residents fees and services
 
—

 
216,951

 
—

 
216,951

Total revenues
 
207,606

 
289,664

 
31,019

 
528,289

 
 
 
 
 
 
 
 
 
Expenses:
 
 

 
 

 
 

 
 

Property operating expenses
 
64,702

 
172,713

 
—

 
237,415

Depreciation and amortization
 
71,138

 
65,179

 
9,837

 
146,154

General and administrative
 
—

 
—

 
18,683

 
18,683

Acquisition and certain other transaction related costs
 
—

 
—

 
8,717

 
8,717

Impairment of assets
 
96

 
8,323

 
—

 
8,419

Total expenses
 
135,936

 
246,215

 
37,237

 
419,388

 
 
 
 
 
 
 
 
 
Gain on sale of properties
 
2,503

 
15,207

 
—

 
17,710

Dividend income
 
—

 
—

 
1,846

 
1,846

Losses on equity securities, net
 
—

 
—

 
(41,516
)
 
(41,516
)
Interest and other income
 
—

 
—

 
352

 
352

Interest expense
 
(12,018
)
 
(1,896
)
 
(78,109
)
 
(92,023
)
Loss on early extinguishment of debt
 
—

 
(17
)
 
—

 
(17
)
Income (loss) from continuing operations before income tax expense and equity in earnings of an investee
 
62,155

 
56,743

 
(123,645
)
 
(4,747
)
Income tax expense
 
—

 
—

 
(99
)
 
(99
)
Equity in earnings of an investee
 
—

 
—

 
534

 
534

Net income (loss)
 
62,155

 
56,743

 
(123,210
)
 
(4,312
)
Net income attributable to noncontrolling interest
 
(2,835
)
 
—

 
—

 
(2,835
)
Net income (loss) attributable to common shareholders
 
$
59,320

 
$
56,743

 
$
(123,210
)
 
$
(7,147
)

 
As of December 31, 2019
 
Office Portfolio
 
SHOP
 
Non-Segment
 
Consolidated
Total assets
$
3,165,577

 
$
3,044,989

 
$
443,260

 
$
6,653,826