Real Estate Properties

6 Months Ended

Jun. 30, 2019

At June 30, 2019, we owned 456 properties, including 22 properties classified as held for sale, located in 42 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 periodically evaluate our assets for impairments. 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 six months ended June 30, 2019, we recorded impairment charges of $2,117 and $8,323, respectively, to adjust the carrying values of 15 skilled nursing facilities, or SNFs, to their estimated fair value. These 15 SNFs, which are located in Kansas, Iowa and Nebraska, are classified as held for sale in other assets, net in our condensed consolidated balance sheet as of June 30, 2019. During the three months ended June 30, 2019, we also recorded impairment charges of $96 for three MOBs. These three MOBs, which are located in Massachusetts, were sold in June 2019. These impairment charges, in aggregate, are included in impairment of assets in our condensed consolidated statements of comprehensive income (loss).

Dispositions:

During the six months ended June 30, 2019, we sold 10 MOBs with an aggregate of 244,564 rentable square feet for an aggregate sales price of $13,607, excluding closing costs, as presented in the table below. We recognized rental income of $589 and $1,599 during the three and six months ended June 30, 2019, respectively, related to these MOBs. In May 2019, we sold three SNFs that were leased to Five Star Senior Living Inc., or Five Star, for an aggregate sales price of approximately $21,500, excluding closing costs, as presented in the table below. In accordance with the terms of the transaction agreement with Five Star that we entered into in April 2019, or the Transaction Agreement, as further described in Note 9, our annual rental income decreased by $831 from our sale of these SNFs that were previously leased to Five Star.



Date of Sale	Location	Type of Property	Number of Properties	Gross Sales Price ⁽¹⁾		Gain (loss) on Sale
February 2019	Florida	MOB	1	$	2,900	$	(64	)
March 2019	Massachusetts	MOB	1	75		(58		)
May 2019	California	SNF	3	21,500		15,207
May 2019	Colorado	MOB	1	2,590		1,035
June 2019	Massachusetts	MOB	7	8,042		1,590
			13	$	35,107	$	17,710

(1) Gross sales price excludes closing costs.

As of June 30, 2019, we had five MOBs located in Massachusetts under agreements to sell for an aggregate sales price of approximately $9,926, excluding closing costs, which have an aggregate undepreciated carrying value of $10,072. These five MOBs are classified as held for sale in other assets, net in our condensed consolidated balance sheet as of June 30, 2019. In July 2019, we sold three of these MOBs for an aggregate sales price of $4,955, excluding closing costs.

As of June 30, 2019, we had 17 SNFs under agreements to sell for an aggregate sales price of approximately $17,000, excluding closing costs, which had an aggregate undepreciated carrying value of $34,246. These 17 SNFs are classified as held for sale in other assets, net in our condensed consolidated balance sheet as of June 30, 2019.

Subsequent to June 30, 2019, we entered into agreements to sell 15 senior living communities for an aggregate sales price of approximately $135,000, excluding closing costs. These 15 senior living communities are not classified as held for sale in our condensed consolidated balance sheet as of June 30, 2019.