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Related Person Transactions
 12 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
Related Person Transactions Related Person TransactionsWe have relationships and historical and continuing transactions with AlerisLife (including Five Star), RMR, RMR Inc. and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR Inc. is the managing member of RMR. The Chair of our Board of Trustees and one of our Managing Trustees, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., is chair of the board, a managing director and the president and chief executive officer of RMR Inc., an officer and employee of RMR and the chair of the board and a managing director of AlerisLife. Jennifer F. Francis, our other Managing Trustee and our President and Chief Executive Officer, and our Chief Financial Officer and Treasurer are also employees and officers of RMR. Jennifer B. Clark,
our Secretary and former Managing Trustee, also serves as a managing director and the executive vice president, general counsel and secretary of RMR Inc., an officer and employee of RMR, an officer of ABP Trust and a managing director and secretary of AlerisLife. Certain of AlerisLife's officers are officers and employees of RMR. Some of our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR or its subsidiaries provide management services. Adam Portnoy serves as the chair of the board and as a managing director or managing trustee of these companies. Other officers of RMR, including Ms. Clark and certain of our officers, serve as managing trustees, managing directors or officers of certain of these companies. In addition, officers of RMR and RMR Inc. serve as our officers and officers of other companies to which RMR or its subsidiaries provide management services.
AlerisLife. We are currently AlerisLife's largest stockholder. As of December 31, 2022, we owned 10,691,658 of AlerisLife's common shares, or approximately 31.9% of AlerisLife's outstanding common shares. Five Star is an operating division of AlerisLife. Five Star manages certain of the senior living communities we own pursuant to the Master Management Agreement. RMR provides management services to both us and AlerisLife. AlerisLife participates in our property insurance program for the senior living communities AlerisLife owns. The premiums AlerisLife pays for this coverage are allocated pursuant to a formula based on the profiles of the properties included in the program. See Note 6 for further information regarding our relationships, agreements and transactions with AlerisLife (including Five Star) and Note 10 for further information regarding our investment in AlerisLife.
As of December 31, 2022, ABP Acquisition LLC, a subsidiary of ABP Trust, the controlling shareholder of RMR Inc., together with ABP Trust, owned approximately 6.1% of AlerisLife's outstanding common shares. In February 2023, ABP Acquisition 2 LLC, a subsidiary of ABP Trust, made a tender offer to purchase all of the common shares of AlerisLife, including the 10,691,658 AlerisLife common shares that we own. We have agreed to tender all of our AlerisLife shares at a tender offer price of $1.31 per share. Additionally, we consented, in connection with the tender offer, for AlerisLife to waive the share ownership restrictions set forth in its charter with respect to ABP Acquisition LLC, ABP Acquisition 2 LLC, and certain related persons that prohibit any person or group from acquiring more than 9.8% of the outstanding shares of any class of AlerisLife's stock. We maintain the right, but not the obligation, to purchase, in a single private transaction, on or before December 21, 2023, a number of shares of common stock of the surviving entity constituting a percentage up to 31.9% of the then issued and outstanding shares of the common stock of the surviving entity based on the tender offer price.
In order to effect our distribution of AlerisLife common shares to our shareholders in 2001 and to govern our relations with AlerisLife (including Five Star) thereafter, AlerisLife (including Five Star) entered agreements with us and others, including RMR. Since then, we have entered various leases, management agreements and other agreements with AlerisLife (including Five Star) that include provisions that confirm and modify these undertakings. Among other things, these agreements provide that:
•so long as we remain a REIT, AlerisLife may not waive the share ownership restrictions in its charter that prohibit any person or group from acquiring more than 9.8% (in value or number of shares, whichever is more restrictive) of the outstanding shares of any class of AlerisLife stock without our consent;
•so long as Five Star is our tenant or manager, AlerisLife will not permit nor take any action that, in our reasonable judgment, might jeopardize our qualification for taxation as a REIT;
•we have the right to terminate our management agreements with Five Star upon the acquisition by a person or group of more than 9.8% of AlerisLife's voting stock or other change in control events, as defined therein affecting AlerisLife, including the adoption of any shareholder proposal (other than a precatory proposal) or the election to AlerisLife's board of directors of any individual, if such proposal or individual was not approved, nominated or appointed, as the case may be, by a majority of AlerisLife's directors in office immediately prior to the making of such proposal or the nomination or appointment of such individual; and
•so long as Five Star is our tenant or manager or has a business management agreement with RMR, AlerisLife will not acquire or finance any real estate of a type then owned or financed by us or any other company managed by RMR without first giving us or such company managed by RMR, as applicable, the opportunity to acquire or finance that real estate.
See Note 6 for further information regarding our relationships, agreements and transactions with AlerisLife (including Five Star).
Our Manager, RMR. We have two agreements with RMR to provide management services to us: (1) a business management agreement, which relates to our business generally; and (2) a property management agreement, which relates to the
property level operations of many of our properties, including our medical office and life science properties, and major renovation or repositioning activities at our senior living communities that we may request RMR to manage from time to time. See Note 7 for further information regarding our management agreements with RMR.
Our Joint Ventures. As of December 31, 2022, in connection with our entering into the LSMD JV in January 2022, we paid mortgage escrow amounts and closing costs of $8,715 that were payable by that joint venture. Those costs are included in other assets, net, in our consolidated balance sheet. RMR provides management services to each of the Seaport JV and the LSMD JV. See Note 7 for further information regarding those management agreements with RMR.
Leases with RMR. We lease office space to RMR in certain of our properties for RMR's property management offices. We recognized rental income from RMR for leased office space of $303, $190 and $163 for the years ended December 31, 2022, 2021 and 2020, respectively. Our office space leases with RMR are terminable by RMR if our management agreements with RMR are terminated.
Share Awards to RMR Employees. As described in Note 5, we award shares to our officers and other employees of RMR annually. Generally, one fifth of these awards vest on the grant date and one fifth vests on each of the next four anniversaries of the grant dates. In certain instances, we may accelerate the vesting of an award, such as in connection with the award holder's retirement as an officer of us or an officer or employee of RMR. These awards to RMR employees are in addition to the share awards to our Managing Trustees, as Trustee compensation, and the fees we paid to RMR. See Note 5 for information regarding our share awards and activity as well as certain share purchases we made in connection with share award recipients satisfying tax withholding obligation on vesting share awards.