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Real Estate Assets, net
12 Months Ended
Dec. 31, 2015
Real Estate [Abstract]  
Real Estate Assets, net

4.

Real Estate Assets, net

The gross carrying amount and accumulated depreciation of the Company’s real estate assets as of December 31, 2015 and December 31, 2014 are as follows (in thousands):

 

 

 

December 31,

 

 

 

2015

 

 

2014

 

Land and land improvements

 

$

229,046

 

 

$

128,662

 

Building and building improvements

 

 

2,297,336

 

 

 

1,545,614

 

Furniture, fixtures and equipment

 

 

60,601

 

 

 

36,319

 

Less: accumulated depreciation

 

 

(116,807

)

 

 

(53,095

)

Real estate investment properties, net

 

 

2,470,176

 

 

 

1,657,500

 

Real estate under development, including land

 

 

62,521

 

 

 

47,153

 

Total real estate assets, net

 

$

2,532,697

 

 

$

1,704,653

 

 

Depreciation expense on the Company’s real estate investment properties, net was approximately $63.6 million, $39.1 million and $12.0 million for the years ended December 31, 2015, 2014 and 2013, respectively.

In June 2015, the Company completed the construction and development of a seniors housing community in Tega Cay, South Carolina (“Wellmore of Tega Cay”), which is a suburb of Charlotte, North Carolina.  Wellmore of Tega Cay opened to residents beginning in July 2015 and was considered placed into service as of June 30, 2015.

In November 2015, the Company completed the construction and development of a seniors housing community in Shorewood, Wisconsin (“Harborchase of Shorewood”), which is north of Milwaukee. Harborchase of Shorewood opened to residents beginning in December 2015 and was considered placed into service as of November 30, 2015.

During the quarter ended December 31, 2015, the Company completed the construction of the independent living villas on the Raider Ranch community in Lubbock, Texas.  Certain villas opened to residents beginning in September 2015 and each villa was placed into service throughout the quarter upon completion.  The Company continues the construction and development of an independent living apartment building at this community.

In June 2014, the Company completed the construction and development of a seniors housing community in Acworth, Georgia (“Dogwood Forest of Acworth”).  Dogwood Forest of Acworth opened to residents in July 2014 and was considered placed into service as of June 30, 2014.

As such, the asset values related to Wellmore of Tega Cay, Harborchase of Shorewood, portions of the Raider Ranch development and Dogwood Forest of Acworth are included in real estate investment properties, net in the accompanying consolidated balance sheet as of December 31, 2015.

4.

Real Estate Assets, net (continued)

As of December 31, 2015, eight of the Company’s seniors housing communities and one post-acute care facility have real estate under development or expansion projects with third-party developers as follows (in thousands):

 

Property Name (and Location)

 

Developer

 

Real Estate

Development

Costs 

Incurred (1)

 

 

(Unaudited)

Remaining

Development

Budget (2)

 

Development Properties

 

 

 

 

 

 

 

 

 

 

Raider Ranch

 

 

 

 

 

 

 

 

 

 

(Lubbock, TX)

 

South Bay Partners, Ltd

 

$

9,942

 

 

$

2,274

 

Watercrest at Katy

 

 

 

 

 

 

 

 

 

 

(Katy, TX) (3)

 

South Bay Partners, Ltd

 

 

26,565

 

 

 

16,245

 

Welbrook Senior Living

 

 

 

 

 

 

 

 

 

 

Grand Junction

 

 

 

 

 

 

 

 

 

 

(Grand Junction, CO)

 

Embree Asset Group, Inc.

 

 

3,198

 

 

 

10,636

 

Waterstone

 

 

 

 

 

 

 

 

 

 

(Greenville, SC)

 

T&D Greenville, LLC

 

 

7,185

 

 

 

21,287

 

Wellmore of Lexington

 

 

 

 

 

 

 

 

 

 

(Lexington, SC)

 

Maxwell Group, Inc.

 

 

8,723

 

 

 

46,282

 

Dogwood Forest of Grayson

 

 

 

 

 

 

 

 

 

 

(Grayson, GA)

 

Solomon Development Services, LLC

 

 

3,973

 

 

 

23,024

 

Fieldstone at Pear Orchard

 

 

 

 

 

 

 

 

 

 

(Yakima, WA) (4)

 

Cascadia Development, LLC

 

 

2,606

 

 

 

13,067

 

Expansion Projects

 

 

 

 

 

 

 

 

 

 

Tranquillity at Fredericktowne

 

 

 

 

 

 

 

 

 

(Frederick, MD)

 

Capital Health Partners

 

 

235

 

 

 

5,649

 

Brookridge Heights Assisted Living & Memory Care

 

 

 

 

 

 

 

 

 

(Marquette, MI)

 

Capital Health Partners

 

 

94

 

 

 

4,725

 

 

 

 

 

$

62,521

 

 

$

143,189

 

 

FOOTNOTES:

(1)

This amount represents land and total capitalized costs for GAAP purposes for the acquisition, development and construction of the seniors housing community or post-acute care facility as of December 31, 2015.  Amounts include investment services fees, asset management fees, interest expense and other costs capitalized during the development period.

(2)

This amount includes preleasing and marketing costs which will be expensed as incurred.

(3)

This property is owned through a joint venture in which the Company’s initial ownership interest is 95%.

(4)

This property is owned through a joint venture in which the Company’s initial ownership interest is 75%.

The development budgets include the cost of the land, construction costs, development fees, financing costs, start-up costs and initial operating deficits of the respective properties.  An affiliate of the developer of the respective community coordinates and supervises the management and administration of the development and construction.  Each developer is responsible for any cost overruns beyond the approved development budget for the applicable project pursuant to a cost overrun guarantee.  Some of these developments were deemed to be VIEs; refer to Note 7. “Variable Interest Entities” for additional information.