Investments in and Advances to Unconsolidated Joint Ventures

9 Months Ended

Sep. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Investments in and Advances to Unconsolidated Joint Ventures

The Company owns interests in the following entities that are accounted for under the equity method (dollars in thousands):



			Carrying Amount
			September 30,		December 31,
Entity⁽¹⁾	Property Count	Ownership %	2019		2018
CCRC JV⁽²⁾	15	49	$	334,546	$	365,764
U.K. JV⁽³⁾	68	49	98,692		101,735
MBK JV	5	50	33,814		35,435
Other SHOP JVs⁽⁴⁾	4	41- 90	26,733		25,493
Medical Office JVs⁽⁵⁾	3	20 - 67	9,890		10,160
K&Y JVs⁽⁶⁾	3	80	1,545		1,430
Advances to unconsolidated joint ventures, net			25		71
			$	505,245	$	540,088

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(1)	These entities are not consolidated because the Company does not control, through voting rights or other means, the joint ventures.


(2)	See Note 3 for discussion of the 2019 MTCA with Brookdale, including the pending acquisition of Brookdale’s interest in the CCRC JV.


(3)	See Note 4 for discussion of the formation of the U.K. JV and the Company’s equity method investment.

(4)

In June 2019, the Company acquired the outstanding equity interests in, and began consolidating, the Vintage Park JV (see Note 4). Remaining unconsolidated SHOP joint ventures (and the Company’s ownership percentage) include: (i) Waldwick JV (85%); (ii) Otay Ranch JV (90%); (iii) MBK Development JV (50%); (iv) Discovery Naples JV (41%); and (v) Discovery Sarasota JV (47%). The Company’s investments in the Discovery Naples JV and the Discovery Sarasota JV are preferred equity investments earning a 10% per annum fixed-rate return.


(5)	Includes three unconsolidated medical office joint ventures (and the Company’s ownership percentage): Ventures IV (20%); Ventures III (30%); and Suburban Properties, LLC (67%).


(6)	At September 30, 2019, includes two unconsolidated joint ventures. At December 31, 2018, includes three unconsolidated joint ventures. In October 2019, the Company sold its interest in one of the unconsolidated joint ventures for $4 million.

CCRC JV. During the third quarter of 2019, the CCRC JV classified one property that Brookdale and the Company committed to sell to a third-party as held for sale in the joint venture’s stand-alone financial statements. In conjunction with classifying the property as held for sale, the CCRC JV recognized an impairment charge of $12 million to reflect the write-down of the property’s previous carrying value to the estimated selling price, less costs to sell. The Company recognized its 49% share of the impairment charge ($6 million) through equity income (loss) from unconsolidated joint ventures during the three months ended September 30, 2019. The second property that Brookdale and the Company intend to sell to a third-party has not been classified as held for sale as an active program to locate a buyer had not been initiated as of September 30, 2019.

Additionally, in October 2019, the Company agreed to acquire Brookdale’s 51% interest in 13 of the 15 communities held by the CCRC JV. Refer to Note 3 for a detailed discussion of the 2019 MTCA with Brookdale.

U.K. JV. In October 2019, the Company entered into a definitive agreement to sell its remaining 49% interest in the U.K. JV for net proceeds of approximately $90 million. Upon sale, which is expected to close during the fourth quarter of 2019, the Company expects to recognize a loss on sale of approximately $8 million (based on exchange rates at the time the agreement was executed). The transaction will complete the Company’s strategic exit from the U.K.