Real Property Acquisitions and Development

3 Months Ended

Mar. 31, 2012

Real Property Acquisitions and Development [Abstract]

Real Property Acquisitions and Development

3. Real Property Acquisition and Development

Seniors Housing Triple-net Activity

During the three months ended March 31, 2012, we completed the acquisition of three seniors housing propertiesoperated by Senior Lifestyle Management LLC. The total purchase price for the communities acquired has been allocated to the tangible and identifiable intangible assets and liabilities based upon their respective fair values in accordance with our accounting policies. Also during the three months ended March 31, 2012, we finalized our purchase price allocation of the previously acquired Genesis real estate assets. There were no material changes in the Genesis HealthCare Corporation purchase accounting allocation from those previously disclosed in Note 3 to our Annual Report on Form 10-K for the year ended December 31, 2011. The following is our purchase price allocations and other seniors housing triple-net real property investment activity for the periods presented (in thousands):

		Three Months Ended
		March 31, 2012			March 31, 2011
			Amount			Amount
Land and land improvements			$	5,950		$	8,990
Buildings and improvements				89,333			105,340
Receivables and other assets				-			329
	Total assets acquired			95,283			114,659
Assumed debt				-			(7,054)
Accrued expenses and other liabilities				(232)			(1,655)
	Total liabilities assumed			(232)			(8,709)
	Cash disbursed for acquisitions			95,051			105,950
Construction in progress additions				38,467			31,892
Less: Capitalized interest				(1,242)			(976)
Cash disbursed for construction in progress				37,225			30,916
Capital improvements to existing properties				9,948			3,235
Total cash invested in real property, net of cash acquired			$	142,224		$	140,101

Seniors Housing Operating Activity

During the three months ended March 31, 2012, we acquired six seniors housing properties which were added to our partnership with Belmont Village, LP to own and operate a portfolio of seniors housing communities. We own a 95% partnership interest and Belmont owns the remaining 5% interest and continues to manage the communities. The total purchase price for the communities acquired has been allocated to the tangible and identifiable intangible assets and liabilities as well as the noncontrolling interests based upon their respective fair values in accordance with our accounting policies. The following is a summary of our seniors housing operating real property investment activity for the periods presented (in thousands):

		Three Months Ended
		March 31, 2012			March 31, 2011
			Amount			Amount
Land and land improvements			$	18,980		$	71,610
Building and improvements				174,467			968,727
Acquired lease intangibles				16,656			88,285
Restricted cash				-			8,185
Investment in unconsolidated entities				-			11,516
Receivables and other assets				1,182			3,455
	Total assets acquired(1)			211,285			1,151,778
Secured debt				-			(585,657)
Accrued expenses and other liabilities				(1,649)			(39,043)
	Total liabilities assumed			(1,649)			(624,700)
Capital in excess of par				-			(6,017)
Noncontrolling interests				(2,054)			(27,559)
Non-cash acquisition related activity				-			(24,646)
Cash disbursed for acquisitions				207,582			468,856
Capital improvements to existing properties				3,040			2,267
Total cash invested in real property, net of cash acquired			$	210,622		$	471,123
(1) Excludes $1,619,000 and $34,973,000 of cash acquired during the three months ended March 31, 2012 and 2011, respectively.

Medical Facilities Activity

During the three months ended March 31, 2012, we acquired 12 medical office buildings and one hospital. The total purchase price for the communities acquired has been allocated to the tangible and identifiable intangible assets and liabilities based upon their respective fair values in accordance with our accounting policies. The following is a summary of our medical facilitiesreal property investment activity for the periods presented (in thousands):

		Three Months Ended
		March 31, 2012(2)			March 31, 2011
			Amount			Amount
Land and land improvements			$	9,509		$	6,981
Buildings and improvements				320,481			-
Acquired lease intangibles				39,619			-
Receivables and other assets				4,158			-
	Total assets acquired			373,767			6,981
Secured debt				(172,856)			-
Accrued expenses and other liabilities				(9,255)			-
	Total liabilities assumed			(182,111)			-
Cash disbursed for acquisitions				191,656			6,981
Construction in progress additions:				40,557			82,590
Less: Capitalized interest				(1,178)			(3,689)
	Accruals(1)			(20,752)			(19,130)
Cash disbursed for construction in progress				18,627			59,771
Capital improvements to existing properties				7,071			5,376
Total cash invested in real property			$	217,354		$	72,128
(1) Represents non-cash accruals for amounts to be paid in future periods relating to properties that converted in the periods noted above.
(2) Includes acquisitions with an aggregate purchase price of $363,136,000 for which the allocation of the purchase price consideration is preliminary and subject to change.

Development Conversions

The following is a summary of the construction projects that were placed into service and began generating revenues during the periods presented:

			Three Months Ended
			March 31, 2012			March 31, 2011
	Development projects:
		Seniors housing triple-net		$	23,859		$	0
		Medical facilities			93,676			105,940
		Total development projects			117,535			105,940
	Expansion projects				240			11,524
Total construction in progress conversions				$	117,775		$	117,464

Transaction Costs

Transaction costs primarily represent costs incurred with property acquisitions,including due diligence costs, fees for legal and valuation services and termination of pre-existing relationships computed based on the fair value of the assets acquired, lease termination fees and other acquisition-related costs.