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Real Property Acquisitions and Development
 12 Months Ended
Dec. 31, 2012
Real Property Acquisitions and Development [Abstract]  
Real Property Acquisitions and Development

3. Real Property Acquisitions and Development

 

The total purchase price for all properties acquired has been allocated to the tangible and identifiable intangible assets, liabilities and noncontrolling interests based upon their respective fair values in accordance with our accounting policies. The results of operations for these acquisitions have been included in our consolidated results of operations since the date of acquisition and are a component of the appropriate segments. 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. During the year ended December 31, 2012, we finalized our purchase price allocation of certain previously reported acquisitions and there were no material changes from those previously disclosed.

 

Seniors Housing Triple-net Activity

 

The following is our purchase price allocations and other seniors housing triple-net real property investment activity for the periods presented (in thousands):

   Year Ended December 31,
    2012(1)  2011  2010
Land and land improvements  $ 87,242  $ 212,156 $ 61,290
Buildings and improvements    984,077    3,108,508   967,239
Receivables and other assets    119    9,101   0
 Total assets acquired(2)   1,071,438    3,329,765   1,028,529
Secured debt    (89,881)   (93,431)   (84,086)
Accrued expenses and other liabilities   (3,542)   (91,290)   (26,345)
 Total liabilities assumed   (93,423)   (184,721)   (110,431)
Capital in excess of par   921   0   0
Noncontrolling interests   (17,215)   0   0
Non-cash acquisition related activity   (616)   (2,532)   (9,922)
 Cash disbursed for acquisitions   961,105   3,142,512   908,176
Construction in progress additions   179,684   182,626   85,993
Less: Capitalized interest   (6,041)   (5,752)   (6,396)
Cash disbursed for construction in progress   173,643   176,874   79,597
Capital improvements to existing properties   67,026   0   21,833
 Total cash invested in real property, net of cash acquired  $ 1,201,774  $ 3,319,386 $ 1,009,606
          
           
(1) Includes acquisitions with an aggregate purchase price of $37,772,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Excludes $2,031,000 of cash acquired during the year ended December 31, 2012.

Seniors Housing Operating Activity

Acquisitions of seniors housing operating properties are structured under RIDEA, which is described in Note 18. This structure results in the inclusion of all resident revenues and related property operating expenses from the operation of these qualified health care properties in our consolidated statements of comprehensive income. Certain of our subsidiaries' functional currencies are the local currencies of their respective countries. See Note 2 for information regarding our foreign currency policies.

The following is a summary of our seniors housing operating real property investment activity for the periods presented (in thousands):

   Year Ended December 31,
    2012(1)  2011  2010
Land and land improvements  $ 146,332  $ 112,350 $ 75,620
Buildings and improvements    1,341,560    1,512,764   676,623
Acquired lease intangibles    118,077    122,371   63,757
Restricted cash   1,296   20,699   -
Receivables and other assets    10,125    901   16,459
 Total assets acquired(2)   1,617,390    1,769,085   832,459
Secured debt    (124,190)   (796,272)   (305,167)
Accrued expenses and other liabilities   (17,347)   (44,483)   (6,849)
 Total liabilities assumed   (141,537)   (840,755)   (312,016)
Capital in excess of par   -   (6,017)   (43,641)
Noncontrolling interests   (56,884)   (69,984)   (101,091)
Cash disbursed for acquisitions   1,418,969   852,329   375,711
Capital improvements to existing properties   21,751   15,880   1,735
 Total cash invested in real property, net of cash acquired  $ 1,440,720  $ 868,209 $ 377,446
          
           
(1) Includes acquisitions with an aggregate purchase price of $1,370,128,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Excludes $20,691,000, $38,952,000 and $8,532,000 of cash acquired during the years ended December 31, 2012, 2011 and 2010, respectively.

Medical Facilities Activity

 

Accrued contingent consideration related to certain medical facility acquisitions was $34,692,000 and $39,827,000 as of December 31, 2012 and 2011, respectively. Of the amount recognized, $12,500,000 is required to be settled in the Company's common stock upon the achievement of certain performance thresholds. The following is a summary of our medical facilities real property investment activity for the periods presented (in thousands):

   Year Ended December 31,
    2012(1)  2011  2010
Land and land improvements  $ 68,619  $ 48,342 $ 49,632
Buildings and improvements    648,409    520,976   513,152
Acquired lease intangibles    115,233    60,609   67,929
Restricted cash    975    100   0
Goodwill(2)   0   0   68,321
Receivables and other assets    4,469    3,053   0
 Total assets acquired(3)   837,705    633,080   699,034
Secured debt    (267,527)   (72,225)   (170,255)
Accrued expenses and other liabilities   (25,928)   (34,214)   (75,010)
 Total liabilities assumed   (293,455)   (106,439)   (245,265)
Capital in excess of par   0   0   (2,721)
Noncontrolling interests   (193)   (7,211)   (10,848)
Preferred stock   0   0   (16,667)
Non-cash acquisition related activity   (880)   0   0
Cash disbursed for acquisitions   543,177   519,430   423,533
Construction in progress additions   134,830   165,593   252,595
Less: Capitalized interest   (3,736)   (7,412)   (13,924)
Accruals   (18,327)   (33,451)   (11,435)
Cash disbursed for construction in progress   112,767   124,730   227,236
Capital improvements to existing properties   46,673   24,031   36,354
 Total cash invested in real property, net of cash acquired  $ 702,617  $ 668,191 $ 687,123
          
           
(1) Includes acquisitions with an aggregate purchase price of $190,799,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Goodwill represents the estimated fair value of the future development pipeline expected to be generated. Cash flows from this future pipeline are expected to come from development activities and the ability to perform the management functions at the assets after the properties are developed.
(3) Excludes $2,154,000 of cash acquired during the year ended December 31, 2011.

Construction Activity

 

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

    Year Ended
    December 31, 2012 December 31, 2011 December 31, 2010
 Development projects:         
  Seniors housing triple-net $ 146,913 $ 114,161 $ 273,034
  Medical facilities   189,135   355,935   162,376
  Total development projects   336,048   470,096   435,410
 Expansion projects   4,983   45,414   3,216
Total construction in progress conversions $ 341,031 $ 515,510 $ 438,626

At December 31, 2012, future minimum lease payments receivable under operating leases (excluding properties in our seniors housing operating partnerships and excluding any operating expense reimbursements) are as follows (in thousands):

2013 $ 1,039,427
2014   980,258
2015   952,029
2016   950,079
2017   929,224
Thereafter   7,579,800
Totals $ 12,430,817