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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)20112010
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)20112010
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)20112010
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, 2012December 31, 2011December 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