Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

At September 30, 2014, we had six outstanding letter of credit obligations totaling $10,769,000 and expiring between 2014 and 2015. At September 30, 2014, we had outstanding construction in process of $179,356,000 and were committed to providing additional funds of approximately $217,337,000to complete construction. Purchase obligations at September 30, 2014 include $1,083,370,000 representing acquisitions expected to be completed before year end. Purchase obligations also include contingent purchase obligations totaling $39,988,000. These contingent purchase obligations relate to unfunded capital improvement obligations and contingent obligations on acquisitions. Rents due from the tenant are increased to reflect the additional investment in the property.At September 30, 2014, we had an unfunded commitment of $360,000,000 related to a secured bridge facility with one of our operators for which we are receiving a commitment fee.

     We evaluate our leases for operating versus capital lease treatment in accordance with Accounting Standards Codification (“ASC”) Topic 840 “Leases.”  A lease is classified as a capital lease if it provides for transfer of ownership of the leased asset at the end of the lease term, contains a bargain purchase option, has a lease term greater than 75% of the economic life of the leased asset, or if the net present value of the future minimum lease payments are in excess of 90% of the fair value of the leased asset. Certain leases contain bargain purchase options and have been classified as capital leases. At September 30, 2014, we had operating lease obligations of $857,034,000 relating to certain ground leases and company office space and capital lease obligations of $113,075,000 relating to certain investment properties. Regarding ground leases, we have sublease agreements with certain of our operators that require the operators to reimburse us for our monthly operating lease obligations. At September 30, 2014, aggregate future minimum rentals to be received under these noncancelable subleases totaled $27,967,000.