Real Property Acquisitions and Development

9 Months Ended

Sep. 30, 2014

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.

Seniors Housing Triple-net Activity

		Nine Months Ended
(In thousands)		September 30, 2014(1)			September 30, 2013
Land and land improvements			$	36,427		$	56,665
Buildings and improvements				303,273			211,903
	Total assets acquired			339,700			268,568
Non-cash acquisition related activity				(1,937)			-
	Cash disbursed for acquisitions			337,763			268,568
Construction in progress additions				79,668			103,951
Less:	Capitalized interest			(3,258)			(3,337)
	Foreign currency translation			116			-
Cash disbursed for construction in progress				76,526			100,614
Capital improvements to existing properties				13,481			27,819
	Total cash invested in real property, net of cash acquired		$	427,770		$	397,001
(1) Includes acquisitions with an aggregate purchase price of $83,615,000 for which the allocation of the purchase price consideration is preliminary and subject to change.

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 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 for information regarding our foreign currency policies.

		Nine Months Ended
(In thousands)		September 30, 2014(1)			September 30, 2013
Land and land improvements			$	40,764		$	437,046
Building and improvements				224,936			4,214,254
Acquired lease intangibles				10,021			377,929
Construction in progress				27,957			-
Restricted cash				-			41,524
Receivables and other assets				5,679			81,546
	Total assets acquired(2)			309,357			5,152,299
Secured debt				(12,846)			(1,261,093)
Accrued expenses and other liabilities				(17,011)			(86,412)
	Total liabilities assumed			(29,857)			(1,347,505)
Noncontrolling interests				-			(230,441)
Non-cash acquisition related activity(3)				-			(856,103)
	Cash disbursed for acquisitions			279,500			2,718,250
Construction in progress additions				6,984			1,521
Less:	Capitalized interest			(293)			(18)
	Foreign currency translation			(810)			-
Cash disbursed for construction in progress				5,881			1,503
Capital improvements to existing properties				52,177			36,813
	Total cash invested in real property, net of cash acquired		$	337,558		$	2,756,566
(1) Includes acquisitions with an aggregate purchase price of $262,935,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Excludes $8,476,000 and $87,406,000 of cash acquired during the nine months ended September 30, 2014 and 2013, respectively.
(3) Represents Sunrise loan and noncontrolling interests acquisitions.

Medical Facilities Activity

		Nine Months Ended
(In thousands)		September 30, 2014 (1)			September 30, 2013
Land and land improvements			$	29,588	$	-
Buildings and improvements				471,410		144,708
Acquired lease intangibles				17,440		-
Restricted cash				-		505
Receivables and other assets				1,245		151
	Total assets acquired			519,683		145,364
Secured debt				(50,500)		(26,300)
Accrued expenses and other liabilities				(9,308)		(479)
	Total liabilities assumed			(59,808)		(26,779)
Non-controlling interests				(39,987)		-
Non-cash acquisition activity(2)				(45,836)		(12,056)
	Cash disbursed for acquisitions			374,052		106,529
Construction in progress additions				71,245		87,882
Less:	Capitalized interest			(1,533)		(1,343)
	Accruals(3)			(11,290)		(9,806)
Cash disbursed for construction in progress				58,422		76,733
Capital improvements to existing properties				20,666		17,887
	Total cash invested in real property		$	453,140	$	201,149
(1) Includes acquisitions with an aggregate purchase price of $500,177,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) For the nine month period ended September 30, 2014, relates to an acquisition of assets previously financed as real estate loans. Please refer to Note 6 for additional information. For the nine month period ended September 30, 2013, relates to an asset swap transaction. Please refer to Note 5 for additional information.
(3) Represents non-cash accruals for amounts to be paid in future periods relating to properties that converted in the periods noted above.

Construction Activity

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

			Nine Months Ended
			September 30, 2014			September 30, 2013
	Development projects:
		Seniors housing triple-net		$	71,569		$	105,265
		Medical facilities			56,807			78,839
		Total development projects			128,376			184,104
	Expansion projects				17,586			14,229
Total construction in progress conversions				$	145,962		$	198,333